The Trail of Gold and Silver

by Duane A. Smith

With the war over, the pace of railroad building picked up from both ends. The Union Pacific raced across the prairie where covered wagons and stagecoaches had until recently held sway. However, horrified Coloradans were beside themselves to learn that except for “far away” Julesburg, the line would bypass their territory. Despite their promotion and protests, the railroad executives decided that no pass through the Colorado Rockies was feasible, because of the steep grade, altitude, and high cost.

  The threat to Colorado’s future was enormous, particularly when the UP started a rival town to the north. Cheyenne, Wyoming, challenged Denver’s economic and political position as “the queen of the mountains and plains.” Denverites responded quickly by organizing their own short line, the Denver Pacific, to intersect the UP east of Cheyenne so that they could completely bypass the upstart city.

  They pushed their line northward while the Union Pacific raced westward, finally joining with the Central Pacific at Promontory, Utah, on May 10, 1869. The Denver Pacific had not quite reached the junction with the UP as the year ended. Nevertheless, eager Coloradans were already planning railroads that would reach into the mountains to serve the mines and mining communities. Locals up there could hardly wait. A mining boom, they believed, was near realization with the coming of a cheap, year-round, and dependable railroad.

  The government’s military arm also eased another problem and worry: the threat of the Plains Indians. A series of campaigns had ended with most of the tribes being placed on reservations and the opening of eastern Colorado to settlement. That provided a blessing beyond safety, because Coloradans hoped farmers and ranchers would settle there and raise crops and cattle. Homegrown crops would lower the cost of living and lessen the territory’s dependence on the midwest and the east.

  However, the Utes still lived beyond the “snowy range” in the valleys of the Western Slope. The various bands had already found prospectors in their lands, and some tribal leaders had an idea of what was coming. The pattern was well established: When prospectors and miners appeared, the Native Americans left, and often quickly. One had only to look to California, Idaho, Nevada, and elsewhere in the west to see this result.

  In fact, the final drama was already in its first act. One of the two “new” mining districts opened in 1869 was the San Juans, right in the heart of Ute land. Charles Baker’s 1861 fiasco had faded from memory, but not the legend of rich gold deposits and mines in those mountains. There had been a brief respite during the war and immediately thereafter, but in 1869 a prospecting party from Prescott, Arizona Territory, worked its way up the Dolores River looking for gold.

  A second prospecting party ventured out of Central City toward northern Boulder County, where one of the prospectors had found a silver float on a mountainside. Up near the Continental Divide they discovered silver, but, being experienced miners, they said little about it to outsiders. Winter comes early at 10,000 feet, so they settled in, built a cabin, worked their claims, piled up ore, and blazed a little trail down to the wagon road between Central City and Gold Hill. They managed to keep their discovery quiet as long as the snow was heavy and the winds blew steadily. And the winds did blow; in fact, the mining camp they eventually named Caribou was known as “the place where the winds begin.”

  As the year and the decade ended, the outlook for Colorado’s future had brightened considerably. Hill had solved many of the smelting problems and was working to resolve others. That promised to revive some of the older districts and particularly benefit Gilpin, the king of the mining counties. Several new districts were about to be added to Colorado’s galaxy, and older ones had been revitalized. Coloradans knew they had, or were about to get, two of the three essentials of a new mining boom. They did not doubt that their mountains held rich ore, and the most modern transportation available was coming—the iron horse. Railroad connections had nearly been completed, and settlement promised to spread across the plains and mountains. Now all they had to do was encourage investors to come, traveling in ease and comfort previously unavailable, and invest in the wonderful mines located throughout their majestic mountains. The Rocky Mountain News, December 3, 1867, placed the situation in perspective when it proudly identified “Mining, our great industry, the foundation upon which rests our whole business prosperity.” Those “good times a-comin” were almost at hand.

  I am bound for the promised land;

  Oh, who will come and go with me?

  —SAMUEL STENNETT,

  “ON JORDAN’S STORMY BANKS I STAND”

  5

  1870–1874: Bonanza! “Three Cheers and a Tiger”

  The promised land! Prospectors and miners had been looking for it in the mountains of Colorado since 1859. Before the decade of the 1870s ticked into history, some at least would finally reach it. To paraphrase the words of another popular song of the post-Civil War era, it was the “Decade of the Jubilee”: the 1870s, Colorado’s great mining decade in which all the stars aligned. Before 1880 dawned, Colorado reigned as the premier gold and silver mining state in the United States. Not bad for a territory that ten years before had ranked behind Nevada, Montana, and California—and had seen Idaho just a nose ahead—in gold and silver production. There would never be another decade quite like this one for Colorado, nor for its mining industry.

  Production statistics alone chart the astonishing change. The three old, original mining counties tell the tale even without the tally from the new districts that burst onto the scene. Between 1870 and 1880, gold and silver production in Clear Creek County jumped from $572,000 to $2.3 million; Gilpin County snuck up from $2.2 million to $2.6 million; and Boulder County, the lowest producer among the old-timers, still moved from $180,000 to $789,000. Then amazing Lake County astonished locals and the whole country alike: After having barely topped $65,000 in 1870, production there skyrocketed to $11.5 million. Only Summit County, once the placer heartland, declined in production by $75,000 to $438,000.

  Total Colorado silver and gold production vaulted from $2.9 million in 1870 to $19.5 million a decade later. Clear Creek, Gilpin, and Lake Counties accounted for the lion’s share of that, with Lake being the prime mover. To put these totals in perspective for the twenty-first century, gold in that decade sold for $20.67 an ounce and silver hovered between $1.35 and $1.15 per ounce, while facing a continuing downward trend.

  It did not happen overnight. Like a Rocky Mountain snow slide, production picked up speed as new discoveries sparked excitements and old districts revived. Support industries matched the mining industry almost step for step, with each one enhancing the development of the other and all of Colorado gaining.

  United States Mining Commissioner Rossiter Raymond correctly forecast what was going to happen and why. Railroads were coming, along with “the growth of several branches of domestic manufactures.” The development of cities and agriculture taking root in her “fertile plains and parks” all boded well for mining. “It is difficult to find an instance where the two fundamental productive activities of man [mining and agriculture] are both so magnificently endowed, and so conveniently located for mutual assistance without interference.”1 In an 1870 report, Raymond noted “that the industry is now looked upon as legitimate business more than ever before. The time of wild and extravagant speculation . . . has passed away in Colorado.” In this, he proved a bit optimistic, but legitimate business practices were certainly becoming more common.

  The first rush of the decade was Boulder County’s Caribou, whose discoverers could not long hide their good fortune when winter turned to spring. As they shipped ore out to Black Hawk, the rush started, reinvigorating the 1860s Grand Island Mining District. Claims were staked all over Caribou and the Idaho hills—and a little camp grew in the valley at their feet, following a familiar pattern. Because of the revived Nevada Comstock and its extraordinary “Big Bonanza,” silver had become the darling of the mining scene—particularly as the Comstock seemed to magically produce more silver each year, yielding $61 million in 1876 alon
e.

  Caribou even made the New York Times, with a multitude of headlines: “Wild Excitement Among the Adventurers of the Territory”; “The Richest Silver Deposits on the Continent”; “A City Grown Up in a Month” (September 12, 1870). The article opened, “Ferment over this new district nothing short of wonderful. People are rushing in here from the surrounding country by the hundreds. Undoubtedly they have found one of the richest silver mining regions ever known.” Perhaps this report served up a large slice of the exaggeration and overenthusiasm that were abundant in mining rush days. Nevertheless, Caribou supplied the first good mining news that Coloradans had enjoyed for quite a while.

  In the years that followed, Caribou received less coverage but occasionally made brief bids for public attention: for example, when an up-to-date smelter opened at nearby Nederland, and again when the Caribou Mine was sold to Dutch investors in 1873 for $3 million, the largest Colorado sale to date. The mine’s failure three years later, which stirred finger-pointing and accusations, garnered negative headlines. Then, in 1879, fire destroyed part of the community and numerous mine buildings and Caribou started its final downward spiral.

  Caribou went through a complete evolutionary life cycle in one decade. It went from the wonderful days of 1870, when its “citizens believe with reason they are in one of the best mining districts of the territory,” to maturity and then slowly slipped into decline. Caribou was a “Cornish” district; these skilled miners, coming over from Central City, prolonged the life of the area and probably boosted production considerably. Conservative estimates place the decade’s production at slightly over $2 million, and other figures range as high as $3.5 million—but that was not Caribou’s major significance. It advertised and promoted Colorado at a time when the struggling territory needed something new and promising, with no ties to old failures and scams. Like every other mining district, it provided jobs and a market for local products, encouraged further prospecting, pumped money into the Colorado general economy, and promoted (in this case) Boulder County’s varied resources. Caribou lured back both investors and their money, demonstrated that Colorado still contained undiscovered mineral treasures, and focused greater attention on silver.

  Through it all, Colorado’s “Silver Queen,” Georgetown, never yielded its crown to the upstart Caribou. Though not as newsworthy in 1870, its local production easily topped that of its Boulder County rival. At the opening of the decade, Georgetown was hailed for “more solid development” and the “energy of actual work,” as it left behind the “tunnel excitement” and “desire to ‘sell out’” of earlier years. By 1872, production in Clear Creek County soared over $1 million, and two years later it surged past $2 million. In 1874, the county even became the territory’s top producer—“the banner mining-county of Colorado”—before again yielding the top spot to Gilpin County, the long-time number one producer, the next year.

  Like Caribou, Georgetown followed a familiar pattern. The Terrible Mine, “one of the leading producers in the county,” was sold to English investors in 1870. After five years of steady production, it ran into an apex dispute and work was suspended.

  Legal action, which was both costly and time-consuming, constituted one of the great blights of the mining industry. Though it gave secret joy to lawyers, the apex issue bedeviled miners throughout the west. The discoverer of a vein’s apex was entitled to “extralateral rights, or the right to pursue the vein in depth beyond the side-line boundary of the originally patented surface ground, and into the land adjoining.” It seemed simple. The owner of the apex had the exclusive right to mine the vein beyond his property’s sidelines, but not beyond the end lines, unless he bought the neighboring claims. If the claims—and the ore—followed the orderly seams described in textbooks, all went well. They seldom did, however. Instead, the veins ran every which way and often surfaced on other claims.

  With the state of mining at the time, defining a vein’s apex often proved difficult and created lawsuits rather than wealthy mine owners. A noted mining engineer, James D. Hague, who worked in Colorado as early as the 1870s, wrote about this:

  How shall be determined the linear extent of the lode in depth, between end-line planes produced from non-parallel, diverging, converging, broken, crooked, or otherwise non-conformable or unstatutable surface end-lines of variable direction, sometimes becoming sidelines, while side-lines become end-lines[?]

  Hague finally admitted that the law barely managed to touch “the perplexing complications of end-lines and side-lines, the puzzling identity of lodes and the doubtful place of the true top or apex.” The apex, Hague went on to say, has “been the most fruitful source of conflicting interests and bitter controversy.”2 This confusing, perplexing puzzle mystified miners and everyone else, but gave lawyers, witnesses, and experts steady work and a bonanza in fees.

  This legal “curse” led to numerous lawsuits in various Colorado districts, along with violence (even killings) and ruined reputations. Sometimes litigation dragged on for years before someone won or the contestants consolidated their properties. Usually, far more losers emerged than winners. The reason? According to the 1872 law, the claimant had to fix surface boundaries to include the apex of the vein; failure to do so negated the right to follow it through the side boundaries.

  The Terrible Mine illustrated one possible solution. After work stopped, to avoid costly lawsuits, it was merged into a larger company. By the late 1870s, it had both company miners and lessees working the property. The Pelican/Dives, in contrast, did not fare as well in the storm that came with apex controversies. Initiated in 1873, the dispute carried into the next decade. Both sides hired toughs; armed Pelican miners seized the Dives; both western and eastern owners filed lawsuits against each other. A sad tale of bloodshed, killing, upset stockholders, and destroyed reputations was played out before the Pelican and Dives Mining Company finally emerged—as owners of a ruined mine.

  Both cases hurt Georgetown’s image and highlighted the complicated nature of apex litigation. The Pelican/Dives matter had been particularly costly, both in individual reputations and in money spent. The underfunded Pelican owners, for example, admitted in 1876 that they had already spent half a million dollars defending themselves. Of course, apex struggles were not the only cases. Over in Lake County, the Printer Boy Mine was jumped, and expensive, lengthy litigation ensued before the owners got it back.

  The Georgetown district seemed particularly plagued by legal wrangles, however. In his 1873 report, Raymond pointed this out, along with the negative results thereof:

  The past year has witnessed an unusual amount of mining litigation, which seems to be especially the curse of this section of Colorado. The profits of some of the best mines bid fair to be absorbed in legal fees, and Clear Creek County to be bankrupted by the expenses constantly arising from “jumping,” and from the bloodshed which frequently follows.3

  Such cases made investors nervous, infuriated locals, and raised questions about other mines in the district. Unfortunately, these problems were one result of the national 1872 mining law, which was meant to clarify such issues, not to add to the confusion and encourage contentious litigation.

  The rest of the 1872 mining law proved less controversial at that time. Its aim was, simply, “to offer means for a fair adjustment of thousands of claims upon all kinds of mining property, and lying between men of every class and nationality,” and to develop the country’s mineral resources. Of course, one had to be a citizen, or declare one’s intention of becoming a citizen, to be able to stake a claim. The national law validated claim locations “by the customs, regulations, and laws in force at the date of their location” and allowed miners in a district to “make rules and regulations not in conflict with the laws of the United States” or the state or territory. In section 6, it discussed in some detail how to patent a mine. In all, the law’s sixteen sections became the miner’s bible.4

  Despite the problems that Caribou and Georgetown were suffering, there we
re plenty of new districts opening to tempt miners and the investing public. Boulder County stepped into the spotlight with the discovery of mines that had “remarkable rich ore” at Sunshine, a “prominent little camp.” This discovery, along with Caribou, “greatly stimulated mining” in older districts, such as Gold Hill and Ward, and encouraged prospecting throughout the nearby mountains.

  Park County saw “rich discoveries” on Lincoln and Bross mountains, which caused an “influx of prospectors and capitalists, and called attention to the wonderful riches of the whole Mosquito Range.” The “Hardscrabble district,” in Fremont County’s Wet Valley, centered at Rosita and Silver Cliff, also captured attention with its silver veins. That somewhat isolated district echoed a familiar refrain: It needed railroad connections, investors, and a successful local smelting works. Though the rails failed to appear in 1873, Hardscrabble passed through the “vicissitudes of early age” and awaited prosperity.

  Of all the districts, however, the far away San Juan, in the southwestern part of the territory, held the most promise. This mineral “treasure house,” which had started as a gold district, quickly became known for its silver mines. Despite warnings from critics who well remembered the 1861 fiasco, mining and permanent settlement had gained a toehold there by 1872. Even an unusually critical William Byers, and his Rocky Mountain News, which had called it a hoax or worse in 1870, praised the region by 1872. “Possibilities point to a busy and exciting season,” crowed the May 18 edition. “All will be bustle, hurry, noise, excitement and confusion.”

  Later that year, the News (November 14, 1872) had an even more exciting tidbit for its readers: diamonds. Out of the past came Colorado’s first governor, William Gilpin, to predict once more that diamonds would be found in Colorado and “most conclusively” in the San Juans. A correspondent wrote to the paper on December 12 that a party from the “newly discovered diamond fields in the San Juan” had arrived with a “camp kettle full of diamonds of the first water” and two “gunny sacks full of rubies and sapphires.” It must have been a full moon and the lunacy season in full blossom, because to this day none of these have ever been found in the San Juans.