Mining companies learned value of experts hard way
Copper Country's past and people
There were many hastily organized companies that secured permits for mineral lands from the government, then hired someone to go off thrashing through the woods and underbrush in search of a big mother lode of copper, poking out of the ground, all nice and shiny, and red, like a strawberry patch just waiting to be picked.
Then, there were intelligent companies, like the Pittsburgh and Boston, whose agents, William Pettit, John Hays, Edward Jennings, and a company director named Curtis Hussey, learned from other companies on Keweenaw Point.
Pettit had overall charge of all three of the Pittsburgh and Boston company’s mineral tracts in 1845, and he visited the other two active mining ventures on the “Point,” which coincidentally, were controlled by the Lake Superior Copper Company. Pettit wanted to contract a competent geologist to conduct a thorough survey of the Pittsburgh company’s three tracts. But he had learned quite a bit from talking with Charles Gratiot at the mine at Eagle River and Joshua Child at Copper Falls, and when he sought a geologist he did not choose Charles T. Jackson.
Who he did select was a professor from New Haven, Connecticut named Forrest Shepherd, a science professor at Yale College.
Shepherd was asked to survey the tract at Copper Harbor, the tract that embraced the Cliff Lode, and the third, about 12 miles west of the Cliff, which had only been skimmed over by an explorer hired by the company, whose name seems lost to history.
Shepherd, a renowned professor of natural sciences, compiled and sent his report to the company directors, which included a report of the analysis of the ore samples collected during his survey of the lands. The analysis was conducted by Professor Benjamin Silliman, also of Yale.
The report contained 35 pages and and additional four pages of maps. It included descriptions of copper mines and their values throughout the world, to offer something of a comparison to the value of the Pittsburgh properties.
“It appears from the above facts,” Shepherd wrote, “that the Lake Superior copper region does not suffer in comparison with the best mines yet discovered on the globe.”
Yet, while Shepherd was very optimistic, as suggested above, he was also brutally honest.
“Let no one, however, suppose that he can purchase a few shares of stock in a company,” he wrote, “and in a few weeks, or a few months, rush into fortune. He must, in the exercise of good common sense, expect to sew before he can reap; and allow for the seed to germinate; and then time for the blade; and then, time for the ear: before he obtains a harvest of full corn in the ear.”
Shepherd stated something here that not many seemed to understand in the mid-1840s in the copper region. What he said with that assertion was anyone investing in a copper mine must wait for the mine to be opened and developed, then will come the time the surface plant — hoisting equipment, stamp mills and ore processing facilities — to be purchased and installed, and put into operation. It could conceivably take years for a shareholder to see a return on his investment. It was a prophetic statement. The investors of the Pittsburgh and Boston company did not receive their first dividend for five years after the company was organized.
In informing the board of the value of the company’s lands, in the case of the most westerly lease, Shepherd tried very hard to be optimistic, suggesting it could be used for growing hay and oats, harvesting bird’s-eye maple, and even a sandstone quarry. The lease at Copper Harbor, he wrote, warranted further, but economically cautious, exploration.
From Shepherd’s and Silliman’s reports, the company directors learned a great deal regarding their three mineral tracts. And all the information contained in the report, told the directors — nothing of real use.
“The vein is quite as likely to grow richer in working,” the report stated, “as it is to become poorer.” Thanks for that perceptive insight, Professor.
The vein had a 50% chance of being worth commercial mining, which meant it also had a 50% chance of failing. Anybody willing to gamble investment capital went into the game knowing that much. But still, it was far more accurate than the reports submitted to the Lake Superior Company by their contract geologist, Charles T. Jackson.
“It is obvious that there is (an) adequate quantity of rich ore in this vein,” wrote Jackson, “to render working profitable, and that there is no danger of exhausting the ore even should it give out at a depth of 100 feet, of which there is no probability.”
For a man of Jackson’s knowledge, experience, and international reputation, such a statement was beyond absurd. Jackson was the only one in the district, who had seen the mine, who held that view, according to the August 21, 1845 edition of the Daily Union, a Washington D.C. newspaper.
“They say the mine is a deposit of native silver and copper in pure trap-rock, and no vein at all,” the paper stated, “that it presents the appearance of these metals being mingled broadcast in the mass of traprock; that, in sinking a shaft, the constant danger is, that while a few successive blasts may bring up very rich specimens of the metals, the succeeding blast or stroke of the pick-axe may bring up nothing but plain rock.”
While Jackson had proclaimed the mine on the west bank of the Eagle River was worth $1 million dollars in 1845, it took the Lake Superior company directors an additional three years, and an expenditure of more than $105,000 to finally admit that Jackson was simply wrong and the Daily Union had been correct. The coffers exhausted, the company suspended operations, liquidated, and went out of existence, to then become the Phoenix Mining Company under new management.
So, in the end, two world-renowned geologists submitted reports that survived to become historical documents. With the advantage of living 147 years into Shepherd’s and Jackson’s futures, we can read the documents they wrote, and history amply testifies that Jackson was wrong, and Shepherd was inconclusive. It just stood to prove Shepherd’s point: Mining was a gamble.