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C&H takes control of the northern copper district

Concerns and apprehension of local residents as the new year of 1911 approached were predicated on events begun in 1907 when the Osceola Consolidated Mining Company became the first venture targeted for takeover by the Calumet and Hecla Mining Company.

By the turn of the 20th century, C&H was already keenly aware that it was approaching the limit of its ore reserves on its Calumet Conglomerate Lode. Yet that lode was not the only rich ore body in the Calumet area, nor was it the only one the company was exploiting. It was also mining the Osceola Amygdaloid lode and had recently opened a couple of shafts on the Kearsarge Lode.

C&H only had limited access to these lodes, however. The majority of the properties located on these lodes were controlled by Albert S. Bigelow and his partner, Joseph Clark. Among the ventures on the amygdaloid lode that Bigelow and Clark managed were the Allouez, Centennial, Osceola Consolidated, and the Kearsarge mining companies. They sat atop rich lodes.

The C&H management decided that if their company was going to survive, it would need to own not only the Calumet Conglomerate, but also the Kearsarge and Osceola Amygdaloid lodes, as well.

C&H’s directors decided it would take those companies over. A bill passed in Lansing in 1903 that permitted mining companies to purchase stock in other companies would be an excellent way to go about it.

The transcript of the United States Court of Appeals case, Hyams versus Calumet & Hecla Mining Company sums up the situation quite well.

After the passage of the bill, C&H entered upon a “pronounced policy of expansion,” the transcript states.

Starting in 1905, C&H bought large stock interests in the Superior, La Salle, and Gratiot Mining Companies, neither of which was then producing, the transcript reports.

During the winter of 1906-07 it purchased a large amount of stock of the Osceola, Allouez, and Centennial Companies, and obtained from other stockholders in the Osceola Company sufficient stock proxies to enable it to control the election of directors, and officers of that company (most of these acquisitions are included in the C&H annual report for 1906/07).

C&H announced to the Board of Directors of the Osceola Consolidated Company that it now had controlling interest in that company and intended to vote to install its own directors to the seats on the Osceola BOD.

On Feb. 21, 1907, C&H vice president T.L. Livermore sent a letter to Bigelow, president of the Osceola company.

“In view of this Company having become the largest shareholder of record in the Osecola Consolidated Mining Company, and of our expectation that we shall elect a majority of the of the directors at its annual meeting on March 14th next,” the letter began, “we hereby request that until the annual meeting and the Board of Directors has been elected at the annual meeting no contract shall be entered into by the President, Directors, or Agents of said Company in its behalf which, by its terms, is not performed entirely during the term of the present Board of Directors –“

In response, Bigelow filed two separate bills in equity, alleging C&H’s stock purchases were in violation of the federal Anti-Trust Act, the Michigan statute against trusts and monopolies, as well as common-law prohibitions. Additionally, the land purchases mentioned were argued to be illegal, being in excess of the acreage which the Michigan statutes permitted a mining company to hold. It was an effort to restrain the Calumet & Hecla from voting with its Osceola stock and proxies in the election of directors of that company.

The U.S. District Court for the Western District of Michigan granted a temporary injunction against C&H while it sought answers to its own questions, including what was the definition of a monopoly as would be applicable to the case? Can such a monopoly be created in Lake Superior copper? Can Lake Superior copper be distinguished from copper produced everywhere else?

The injunction was only temporary, though. The annual report of the Osceola company for the year ending Dec. 31, 1908 listed Bigelow as the president, Norman Haire as vice president, William Ladd as secretary and treasurer.

The next year, Quincy A. Shaw was listed as president. All of the board members under Bigelow had been replaced by C&H men, including James MacNaughton, C&H’s general manager.

C&H had managed to gain controlling interest in all of the Bigelow group’s Michigan holding, except for the Isle Royale, in Houghton. The Court of Appeals transcipt states:

“After the termination of the Bigelow litigation, Bigelow and his associates, including the present plaintiff, made through the latter a sale to the Calumet & Hecla of substantially all, and (with the exception of part of plaintiff’s holding in the Tamarack and Isle Royale) perhaps all of their holdings in the Osceola, Seneca, Tamarack, Ahmeek, Laurium and Isle Royale Companies; the last five named companies having been up to that time operated in connection with the Osceola under the Bigelow management.”

The transcript goes on to say that by the end of 1909, C&H , “although a majority stockholder in but 5 of the 11 other companies was, with the aid of proxies, in the effective management — and control of — each of the 11. Nine of these were Michigan corporations. The Isle Royale being organized under the New Jersey statutes and the Gratiot being a Maine corporation. In the spring of 1910, of the president and vice president, respectively, of C&H, one was president of each of the other 11 companies; the other being vice president except where no such officer was had. All 12 companies had the same secretary and treasurer, and the same general manager.”

These three men, Shaw, Rodolphe Agassiz, and MacNaughton, drafted the details of what consolidating 10 of these companies would look like.

While C&H officials said these companies would continue to operate as independent ventures, in truth, they were in name only; they became C&H subsidiaries.

While the C&H directors thought they had gained a victory through these takeovers, they didn’t gain much. They did not increase the amount of copper the mines were producing, but they did prolong the existence of the name Calumet and Hecla, even if by the latter half of the 20th century, the company had declined to the status of marginal producer.

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