Comstock Lode


	Nevada’s Comstock lode, America’s first great silver-mining district, was mired in fraud and corruption for the first half-century of its existence.


	Henry “Pancake” Comstock didn’t discover the Comstock lode, but he bullied the true discoverers into giving him a share


	Despite his share in the silver discovery, Comstock didn’t become a millionaire. He sold out early, squandered his wealth, and left the area to spend the rest of his life trying to find another Comstock lode.


	Miners and prospectors organized the camps of Gold Hill (left) and Virginia City (right).


	The silver discoveries created a sensation in San Francisco.


	The extensive and expensive surface and underground workings of the various Comstock silver mines required large outlays of investment capital. Most of the investors were in San Francisco.


	The San Francisco Stock and Exchange Board, San Francisco’s first stock exchange, was organized to facilitate the frenzied trading in shares of Comstock silver-mining companies. Most Comstock mining fraud took place not in Nevada, but in the various San Francisco stock exchanges.


	*A San Francisco Chronicle* cartoon shows Comstock mining share speculators and their life savings being crushed under the wheels of the San Francisco Stock and Exchange Board.**


	A frantic scene in the San Francisco Stock Exchange, 1873.


	By 1865, Gold Hill and Virginia City were substantial towns, and the Comstock was the nucleus of the territory and then the state of Nevada.


	*Samuel Clemens, writing under the name Mark Twain* for the Virginia City Territorial Enterprise, took bribes from mining promoters in exchange for favorable newspaper writeups.**


	The Comstock lode consisted of many intertwined veins, leading to legal disputes between owners of the different veins.


	Early miners settled their differences over mining claims without benefit of legal counsel.


	Disagreements over mining rights followed the mines underground, and rival companies hired gunmen to fight when mining tunnels intersected.


	Disputes over mining rights were not much better above ground in the Nevada Territorial courts of the 1860s, where (according to persistent rumor), witnesses, judges, and juries were regularly bribed by the litigants.

William Stewart, the most successful lawyer on the Comstock, had a particularly bad reputation. His enemies accused him of corrupting the courts.

Stewart became a U.S. senator from Nevada.

James G. “Slippery Jim” Fair was an able mining superintendent, but he also used insider deals to enrich himself at the expense of the shareholders of the companies he controlled.

Fair became a U.S. senator from Nevada.


	James Flood was another member of the famous Bonanza firm.


	Flood used his Comstock profits to build a mansion on Nob Hill in San Francisco.


	Company insiders learned that they could reap huge profits by sending the ore from the mines to treatment mills owned by themselves.

Each mill had an annex called the “little joker,” which reprocessed the crushed ore. All the gold and silver recovered by the little joker was kept by the milling company.

At left is a photo printed in the Engineering & Mining Journal of the little joker at the Nevada mill.


	As the Bank of California’s agent on the Comstock, William Sharon forced mining companies owing money to the bank to send their ore to mills owned by Sharon and other Bank of California insiders. Sharon became a U.S. senator from Nevada.




	John P. Jones’ Comstock wealth bought his way into the U.S. Senate. From Washington, he continued to profit from insider deals of the Comstock mill ring..


	Close ties between the United States mint at Carson City, Nevada, and the milling companies raised suspicion that mint employees were colluding with the mill owners to hide the amounts of bullion the mills were stealing from the mines. Some called for the shutdown of the mint.


	The famous silver mines are all shut down, but Virginia City is no ghost town. It thrives as a tourist attraction a short drive from Reno.

		5/25/06

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	10/10/2009