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An Overview of Mining in the California Desert

Silver as King

The significant output of silver during this time was influenced by events that were transpiring far away in Washington D.C. Silver was a relatively scarce commodity prior to the discovery of bonanza ore in the Comstock mines in the early 1870s. On the open market, it was worth $1.02 an ounce. However, prior to passage of the Coinage Act in 1873, the U.S. Mint would only pay one dollar to purchase an ounce of silver. With the passage of this Act, the United States demonetized silver, and silver dollars were no longer were produced (although the half dollar, quarter and dime continued to be minted). In addition, U.S. bonds had to be redeemed only in gold as silver was no longer a monetary metal. During the mid-1870s the market became flooded with newly mined western silver. Also, France and Germany had adopted the gold standard, dumping millions dollars worth of silver on the market. As a result, its price had dropped to ninety cents an ounce by 1878. Mining interests clamored for repeal of the Coinage Act that they labeled as the “crime of 1873.”

In 1878 the Bland-Allison Act, passed to reverse the effect of the Coinage Act of 1873, mandated purchase of between $2 million and $4 million worth of silver each month from the western mines. The Bland-Allison Act of 1878 was repealed by the passage of the Sherman Silver Purchase Act of 1890. The 1890 act required the U.S. government to purchase nearly twice as much silver as before, and pay for it with legal tender, treasury notes redeemable in gold. The silver was to be purchased at market rates. After the financial panic of 1893, President Cleveland called a special session of Congress and secured, in 1893, the repeal of the act.

The Bland-Allison Act and the Sherman Silver Purchase Act provided stable silver prices at a time when market forces would have otherwise depressed silver prices due to over-supply. As a result silver was king in the California desert from 1878 until 1893. The repeal of the Sherman Act in 1893 sounded the death knell to silver mining. One victim was the New York Mine, also known as the Sagamore, located in the East Mojave. Issac Blake, the mine’s principal promoter, had invested much time, energy and money in the construction of the Nevada Southern Railroad to primarily serve this mine. The railroad, constructed north from Goffs, reached Manvel by July 1893. However his entire empire collapsed at nearly the same time.

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