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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1878 was repealed by the passage of the Sherman Silver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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