Thursday, June 20, 2013

Number 177 "Flint Chips: Tales of the Flint Creek Valley" by Dan Meschter

Several readers have asked me: "Are you going to tell about Miss Kate? How old really was she?" Yes, of course I am going to tell the story of Kate Smith and her age - a secret that kept Philipsburg gossips busy for years.

To make a long story out of it, the tale of Kate Smith is rooted in the exciting events surrounding the San Francisco mine just above Tower.

The San Francisco was one of those first claims located in Philipsburg in August 1866 by Jim Estill and some others whose names don't mean much anymore. After relocation as the E. D. Holland the Little Tom, the owner in 1883 was Eli Holland with minor interests held by John Ulery, James Patton and Tom Hynes.

It was not well thought of for many years because the vein was in the granite instead of the lime which the miners in the Hope and Trout were familiar. The deepest of three shafts was only down 60 feet and an adit was in barely more than a hundred feet.

Not much was thought of it, that is, until Charley McLure opened the Granite Mountain mine and put the lot of test ore through the Algonquin mill in June 1883 that yielded such rich returns. All of the veins in the granite began to attract attention after that:
        "Since the first discovery of the camp, no strike has given more general satisfaction than that 
         which has been lately made in the San Francisco. It is in the granite and, with the exception of  
         the Granite Mountain mine, is pronounced by experts to be the finest property in the region.
         The vein is five feet wide and carries ore, some of which runs up into the hundreds." New Northwest, June 8, 1883.

Rumors began flying even before the results of milling the granite ore became known:
          "At Philipsburg, the San Francisco mine was being bonded to a Butte Company for $40,000   
           and $5000 paid down, and a large force of men was to be put on to develop the mine" Id.  June 22, 1883.

Holland denied this story, but it died hard. Its real significance was how it paralleled the sale arrangement in the case of the Granite Mountain mine, by the taking of an option to buy for a preset price with regular payments while development was being carried on.

Holland and his partners only drove the adit ahead 400 feet during the next year and seemed neither eager to sell nor encouraged to do much more work for the time being. In the meantime, the methods of financing mining ventures were changing again.

In Philipsburg's earlier days, the old St. Louis and Montana Mining Company and the Northwestern Company, for two examples, were chartered as corporations; but their promoters were both capitalists and investors. They bought the mining property outright. Their stock was closely held and traded only among themselves if at all.

The method used for the Granite Mountain was similar to start with. The investors formed a syndicate to put up the initial capital to option or "bond" the property and pay for enough development to prove its worth before making a final commitment to buy. The syndicate then was converted to a stock corporation with the stock distributed among the owners being available for trade on the St. Louis stock exchange.

A variation of this method developed around 1880 was to 'incorporate' the property, quite often no more than a single claim. The promoters would organize a corporation first and then offer stock to the public to raise money to buy the claim and pay for development. From the promoters view the ideal was to put up as little money of their own as possible and get the seller to take as much stock instead of cash as they could persuade him to accept.

Philipsburg hadn't forgotten Cole and Phil Saunders from the days of '67 and they hadn't forgotten Philipsburg, either; only they were promoters now. Phil organized the San Francisco Consolidated Mining Company in October 1886 and took a bond from Holland in February 1887. The details were described when the Company completed the deal in September 1887:
       "Mr. Eli D. Holland has realized a nice little sum from the San Francisco lead on which he has been working for the past two or three years. The lode was taken by a party of St. Louis capitalists as a basis for the San Francisco Consolidated Mining Company with a capital of 500.000 shares at par value of $10 each. Mr. Holland got $20,000 cash and 10,000 shares of stock which already are quoted at $1.75 to $2.00 in St. Louis." Id. September 23, 1887.

Reprinted  with permission from Catherine J. Meschter daughter of Dan Meschter.

This newspaper column published in the Philipsburg Mail,, June 8, 1989 was to be continued the next week. Unfortunately this was the final "Flint Chips." "The rest of Miss Kate" will be published in this blog in a few days.

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