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Colonel William C. Greene and the Cananea Copper Bubble

Published online by Cambridge University Press:  24 July 2012

Marvin D. Bernstein
Marvin D. Bernstein
Affiliation:
Washington, D. C.
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Extract

By far the most swashbuckling figure in the history of the Mexican mining industry was “Colonel” William C. Greene. While the Guggenheims built an empire founded on financial acumen and sound metallurgical practice, Greene built an empire founded on prospectuses and sheer bluff. Greene, in his time, controlled the largest copper ore body in all Mexico, yet he drove his company into bankruptcy. The story of his opening of the Cananea copper deposit is fantastic—stranger than fiction.

Type
Research Article
Information
Business History Review , Volume 26 , Issue 4 , December 1952 , pp. 179 - 198
Copyright
Copyright © The President and Fellows of Harvard College 1952

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References

1 The personal biographical material on Greene is based on McClintock, James H., Arizona, 3 vols. (Chicago, 1916), vol. ii, pp. 603–605Google Scholar, and “William C. Greene” in the Dictionary of American Biography, vol. vii, pp. 577–578. The biography of Greene in Joralemon's, Ira B.Romantic Copper (New York, 1934)Google Scholar, Chap. 6, is almost wholly from McClintock. The Dictionary of American Biography gives Greene's birthplace as Chappaqua, Westchester County, New York.

2 McClintock, op. cit., p. 603.

3 Engineering and Mining Journal (hereinafter cited as E. & M. J.), vol. 68, Dec. 30, 1899, p. 801.

4 Rubio, Benjamin, “Las minas Capote 15, Veta Grande y La Colorada de la negociación minera ‘The Cananea Consolidated Copper Company,’ S.A.,” Boletin Minero, vol. xxv, no. 6, June, 1928, p. 362Google Scholar; Emmons, S. F., “The Cananea Mining District of Sonora, Mexico,” Economic Geology, vol. v, no. 4, June, 1910, pp. 315–317Google Scholar; J. R. Southworth, Las minas de México, 1905, pp. 230–231, give the earlier history with some detail. For two contemporary accounts of the geology of Cananea, see Austin, W. L., “Ore Deposits Near Igneous Contacts,” American Institute of Mining and Metallurgical Engineers, Transactions, vol. xxxiii (1902), pp. 1070–1077Google Scholar, and Weed, W. H., Principal Copper Mines of the World (New York, 1907), pp. 232–241.Google Scholar

5 E. & M.J., vol. 67, Apr. 15, 1899, p. 452; Apr. 29, 1899, p. 512; vol. 68, Aug. 26, 1899, p. 256; Chas. F. Shelby, “Growth of the Cananea Copper Smelting Works,” E. & M.J., vol. 86, Nov. 14, 1908, p. 954.

6 McClintock, op cit.; E. & M. J., vol. 69, Feb. 10, 1900, p. 180.

7 E. & M.J., vol. 68, Sept. 2, 1899, p. 290; vol. 71, Mar. 30, 1901, p. 414.

8 New York Daily Tribune, Aug. 6, 1911; Dict. of Amer. Biog., loc. cit.

9 McClintock, op. cit.; E. & M. J., vol. 70, Dec. 22, 1900, p. 741; vol. 71, Jan. 19, 1901, p. 95; Mar. 30, 1901, p. 414; vol. 72, Aug. 3, 1901, p. 150; Aug. 10, 1901, p. 180; Aug. 31, 1901, p. 280; vol. 74, July 12, 1902, p. 63; Dec. 13, 1902, p. 798; vol. 75, June 6, 1903, p. 874.

10 Anon., “La Compañía Minera de la Cananea (Sonora),” Boletin de la Secretaria de Fomento (Mexico), July, 1905; E. & M. J., vol. 74, Aug. 2, 1902, pp. 166, 229; Dec. 6, 1902, pp. 744–745; Dec. 13, 1902, p. 799; vol. 76, Aug. 1, 1903, p. 173; Sept. 5, 1903, p. 364; Martin Schwerin, “Method of Concentrating at La Cananea,” Ibid., Sept. 26, 1903, pp. 463–464; Oct. 7, 1903, p. 600; Oct. 24, 1903, p. 638.

11 E. & M. J., vol. 74, Oct. 25, 1902, pp. 562, 563; Nov. 15, 1902, p. 663; Nov. 29, 1902, p. 726; vol. 75, Mar. 14, 1903, pp. 415–416; Mar. 28, 1903, p. 469; vol. 76, July 25, 1903, p. 140; Aug. 15, 1903, p. 254; Sept. 5, 1903, p. 366; Oct. 24, 1903, p. 638; Dec. 5, 1903, p. 857; James W. Malcolmson, “Mining in Mexico,” Ibid., vol. 77, Jan. 7, 1904, p. 22; Anon., “Greene Consolidated Copper Company,” Ibid., vol. 79, Feb. 2, 1905, p. 250.

12 Southworth, J. R., Las minas de México, 1905, pp. 231–232Google Scholar; Dwight E. Woodbridge, “Ore Dressing at Cananea,” E. & M. J., vol. 77, June 30, 1904, pp. 1044–1045; Ibid., vol. 78, Oct. 20, 1904, p. 617; Dec. 8, 1904, p. 898; Dec. 15, 1904, p. 938; Anon., “Greene Consolidated Copper Co.,” Ibid., vol. 79, Feb. 2, 1905, p. 250.

13 Joralemon, loc. cit.; New York Daily Tribune, Aug. 6, 1911.

14 Woodbridge, Dwight E., “La Cananea Mining Camp,” E. & M. J., vol. 82, Oct. 6, 1906, pp. 623–627Google Scholar; D. E. Woodbridge, “Concentration at Cananea,” Ibid., Nov. 24, 1906, p. 965; Chas. F. Shelby, “Growth of the Cananea Copper Smelting Works,” Ibid., vol. 86, Nov. 14, 1908, p. 954; Mexican Year Book for 1912, p. 160.

15 Southworth, J. R. and Holms, P. G., El directorio oficial minero de México, 1908, pp. 55–59, 193Google Scholar; E. & M. J., vol. 79, Jan. 15, 1905, p. 35; C. Nelson Nelson, “The Sahuaripa District, Sonora, Mexico,” Ibid., vol. 82, Oct. 6, 1906, pp. 629–630; Ibid., vol. 83, June 1, 1907, p. 1043.

16 Joralemon, loc. cit.

17 Southworth, Las minas de México, 1905, p. 235.

18 Rickard, T. A., Interviews with Mining Engineers (San Francisco, 1922), p. 455.Google Scholar

19 Joralemon, loc. cit.

20 Southworth, Las minas de México, 1905, pp. 233–234; Joralemon, loc. cit.

21 Petre, Reginal W., “The Mines of Pinitos and Azul Mountains, Sonora, Mexico,” E. & M.J., vol. 76, Sept. 28, 1903, p. 468.Google Scholar

22 Editorial, “The Riots at Cananea,” E. & M. J., vol. 81, June 9, 1906, p. 1100.Google Scholar

23 Cárdenas, Leon Díaz in Cananea (Biblioteca del Obrero y Campesino, número 11, Mexico, 1937)Google Scholar, gives this phase in detail. The material for this pamphlet was obtained in great part from Ricardo Flores Magon. Although the interpretation is a naive Marxism, the various documents printed are valuable. Also see Clark, Marjorie R., Organized Labor in Mexico (Chapel Hill, 1934), pp. 10–11.Google Scholar

24 Díaz Cárdenas, Cananea, pp. 21–34, 42n.

25 The letter is reprinted — with marginal comments of a “Marxist” nature — in Diaz Cárdenas' Cananea, pp. 37–48. Ira B. Joralemon's account of the strike in Romantic Copper, pp. 160–162, is a rather fanciful and crude attempt to whitewash Greene.

26 Díaz Cardenas, op. cit., pp. 48–53. Turner, John K. in Barbarous Mexico (New York, 1910), pp. 213–219Google Scholar, gives a very competent account of the strike compiled by interviewing eyewitnesses while Turner was a reporter in Mexico. Except for certain numerical details which are impossible to ascertain because of the confusion, Turner's account agrees with that of Díaz Cárdenas.

27 Anon., “The Cananea Troubles,” E. & M. J., vol. 81, June 9, 1906, p. 1104; Turner, he. cit.

28 Díaz Cardenas, op. cit., pp. 56–62; Turner, loc. cit.; Martin, P. G., Mexico of the XXth Century (London, 1907), vol. i, p. 22Google Scholar; Joralemon, loc. cit.

29 Díaz Cárdenas, op. cit., pp. 71–72.

30 Mining and Scientific Press, vol. 93, Sept. 15, 1906, p. 302.

31 E. & M. J., vol. 82, July 7, 1906, p. 39.

32 Turner, op. cit., p. 219.

33 Madero, Francisco I., La sucesión presidencial en 1910, San Pedro, Coahuila, 1908), pp. 206–208.Google Scholar

34 Woodbridge, Dwight E., “Labor Data of a Northern Mexico Mine,” Mexican Mining Journal, July, 1913, pp. 348–349Google Scholar, reprinted from E. & M. J., vol. 96, July 26, 1913, pp. 177 ff.

35 D. E. Woodbridge, “Labor Data …,” loc. cit.

36 Louis D. Ricketts in an interview with T. A. Rickard, Interviews With Mining Engineers, pp. 442–443.

37 E. & M. J., vol. 84, Aug. 17, 1907, p. 324; Louis D. Ricketts, “The Cananea Consolidated Copper Company,” Ibid., vol. 85, Apr. 11, 1908, pp. 754–755. Also see Chas. F. Shelby, “The Cananea Blast Furnace,” Ibid., Apr. 25, 1908, pp. 841–852.

38 E. & M. J., vol. 92, Dec. 2, 1911, p. 1108; L. D. Ricketts, “Cananea Consolidated Copper Co.,” Ibid., vol. 91, June 24, 1911, pp. 1246–1248.

39 Report of Thornton, W. D., “Greene Cananea Consolidated Copper Co., S. A., 1911,” Mexican Mining Journal, July, 1912, p. 46.Google Scholar

40 E. & M. J., vol. 93, Jan. 27, 1912, p. 240; June 15, 1912, p. 1202.

41 Their holdings started with the San Pedro Copper Co., S. A., and the Cananea Development Co., S. A. The Cananea Development Co. was owned by the Cananea-Duluth Copper Co., an Arizona corporation.

42 Cananea Central took over all the stock of the San Pedro Copper Co. and 268,180 shares of the 269,236 outstanding shares of Cananea-Duluth.

43 2,500,000 shares with a par value of $20 were to be issued. 1,500,000 shares were to be exchanged for Greene Consolidated on the basis of 1.5 shares of the new company for each share of the old. The remaining million shares were to be exchanged at one for one for Cananea Central stock. An additional bonus of $4,000,000 was paid to Greene Consolidated for 200,000 shares of Cananea Central in its treasury. The 200,000 shares had been paid over when Cananea Central was formed in return for a large tract of mineral land transferred to it from Greene's holding. None of the stock of the new Greene-Cananea company was offered to the public.

An examination of the terms discloses that Cananea Central was merely a motley collection of mediocre mines that was being “sold” to Greene-Cananea for two fifths of the value of one of the world's great copper mines, with the combination capitalized at a fantastic watered figure. The Cole-Ryan holdings in both companies assured their control of the combination. The $4,000,000 paid for the Cananea Central stock was necessary to put the new company on its feet. Of the $4,000,000, $3,990,549 was marked up as profit, an indication of the value of the land advanced to Cananea Central to give it some property before the merger. Of the profit, $1,990,549 was put into the profit and loss account for the previous year and the $2,000,000 remaining was retained as income along with $1,350,000 from the sale of 76,500 shares of the Sierra Madre Lumber Co.

44 In 1915, 30,800 shares of Greene-Cananea stock were turned over to the Anaconda Copper Mining Company by the Amalgamated Copper Company. Anaconda pursued a policy of buying Greene-Cananea stock on the open market. How many of the outstanding shares were held by Anaconda in July, 1929, is unknown, but an exchange was made of Anaconda stock for the remaining outstanding Greene-Cananea stock, making Greene-Cananea a wholly owned subsidiary. On December 31, 1928, the Greene-Cananea Copper Company was valued at $56,-265,665. In 1931, Anaconda acquired the Democrata Mining Company, owned by H. H. Hoffman of Cincinnati, Ohio, which was completely surrounded by Cananea properties. J. R. Southworth and P. G. Holms, El directorio oficial minero de México, 1908, pp. 181, 188–189; Mexican Year Book for 1911, pp. 213, 216; Mexican Year Book for 1912, p. 157; Second Annual Report of the Directors of Cananea Central Copper Corporation for the Year Ending December 31, 1908 (Duluth, Minnesota, Mar. 6, 1909); E. & M. J., vol. 82, Aug. 25, 1906, pp. 365, 368; Sept. 15, 1906, p. 522; Sept. 22, 1906, p. 567; Dec. 22, 1906, p. 1183; vol. 83, Jan. 5, 1907, pp. 6, 43; Feb. 23, 1907, p. 405; vol. 85, May 9, 1908, p. 947; vol. 90, July 9, 1910, p. 73; vol. 96, Sept. 27, 1913, p. 597; vol. 103, June 23, 1917, p. 1101; vol. 115, Mar. 21, 1923, p. 738; vol. 124, Dec. 17, 1927, p. 997; vol. 128, July 6, 1929, p. 34; vol. 132, July 13, 1931, p. 38; Report of the Federal Trade Commission on the Copper Industry (Washington, 1947), Part II, pp. 358–360; Ira Joralemon, Romantic Copper, p. 163.

45 E. & M. J., vol. 90, July 30, 1910, p. 212; Aug. 6, 1910, p. 286.

46 E. & M. J., vol. 84, Nov. 2, 1907, pp. 836, 842; vol. 85, Feb. 15, 1908, p. 385; Mar. 21, 1908, p. 627; May 9, 1908, p. 947; vol. 86, July 25, 1908, p. 188; Aug. 1, 1908, p. 243.

47 New York Daily Tribune, Aug. 6, 1911, p. 7; New York Times, Aug. 6, 1911, p. 9; Mexican Mining Journal, Sept., 1911, p. 35; E. & M. J., 92, Aug. 19, 1911.