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The Montana Company, Limited: Case Study of an Anglo-American Mining Investment
Published online by Cambridge University Press: 24 July 2012
Abstract
The mineral riches of the West were exploited in distinct stages. Before a settled industry could emerge, highly speculative development companies bought out the discoverers, skimmed the cream, and braved the hazards of nature and management. Some, like the Montana Company, flourished for a time, but litigation, depletion, absentee ownership, and high costs made long-term existence almost impossible.
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- Copyright © The President and Fellows of Harvard College 1959
References
1 These figures have been compiled from a survey of records in the Companies Registration Office, Board of Trade, Bush House, London, and the Queen's Remembrancer, Parliament Square, Edinburgh.
2 Of “sturdy Irish stock,” Cruse had migrated to the United States in 1856 at the age of twenty. In 1863 he went to California, prospecting there and in Nevada and Idaho for several years before settling in Montana. In 1887 Cruse founded the Thomas Cruse Savings Bank of Helena, but continued his mining work also. See Progressive Men of the State of Montana (Chicago, n.d.), p. 40.
3 Quoted in Leeson, Michael A. (ed.), History of Montana (Chicago, 1885), p. 753Google Scholar; Report of the Director of the Mint upon the Statistics of the Production of the Precious Metals in the United States (1882), pp. 241–242.
4 Financial & Mining News (London), May 9, 1884.
5 Memorandum of Agreement (Jan. 15, 1883) between the Joint Stock Association, Ltd. and the Montana Company, Ltd.; Memorandum of Agreement (Dec. 28, 1882) between the Joint Stock Association, Ltd. and Matheson and Company; Memorandum of Agreement (Nov. 11, 1882) between Thomas Cruse and the London Mercantile Association, Ltd.; Memorandum of Agreement (Jan. 15, 1883) between the London Mercantile Association, Ltd. and the Joint Stock Association, Ltd. See Montana Company, Ltd., Prospectus (Jan., 1883)Google Scholar, located in the Stock Exchange Archives, London, and Memorandum and Articles of Association, pp. 3, 33–36, Montana Company, Ltd., File No. 17787, Companies Registration Office, Board of Trade, London. The latter is cited hereafter as C.R.O. 17787.
6 Pixley was Justice of the Peace for Middlesex, a member of the Court of the Goldsmith Company, and partner in the brokerage house of Pixley and Abell. London Times, March 14, 1899. For some idea of the scope of Darlington's mining investment activities see Skinner, Walter R. (ed.), The Mining Manuel for 1894 (London, 1894), p. 621.Google Scholar
7 Montana Company, Ltd., Prospectus (Jan., 1883).Google Scholar
8 The term “guinea pig” was used because often directors selected for the importance of their names received one guinea for every board meeting attended. For contemporary comments on the abuse of this practice see Engineering and Mining Journal (New York), June 18, 1881; Liang-Meason, Malcolm Ronald, Sir William's Speculations or, the Seamy Side of Finance (London, 1886).Google Scholar
9 See Debrett's Peerage (London, 1936 ed.), p. 200; Dictionary of National Biography, 2d Supplement, Vol. III, p. 434. Other directors included J. R. Armitage, Wilmot Holland, and Thomas Pyke – all with London business connections.
10 Qualification for holding a directorship was the ownership of £1,000 worth of shares. Memorandum and Articles of Association, pp. 18–19, Montana Company, Ltd., C.R.O. 17787.
11 Matheson & Co. was originally to receive a commission of 2 per cent for handling bullion and 2½ per cent on goods and equipment supplied. A later modification scaled down these percentages and ultimately the agreement was cancelled. Ibid., p. 33; Montana Company, Ltd., Prospectus (Jan., 1883); Financial & Mining News, May 9, 1884. In the 1890's at least, Matheson & Co. also purchased mines and organized mining companies to operate them. See copy of undated agreement (sometime in 1899) for purchase of the Oregon Butte Placer Mines, Fremont County, Wyoming, in James D. Hague MSS, Box 18, Huntington Library.
12 Attwood had commenced his professional career with his British-trained father, Melville, at the age of sixteen in California and Nevada. At eighteen he was assayer, metallurgist, and chemist for the Ophir Company on the Comstock Lode. Who's Who in Mining and Metallurgy (London, 1908), p. 3.
13 Profit for 1883 was £1,080. Montana Company, Ltd., Directors' Report, Jan., 1883, to Dec. 31, 1883; Directors' Report, Feb. 22, 1884. Unless otherwise noted, all circulars and company reports are located in the Stock Exchange Archives, Share and Loan Department, London.
14 Report of the Director of the Mint upon the Statistics of the Production of the Precious Metals in the United States (1884), p. 309.
15 Montana Company, Ltd., Directors' Report, Feb. 22, 1884.
16 Montana Company, Ltd. Report of Proceedings at the Extraordinary General Meeting of Shareholders held at the Cannon Street Hotel, on Tuesday, the 6th May, 1884, pp. 5–6.
17 The proposed plan was to offer shares of the new concern pro rata to shareholders of the Montana Company in order to raise a capital of £60,000, one half of which would go to the vendor, who was represented as being willing to invest £10,000 in shares of the new firm. Montana Company, Ltd., Circular to Shareholders, Feb. 22, 1884.
18 Special Resolution, passed May 6; confirmed May 20, 1884, Montana Company, Ltd., C.R.O. 17787.
19 Montana Company, Ltd., Report of Proceedings at the Extraordinary General Meeting of Shareholders held at the Cannon Street Hotel, on Tuesday, the 6th May 1884, p. 13.
20 McCarthy, E. T., Incidents in the Life of a Mining Engineer (London, n.d.), pp. 158–159.Google Scholar
21 For a brief biography of Smith see Dictionary of American Biography, Vol. XVII, pp. 273–274.
22 Montana Company, Ltd., Report of Messrs. N. Story-Maskelyne and J. R. Armitage to the Board of Directors (Nov. 12, 1884), p. 9.
23 Ibid., pp. 8–9.
24 Ibid., pp. 9–10, 40–41.
25 Montana Company, Ltd., Report of the Proceedings at a Special General Meeting of Shareholders held at the City Terminus Hotel, Cannon Street, London, E.C., Wednesday, 19th November, 1884, pp. 5–6.
26 Ibid., p. 5.
27 Ibid., pp. 31, 38; Engineering and Mining Journal, Dec. 6, 1884.
28 Wolle, Muriel Sibell, The Bonanza Trail (Bloomington, 1953), p. 197.Google Scholar
29 The actual debt was £58,000. The company was authorized to issue up to £60,000 in debentures of £20 denominations, bearing 8 per cent interest and redeemable within three years. Montana Company, Ltd., Annual Report, year ending Dec. 31, 1884; Circular to Shareholders, Jan. 29, 1885.
30 Brereton had been employed in 1854–1855 to help construct the steamship Great Eastern, but left before the completion of the vessel for India, where he spent the next fifteen years of his life. In the spring of 1871 he toured the United States, then worked for five years on various projects in the West, including irrigation development in California and as manager of the Richmond Consolidated Mining Company, Ltd., a British concern operating in Nevada. Returning to his native County of Norfolk, he acted as surveyor of roads and bridges until persuaded to take charge of the Drumlummon. See Brereton, Robert Maitland, Reminiscences of an Old English Civil Engineer (Portland, Oregon, 1908), pp. 1–33.Google Scholar
31 Brereton to James D. Hague, May 19, 1885, Hague MSS, Box 11.
32 Brereton, To the Shareholders of the Montana Company, Limited, Jan. 1, 1886, p. 1 [printed circular], Hague MSS, Box 11.
33 Brereton to Hague, Jan. 9, 1886, Hague MSS, Box 11.
34 Brereton accused Bratnober and Bayliss of falsifying production records, insisting that their books actually showed a yield of 104 per cent of gold for one set of millings. Ibid.; Brereton, To the Shareholders of the Montana Company, Limited, Jan. 1, 1886, pp. 1–4. Brereton spent 1886–1889 as commissioner of the Duke of Sutherland in Scotland, then returned to North America to engage in engineering and managerial work in West Coast mines. Brereton, Reminiscences of an Old English Civil Engineer, pp. 35–39.
35 Montana Company, Ltd., report of semiannual general meeting of March 31, 1891, held at Winchester House, Old Broad Street, London Times, April 1, 1891.
36 Montana Company, Ltd., Annual Report, year ending Dec. 31, 1884; Semi-Annual Report, half year ending Dec. 31, 1885; Semi-Annual Report, half year ending Dec. 31, 1886. It should be noted that official Reports frequently contained information regarding developments several months after the period they were supposed to cover. Thus the one for the six months ending Dec. 31, 1886, actually contained news of events as late as April 15, 1887.
37 Montana Company, Ltd., Semi-Annual Report, half year ending June 30, 1888.
38 Report of the Committee on Mines and Mining Interests of Aliens in the Territories, Senate Report No. 2690, 50th Cong., 2d Sess. (1888–1889), p. 16; Union Pacific Railroad Company, The Resources of Montana (St. Louis, 3d ed., 1891), pp. 56–57.Google Scholar
39 Montana Company, Ltd., Semi-Annual Report, half year ending June 30, 1892.
40 Montana Company, Ltd., Semi-Annual Report, half year ending Dec. 31, 1889; St. Louis Mining and Milling Company & Montana Company, Ltd., 9 Montana Reports (1890), p. 308.
41 Montana Company, Ltd., Semi-Annual Report, half year ending Dec. 31, 1889; Semi-Annual Report, half year ending Dec. 31, 1890.
42 Details of this reorganization, which cost a total of £2,033 18s. 8d. can be found in Montana Company, Ltd., Circular to Shareholders, Nov. 18, 1892; Special Resolution; passed Nov. 25; confirmed Dec. 14, 1892, Montana Company, Ltd., C.R.O. 17787; Skinner, Mining Manual for 1894, p. 228; Memorandum of Agreement (Dec. 16, 1892), between the Montana Company, Ltd. (F. W. Pixley, liquidator) and the Montana Mining Company, Ltd.; Summary of Capital and Shares to June 21, 1894, Montana Mining Company, Ltd., C.R.O 37766; Montana Mining Company, Ltd., Directors' Report, six-and-one-half months ending June 30, 1893.
43 Montana Mining Company, Ltd., Circular to Shareholders, May 26, 1893; Semi-Annual Report, half year ending June 30, 1895; St. Louis Mining and Milling Company & Montana Mining Company, Ltd., 58 Federal Reporter (1893), pp. 129–132.
44 The Dickens Custer Mines, Ltd., for example, disposed of its Idaho workings at what the directors estimated to be a loss of £365,336 and acquired property in Australia; La Plata Mines, Ltd. leased its Colorado holdings to its former manager and purchased interests in Mozambique; the Jay Hawk and Lone Pine Consolidated Mining Company, Ltd. suspended operations in Montana and ultimately migrated to New Zealand. Dickens Custer Mines, Ltd., Directors' Report, April 1, 1893, to Dec. 31, 1895; La Plata Mines, Ltd., Directors' Report, Oct. 27, 1892, to March 31, 1894; Jay Hawk and Lone Pine Consolidated Mining Company, Ltd., Circular to Shareholders, Aug. 25, 1896. The Montana Mining Company, Ltd. purchased £1,009 18s. 2d. of Bank of New Zealand bonds in 1894 and £11,415 worth of United States government bonds three years later. Montana Mining Company, Ltd., Semi-Annual Report, half year ending Dec. 31, 1894; Semi-Annual Report, half year ending June 30, 1897.
45 Report of the Director of the Mint upon the Statistics of the Production of the Precious Metals in the United States (1897), p. 154.
46 Born in Scotland, Burrell had come to Chicago when a small boy and had literally grown up in the Illinois coal mines. He came to the Drumlummon in 1888 to take charge of supplies. Miller, Joaquin, An Illustrated History of the State of Montana (Chicago, 1894), Vol. I, p. 398.Google Scholar
47 Montana Mining Company, Ltd., report of the Thirteenth Ordinary General Meeting of April 25, 1899, London Times, April 26, 1899; Semi-Amraal Report, half year ending June 30, 1899; Semi-Annual Report, half year ending Dec. 31, 1903.
48 Montana Mining Company, Ltd., Report of the Twenty-second Ordinary General Meeting of Nov. 19, 1903, reprinted from the London Mining World, Nov. 21, 1903. “We have really sunk enough money on such wild goose chase enterprises to pay for the sinking of the shaft over 500 feet,” said one disgruntled investor, referring to the company's search for new property. Report of the Twenty-fourth Ordinary General Meeting of June 29, 1905, reprinted from the Mining World, July 1, 1905.
49 Montana Mining Company, Ltd., Directors' Report, Jan. 1, 1910, to July 31, 1912.
50 For this series, which involved the application of the controversial “apex rule,” see 20 Montana Reports (1897), p. 406; 23 Montana Reports (1899), pp. 312–318; 104 Federal Reporter (1900), pp. 665–669; 113 Federal Reporter (1902), p. 903; 148 Federal Reporter (1906), p. 450; Montana Mining Company, Ltd., Annual Report, year ending Dec. 31, 1906.
51 Montana Mining Company, Ltd., Annual Report, year ending Dec. 31, 1906; Annual Report, year ending Dec. 31, 1908; Directors' Report, Jan. 1, 1910, to July 31, 1912.
52 Montana Mining Company, Ltd., Report of the 30th Ordinary General Meeting of Oct. 4, 1911, at Exchange Chambers, St. Mary Axe, reprinted from the Mining World, Oct. 7, 1911.
53 Montana Mining Company, Ltd., Directors' Report, Aug. 1, 1912, to Sept. 30, 1913.
54 Montana Mining Company, Ltd., Report of the Extraordinary General Meeting at Merchants' Hall, March 18, 1913, reprinted from the Mining World, March 22, 1913.
55 Ibid.
56 Montana Mining Company, Ltd., Circular to Shareholders, May 25, 1914.
57 Special Resolution: passed June 5; confirmed June 24, 1914; Extraordinary Resolution: passed February 24, 1916, both in Montana Mining Company, Ltd. C.R.O. 37766.
58 Summary of Capital and Shares to March 14, 1884, Montana Company, Ltd., C.R.O. 17787; Summary of Capital and Shares to June 21, 1894, Montana Mining Company, Ltd., C.R.O. 37766.
59 Montana Mining Company, Ltd., Report of the Extraordinary General Meeting at Merchants' Hall, March 18, 1913, reprinted from the Mining World, March 22, 1913.
60 Report of the Committee on Mines and Mining Interests of Aliens in the Territories, Senate Report No. 2690, 50th Cong., 2d Sess. (1888–1889), p. 16. One blatant example of an attempt to capitalize on the Montana Company's early reputation was the organization of the short-lived Anglo-Montana Mining Company, Ltd. of 1886. See Anglo-Montana Mining Company, Ltd., Prospectus (July, 1886).
61 See Old Guard Mining Company, Ltd., Prospectus (May 14, 1887).