The Mormons and Sterling Nevada

In the early 1890’s, Utah fell into a grave depression for funds after a decade-long attack by the Federal Government. After the confiscation and misuse of church property, the elders were in need of some profitable enterprises to recoup the lose of funds from the church. One of the financial undertakings was to purchase some mining claims in the Nye County Nevada region to the west. The facts that the Mormons did not have the experience to process gold ores and the lawless location of the claim caused some miss led aspirations among Mormons.

The first steps of this movement to increase funds were to provide work for unemployed Mormons and to tap some of the region resources. They were assuming they could sell stocks in the mining ventures for help in the processing. The first contacts made were G. A. Purbeck and company of Rhode Island who along with the Mormons organized the Utah Company to promote their enterprises. This partnership included the railroad from Utah south to California, a salt company, a Great Salt Lake resort, a coalmine and a hydroelectric power plant. These were the foundations leading to a Mormon financial empire in later days.

The Sterling Mine discovery was made in 1869, that being silver, and by the early 1890’s a small mill was processing gold ore. The water needed for the mill was piped in from Big Timber springs some two miles south of Sterling.  However, due to the shallow nature of ore the mining activity fell off and was soon abandoned. Some of the other mines in the area discovered around 1890 were the Chispa (later called the Congress) and the Johnnie mine. These two mines by the spring of 1891 had spurred a small but rough camp of about a hundred souls. However, neither was actively being worked by 1893. It was at this time that the Mormon surveyors became interested in the claims.

After the railroad survey was completed, Smith and Langford returned to Salt Lake. Langford acquired an interview with the elders of the church and displayed their great confidence that the Sterling Mine property would produce a clear $10,000 a month. The result of the meeting led to the organization of the Sterling Mining and Milling Company, incorporated in Utah with capital stocks of one million dollars. Smith was made president and Langford, vice-president, with each of the elders having a son on the board of directors.

Money for the purchase came first from Smith and Langford in the sum of $14,500, and the investors followed with $85,000 of which the church furnished more than half. The hope was that much of the profits would go to pay the churches mounting debt.

At the time the Sterling firm was incorporated, it had already acquired many other properties in the Sterling and Montgomery mining districts. Some of the other mines were the Boss, Bay Dick, Mollie Vaughn, Blaze, Lube and Magpie as well as two thirds of the Grey Eagle. Late in 1894, Orson Smith informed the elders of additional funds needed to finish two ten-stamp mills being erected at the mines. He assured them that upon completion they would see some profits. The following spring the Sterling mine produced two gold bars worth $3,600 each and were sent to the company’s bank creditors.

On April 9, 1895, the Sterling Mining and Milling Company purchased the Chispa and Johnnie mines and several other claims and mills. Then later in the month a report from the Sterling mine mentioned they had produced $4,000 in gold in a total of eight days. In addition, in May, Orson Smith again reported that they had taken out 12,000 tons of ore with an average of $20 per ton. This led the elders to anticipate they would see a gross profit of $240,000 from the now large stockpile. By mid-summer they received another small gold brick only to be followed in September by a large $8,000 bar from the Johnnie.

George Montgomery discovered the Johnnie in 1891. He was to name the rich strike the Chispa, meaning nugget in Spanish. The boom hit and the mining excitement was strong, but only for a year and then all activity came to a halt in 1892. It was said that the extravagant mismanagement of Montgomery put a great burden on his backers, for which financial support came to a halt as well. One of the early partners, William Dechant sold out through a Utah mining broker named Samuel Godbe. The Sterling Company was then able to buy into the Johnnie for $50,000 in 1895.[ii]

Coincidently about the same time Sterling Company bought into the Johnnie mine, Bob Black (Piaute Bob) had discovered the confidence mine over in California. A cousin named Mary Scott led him to it. Soon after Frank Cole and James Ashdown purchased the major interest in the mine. Bob Black was promised $4,000 in return for leading them to the discovery. Then the remaining interest was picked up by one of the Montgomery boys. Historians differ on weather George or his brother Bob (E. A.) bought interest in the mine, but it was a Montgomery who persuaded the Sterling Company to buy out Cole and Ashdown.[iii]

Jeremiah Langford was convinced by this time that the California mines, including the Mendocino mine should be added to the holdings of the Sterling Company. So they bought into the Confidence for a price somewhere between $24,000 and $81,000, reports vary on the actual price.

However, things seem to go fine until the late summer when trouble arose over the possession of the Chispa mine. There had seemed to be two owners. The operators, Smith and Langford may have not kept up the development work to hold their claim or the prior supervisor McArthur may have filed his own claim. Either way McArthur had hire Phil Foote, Billy Moyer, George Morris and none other than Jack Longstreet, who the Mormon newspapers referred to as “Check Longstreet, a half-breed”, to take back control of the mine. Now to make a long story short, the gang was able to jump the miners and run them off after a gun battle occurred. Phil Foote was the only death to come out of the fight and no one was sure who fired the shot that killed him. Longstreet turned him self in later to the Nye county sheriff and received the heaviest fine ($3,000) for his part in the fight. The out come was that the Sterling Company held on to the claims for at least a while longer.

Now the Mormons had trouble of another kind. The mines did not produce as they were expected. Unhappy with the results the church leaders recognized that changes were need in the management of the Company. Early in 1896, Abraham H. Cannon was made Manager of the Sterling Mining Company. Then soon to follow Joseph Smith was appointed president and Thomas Gillespie, a non-Mormon resident was made superintendent of the Nevada operations. These management changes did very little towards improving the profits from the Company. Early the next year Gillespie proposed that they lease the mining property on a percentage basis, which ended up giving him more control over the mines.

The major problem was that the gold ore was proving refractory to the Mormon refining process. It seemed that the prospects were never again as promising. The biggest reason was the precarious state of the church finances. As if the refining problem followed by the McArthur attempt to take control by force was not bad enough, Gillespie was murdered a month later.

For Bob Black’s knowledge that he shared, leading to the discovery of the Confidence Mine, he was promised $4,000. He was going to use the money to buy Longstreets Ranch in Ash Meadows. Originally, George Montgomery owed Black for the location of the mine, what he did was let Black draw supplies from the company store at Johnnie. When Gillespie showed up with his desire for power and a need to cut cost, he stopped Black’s store privileges. No one witnessed the shooting, but all fingers were pointing at Bob Black. Soon after this Black went on a drunken stooper and killed others and then skipped town. Years later he would end up staying with his brother-in-law Longstreet at Jacks northern ranch. Jack Longstreet would be the one to finally kill Black in an argument at the ranch.

With the problems of refining and then the murder of Gillespie, the church leaders looked upon the great mining venture as a disappointment. One problem after another and all costing them more in the end. They had to borrow repeatedly to make payments on the mining property. Finally on December 2, 1898, the new Mormon president, Lorenzo Snow had a meeting with Hugh J. and George M. Cannon. The purpose of the meeting was to enlighten Snow on affairs of the Sterling Mine. The record of the meeting so stated “ they were doomed to disappointment, however, for the mine proved to be a failure.

Attorney John Cannon was employed for the purpose of winding up its affairs and borrow the funds needed to pay the debt on the now defunct investment. In 1887, George Cannon was placed in custody of his uncle John Taylor’s stock in the Bullion Beck mine of Eureka. George relinquished his stock over to Snow in 1898 for the express purpose of “ Liquidating the obligation assured by the church in connection with the Sterling Property.[iv]