125 Years of Persistence and Perspective |
University of idaho |
By Bart Ward
In 1907, a year most closely associated with a nationwide banking panic, James F. McCarthy was one of a handful of men who ran the mining district known as the Coeur d’ Alene in the Silver Valley of Northwest Idaho. McCarthy was in charge of the daily operations of the Hecla Mining Company, a little-known lead mining company. The Panic of 1907 nearly wiped out the company, as did the Great Crash of 1929. Yet it survived long enough to face more financial turmoil in 2008 – 2009, with President / CEO Phil Baker steering the company through the Great Recession. For Hecla, endurance through those tough times eventually led it to become one of the longest-surviving precious metals mining companies in the United States, and the lone survivor of the pioneer mining companies formed in the Coeur d’ Alene District before 1900.
Hecla got its start when James Toner staked a claim on May 5, 1885 on the banks of Canyon Creek near what would become known as the town of Burke, Idaho. Toner did nothing with the claim, and it passed through a few hands until Patsy Clark ended up with 100 % of the mine on July 11, 1891. Clark, who had settled in Spokane, had a history of mining in the Comstock mines of Virginia City, and he built a mansion in Spokane that still stands today. The company was capitalized at $ 500,000 in Idaho on October 14, 1891 by Clark and co-founders John Finch and Amasa Campbell.
The early years of Hecla were punctuated by union scraps, which included beatings and murders. As a result, twice in its history— in July 1892 and May 1899— the area came under martial law. The unrest resulted in the severing of eastern money and the relocation of mine owners to Spokane. Once these men moved out of the Coeur d’ Alene, many of them, including Finch and Campbell, invested in other mining and non-mining companies.
Under the leadership of McCarthy, who
Hecla’ s timber-framed surface buildings at Burke, Idaho, before they were destroyed by fire in 1923.
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had taken over Hecla’ s daily operations in 1903, the company’ s stock had more than doubled. That year, Hecla had a net income of $ 153,263 and paid $ 60,000 in dividends; they also bought the Milwaukee mill in the town of Gem for $ 50,000. The next year, the company netted $ 244,779, and dividends more than doubled. In 1907, Hecla paid $ 520,000 in dividends.
The Panic of 1907 began with the failure of the Knickerbocker Trust Company in New York City. According to Robert F. Bruner and Sean D. Carr in their book, The Panic of 1907: Lessons Learned from the Market’ s Perfect Storm:
Lines in front of banks in New York and elsewhere extended for blocks … In the coming days, money would become scarce, banks would fail and the stock market would plummet … In short, the volatile and falling asset prices in the first three quarters of’ 07 manifested deeper problems in the American economy— the dark clouds of the perfect storm were gathering on the near horizon.
This included the collapse of lead prices, Hecla’ s main source of revenue. The company closed its doors on January 1, 1908, and remained shut for five months. Its income would not return to its 1907 level for another eight years. On September 5, 1908, Hecla’ s president and largest shareholder, James Smith, died. He left his shares to his new wife, Sarah, who was an unknown entity to the company’ s management. She had her ups and downs with Hecla’ s board until she was replaced in 1922.
Over the next 15 years, Hecla— which started out using steam power and mule teams— was moving to electric power and mechanized equipment. This completely changed the district, which saw increased production and enhanced safety. In addition, the company was listed on the New York Curb Exchange, predecessor of the American Stock Exchange, on September 23, 1915.
In mid-1917, Hecla begin using Hill & Sullivan as its smelter in the nearby town of Kellogg, which reduced it shipping costs. Lead production was in full swing,
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