Great Gold Reserves Controversy at Cripple Creek
As appearing in The Gold Nugget, April 2007
Dan Plazak
Transcribed by Paul Nagy

After several local mining scams, including the infamous Mt. Pisgah hoax, disgusted investors, promoters and prospectors alike kept away from the Pike's Peak area for years. Finally in the 1890's ranch hand and casual prospector "Crazy Bob" Womack discovered gold in the Cripple Creek area. A somewhat tragic albeit history-changing character, Womack died years later both poor and drunk. But his discovery ignited local interest including that of carpenter Winfield Scott Stratton, who had the discipline and acumen to develop his own discovery into the Independence Mine, and into a great mining fortune. Known as an eccentric (again, in this case, the distinction between "eccentric" and "crazy" appears to be financial), Stratton rose to become, among other successes, President of the Board of Trustees of the Colorado School of Mines.

Being of a financially prudent nature, Stratton chose to not fully develop the Independence Mine, believing that the safest place for gold was in the ground. Others close to Stratton, including promoter Verner Reed and State Geologist Thomas Rickard, recognized the undeveloped potential of the mine and endeavored to convince him to sell out. At this time the position of State Geologist was honorary and unpaid. Also during these "gentlemanly" Victorian times, the term "conflict of interest" was presumably not in vogue! In any event Stratton was persuaded to sell out to a British group for ten million dollars, with Reed and Rickard benefitting from the deal.

Basically generous, Stratton spent much of the rest of his life in philanthropic pursuits, finally leaving his fortune to an aged citizens home named after his own father. After his death many women claimed to be secretly married to him. Some things, it seems, do not much change with the times. To verify the value of their acquisition, the British company sent samplers into the mine, supervised by Thomas Rickard himself. To everyone's horror, the samples returned results far below expectations. The share price plunged. Accusations abounded. All parties, of course, denied culpability. The very blunt opinions and quotations used in the mining press of the time are both startling and entertaining, although hardly "gentlemanly." Obviously slander and character defamation did not carry the legal threat which they do today! Mercifully, dueling was long illegal.

In the end, it was discovered that the geologists and engineers employed by Rickard had taken their samples from across the entire width of the stopes (ore extraction areas), as they indeed were instructed to do. However, the reality was that there were extreme changes in value across each stope. Subtle changes in the appearance of the rock reflected gross changes in value. This was not recognized by Rickard or his professionals but was well known to the miners who daily had there "nose to the rock." After every blast they carefully separated the ore from the waste, and sent the ore to the mill and the waste to the dumps, which is the very essence of successful and profitable mining. After the controversy was resolved, the Independence mine was profitable for many years afterward and was probably worth the money paid for it.

There are many morals to the story, but one is that disagreements can degenerate to rancor, and often enough to the most raw violence, when all the time the reality, if known, would be satisfactory to all parties!

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