Michigan Copper and Boston Dollars: An Economic History of the Michigan Copper Mining Industry [Reprint 2014 ed.] 9780674491960, 9780674186880

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M I C H I G A N COPPER A N D B O S T O N D O L L A R S

STUDIES IN ECONOMIC HISTORY

PUBLISHED IN COOPERATION WITH THE COMMITTEE ON RESEARCH IN ECONOMIC HISTORY

WILLIAM Β. GATES, JR.

Michigan Copper and Boston Dollars AN ECONOMIC HISTORY OF T H E MICHIGAN COPPER MINING INDUSTRY

HARVARD UNIVERSITY PRESS CAMBRIDGE, MASSACHUSETTS

• 1951 ·

COPYRIGHT, 1 9 5 1 BY THE PRESIDENT AND FELLOWS OF HARVARD COLLEGE

DISTRIBUTED IN GREAT BRITAIN BY GEOFFREY CUMBERLEGE OXFORD UNIVERSITY PRESS LONDON

PRINTED IN THE UNITED STATES OF AMERICA

TO MARGARET D. GATES WITHOUT WHOSE COURAGE AND DEVOTION THIS BOOK — AND THE LONG YEARS OF INTELLECTUAL APPRENTICESHIP

OUT OF WHICH

MIGHT NOT HAVE BEEN POSSIBLE.

IT GREW —

Preface During the century following 1845 copper evolved from a metal of secondary importance — mainly useful for household utensils, sheathing material for ships, some lines of the engineering trade, and the fine arts — to become a requisite of the expanding electrical industries and a basic material of modern warfare. World production of new copper rose from an annual total of 50,000 short tons in the 1840's to more than 500,000 around the turn of the century when the electrical industries began to hit their stride, and finally to over 3,000,000 short tons per annum during World War II. For the last years of the nineteenth century and almost three decades of the twentieth (1894-1926), United States mines contributed more than 50 per cent of the world total, and even during recent years domestic properties have produced a third of the new copper mined. The Michigan deposits were the first major United States field to be developed and, until the railroads were extended to the Montana and Arizona fields around 1882, consistently produced three-quarters or more of United States output. As late as 1907 one-quarter of domestic copper came from the Michigan lodes, and in spite of a gradual decline to virtual insignificance following World War I, the industry can boast of having produced 14.6 per cent of all copper mined in the United States since 1845, a total of some 9.6 billion pounds, valued at $1.5 billion. At the peak of the district's development, around 1907, the companies furnished employment for more than 21,000 workers and provided the economic core for a community of 95,000 people. That same year the stocks of the six significant producers were valued at $185 million in the market. During the whole century of production, shareholders in the two-dozen-odd Michigan copper mining companies which did better than break even received $350 million in dividends.

viii

PREFACE

Not only has the history of the industry significance for its own sake; it may also prove useful in understanding developments which are likely to take place in the evolution of other United States extractive industries. The Michigan copper district was one of the first major domestic non-ferrous metal mining fields to be opened up, and its history provides a full century of development for study, including an almost complete cycle of growth and decline. The problems of each extractive industry will certainly differ in accordance with peculiar conditions of time, locale, and other special circumstance, but it seems probable that many will show a similar pattern of growth and decline, each phase of which may present a number of parallel problems. A period of establishment may be expected in which risks are very great, profits are small — or nonexistent — for all but a few concerns, and the flow of capital into the industry is heavy and is very largely lost to the immediate investor. The next period will be one of substantial growth, both in scale of enterprise and number of successful units, and again the flow of capital is likely to be toward the industry, but this time primarily in the form of reinvestment of earnings, rather than new market flotations. Growth is followed by maturity, a period when new investment opportunities are unpromising and output remains fairly stable. An increasing interest in consolidation schemes may be expected, and earnings are likely to be exceptionally high and to be paid out as made. Finally, decline of the industry brings with it inability to earn enough to meet depletion and even depreciation charges,1 and an effort to rescue as much sunk capital as possible, often through planned shifts by the companies into other stages of the metals industry. The history of Michigan copper mining is rich in more general laboratory materials. It has its monopoly elements, constantly reappearing in one form or another. It forcefully underlines the importance of technological change in economic 1 Since these charges are expenses, but not expenditures, failure to cover them does not necessarily indicate financial stringency; it does indicate an unfavorable change in total asset values.

PREFACE

ix

evolution; presents three sets of war control problems; and provides an interesting example of the operation of the free enterprise profit incentive system in opening up difficult natural resources. Finally, it includes a case study of the critical problem of labor reallocation in a declining industrial area, and poses the problem of the effects of benevolent paternalism upon industrial relations and the general pattern of life in a oneindustry community. The author is a firm believer that all too little economics has been used in approaching problems in economic history. The rewards from such application of theoretical tools are likely to take the form of much clearer insights into economic development and a much more meaningful over-all historical picture. This is a limited objective, and the real revolution in the analysis of economic history, and even in economics as a whole, will probably be wrought by that much abused — often justifiably so — advance guard of social scientists who are attempting to develop methods of analyzing the dynamics of institutional change. It is the first of these methodological objectives which has been set as a goal in this study. The economic techniques used are by no means complex, but the author has attempted to write an economic history with the idea constantly in mind that he is, first of all, an economist. So many people have contributed time and ideas to this study that it is all but impossible to make adequate thanks in a preface. The study began when the author ran across a splendid book entitled Boom Copper by Angus Murdoch and later had occasion to talk with him and absorb some of his feeling for the Copper Country. At the University of Chicago, where most of the work was done, I am deeply indebted to Professors Chester Wright, Gregg Lewis, Melvin de Chazeau, and Frank Knight — all of whom spent long hours going over early drafts of the manuscript and taking me to task on its deficiencies. My greatest debt, perhaps, is to my many friends in the Copper Country who unstintingly made available to me their knowledge of the locality, the historical documents they had collected, and, above all, their understanding of technological

χ

PREFACE

aspects of the industry. Among those who gave freely of their time are Professor James Fisher of the Mining College, John W. Rice of the Mining Gazette, Benjamin D. Noetzel, long associated with the Isle Royale and other Lake copper companies, and Gene Saari, local representative of the Mine Workers Union. Without the wholehearted cooperation of President Endicott R. Lovell and numerous officers of the Calumet and Hecla Consolidated Copper Company (including J. H. Elliott, C. H. Benedict, A. E. Petermann, and Ocha Potter), the research for the study would not have been possible. The company saw to it that the author spent several days going through the Copper Country works, did special statistical studies at his request, made available to him its magnificent files at the Boston office, provided photographs from its collection, and had an early draft of the manuscript read and criticized by a number of company officers. I am particularly grateful to Professors Arthur H. Cole and Edward C. Kirkland who read the manuscript, made suggestions for its improvement, and were its sponsors for publication by the Committee on Research in Economic History. Without the constant encouragement and guidance of Professor Cole, completion of the last draft might have been delayed for years. Finally, my sincere thanks are due to Helene P. Gans, who read the manuscript for matters of style and typed one of the early drafts, and to my wife, Nancy Gans Gates, who constantly encouraged me in this endeavor and somehow remained patient when I gave way to temperament at the more difficult stages. W. B. G., Williamstown, Massachusetts March i, 1950

JR.

CONTENTS LIST OF TABLES LIST OF ILLUSTRATIONS I OPENING T H E MICHIGAN LODES, 1845-1866 Discovery and Exploration · The Challenge and the Accomplishment · The Copper Cake beneath the Icing · Roads and Canals or Bust · An Early Technological Revolution · Financial and Managerial Organization and Controls II MICHIGAN DOMINATES T H E U N I T E D STATES MARKET, 1867-1884 The Postwar Depression, 1867-1871 · The Rise of Calumet and Hecla · The Protective Tariff and the Pooling Arrangements · Revival of the Industry, 1873-1884 III T H E STRUGGLE FOR DOMESTIC AND WORLD LEADERSHIP, 1885-1904 Twenty Years of Continued Vitality · Consolidation and Integration · Attempts at Market Control and the Price Boom at the Turn of the Century · The Competitive Position of the Michigan Industry at the Turn of the Century IV LABOR A N D T H E COMMUNITY T O 1904 A Frontier Mining Community · A Settled Mining Community and Benevolent Paternalism V T H E INDUSTRY AND MATURITY, 1905-1918 The Pattern of Maturity · The Battle to Hold Costs Down · The Labor Shortage Problem and the Strike of 1913-1914 · War Controls — the Allocation Problem — and the Question of Profiteering

xii

CONTENTS

VI M I C H I G A N COPPER M I N I N G I N DECLINE, 1919-1938 The Pattern of Decline · Decline of Michigan Copper Mining in a Period of General Business Prosperity, 1919— 1929 · Decline of Michigan Copper Mining in a Period of General Business Depression, 1930-1938 • The Impact of the Decline upon the Community VII W O R L D WAR II A N D T H E F U T U R E

143

170

Michigan Copper Mining on the Eve of United States Entry into the War · War Controls and the United States Copper Mining Industry · Operations of the Michigan Industry during the War Years · The Michigan Copper Companies Face the Future · The Michigan Copper District Faces the Future EPILOGUE

188

APPENDIX

193

NOTES

235

BIBLIOGRAPHY

273

GLOSSARY O F M I N I N G TERMS

284

INDEX

287

TABLES Ι.

U N I T E D STATES FOREIGN T R A D E IN U N M A N U F A C T U R E D

COPPER,

1870-1882 2.

MONTHLY

47 MICHIGAN

WAGES

FOR C O P P E R

MINERS

COMPARED

W I T H W A G E S FOR IRON M I N E R S IN THE E A S T , 1 8 4 5 - 1 8 6 6 3.

MONTHLY

MICHIGAN

WAGES

FOR

COPPER

MINERS

101

COMPARED

W I T H W A G E S FOR IRON M I N E R S IN THE E A S T , 1 8 6 7 - 1 9 0 4 4.

108

M I C H I G A N COSTS C O M P A R E D W I T H T H O S E OF THE R E S T OF T H E D O M E S T I C INDUSTRY, 1 9 0 9 — 1 9 1 8

5.

121

M I C H I G A N COSTS C O M P A R E D W I T H T H O S E OF THE R E S T OF THE D O M E S T I C INDUSTRY, 1 9 2 8 - 1 9 3 0

6.

WORLD,

UNITED

STATES,

AND

154 MICHIGAN

OUTPUT

OF

NEW

COPPER, 1 8 4 5 - 1 9 4 6 7.

197

U N I T E D STATES FOREIGN T R A D E IN AND C O N S U M P T I O N OF

NEW

COPPER, 1 9 1 6 - 1 9 4 6

202

8.

M I C H I G A N O U T P U T OF C O P P E R AND V A L U E OF O U T P U T ,

1845—

9.

M I C H I G A N C O P P E R M I N I N G C O M P A N I E S CLASSIFIED BY S I Z E OF ANNUAL OUTPUT, 1 8 4 5 - 1 9 4 5

207

10.

MICHIGAN COPPER MINING C O M P A N Y EMPLOYMENT, 1 8 5 0 - 1 9 4 6

208

11.

P O U N D S OF C O P P E R PRODUCED A N N U A L L Y PER M I C H I G A N C O P P E R

12.

DIVIDEND PAYMENTS — A L L

13.

ANNUAL

1946

203

MINING COMPANY EMPLOYEE, 1 8 5 0 - 1 9 4 6 MICHIGAN

212

COPPER

MINING

COM-

PANIES, 1 8 4 5 — 1 9 4 6

14. 15.

215

HIGH-LOW

STOCK

Q U O T A T I O N S OF S E V E N

MICHIGAN

COPPER M I N I N G COMPANIES, 1 8 4 8 - 1 9 4 6

223

COPPER COUNTRY POPULATION D A T A , 1 8 5 0 - 1 9 4 0

228

O U T P U T OF THE C A L U M E T AND H E C L A

COPPER MINING

COM-

P A N Y , AND PERCENTAGE OF M I C H I G A N O U T P U T , 1 8 6 7 — 1 9 4 6 16.

FREIGHT COPPER

RATES

FOR

BETWEEN

WATER

LAKE

TRANSPORTATION

OF

SUPERIOR

AND

LOWER

ASSESSED V A L U A T I O N —

ALL

PERSONAL

COAL

LAKE

230 AND

PORTS,

1887-1940 17.

EQUALIZED

231

P R O P E R T Y OF H O U G H T O N C O U N T Y , 1 9 0 0 - 1 9 4 6

AND

REAL 232

ILLUSTRATIONS M A P OF THE M I C H I G A N C O P P E R C O U N T R Y

2

C O P P E R M I N I N G IN M I C H I G A N DURING THE C O P P E R M I N I N G IN M I C H I G A N ABOUT

1915

1850's

Following page Following page

16 48

CHARTS ~ÖENERAL W A G E S AT C A L U M E T , M I C H I G A N , C O M P A R E D W I T H T H O S E AT D E T R O I T , 1 9 0 8 — 1 9 1 9

137

W A G E T R E N D AT C A L U M E T C O M P A R E D W I T H U . S . W H O L E S A L E P R I C E TREND, 1 9 0 8 - 1 9 1 9

137

M I C H I G A N PRODUCTION AND PERCENTAGE M I C H I G A N OF U . S .

TOTAL

PRODUCTION, 1 8 4 5 - 1 9 4 6 MICHIGAN

COPPER

MINING

195 COMPANY

DIVIDEND

PAYMENTS

COM-

DISTRICT COMPARED

WITH

PARED W I T H A V E R A G E A N N U A L C O P P E R PRICES - P O P U L A T I O N OF THE M I C H I G A N C O P P E R

195

MINING COMPANY EMPLOYMENT, 1860—1946

196

P R O D U C T I O N OF C O P P E R PER M A N - Y E A R OF L A B O R E M P L O Y E D IN THE M I C H I G A N C O P P E R M I N I N G INDUSTRY, 1 8 5 0 - 1 9 4 6 U N I T E D S T A T E S C O P P E R PRODUCTION, C O N S U M P T I O N , N E T

196 IMPORTS

AND E X P O R T S , 1 8 4 5 - 1 8 8 0 U N I TAND E D STATES COP PE CONSUMPTION, N E T EXPORTS, 18 8R 0 - 1PRODUCTION, 933

201 IMPORTS

201

MICHIGAN COPPER AND BOSTON DOLLARS

CHAPTER

I

Opening the Michigan Lodes, 1845—1866 Were it not for the chance of some great prizes, all this necessary work of exploration would not have been undertaken. Under such conditions a high return on the lucky venture does not constitute a true surplus. Nor is it easy to say whether, on the whole, the gains in successful mining ventures suffice to offset the losses in the unsuccessful. Prizes often have an undue effect on the imagination. The unfailing attraction of a lottery (in which it is obvious that the speculators as a body must lose) proves that where there is a chance of great gain from a lucky stake, men will often pay for the chance more than its actuarial value. 1 — Frank William

Taussig

The Michigan Copper Country is located on Keweenaw Peninsula which reaches out like an index finger from the southern shore line of Lake Superior. As shown by the map on page 2 all of the known copper deposits lie along a mineral range which runs a hundred miles through what today are the Upper Peninsula counties of Ontonagon, Houghton, and Keweenaw. DISCOVERY AND EXPLORATION

Early exploration. The deposits were known to the Indians at the time the French began to explore the Lake Superior region and had been worked by a forgotten race of miners long before Columbus discovered America. 2 The Indian tales were passed along with embellishments by the early French explorers and missionaries, but it was not until 1771 that an Englishman, Alexander Henry, organized the first mining expedition of modern times to reach the Copper Country. The enterprise failed after a long winter spent in the southern section of the Peninsula, and interest in the district lapsed until 1800 when the United States Congress directed the President

2

MICHIGAN

COPPER AND BOSTON

DOLLARS

to appoint an agent to investigate the copper deposits of Lake Superior. N o action was taken under the bill, and the next authentic report of the existence of copper on the shores of the lake came from Henry R. Schoolcraft in 1820, who found the indications so promising that he suggested the government should work the deposits. Twenty years more elapsed before scientific exploration was undertaken by Douglass Houghton, first geologist of the newly admitted state of Michigan.

Fig. i. Michigan Copper Country The surveys and land laws. In 1840 Houghton began a careful examination of the district and by late 1841 had issued two reports to the State Legislature in which he gave a cautious but encouraging appraisal of copper mining potentialities of the Peninsula. Congress showed sufficient interest in 1841 to appropriate funds for the purchase of the lands from the Indians, and in the summer of 1842 a treaty was negotiated with the Chippewas by which they ceded some 25,000 square miles of territory to the Federal government. 3 Shortly thereafter an agreement was concluded with Houghton to take charge of a

OPENING THE MICHIGAN

LODES

3 linear survey for the United States in addition to the topographical and geographical survey upon which he was already engaged for the state of Michigan.4 Work on the surveys went forward rapidly, and by 1843, when the first mining permit was issued, locations and boundaries could be designated in something resembling an orderly fashion. By that year interest in the district had become intense, particularly in the East, and the federal government was under pressure to throw the area open and designate rules under which the deposits might be worked. Following the precedent set in leasing early western lead lands,5 permits were issued by the War Department — first for nine square miles, and, later, in March, 1845, reduced to one square mile. After a location had been made the permit holder was to apply to Washington for a lease and forward surety bonds amounting to $20,000.® The lessee was "allowed one year for exploration, and three more years to mine, with the privilege of two renewals of three years each, making the whole term ten years." 7 He was required to send in returns to the Mineral Agency giving the amount of copper raised and to pay the government 6 per cent royalties for the first three-year mining period and 10 per cent thereafter. The first major United States mining boom. A few hardy souls came overland into the district from the Wisconsin lead lands as early as the summer of 1843, but it was not until the spring of 1844 that the real boom began. Several schooners owned by the fur companies were operating on Superior at that time, and during the following two years, a half dozen more, including the propeller Independence and the sidewheeler Julia Palmer, were hauled over the portage at Sault Ste. Marie to carry explorers, miners, speculators, and their supplies up to Keweenaw, and small quantities of copper and hundreds of disillusioned failures back. Twenty to twenty-five days were required to send mineral from the mines to Buffalo and thence to Boston — the cost running from $ 1 8 to $20 per long ton.8 (At about this same period the rate on a long ton of ore from Chile to Boston was

4

MICHIGAN COPPER AND BOSTON DOLLARS

$ 1 5 ; from Cuba to Boston, $6.) 9 Cargoes had to be hauled by human or animal labor almost a mile across the portage at the Soo and then reshipped on the other side. Even worse, navigation was impossible for at least five months of the year as a result of winter storms and ice formations along the shore of Lake Superior, and was apt to be risky even during the summer season. Although there were a number of harbors at the Peninsula, most were blocked by sand bars to all but the smallest vessels, and passengers and supplies often had to be transferred to lighters before shore could be reached. Finally, the phrase bandied about among returning prospectors of " a howling wilderness" was perhaps a harsh generalization but was, nonetheless, a fitting description for some of the conditions encountered once the Copper Country had been reached. The Peninsula was heavily wooded, swampy in many places, and cut off by land from the outside world by over 200 miles of virtually uninhabited wilderness. Only experienced woodsmen or those fortunate enough to have at their command a sleigh and dog team could reach civilization once the snows began in November. During the first two years of prospecting and mineral land speculation, there was little that could be dignified by the term "mining." Hundreds of men tramped the wilderness, each equipped with a pick and a few pounds of gunpowder, and with one eye on speculation in land permits where the real money lay. What little copper they found was lying on the surface or easily blown loose from outcropping rocks. But even in these early days there were a few beginnings at real mining, and by 1847 the main outlines of prevailing technology are discernible. In general discarded methods drawn from the earlier history of other mining fields of the world, particularly Cornwall, were employed. Drilling was by hand, one man holding the drill and one or two others driving it into the rock with sledges. Blasting was done with ordinary gunpowder, and both processes required much skill to get effective results. As the shaft went down into the vein, rock and copper masses were

OPENING THE MICHIGAN

LODES

5

hauled to the surface in an iron bucket, known as a "kibble," which was attached to a heavy chain and powered by men at a windlass or by one or more horses at a whim. The whim was a seventeenth-century Cornish invention, used for both hoisting and pumping, which had been very largely replaced in England by steam power. 10 Copper rock was transported underground to the shafts by wheelbarrows rolled along boards, in contrast with the carts pushed along wooden or iron rails which had been adopted in older fields of the world. Finally, Michigan miners, trammers, and laborers climbed in and out of the shafts by ladders, whereas their Cornish counterparts were already beginning to use man-engines as early as 1841. 1 1 The main items of surface equipment usually consisted of a small farm, a blacksmith shop, a carpenter shop or small sawmill, a log bunkhouse or two, a storehouse, a rockhouse, and sometimes a stamp mill. The early prospectors searched for lodes made up of copper masses, almost pure chunks of metal, often weighing ten tons or more, which were laboriously cut up underground and usually shipped directly to the smelter. Barrelwork, copper in very small masses which was detached from its rock matrix by hammering at the rockhouse, was also valued, in part because it did not require milling. But even in 1847 a certain amount of stamp work, or low copper content rock, was considered worth treating. During the summer and fall of 1845, a stamp mill operated by an overshot water wheel was working at Eagle River. 12 These early stamps were of Cornish design with wooden stems and iron heads weighing around 200 pounds, which dropped on the rock some twentyodd times per minute. Copper mineral 13 was extracted from the resultant sands by hand treatment — the washing and jiggling on boards being about the same technique as that used in the early gold fields.14 Mass copper was often roasted in kilns or small ovens in order to eliminate waste rock. The rock was piled upon a layer of crossed cordwood, allowed to burn for several days, and then cooled by water which helped to complete the splintering of the matrix. But during this initial boom period serious mining attempts

6

MICHIGAN

COPPER

AND BOSTON

DOLLARS

were the exception rather than the rule. N o t only was the district difficult to reach, even worse to open up, and conspicuously lacking in easily discoverable, rich lodes, but the leasing system soon proved extremely detrimental to successful establishment of the industry. B y M a y , 1846, approximately 1,000 permits had been issued, and claims had been staked on every spot that showed signs of copper and even, for speculative purposes, on locations where the existence of the metal was known to be impossible. As one old-timer put it in speaking of permit speculators, "Some of their permits are located where they can't touch land up, nor down, nor sideways — and others ain't nowhere." 15 Having a permit turned into a lease was an expensive step, particularly with the surety bond requirement, and there is evidence that a good deal of politics entered into approval at Washington. 16 Finally, a ten-year maximum leasing period did not represent secure enough tenure to justify the heavy capital investment required to open up a mine. T h e net result was a wild speculative spree in the selling and buying of permits, very little serious mining, and a marked absence of royalties for the government. In M a y , 1846, the President suspended further issue of permits, and by late 1847 the speculative bubble had burst, and the district was all but deserted. Congress came to the rescue in that year with an act which shifted custody of the mineral lands from the War to the Treasury Department and authorized outright sale of the full extent of a lease for $2.50 an acre and of a 40-acre lot within a lease for $5.00 an acre. 17 In September, 1850, the minimum price was reduced to $1.2 5, 18 and that same year a United States geological survey was completed which provided the first adequate geological maps of the district and enough basic scientific knowledge to permit rational exploration and development work. 19 The feverish prelude to the history of the Michigan copper mining district was over. An enormous amount of work remained to be done before the industry could be placed on a paying basis, but at least the initial task of developing favorable land laws and of providing basic geological knowledge had been accomplished by 1850.

OPENING

THE MICHIGAN

LODES

7

THE CHALLENGE AND THE ACCOMPLISHMENT

Domestic and world copper background. Before turning to a consideration of developments after the initial speculative boom, it will be useful to sketch the more general domestic and world copper picture of the period, particularly since some of these outside developments tended to make the task of opening the Michigan lodes an even more difficult one. In the early forties, just before mining began in Michigan, United States output of copper was running around 200,000 pounds per annum. Scattered, sporadic producers in the East — namely in Connecticut, Vermont, and Maryland — were the only domestic sources of the metal. Theirs was an insignificant production eveii in terms of the copper needs of that day, and the United States annually imported some 3,300 short tons of unmanufactured pigs and bars, plates and sheets, and various manufactures of brass and copper. Since raw copper could enter free of duty and manufactured articles were subject to high rates, over three-quarters, by value, of these imports took the form of pigs, bars, and old copper from the United Kingdom, Chile, and Peru, and plates and sheets from Britain for the domestic shipbuilding industry.20 The major sources of world copper of the period were Cornwall and Devon which had reached their peak by the 1840's and were entering a period of gradual decline.21 Substantial increases elsewhere, notably from Chile, which was soon to surpass England as a copper producer, and from Spain, Australia, and the United States more than doubled world annual production in the two decades following 1845, and had begun, by the mid-fifties, to exert a downward pressure upon world copper prices. During the forties and early fifties consumption of copper increased rapidly for sheathing wooden ships and for use in the expanding engineering trades, but shortly thereafter the red metal began to run into competitive difficulties in a number of old established lines. Application of steam power to the manufacture of iron and steel, as well as improvements in

8

MICHIGAN

COPPER AND BOSTON

DOLLARS

foundry technology, had cheapened iron to a point where it was offering serious competition in the pot and pan trade, brewery equipment, sugar refining machinery, and similar lines.22 Engineering demands continued to increase, but by the early sixties, iron ships had begun to supplant wooden vessels which resulted, a few years later, in a reversal of the rising demand trend for copper sheathing.23 These developments not only tended to dampen the demand for copper but temporarily increased the amount of scrap flowing back into the supply stream. After 1855 there was a gradual weakening in the world price of the metal — the situation reaching crisis proportions in the London market by late 1865. The domestic economy was partially protected by the passage of a tariff in 1861 of two cents a pound on pigs, bars, and ingots, and of 5 per cent ad valorem on copper ores. Civil War needs for the metal also proved a boon, but gradually weakening world prices hung like a dark cloud over the newly established industry throughout much of its developmental period. Internal problems involved in opening up the Michigan lodes. Internal problems were quite serious enough without the complication of a world copper glut. The Peninsula comprised approximately 3,000 square miles of territory within which were scattered some 400 lava flows and conglomerate and sandstone beds which the early prospectors might have discovered. And of these 400 possible locations, not more than a dozen or so were destined to yield copper in commercial quantities.24 Careful exploration of the range had barely begun, and it was still not known that the mass deposits, which, in the forties, had been considered the only lodes worth mining, were geological freaks representing little more than icing of the main copper cake. The really significant deposits were of finely disseminated metal in amygdaloid and conglomerate rock,25 running to great depth, and seldom outcropping in a fashion which would make proving of potentialities rapid or inexpensive. Past mining and metallurgical experience of the world had little to offer in the way of adequate methods for handling these new problems, and

OPENING THE MICHIGAN

LODES

9

tremendous uncertainty, springing from technical and geological ignorance, was the greatest handicap to be overcome. Only a little less important were transportation difficulties which were closely associated with those of obtaining an adequate labor supply. For many years the problem of getting copper out and supplies in at something less than prohibitive cost was too much for many of the infant companies and a severe handicap for all except the two or three with bonanza finds. Copper content of all shipments had to be high; in 1847 the trustees of the Copper Falls Company were advising their agent that his first consignment of some 7,000 pounds of mineral had not paid costs. As a result of high transportation charges, nothing yielding less than 40 per cent metal should be shipped.26 The industry approached these problems with a number of factors in its favor. Bad as the transportation problem was, the Great Lakes waterway represented an incalculably great asset, as did the fact that the copper discoveries were of pure metal, uncontaminated by sulphur or other undesirable elements which greatly complicated the refining of copper ore found in other parts of the world. In addition the corporate form of enterprise was available from the beginning, as well as stock exchanges in the East which tapped the meager store of speculative capital available in the young nation. Finally, there came to the district a steady stream of high-class labor from older mining and industrial centers of the world. The immigrants brought to Michigan not only their youth and skill, but a highly favorable incentive wage system and the best mining knowledge the world had to offer.27 The accomplishment by 1866. From a production standpoint the accomplishment in this first period of 22 years was an impressive one. B y the early 1860's the new district was producing about 14 million pounds of copper per annum,28 an amount equivalent to 60 per cent of domestic requirements, which had tripled since the early forties.29 Actually, since 1855 the United States had become an exporter as well as an importer of refined copper. The Lake product was of particular value for

10

MICHIGAN

COPPER

AND

BOSTON

DOLLARS

military and artistic purposes and sold at a premium in foreign markets. From 1855 to 1861, 30 to 80 per cent of annual Michigan output was shipped abroad. T h e less expensive fire refined metal from Chilean and other foreign and domestic mines continued to be good enough for the requirements of most domestic manufacturers. The most rapid increases in output were made between 1854, when production stood at about four million pounds, and 1861, when it topped 15 million. B y the peak inflationary year of the Civil War, some $5.8 million worth of copper was flowing Eastward from the distant shores of Lake Superior where five thousand men worked for the mining companies in a community which now numbered 19 thousand. 30 In marked contrast with the production record, the financial operations of the industry can hardly be called a success. From 1845 through 1865, 94 Lake copper companies made capital calls on their stockholders for a total of over $13.1 million. During the same period these companies paid in dividends $5.6 million. 31 It seems probable that there had been at least 20 other enterprises whose bitter history is not included in this statistical summary as well as hundreds of prospectors and miners who came to the district, lost their savings, and were obliged to leave. A few companies were established which paid substantial sums in later years and whose capital investment in 1865 represented a real asset for stockholders, but they numbered at most three or four, and their total assessments had amounted to about half a million dollars. But such an accounting leaves the whole nature of the problem in obscurity. Eight out of the ninety-four companies paid dividends at one time or another, and six of the eight were successful in the limited sense of paying out more money than they took from stockholders in the form of assessments. 32 Five of the six paid over 300 per cent on invested capital; one of the five paid almost 500 per cent; and the bonanza of the day almost 2,000 per cent. It is extremely important to understand in terms of dollars and cents just what it meant to get in on the ground floor of an exceptionally rich mine.

OPENING

THE MICHIGAN

LODES

II

Let us suppose that an investor was fortunate enough to own 500 of the 6,000 shares of the Cliff mine in 1845. I n the course of the next few years, he would have been assessed $9,170. By 1866, the mine would have paid him $175,000 in dividends, or even better, he might have been astute enough to have sold out at the stock market peak in 1859 for $167,000, having already received a little more than $88,000 in dividends. Thus, it is conceivable that an investor might have maximized his return at $255,000 on a 13-year investment of a little over $9,000 — or more than a 200 per cent return per annum. In any case, this was the stuff men's dreams were made of. It proved incentive enough for a more or less continuous flow of capital into the Copper Country. The gambling element is the key to understanding, and it is even a mistake to measure pecuniary success of individual stockholders chiefly in terms of dividends. The game was so uncertain, and there was such a substantial lapse of time between the day a mine was opened and the day it was finally proven a success or failure that there were plenty of opportunities to make (or lose) a fortune by speculating in the securities of even those companies which ultimately ended completely bankrupt. Nor can the extent of the accomplishment be measured adequately in terms of an immediate dollar-and-cent accounting. This was a period of spade work on a grand scale — of capital loss for all but a few of the early shareholders, which represented, in large part, a capital investment for the more fortunate shareholders who followed them. B y 1866, the three major types of copper rock formation of the Peninsula had been discovered, and a beginning had been made in exploiting two out of the three richest copper bearing lodes. An adequate water route to the East had been developed, and during the last few years of the period, real progress was made in solving the problem of internal land transportation. Years of trial-and-error fumbling were required to gain detailed geological knowledge and to adapt the technology of other mining fields to new mining and metallurgical problems. T h e financial record to the contrary, the accomplishment had been an enormous one, and

12

MICHIGAN

COPPER AND BOSTON

DOLLARS

it will be discussed in more detail in the remainder of this chapter. THE COPPER CAKE BENEATH THE ICING

The major discoveries. The first discoveries to be developed into paying mines were located in what later constituted Keweenaw County, or the northern third of the mineral range, and Ontonagon County, or the southern third. The section opened up last was Houghton County, lying between Ontonagon and Keweenaw, and containing the Pewabic amygdaloid lode near Portage Lake and the famous Calumet conglomerate, which was to prove one of the richest copper deposits in the world. The mining attempt in this forbidding country might well have been given up for another quarter of a century if two early prospectors had not stumbled upon lodes containing fabulously rich copper in an uncomplicated form, from both a mining and metallurgical standpoint. The Cliff lode, discovered in 1845, a n d the Minesota, discovered in 1848, were deposits of mainly mass copper. Similar formations were found elsewhere in the district, but nothing comparable in richness to these first two bonanzas.33 The Keweenaw section led in production until well into the fifties when the Minesota boosted Ontonagon into first place, and by 1856 the Ontonagon mines were accounting for a little less than 50 per cent of Michigan output, those of Keweenaw probably around 45 per cent, and the small properties near Portage Lake not over 5 per cent.34 That same year, the main body of the great Pewabic amygdaloid lode was discovered by one of several old companies which had been working relatively minor offshoots of it since the early fifties. Not only did a geographic shift in the production balance to the Portage Lake section result, but the shift was geologic as well. The new mines were working beds of amygdaloid rock containing some 2 to 4 per cent finely disseminated copper. Their rise was very rapid, and it was apparent as early as i860 that the future of the district depended upon exploitation of such low content rock. Houghton County estab-

OPENING

THE MICHIGAN

LODES

13

lished production superiority by 1865, when its output was ten tons more than that of Ontonagon and Keweenaw combined.35 A falling-off of production at the Cliff and Minesota brought with it not only a relative, but an absolute, decline for the two older sections of the district. As the period covered by this chapter was closing, a mine was being opened on the third main type of lode found at Superior — a mine which was soon to startle the copper world and make the mighty Minesota seem like a trivial discovery. In 1859, a surveyor named Edwin J. Hulbert had stumbled across a curious pit containing copper rock (apparently stored there by some forgotten race of miners) and a year later had bought a substantial piece of property near that site. On September 17, 1864, the main body of the Calumet lode was discovered on his property. The rock was conglomerate — a tough pudding stone, which, at the new mine, was still low in copper content, as compared with the mass lodes, but much richer than the softer Portage Lake amygdaloids. Throughout these first twenty-two years, silver was found along with the copper in many of the Lake mines. The Minesota and Cliff were famous for what Swineford calls "silver waifs." 3 6 Even the Portage Lake mines produced enough silver so that it paid to employ silver pickers at the stamp mills. But the gray metal was not significant enough to make or break a Michigan company, even when the company owned a marginal property. It did, particularly in the early days, add to the speculative aura which hung over the district. Until much experience indicated the contrary, the companies always hoped that the next blast of gunpowder would turn their copper into a silver vein. Growth in the size of enterprises. Discoveries of new lodes and the establishment of new producing companies (the number rose from eight in 1850 to twenty-three in i860) 37 was the most important factor in increasing output during these years. But there was also a trend toward larger scale of production of the individual enterprises making up the industry, particularly until the Civil War years. Whereas only one of the eight

14

MICHIGAN

COPPER AND BOSTON

DOLLARS

companies recorded as having a significant output in 1850 produced over 500,000 pounds of copper, nine of the sixteen producers in 1861 had outputs of over 500,000, and six of the nine produced between one and four million pounds. This represented a substantial change since the late fifties when the Minesota and Cliff had stood alone as giants in the industry with annual outputs of two to four million pounds, while the rest of the companies accounted for only a few hundred thousand each per annum. Growth of the Portage Lake mines was tending to place a half dozen enterprises on just about an output par. These new mines began to reach significant size around 1859-1860, and their continued growth through 1861 provides an interesting problem in output-price relationships. In spite of slowly declining copper prices after 1856 (which were accompanied by three years of gradually declining output) and the lowest copper prices in ten years in 1 8 6 1 , between 1859 and 1861 the Michigan field scored its heaviest gain in output of this 22-year period. The explanation of this phenomeno emphasizes the importance of the development of new prope ties, which on several occasions brought about rapid increas in Michigan production in spite of falling copper prices. About the time that the Minesota and Cliff began to declin in consequence of lower copper prices and depletion of copp< reserves, a half dozen new mines were opening up, mainly the Portage Lake section. (The most important of these ne enterprises were the Quincy, Franklin, and Pewabic.) Th( combined output increased rapidly between 1857 and 1859, spite of falling copper prices, but was still so small that th production increase was overbalanced by declines at the C and Minesota. The low copper content of the rock which 1 new mines were working and the depth of their lodes called f a large scale of operations if the ventures were to succeed. Bi tween 1859 and 1861 their combined output increased by ove two and one-half times, a substantial enough gain to raise tl Michigan total in spite of falling output at older, "mas; copper" properties.

OPENING

THE MICHIGAN

LODES

Copper for War. The initial impact of the Civil War upon the Michigan copper mining industry was very similar to that of the first World War over a half century later. T h e domestic copper market was completely disorganized, and trade lines with Europe were threatened by Confederate privateers. Alfred Swineford, writing in 1866, characterized those first few months of the war as "one of the darkest hours we remember for the copper mining interests." Everyone supposed the end had come — that the mines must close down —• that nothing was left to do but shoulder the musket and march to the South. Copper stocks fell to a zero point; nobody would want our copper . . . the price of copper fell to seventeen cents.38 But recovery came with amazing rapidity; government orders for brass buttons, copper canteens, bronze cannon, and naval equipment 3 9 replaced the foreign demand, and the annual average price of Lake copper went from 19.1 cents a lound in 1861 to 46.3 cents in 1864.40 Expressed in gold prices, per

DiviC ends

rices

I t

\

!

I 1

1

1

\

!

30 h 1

I '

\

•

V Λ

V

,/

A Λ

1850

ί κ

\ Λ •J

/ "V /ν

*

\

J/

I

20

If

>

W

1900

A

rη

Λ A /

1

ν ' 1925

JVy

l·/ f\j

Fig. 5. Michigan Copper Mining Company Dividend Payments Compared with Average Annual Copper Prices Source:

Tables 8 and 12.

[I9S]

0 1950

Fig. 6. Population of the Michigan Copper District Compared with Mining Company Employment, 1860-1946 Source'. Tables 10 and 14.

Thousands of Pounds of Copper

Fig. 7. Production of Copper per Man-Year of Labor Employed in the Michigan Copper Mining Industry, 1850-1946 Source:

Table

n.

[196]

TABLE 6 WORLD, U N I T E D STATES, AND M I C H I G A N O U T P U T OF N E W

COPPER,

1845-1946

(Thousands of Pounds)

Year

World"

1845

98,762 a

1846 1847 1848 1849 1850 1851 1852 I8S3 I8S4 IS55 1856 1857 1858 1859 i860 1861 1862 1863 1864 1865 1866

United. States" 224"

27"

12.1

336

58

17-3

672

477

71.0

1,120

i,033

92.2

1,568

i,505

96.0

1,456

1,281

88.0

2,016

i,745

86.6

2,464

i,744

70.8

4,48ο

2,905

64.8

A a a a 151,816 a a a a a a a a a 229,868 a η a a a

Michiganc

Percentage Michigan of U.S.

5,040

4,075

80.9

6,720

5,808

86.4

8,960

8,212

91.7

10,752

9,53i

88.6

12,320

9,157

74-3

14,112

8,926

63-3

16,128

12,069

74.8

16,800

15,037

89-5

21,160

13,586

64.2

19,040

12,985

68.2

17,920

12,490

69.7

19,040

14,358

75-4

19,936

13,749

69.0

202,264

150,758

74-5

22,400

17,526

78.2

Subtotal 1845-1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877

3,489,940 a a a a 284,748 η

• a a a a

25,984

20,935

80.6

28,000

26,625

95·ΐ

28,224

24,622

87.2

29,120

26,748

91.9

28,000

24,553

87.7

34,720

30,090

86.7

39,200

34,332

87.6

40,320

36,039

89.4

42,560

38,370

90.2

47,040

39,025

83-0

[ 197

1

TABLE 6 (Continued)

Year 1878 1879 1880 1881 1882 1883 1884 Subtotal 1867-1884 188S 1886 1887 1888 1889 1890 1891 1892

World* A

United Statesb

Percentage Michigan Michigan" of US. 82.4

48,160 51,520 60,480 71,680 90,646 115,526

39,691 42,849

144,947

69,353

51-7 47.8

5,587,460

948,527

690,753

72.8

506,242 482,176 501,076 589,608 582,036 610,668

165,876

72,148 79,891

43-5 51.0 41.7 38.2

337,924 346,696 362,686 404,074 448,614 490,010

1893 1894

633,344 704,500 669,856 706,986

189S 1896 1897 1898 1899 1900 1901 1902 1903 1904

737,9 2 6 845,676 909,062 961,808 1,038,672 1,090,878 1,160,018 1,228,872 1,312,960 1,454,432

156,735 180,921 226,361 226,776 259,763 284,122 344,999 329,354 354,188 380,613 460,061 494,078 526,513 568,667 606,117 602,073

49,737 53,573 56,983 59,702

75,472 86,472 88,176 101,410 114,223 123,198 112,605 114,309 129,331 143,524 145,282 158,492 147,400

83.2 82.2 74-7 62.9

38.9 39-0 40.2 35-7 34-2 32.3 34-0 31.2 29.4 30.1 25-9 24.0 26.0

659,509 698,045 812,537

145,461 156,289 170,609 192,401 208,309

16,726,796

8,337,308

2,565,002

30.8

1,570,802

888,784 916,971 847,151 956,841 1,126,521 1,088,237

230,288

25-9 25-1 25-5 23·4 20.7 20.3

25-9 27.6 25.6

Subtotal 1 8 8 5 - 1 9 0 4

190S 1906 1907 1908 1909 1910

i,S9S,SS4 1,589,410 1,640,200 1,824,476 1,922,636

[198]

230,525' 216,007 223,540 233,516 221,163

T A B L E 6 (Continued)

Year

World*

1911

1,993,014 2,205,012

1912 I9I3 1914

2,181,254 2,054,090

United States"

Michigan"

Percentage Michigan of U.S.

1,114,764

219,771

19.7

1,249,095 1,235,570

216,793

17-4

139,650 166,184

11-3

14-5 13-3

I9I5 1916

2,330,886

1,148,431 1,488,072

2,998,680

2,005,875

258,103 266,839

1917

3,149,186

1918

3,158,592

1,895,434 1,910,023

228,174

13-5 11.9

30,213,792

17,871,769

3,106,590

17.4

1919

2,191,372

1,212,334

178,366

1920

2,114,328

1,224,550

161,344

1921

1,229,266

466,191

92,262

14-7 13-2 19.8

964,584 1,477,740 1,606,165

121,387

12.6

137,957 138,160

9-3 8.6

154,799 175,442

10.2

177,538'

10.8

Subtotal 1905-1918

1922

256,037

17-3

1923

1,904,774 2,682,998

1924

2,987,224

192S 1926

3,093,054 3,216,512

1,678,118

1927

3,348,788

1928

3,756,638

1,649,959 1,809,797

1929

i,995,no

178,443 186,402

1930

4,199,764 3,530,240

1,410,147

169,382

9-3 12.0

I93I 1932

3,093,440 2,087,680

1,057,749 476,221

118,060

II.2

54,396

11.4

1933

2,322,880

381,285

1934

2,943,36ο

474,8io

46,854 48,216

12.3 10.2

1935 1936

3,422,720

760,996

64,108

8.4

4,032,000

1,229,031

95,968

7.8

5,252,800

1,683,996

4,580,800

1,115,525

94,928 93,486

8.4

61,990,638

24,399,584

2,487,498

10.2

1939 1940

4,869,760

1,456,638

87,970

6.0

5,602,240

1,756,172

1941

6,048,000

5-i 4.8

1942

6,272,000

1,932,144 2,160,122

90,396 92,880

1943

6,076,000

2,181,636

91,358 93,528

4-3

1937 1938 Subtotal 1919-1938

1,725,276

[199]

9.2

9.9

5-6

4.2

TABLE 6 (Continued)

Year

World *

United States

b

Michigan

c

Percentage Michigan of US.

1944

5,686,000

1,945,098

84,842

44

194S 1946

4,758,000

1,545,788

60,802

4,078,000

1,217,474

43,326

3-9 3-6

43,391,000

14,195,072

645,102

4-5

161,399,626

65,954,524

9>645»703

ι4·6

Subtotal 1939-1946 Grand Total

ft F i g u r e s for world o u t p u t u n t i l 1879 are annual averages calculated from total o u t p u t per decade as reported b y B r o w n a n d T u r n b u l l . A f t e r 1878 the figures refer to smelter o u t p u t as reported b y The Minerals Yearbook, various dates. W h e n e v e r possible, scrap production h a s been eliminated f r o m t h e smelter figures. ( F o r a definition of " s m e l t e r o u t p u t / ' see note b.) W o r l d o u t p u t figures are, a t best, reasonably a c c u r a t e estimates. b F i g u r e s for U n i t e d States o u t p u t are " s m e l t e r p r o d u c t i o n " for the y e a r s 1 8 4 5 - 1 9 0 5 and " m i n e p r o d u c t i o n " t h e r e a f t e r . ( M i n e production figures first b e c a m e available in 1906 and reflect more a c c u r a t e l y the q u a n t i t y of metal a c t u a l l y mined in a n y given y e a r . ) Smelter production is the o u t p u t of domestic mines as reported b y the companies w h i c h smelted the mineral, w h e r e a s mine production is o u t p u t as reported b y the m i n i n g companies on the basis of smelter reports to t h e m of the copper c o n t e n t of mineral shipped. T h e r e are three major causes of differences between the figures in a n y given y e a r . First, copper in transit f r o m mine to smelter around the end of a y e a r will be reflected in mine, b u t not in smelter figures. Second, smelter o u t p u t is in terms of refined copper produced in a n y given y e a r , a n d there m a y be variations in the q u a n t i t y of mineral in stock at the smelter. F i n a l l y , smelter is l i k e l y to be s l i g h t l y larger than mine production since the mines are not credited for u n u s u a l l y low copper content mineral. c F i g u r e s for M i c h i g a n o u t p u t are smelter production for the y e a r s 1 8 4 5 - 1 9 0 5 and mine production t h e r e a f t e r . 4 Source: The Minerals Yearbook. « F i g u r e s for M i c h i g a n o u t p u t f r o m 1845 t h r o u g h 1905 are f r o m various v o l u m e s of The Minerals Yearbook. ' M i c h i g a n figures for the y e a r s 1 9 0 6 - 1 9 2 6 are f r o m H o r e , p p . 2 0 3 - 2 2 0 ; a n d Pardee,

pp. 30-33. * Michigan Yearbook.

figures

for

the y e a r s

1927-1946

are f r o m v a r i o u s

[ 200 ]

volumes

of

The

Minerals

United States Copper Production, Consumption, Net Importe, Ei ports 1845-1880; Fiscal Years ending June30

€0

υ) 50 Ό C Ο

CL

40

Ο Ο Ο Ο 30 ο

/ Production βί/ster Copper from Domes f i e Ore. (fiscal year figures equal overage calendar year and preceding gear)· 2, Consumption (Production plus net imports minus exports). i 3. Net Imports (foreran imports minus foreign exports). Unmanufactured Copper (ore, mafte,piys, bars,plates joidj. . 07 Weights estimated from dollar values, J84S-/86I. ?' Ore estimated f845-1880. 4 1 4·. Domestic exports unmanufactured Copper: Weights estimated 1845-1863; One ft} 1880.

#f"

ο.

20 -C σ> 10

1845

1850

1855

I860

1865

1870

1875

1880

Figure 8 Production,

United States Copper Consumption. Net Imports, /88o-1933 (Calendar Years)

£*ports

2000 • 1800 •O 1 6 0 0 c 3 a. 1400 Ο §

1200

θΟ" I00Ö ο. c · 800

/. Production from Domestic Ores(Sme!ter to /£W, Refinery I9I2-/933)· f 2. Domestic Consumption (Production plus /Set J Imports minus Domestic imports plus or minus n e t change in stocks). J (Stocks an copper 188* -1906, Refined copper j /90Ί-/333). Ί 3. Net Imports (foreign Imports minus Umijnitporm Unmanufactured Copper (Ore, Maffe, rigs,Bars^ 1 Ingots, Plates, Oldand Scrap) (Ore est: 1880-83, 1895-1903]. 4. Domestic Exports Unmanufactured ΓCopper (Same plus rods and Wire. ' 1915 f f ; Pipes and Tubes, 1921 ff.) (Ore est. i880 f> f

200

1880

1885

1890

1895

1900

1905

1910

1915

1920

1925

1930 33

Figure g Source: Robert B. Fettengill, "The United States Foreign Trade in Copper, 1790-1932," American Economic Review, XXV (1935), 428, 431,

TABLE

7

UNITED STATES FOREIGN TRADE IN AND CONSUMPTION O F N E W COPPER, 1 9 1 6 - 1 9 4 6

(Millions of Pounds)

Year

Imports

1916 1917 1918 1919 1920 1921 1922 1923 1924 I92S 1926 1927 1928 1929 1930 I93I 1932 1933 1934 I93S 1936 1937 1938 1939 1940 1941 1942 1943 1944 I94S 1946

8 7 38 35 109 69 103 161 146 100 171 102 85 134 86 174 168 10 55 36 9 15 4 32 137 694 803 80s 985 1,063 309

Exports

717 1.031 690 438 551 596 653 729 1,008 968 856 922 949 822 594 40S 222 249 525 521 441 590 741 746 713 207 263 355 138 107 105

Apparent Consumption

1,479 1,395 1,661 914 1,053 611 897 1,300 i,355 1,401 1,570 i,423 1,608 1,778 1,265

902 519 679 645 883 1,312 i,390 814 1,430 2,017 3,283 3,356 3,004 3,008 2,830 2,482

Source: The Minerals Yearbook, various dates. T h i s table is included as a supplement to Figures 8 and 9. T h e export-import figures in the table are not as inclusive as those in the charts since they cover only refined copper.

[ 202 ]

TABLE

8

MICHIGAN OUTPUT OF COPPER AND VALUE OF OUTPUT, 1 8 4 5 - 1 9 4 6

Year

Mine Output1 (Thousands of Pounds)

Smelter Outputb (Thousands of Pounds)

Average Pricec (Cents per Pound) 18.5 17.2

5 10

Tnf-fll X U Lai.

27 58 477 I,033 1,505 1,281

Ιΐ·5 19-5 22.3 22.0 16.6 22.0 22.0 22.0 27.0 27.0 25.0 23.0 22.0

50 200 340 280 290 380 640 900

184S 1846 1847 1848 1849 1850 1851 1852 I8S3 I8S4 18SS 1856 1857

1858 I8S9 i860 1861 1862 1863 1864 186s 1866

previous 10 1855: 13,419

I,745 1,744 2,905 4,075 5,808 8,212

13,749

32-9 46-3 36-3 31-8

I,570 2,220 2,380 2,110 1,960 2,690 2,870 3,5io 4,270 5,78ο 5,210 4,370

147,506

150,758

27.9

42,035

16,750 19,795 26,584 24,287

17,526

25-1 23.6

4,400 4,940 6,230

5,820 7,752 9,708 9,O 2 3 9,000 11,792

14,842 13,648 12,812 12,403 14,047 13,240

9,531 9,157 8,926 12,069 15,037 13,586 12,985 12,490 14,358

Subtotal 1845-1866

1867 1868 1869 1870 1871 1872 1873 1874 187S 1876 1877 1878 1879 1880

Estimated Value d ( Thousands of Dollars)

25,707 24,821 29,876 34,267 36,070 38,143 38,880 41,486 42,838 49,601

20,935 26,625 24,622 26,748 24,553 30,090 34,332 36,039 38,370 39,025 39,691 42,849 49,737 [ 203 ]

22.3β

I9.I 25-8

23-4 20.6 22.6 33-0 29-0 23-3 22-5 21.0 i8.6 16.5 17.1 20.1

5,070 6,050 8,100 8,730 8,000 8,110 8,060 7,260 6,550 7,330 10,000

TABLE 8 (Continued)

Year

Mine Output' (Thousands of Pounds)

Smelter Output" (Thousands of Pounds)

Average Pricec (Cents per Pound)

Estimated Value" ( Thousands of Dollars)

1881

53,872

53,573

18.1

9,700

1882

56,583

56,983

18.5

10,540

1883

59,257

59,702

15-9

9,490

1884

69,328

69,353

13-9

9,640

688,145

690,753

20.1

138,200

72,759 80,260

72,148

II.I

8,010

1886

79,891

II.0

8,790

1887

75,793

75,472

1888

86,503

86,472

ιΐ·3 16.7

14,440

1889

87,414 100,695

88,176

13.8

12,170

1890

101,410

15.8

16,020

1891

114,409

114,223

12.9

14,740

1892

107,540

123,198

IS93 1894

113,512

112,605

ιΐ·5 10.8

12,160

114,474

114,309

9.6

10,970

1895

129,676

129,331

10.8

13,970

1896

145,745

143,524

10.9

15,640

1897

142,703

145,282

147,966

158,492'

"•3 12.0

16,420

1898 1899

148,444

147,400

17.6

25,940

1900

142,078

145,461

16.5

24,000

1901

156,289

16.6

25,940

1902

155,617 170,176

170,609

11.9

20,300

1903

192,249

192,401

Ι3·4

25,780

1904

208,279

208,309

i3.o

27,080

2,536,292

2,565,002

13.2

334,090

I9°S 1906

229,120

230,288

230,525

229,696

15-7 19.6

45,020

1907

216,007

219,132

20.7

45,36o

1908

223,540

222,290

13-4

1909

233,516

227,006

13-3

29,787 30,192

1910

221,163

221,463

i3.o

28,790

1911

219,771

218,185

12.6

27,490

1912

216,793

231,112

i6.6

38,370

Subtotal 1867-1884 1885

Subtotal 1885-1904

[ 204]

8,530

14,170

19,020

36,160

TABLE 8 (Continued)

Year

Mine Output * (Thousands of Pounds)

Smelter Output" (Thousands of Pounds)

Average Pricec (Cents per Pound)

Estimated Value d (Thousands of Dollars)

139,650 166,184 258,103 266,839 256,037 228,174

155,715 158,010 238,956 269,795 268,508 231,096

15-7 13.6 17-3 28.2 29.2 24.7

24,450 21,490 41,340 76,080 78,400 57,o8o

3,105,422

3,121,252

18.6

580,009

1919 1920 1921 1922 1923 1924

178,366 161,344 92,262 121,387 137,957 138,160

192S 1926 1927 1928 1929 1930

154,799 175,442 177,538 178,443 186,402 169,382 118,060 54,396 46,854 48,216 64,108 95,968 94,928 93,486

177,594 153,484 100,918 122,545 137,691 145,333 138,030

I9I3 1914 191S 1916 1917 1918 Subtotal 1905-1918

I93I 1932 1933 1934 1935 1936 1937 1938 Subtotal 1919-1938 1939 1940 1941 1942 1943 1944

174,779 195,135 179,104 185,301 142,986 105,222 63,899 72,341 51,682 73,812 91,105 84,751 75,28i

2,487,498

2,470,993

87,970 90,396 92,880 91,358 93,528 84,842

89,402 91,486 93,504 94,940 90,996 84,842 [205]

18.7 8

9-5 13.2 10.0

33,210 26,860 12,620 16,420 19,830 18,890 19,320 24,120 25,170 26,150 33,540 18,590 8,520 3,58ο 5,o6o 4,340 6,350 8,660 11,190 7,530

13.4

329,950

17-5 12.5 13-4 14.4 13.0 14.0 13.8 12.9 14.6 18.1 13-0 8.1 5-6 7.0 8.4 8.6

II.O ιΐ·3 11.8 12.5 h 13-3 13-5

9,830 10,340 11,030 11,870 12,100 n,45o

T A B L E 8 (Continued)

Year

Mine Output * (Thousands of Pounds)

1945 1946

60,802

60,802

Ι3·7

8,330

43,326

43,326

i6.I

6,875

645,102

649,298

12.6

81,825

9,609,965

9,648,056

15-6

1,506,109

Subtotal 1939-1946 Grand Total

Smelter Output" (Thousands of Pounds)

Average Price " (Cents per Pound)

Estimated Value d (Thousands of Dollars)

* Source: For the years 1845-1926, Hore, and Pardee; after 1926, The Minerals Yearbook. Source: For the years 1845-1943, The Minerals Yearbook; after 1943, " m i n e " figures have been used, since the Bureau of Mines stopped giving a smelter breakdown by states. c Source: For the years 1845-1849, price has been determined by dividing output into gross receipts, as shown by Stevens, Tht Copper Handbook, V I , 1087; for the years 1850-1859, E. D . Gardner, C . H . Johnson, and B. S. Butler, Copper Mining in North America, U.S. Bureau of Mines, Bulletin 405 (Washington, 1938), p. 1 1 ; for the years 1860-1913 and 1 9 1 9 - 1 9 4 1 , various volumes of The Mineral Industry', for the years 1 9 1 4 - 1 9 1 8 , The Mines Handbook (New York, 1922), pp. 4 0 - 4 1 ; and for the years 1942-1946, American Metals Market, January 15, 1947; The Minerals Yearbook jor 1945', and Engineering and Mining Journal, July, 1945, p. 88. d Except for the years 1845-1849, estimated value has been arrived at by multiplying average price by output. e See note c. T h e quotations are Engineering and Mining Journal averages for both spot and future delivery. Since the prices are quotational averages, they may give a distorted picture in periods of rapidly changing prices. f The smelter output figure for 1898 may be an error in the source data, although it is perfectly conceivable that smelter inventories of mineral were substantially reduced at this time. ε See note c. All quotations through 1919 are for Lake copper which sold at a premium over other grades. After 1919 the premium ceased to be significant and the quotations are for electrolytic copper. h The government stabilized the market price at 11.8 cents a pound in 1941. T h e figures given for the years 1942-1946 include subsidy payments (see note c). In consequence of special subsidies, Michigan producers received substantially higher prices than those shown in the table. b

[ 206 ]

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TABLE

11

POUNDS o r COPPER PRODUCED ANNUALLY P E R MICHIOAN COPPER M I N I N G COMPANY E M P L O Y E E , 1 8 5 0 - 1 9 4 6 "

(In Thousands of Pounds) Calumet and Hecla Year 1850

All Companiesb

Houghton County °

Mill*

All'

1.8

I8S4

1.8

I860

3·2

1864

2-3

1869 1870

Underground*

5-8

1871 1872

20

92

13

18

95

12

19 20

NO 109

13 12

18

116

12

19

122

12

19 22

121

12

1876

123

13

1877

24

IS

1878

26

157 177

1879

30

17 20

1873 1874

6-3

1875

17

40

157 167

1881

45

162

21

1882

45

146

22

43

142

18

50

127

22

47

113

22

12

42 62

133 124

13

33

135

23 18

13

28

125

16

1890

13

32

124

18

1891

14

36

20

1892

13

31

137 NO

1893 1894

IS

35

145

20

15

32

189S 1896

17

41

147 172

17

47

209

23 26

1897

16

34

200

23

1898

14

36

165

20

1899

II

149

18

1900

10

31 28

141

16

1901

II

30

156

17

1880

9-9

1883 1884

II.O

1885 1886 1887 1888 1889

15-3

16.4

[ 2 1 2 ]

21

17 19

T A B L E 11 ( C o n t i n u e d ) Calumet and Hecla Year

All Companiesb

Houghton County °

1902

12.3

12

1903

13

Underground11

Mill'

All'

30 28

168

18

171

29 31 28

165 177

17 18

180

18

146

15 16

1904

12.7

13

1905 1906

12.3

14 12

1907

10.3

II

1908

II.I

II

25 26

1909

12.2

II

26

1910

12

24

156 142

1911

12

25

142

1912

II 8

25 22

129

I9I3 1914

10

22

12

29

87 123

12

I9IS

1916

12

28

116

16

1917

12

25

106

14

1918

14 13

27 22

91 86

1920

15

33

117

1921

13

87

121

1919

I4.6

1922

14 30 Year of Consolidations

1923 1924

37 36

i92S 1926

36

1927

33 36

1928 1929

170

97

94 124 134 156 162 176

20

16 15 16 15 II 16

Η 13 21 25 18 24 26 26 24 26

37 40

177

1930

211

27 26

1931 1932

41 61

125 102

19 21

1933

78 80

129

29

138

30

67 93

113 178

47

23.8

1934 I93S 1936 1937 1938 1939 1940

27.8

1941 1942

[213]

29

77

144

39

85

120

74 50

112

37 40

106

38

64 40

129

45

121

33

TABLE

11

(Continued)

Calumet and Hecla Year

All Companies

b

Houghton County c

Underground

d

Mill *

All'

1943

22.4

41

121

30

1944

21.6

55

104

29

45

75

22

I94S 1946

36

18.3

17

» T h e calculations are based u p o n data in T a b l e s 8 and 10; H o r e , p p . 2 0 6 - 2 1 4 ; Pardee, p p . 3 0 - 3 2 ; a n d a n n u a l reports of the C a l u m e t a n d H e c l a M i n i n g C o m p a n y . T h e table is of limited usefulness since a v e r y large n u m b e r of factors affect t h e trend line. A m o n g t h e most i m p o r t a n t are t h e price of c o p p e r ; the proportion of underground workers e m p l o y e d a t the r e l a t i v e l y u n p r o d u c t i v e task of o p e n i n g n e w ground, exploring, or s h a f t s i n k i n g ; technological c h a n g e s ; t h e richness of the general run of rock available a t a p a r t i c u l a r period; a n d variations in labor s u p p l y conditions. I n addition, no a t t e m p t has been m a d e to m a k e a l l o w a n c e f o r changes in the l e n g t h of t h e w o r k i n g d a y . b I n arriving a t these figures M i c h i g a n mine o u t p u t was divided b y total n u m b e r of mining c o m p a n y e m p l o y e e s as shown b y State and Federal census and other reports. c T h e n u m b e r of e m p l o y e e s reported b y the H o u g h t o n C o u n t y M i n e Inspector ( u s u a l l y as of S e p t e m b e r 3 0 ) has been divided into total a n n u a l o u t p u t of the mines l y i n g w i t h i n the C o u n t y . A f t e r the C a l u m e t and H e c l a consolidation of 1923 it was no longer possible to separate out H o u g h t o n C o u n t y production. d C a l u m e t a n d H e c l a e m p l o y m e n t figures are for D e c e m b e r 31 of each year. A f t e r 1 9 1 4 the c o m p a n y ' s production f r o m tailings w a s deducted f r o m total o u t p u t in arriving a t o u t p u t per underground worker. 0 The n u m b e r of mill workers w a s divided into total o u t p u t f r o m mines a n d reclamation plants. A f t e r 1 9 1 4 the " m i l l " c a t e g o r y includes reclamation workers. f Besides underground and mill workers the c o m p a n y e m p l o y e d large n u m b e r s of men in shops, transportation, construction, etc. T h e " a l l " c a t e g o r y represents total e m p l o y m e n t less smelter e m p l o y m e n t . T h i s a d j u s t m e n t w a s necessary to m a k e t h e figures a f t e r 1888 c o m p a r a b l e to those b e f o r e t h a t date. ( C a l u m e t and H e c l a b u i l t its own smelter in 1888.) O u t p u t f r o m scrap treatment is not included in the figures for 1943 through 1 9 4 6 .

[214]

TABLE

12

DIVIDEND P A Y M E N T S — A L L M I C H I G A N COPPER M I N I N G COMPANIES (A)

TOTALS FOR

1845-1946

(In Thousands of Dollars) Total Amount

Company Cliff Minesota National Pewabic Quincy Franklin Central Copper Falls Calumet and Hecla * Ridge Phoenix Atlantic Osceola ·. Tamarack Kearsarge Wolverine Champion Trimountain Baltic Mohawk Ahmeek Isle Royale Allouez Copper R a n g e " Centennial Superior White Pine

2,519 1,820 320 1,000 27,353 1,240 2,130 100 183,871 100 20 990 18,044 9,420 160 10,350 32,171 3,250 7,950 17,276 14,050 3,681 2,850 8,280 360 649 33

Grand T o t a l '

349,987 Totalc

Calumet and Hecla Copper Range T o t a l "

[215]

200,633 33,895

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