The Lincoln Gold Company
In the January 30th report on the issuing of the Pyramid Range prospectus, Marmaduke Sampson, author of the piece and Financial Editor of the London Times, revealed – and invited explanation of – a number of similarities found between that prospectus and one which had been issued in November of 1867:
In that year a prospectus was issued on the Lincoln Gold Company, Limited, with a capital of £160,000, to purchase some gold mines in Placer County, California for £70,000, of which one-half was to be in cash. In this mine the mass of auriferous deposit in sight was worth £960,000; the stamps already erected were capable, as a minimum result, of producing £60,000 sterling per annum, and the most striking feature was, as in the present case, that the riches were to be obtained from the ‘visible outcrop’ whence the ore could be taken out ‘by open workings, without any expenditure for pumping machinery’ no allowance being made for the additional value underground. With that company also, as with the present, the cash payment was required, not for the direct vendors, but to recoup an outlay incurred by them in purchasing interests held by other parties … but the most remarkable points are that, while there is a Mr. George D. Roberts, of San Francisco, on the Board of the new scheme ‘George D. Roberts, Esq., and one other to be appointed’ constituted the ‘committee of management at San Francisco’ for the Lincoln Gold Company, and that while the vendor in the new scheme is ‘Ashbury [sic] Harpending, Esq.,’ the mines to be purchased by the Lincoln Gold Company appear to have been described as the ‘Harpending’ and Quarry Gold Mines. From these facts the means of testing the degree of faith to be placed in the prospectus just issued would seem to be immediately at hand.⁵⁷
Sampson’s comments and his reference to the Lincoln Gold Company and Roberts’ and Harpending’s involvement in it quickly derailed the Pyramid Range enterprise. On January 30th, the Times also printed a letter from Ashurst, Morris and Company of London, the solicitors representing the Pyramid Range Silver Mountain Company. They stated that, as regards the Lincoln Gold Company, they had ascertained a number of facts. Among these facts was that in 1866, when Harpending and others were working the Lincoln Gold Mine, they were approached by “a gentleman from Boston” who made an offer to purchase the mine, to which Harpending and his associates provisionally agreed. The Bostonian then:
Came to England, issued a prospectus without submitting it to Messrs. Harpending and Roberts, and succeeded in getting capital subscribed. The statements in the prospectus were so exaggerated that the instant Messrs. Harpending and Roberts became aware of them, they refused to accept their purchase money … and begged (by telegraph from San Francisco) that the applicants for shares should have their money returned to them, without deduction.
Sampson’s comment on the letter was that, although it gave some insight on the origins of the false descriptions contained in the Lincoln prospectus, it had failed to offer any explanation of the “peculiar resemblance” between it and that of the Pyramid Range Company.
If anything, the letter from Ashurst, Morris and Co. draws the reader’s attention to yet another similarity between the two prospectuses. If we are to believe Harpending and Roberts, the Pyramid Range venture was not the first to fall foul of the gross exaggerations of a third party; in both instances the pair claimed to have been outraged and unaware of the contents of either prospectus until after they were published.
Sampson, however, was not one to give in easily. The letter from Ashurst, Morris and Co. had also stated that none of the purchase price for the Pyramid Range Co. would be paid until the New Mexico mines had been:
Carefully and skilfully re-inspected, and the description given of them in the prospectus duly verified to that satisfaction of the Board.
Sampson’s response in the February 1st edition of the Times was that it was “difficult to know in these matters what amount of careful and skilfull inspection should be considered necessary”; after all, the Lincoln prospectus of 1867, which Roberts and Harpending claimed was dreamt up by the Bostonian, purported at the time of its issue to contain full reports from two mining experts which confirmed, and even surpassed, everything said by the Bostonian. In effect, both of those experts (J. Arthur Phillips and Melville Atwood) had confirmed the reports and descriptions of both the quality and quantity of the ores, and the estimates of the magnificent profits which could be made by anyone sensible enough to invest in the Lincoln Gold Company. Sampson queried whether, in view of this, it was not perhaps an injustice to lay the blame at the door of “the Boston gentleman.” He also suggested that Harpending and Roberts would serve themselves well by producing a copy of the telegram which they claimed to have sent from San Francisco, in which they had begged that share applicants should have their money returned to them, “as there are allegations current that the first adverse telegram came from a different source.”
Sampson also drew attention to the fact that the Pyramid Range prospectus stated that John D. Fry, President of the Comstock mines at Nevada, was to be on the Board of Directors, and that over the past nine years those mines had yielded silver worth over £24,000,000. Sampson’s comments on this were as follows:
Are the public to infer from this that Mr. Fry, having presided over the realization of such a sum, is to be regarded as a more than ordinarily efficient director or are they to understand that the accounts hitherto received respecting the Comstock lode are incorrect – namely, that it is a formation of some miles in length, that on this formation a number of claims are worked by independent companies, and that consequently there is no president of the mines in the general sense that would be implied by the phraseology of the Pyramid prospectus?
On February 6, 1871, a curt three line announcement appeared in the London Times:
It is understood that the formation of the Pyramid Range Silver Mountain Mining Company will not be proceeded with.
Nothing more could be found in the Times until over one month later, when, on March 24, 1871, a letter from George D. Roberts, dated San Francisco, March 2, was reproduced. Roberts’ stated purpose for writing the letter was to correct some of the statements made by Ashurst, Morris and Co. in their letter of January 30th. Roberts also refers to his attention having been called to Sampson’s article which had criticized the Pyramid Range prospectus and made unfavorable comments on the Lincoln Gold Company.
In his letter Roberts names the Bostonian as Mr. Bigelow. The same Mr. Bigelow who would later be described as “a friend of Mr. Harpending’s”, introduced to the “right people” in London by Alfred Rubery, at the request of Harpending himself, and who came with a letter of introduction written by Harpending.⁵⁸ Alfred Rubery had been tried alongside Harpending after the “Chapman” affair, and was likewise found guilty of treason, fined, and imprisoned. Roberts asserts that, at the time of the agreement with Bigelow, and for some time after, the ores being extracted and processed were indeed so rich as to justify the claims and descriptions of the two experts cited in the prospectus, but that at some point after the prospectus was issued the ore from the mine began to display different, inferior, qualities; something which could not have been anticipated at the time when Phillips and Atwood made their report.
It was then, Roberts claimed, that he sent the telegram which led to the withdrawal of the Lincoln Gold Company prospectus – not because the property had been deliberately misrepresented, but from a sense of duty, because he felt that it would not live up to its promise. Roberts goes on to say that he is still part owner of the mine, and that he suffered a heavy financial loss as a consequence of the playing out of its high grade ore; he does however rejoice in the fact that he was the only one to suffer financially from the episode, and that to him that was of minor consequence – “for I can better bear the loss of money than the blame of even unintentional imposture.”
He closes with the following paragraph:
I dislike that one of the most disinterested and virtuous of acts should turn upon its author the most unmerited suspicion. Your informant, whoever he is, could not have known the facts you published without also knowing the facts I have here given. As he has made you the instrument of a suppressio veri,* and therefore, of a gross injustice to me personally, it will be but a small amend for you to give this letter a place in your columns.
[*supresso veri – a misrepresentation of the truth by the omisssion or supression of key facts]
How much truth there is in Roberts’ version we cannot know; his past record, and, with the benefit of hindsight, his future enterprises, do not favor him in this respect.
Of course, Sampson could not simply publish Roberts’ letter without commenting on it. He introduces it with yet another recap of the wonderful descriptions and promises contained in both the Lincoln Gold and Pyramid Range prospectuses, heavy with his trademark understated cynicism. He again reminds his readers of the similarities between the two prospectuses, and of Roberts’ association with both ventures and writes of the “rather sudden discovery” that the valuable ore at the Lincoln mine had played out. He questions the “total and sudden disappearance” of the visible outcroppings of ore there; that “mass of auriferous deposit in sight”, worth an estimated £960,000, as described in the Company’s prospectus. Of the heavy loss and financial disappointment sustained by Roberts in the Lincoln Gold affair, Sampson writes:
If a total and sudden disappearance of £960,000 sterling is thus to be expected as a kind of disappointment frequent in mining experience, how will Mr. Roberts explain the fact that within three years of such a disappointment he became again sufficiently sanguine to invite the London public to pay £400,000 for a Pyramid Silver Mountain on his assurance that they could quarry out inexhaustible masses of silver ore, such ore like that of the Lincoln Company being all above ground, and, therefore, ‘not requiring the usual scientific examinations to ascertain the contents and probable produce’?
In short, Sampson just wasn’t buying it – and he was, plainly, cautioning his readers that neither should they.
——
Clark C. Spence’s 1995 work “British Investments and the American Mining Frontier,(Chapter IV – Promotional Methods and Techniques) has a brief but informative section on the Pyramid Range scheme. He describes the prospectus as having “represented a new high in creative fiction”. It even included” a sketch drawing of the “mountains of silver”, which, as per Spence, ranged in height “from 18 to 11,000 feet, with the most important mine, the General Lee, looming up, Matterhorn like, in the desert air.”
©2007-2024 Jim & Erica Parson
REFERENCES FOR THIS INSTALLMENT
⁵⁷London Times. January 30, 1870.
⁵⁸London Times. December 18, 1874.
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