The silver kings of the Comstock

In 1857, Henry Comstock lucked upon an area where he and some others found some gold and silver veins that were promising for riches. Henry acquired the area after the Grosh brothers died before filing claims. Henry took over the cabin and land and enlarged his holdings by claiming more land around the cabin after hearing of a gold strike at Gold Hill. The four miners that found the gold, James Finney, John Bishop, Aleck Henderson and Jack Yount, are given credit for “rediscovering” what became to be named the “Comstock Lode.”

It wasn’t until the spring of 1859 that two miners, Peter O’Riley and Patrick McLaughlin, staked a claim at the head of the canyon by Gold Hill and made a larger discovery of gold and a sticky blue mineral that turned out to be silver.

The rush was on to become rich in the fields of Mount Davidson. This strike would not be the same type as the gold strike in California turned out to be. Gold doesn’t dissolve like silver therefore gold doesn’t travel far from its source. Silver, however, combines with other minerals and cannot be panned out of water like gold is. The silver in Nevada was deep in the ground and needed to taken out by digging shafts that lead to the silver ore. This costs a lot of money and discouraged many would be miners quickly. The big “money people” from other places needed to be found to finance the silver operations.

The original miners who found the first evidence of silver and gold quickly lost their potential fortunes to men who knew how to manage money, stocks and banks. Four of these men became known as the “Silver Kings of the Comstock.”

These four Irishmen: John Mackay, James Fair, James Flood and William O’Brien formed the Consolidated Virginia Mining Company to deal in silver stocks and operation of mines on the Comstock Lode.

James Flood and William O’Brien were partners in a bar on Washington Street in San Francisco. Flood apparently got much inside information about silver stocks from those who frequented the bar and Flood made good use of it. He became very rich and, in 1860, he and O’Brien formed a partnership with Mackey and Fair. Fair was a mine superintendent and Mackay a mining engineer. This combination of talents was able to develop the most prosperous mine on the Comstock and, by 1875, the mines under their control were valued at $1 billion. The output of the mines in the first six months of 1875 averaged $1.5 million monthly. After 1875, due to the heat and the depth, the mines could not be operated profitably and many shut down.

Fair became an overnight millionaire who started out as a Placer gold miner in California and moved to the silver fields of Nevada where he operated a stamp mill. He became a superintendent in the Hale and Norcross Mine in Virginia City, Nev. and also became a partner with Mackey, Flood and O’Brien. Although not well liked, he made fortunes in silver mining, railroads and San Francisco real estate. He and Mackey founded the Nevada Bank to compete with the Bank of California run by William Ralston. The Fairmont Hotel was built and named in his honor by his daughters Theresa Fair Oelrichs and Virginia Fair Vanderbilt who built the hotel.

Flood had a rare genius for stock manipulation. The situation at the Comstock Lode was very fluid and changed day by day. Silver veins are hard to predict, much harder that gold veins, and a rumor about value and amount of silver was easily manipulated by stock brokers. Rumors about the end of a silver vein could cause panic in the streets and runs on banks. Millionaires could be ruined on these rumors, and others could make fortunes in a few hours. Flood was not well liked but he became one of the top 100 wealthiest Americans. With this wealth, he built a mansion, the James Flood Mansion, at 1000 California St. and a extravagant “white cake” Victorian mansion near Menlo Park.

Rediscovering the Peninsula by Darold Fredricks appears in the Monday edition of the Daily Journal.