Financial History Issue 120 (Winter 2017) | Page 35

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 .
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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