The Revenge Of The Trust


Wherever opportunities for great wealth are concentrated there will also be a concentration of men who make up in ambition, genius, and reckless courage what they sometimes lack in scruples. This is as true of Wall Street and Hollywood as it was of the fallen empire of the Incas and the slave coast of Africa. It was true of Butte, Montana, at the turn of the century.

Montana has never been embarrassed about the source of its greatness. Its official nickname is the Treasure State, and its motto is the briskly straightforward Oro y Plata (“Gold and Silver”). But it was the copper in the “richest hill on earth” that really put the state on the map.

In their great days the copper mines of Butte had six hundred miles of tunnels, producing three hundred million pounds of copper a year. The soaring demand for electricity meant the demand for copper was soaring right along with it. It was a seller’s market, and men whose names are still household words in Montana, such as William A. Clark and Marcus Daly, battled the stubborn earth and each other as they moiled for the red metal.

But none of these copper kings, as they are remembered, could match a boy from Brooklyn named F. Augustus Heinze. Heinze combined the rare talents of a born prospector with a gift for politics and a degree of chutzpah rare even among native Brooklynites. He used these attributes to gain—and almost immediately to lose—one of the great American fortunes.

Heinze was born in 1869. His father was a prosperous German immigrant and his mother a Connecticut Yankee. An able student, Heinze graduated from the Columbia School of Mines when he was only twenty and decided to try his luck in Butte.

Heinze cut a fine figure; he was nearly six feet tall, with broad shoulders and brown hair and eyes. In addition, he possessed a powerful personality, a good speaking voice, and the endearing habit of giving his complete attention to whoever was talking. “When he entered a room,” his brother remembered, “you could very near feel it.” In Butte he immediately got a job as an engineer with the Boston and Montana Mining Company, one of the major mineowners, but soon he left the company and began to operate on his own. He leased the Estella Mine from James Murray, who was generally known as the shrewdest operator in Butte, but he wasn’t quite shrewd enough. Heinze had to pay a royalty only on ore that was above a certain grade, and he was careful to mix in enough poor-grade ore with the better to stay just below that level. Murray canceled the lease. Heinze “made both friends and money rapidly,” one early historian of Montana reported, “and spared neither in the promotion and accomplishment of his purposes.”

Heinze departed briefly for Canada, where he obtained a land grant from the Canadian government to build a railroad in British Columbia from Trail to Victoria. The Canadian Pacific, thoroughly alarmed at the prospect, bought him out for a reported $1.2 million.

Back in Butte once more, with major money in his pocket, Heinze built a smelter and soon bought the Minnie Healy, which had been unproductive until Heinze found the richest vein of copper in Butte a month after he bought it. By no means the least of the attractions of the Minnie Healy for Heinze was its proximity to the great mines owned by his former employer, Boston and Montana. Most of its stock was owned by the Amalgamated Copper Company, the so-called copper trust. The boards of these two companies were a who’s who of powerful Eastern financial interests, including J. P. Morgan, Henry H. Rogers, and William Rockefeller of mighty Standard Oil. Not the least intimidated by the copper trust’s size or connections, Heinze intended to use his great knowledge of the geology of Butte Hill, the proximity of his own mines, and a quirk in Montana’s mining law to take it on.

The apex law, one of the more misguided pieces of legislation in American history, had been passed with the best of intentions. The law said that the owner of the apex of a vein of ore, where it reached or came closest to the surface, could follow that vein downward even if it ran under someone else’s property. The purpose was to stimulate prospecting; the result was the “War of the Copper Kings.”

While the apex law was to be a great help to Heinze, he also needed the assistance of a few friendly judges to overcome the enormous economic power of the Amalgamated Copper Company. He set about electing some with the help of William A. Clark, another independent operator. Heinze bought newspapers to carry his party line. He maintained miners’ wages when the Amalgamated cut them. He gave his miners an eight-hour day. He hammered endlessly about the power of the trust and how he was on the side of the workingman.

Heinze’s tactics worked, and his political influence became very strong, especially in Silver Bow County, of which Butte was the county seat. He reportedly had 75 percent of the county vote in his pocket.

His most loyal member of the local judiciary was William F. Clancy, a very large man with a long white beard, bushy eyebrows, a “deep, crashing, bear-like voice,” according to one journalist, and slovenly habits. When a reporter noticed some debris in the judge’s beard, he said, “I see, Judge, that you had scrambled eggs for breakfast this morning.”