South Pacific Mining Company (Death Valley, California)

Product Details

Historical Context

Early in 1881 C. A. Luckhardt (a San Francisco assayer) sold the Salt Spring Mine in Death Valley, California to James Madison Seymour. Seymour was a slim, dapper operator in his mid-thirties. He had speculated in cotton in Texas and grain in Chicago before coming to New York to buy a seat on the New York Stock Exchange and stage a run of stock manipulations.

Together, Luckhardt and Seymour dressed up the old Salt Spring Mine until it became the new speculative favorite of Broadway. They bought the mine for $22,500 and gave it the exotic stage name of the South Pacific Mining Company. Staying behind the scenes themselves, they gave their creation a conservative-looking, paper capital of $500,000 in $1 shares and a respectable-looking paper directorate that included New Jersey Lieuten¬ant Governor Garret A. Hobart and several New York brokers who were distinguished by the fact that they had ‘not before been identified with any mining scheme.’

Posing as a disinterested expert, Luckhardt then came forward with a wonderfully romantic report on the mine – that it was first discovered by Spaniards, that it had produced the richest gold quartz ever found in California, and that it was abandoned only because the Indians attacked and burned the mill. Further fantasizing a 1,200-foot fall of water from the Amargosa River to power a fifty- or more stamp mill, Luckhardt envisioned profits running into millions a year.

In the glow of Luckhardt's praises, Seymour put the South Pacific stock on the exchanges in October 1881, and within a month he and his broker friends had ‘washed’ the price up from its $1 par to $14.63 a share! No other mining stock on the New York exchanges had ever been so far above par, and none had ever been more fictitious.

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