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DANIEL GUGGENHEIM (1856-1930) MINING EMPIRE
These days the name Guggenheim is synonymous with the world of modern art and the Guggenheim Museum in New York. However in the 19th and the early 20th centuries the Guggenheims were better known as the most powerful force in US mining, having built a mining empire in both North and South America.
A Jewish immigrant from Switzerland, Meyer Guggenheim started his business career in the US in manufacturing and then in importing fine lace from Switzerland. He invested some of the gains from his importing business in silver and lead mines at Leadville, Colorado. In 1884, encouraged by the success of his Leadville investment, and of the rapid industrialisation of the US, he closed the lace business to concentrate on mining interests and founded Philadelphia Smelting and Refining to treat his Leadville mining output.
At that time he was almost 60 and his eldest son, Daniel, one of eleven children, who had worked for the Swiss end of the family’s importing business, took up the reins, and progressively became the driving force behind the family’s mining strategy. Daniel was educated at a Catholic high school in Philadelphia and by-passed university to enter the family business and was supported by five of his six brothers.
In 1890, following the imposition of new duties on imported silver and lead concentrates used by the Guggenheims’ Colorado smelters, Daniel acquired Mexican mines and built a smelter there to circumvent the US restrictions. He also developed the Guggenheim Exploration Company which operated worldwide, financing and developing new mines. He gained control of American Smelting and Refining (ASARCO) in 1901 after a short but bitter battle with the Rockefellers and Henry Rogers who had tried unsuccessfully to tempt the Guggenheims into joining his Smelter Trust, one of the new monopolistic industrial trusts being established by powerful industrialists in the US at that time.
Daniel used ASARCO to build a global mining giant operating Bolivian tin mines, African diamond mines, Alaskan gold mines and copper mines in the US and Chile. ASARCO was a dominant economic force in a large number of developing countries where Daniel Guggenheim’s influence was subsequently considerable. As a mining entrepreneur he was also very innovative, profitably mining low grade ores through the technique of treating huge quantities of ore efficiently, and also undaunted by logistics, developing mines such as Kennecott Creek in Alaska and the remote high altitude Chuquicamata in Chile.
Daniel Guggenheim was an autocratic man, which helped him become one of the most powerful late 19th and early 20th century mining figures. He was ruthless in his treatment of labour unions and was not much interested in the environmental damage caused by some of the Group’s mines. The Guggenheim family fortune reached $250 million by the end of the First World War, and the war itself, which the Guggenheims thought the US should participate in at an early stage, provided rich pickings. Demand for copper in particular soared, in fact so much so that President Woodrow Wilson threatened to nationalise Guggenheim’s mines if he did not lower the copper price in support of the US’s latecomer war effort.
The adage ‘those who live by the sword die by the sword’ has some resonance with the decline of Daniel Guggenheim’s influence and an increase in internal family disputes over the running of the family company after the war. One of the younger brothers, Will, was excluded from a Chilean copper deal in the early 1920s and took Daniel and other family members to court; an out-of-court settlement to hide the family’s wealth was the outcome, but decline had inexorably set in.
In 1922 the Guggenheims were thrown off the ASARCO board, accused of mismanaging company funds. A family dispute arose over the sale of a family-controlled copper mine in Chile – the mine was sold but Daniel re-invested in a nitrates operation that proved a dud. In 1923 Daniel retired to his estate on Long Island, his mining days were over but he had left a huge footprint on the industry, and perhaps also a smouldering resentment overseas of profiteering and exploitation that finally surfaced in the Latin American expropriation of US mining assets in the 1960s.
The latter years of Daniel’s life were spent in philanthropic work and the Daniel and Florence Guggenheim Foundation made huge endowments to Mount Sinai Hospital, the New York Botanical Gardens and the Guggenheim Museum, amongst others. Importantly the Foundation also supported and financed the development of the US aviation industry and aerospace research, which laid the foundations for the space age. Daniel died in 1930 a hugely respected figure as a supporter of good causes, but the ruthless accumulation of the riches that enabled him to be so generous was less well publicised.