Mining City History: Augustus Heinze and the Panic of 1907 – by Richard I. Gibson (Montana Standard – April 8, 2019)

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Local geologist and historian Dick Gibson has lived in Butte since 2003 and has worked as a tour guide for various organizations and museums. He can be reached at [email protected]

Butte’s riches and people have had some far-reaching impacts. Brooklyn-born F. Augustus Heinze arrived in Butte in 1889, and with help from a $50,000 inheritance, soon established the Montana Ore Purchasing (M.O.P.) Company and by 1894 had opened a huge new mill-smelter complex just south of Meaderville on the east side of the hill.

The MOP bought ore from smaller companies to process until Heinze had his own mines, including the Rarus. It’s well known that Heinze went on to exploit the rule of the apex to allege that veins reached the surface within his claim boundaries, winning huge riches in the courts to add to his other mining ventures.

In 1902, Heinze combined all his interests in the United Copper Company, which had a production capacity of about a third of that of the Amalgamated (Anaconda) Company.

By the end of 1906, the War of the Copper Kings was largely over, and Heinze had something like $25 million cash on hand. With his brothers Otto and Arthur in New York, he began to operate mostly as an investor, speculator, and banker.

In October 1907 Otto devised a scheme to corner the ownership of United Copper stock by forcing the price of the stock up, squeezing the many short-selling stockholders (who had essentially borrowed stock and bet its price would go down) to sell to the Heinzes. But the plan backfired, and other non-margin stockholders were able to purchase and cover the short sellers.

For the rest of this article: https://mtstandard.com/news/local/mining-city-history-augustus-heinze-and-the-panic-of/article_77ff49e4-f39a-553b-9765-124bc098828e.html#tracking-source=home-top-story-1

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