Dabbling in mining stocks — more common than you may think

Tim Willoughby
Legends & Legacies
Shareholders endure a rough ride up the crude Midnight road to examine results of their investment.
Willoughby collection/courtesy p

Mining stocks dominated America’s stock exchanges for a half a century, where they attained the popularity of railroad stocks. Both enterprises tuned into America’s rapid expansion and seemingly unlimited natural resources.

During the 1860s San Francisco hosted a major stock exchange. Given one broker for every five San Franciscans, stockbrokers infiltrated the town the same way real estate agents pervade today’s Aspen. Mining companies kept their stock prices low, at prices which invited the average worker to dabble in the market. Buyers believed the next gold or silver mine would offer everyone a chance to be wealthy.

Mining stock businesses and company owners were not known for their honesty. Insider trading, price manipulation and falsely advertised discoveries outnumbered legitimate transactions. But such cheating also helped people imagine the possibility of instant riches. And it did not dissuade the public from buying shares in the next bonanza.

As with startup tech companies of today, some workers acquired shares through sweat equity. When prospectors found an encouraging area, they would take on partners to put in the initial work necessary to explore the area’s potential. When they needed more help, rather than pay wages, they would commonly hire for partial pay and partial stock. Miners would unload their shares to locals for a few extra dollars, or hold onto them for a share in hoped-for profits.

A grand time for mine promoters, 1879 when Aspen was founded, followed a couple of national recessions tied to railroads. Those stocks declined due to over-extension, bad bank loans, many shares bought on credit and a few fraudulent acts. The perception of Mining stocks as a good investment hit an upswing. Colorado silver became the newest bonanza.

Through the 1880s mining stocks retained prevalence and popularity. The New York Stock Exchange began to dominate in their sales. Denver and Boston also held major exchanges. Even Aspen supported two formal exchanges, plus a couple of agents who also sold real estate.

More recessions between 1890 and 1915 dampened the mining frenzy. But the downswings did not discourage new generations of investors. The previous generation had proven that a mine might make you a fortune.

My grandfather stepped into this story in 1917, when he raised capital for the Midnight Mine. Elliot Gould and Ed Grover owned a grocery store in Aspen and had been longtime mining investors. They hatched a scheme to dig a 6,500-foot tunnel to connect to a known ore body in the old Midnight Mine. The tunnel also would drain water that had forced the mine to close during the late 1890s.

A startup shareholder list between May 1917 and January 1918 illuminates the diversity of mine investors. During those eight months, 163 shareholders subscribed to the enterprise at $12 a share, $20 in today’s dollars, and bought between five and 15 shares each month.

Many of these shareholders, or their fathers, had settled in Colorado during the mining booms between 1865 and 1900. Many had used their earnings to buy agricultural land in Western Colorado. Those secondary investments had thrived when refrigerated railroad cars enabled the delivery of peaches and cantaloupes to faraway cities.

Grandfather had been living in Hotchkiss at the time, where Gould lived part time. They recruited 44 like-minded Hotchkiss enthusiasts. They found another 30 investors, mostly fellow orchard owners, in nearby towns like Crawford, Paonia and Delta.

Gould and Grover had developed connections to Aspen businessmen. Local investors, 47 of them, included local business owners (names you may recognize) Tomkins, Elisha, Van Loon, Koch, Grown, Kobey, Beck, and the editor of The Aspen Times, Charles Dailey.

Investors subscribed from Chicago, Detroit, Kansas City, Los Angeles and smaller places such as Thermopolis, Wyoming. Only one outside investor lived in a mining town other than Aspen: Silverton.

The flurry of funds, around $300,000 in today’s dollars, enabled the Midnight to undertake the long tunnel. Hundreds of additional investors over the next decade completed the project. Over the years, stockholders held faith that they would burrow to the original shaft, and their dreams came true, in the end.

Tim Willoughby’s family story parallels Aspen’s. He began sharing folklore while teaching Aspen Country Day School and Colorado Mountain College. Now a tourist in his native town, he views it with historical perspective. Reach him at