Willoughby: Taking stock of startup companies in Aspen a century ago
Legends & Legacies
Within boxes of family archives I keep running across my grandfather’s worthless stock certificates. Perhaps a relative saved them because they are graphically pleasing, or as a lesson for the next generation regarding the illusions of investment.
Fred D. Willoughby, my grandfather, studied mining engineering and then immediately focused on the business side of the enterprise. He looked for potential opportunities in Colorado and invested in them. In his first foray, in 1896, he bought 2,000 shares of The Echo Gold Mining Company. During the gold mining boom in Cripple Creek that year he invested in another mine, The Big Mike Gold Mining Company. The Big Mike must have fared better than Echo, because he bought more shares in 1900 to bring his total to 5,000.
Between 1902 and 1906, Willoughby invested in companies with which he was directly involved. He was the president of the Silver Plume Mining and Milling Company and secretary/treasurer of the Crystal Hill Gold and Silver Mining and Milling Company, both in Saguache County.
J.S. Sanderson, one of the other investors, had known my great-grandfather during the 1880s. Saguache had had a silver boom at that time, with renewed interest during the early 1900s. Grandfather acquired 38,000 shares in Crystal Hill. He picked the wrong Silver Plume company, though, in Saguache. Around the same time another Silver Plume Mining company — in Silver Plume — owned the Prince Albert Mine and profited from a silver strike.
Willoughby’s investments extended beyond mines. During 1918 and 1919 he bought shares in my favorite of his investments, the Pan Motor Company of St. Cloud, Minnesota. In those days, more companies built cars. Pan designed a car built for traveling, the seats folded down so you could sleep.
The founder of the company, Samuel Pandolfo, was quite a character. During his early work as an insurance salesman he developed a long list of customers. Pandolfo conceived the idea for his car from traveling, and sold shares in his car company to his insurance patrons. He sold thousands of shares. He built the auto plant and a company town called Pan-Town to house employees. When he continued to sell more shares, shareholders realized he was spending massive amounts of money to promote and sell more shares, in a pyramid scheme. Convicted of mail fraud, he served three years of a ten-year sentence.
Pan produced 735 cars and then closed its doors. During the same period Ford sold 1.2 million Model T motorcars.
Willoughby probably bought the shares because he loved cars. But he might have met Pandolfo while also selling shares to raise capital for Aspen’s Midnight Mine. He had never sold insurance as Pandolfo did, but he had traveled the West to drum up investors for mining enterprises.
Willoughby bought shares only during companies’ start-up phases. Mining during that era in particular could be billed as a high-risk/high-profit investment. Although major mining areas had been scoured for minerals, individual mines still discovered new ore. To take a chance on a mine that had shut down not because it ran out of ore, rather because it had to pump water to get to it, may have paid off.
During that period, reliable sources were rare to assess the risk and potential of buying a share in a company. The Securities Exchange Act would not regulate and oversee the exchange market until 1934. Investors relied on their evaluation of the person who sold the shares. Some paid off, others filled attic boxes.
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 email@example.com.