Willoughby: Corporate restructuring, 1894 style | AspenTimes.com

Willoughby: Corporate restructuring, 1894 style

Tim Willoughby
Legends & Legacies

The rancor of Cripple Creek’s strikes exceeded that of Apen’s. (Cripple Creek in 1897)

The myth of the demise of Aspen's mining after 1893 persists. A distortion of similar magnitude would occur if people summarized the Great Recession's local impact: "A housing bubble wreaked havoc for the real estate business and Aspen's economy receded into the twilight years."

In national unemployment rates and bank failures, the Panic of 1893 ranked second only to the Great Depression. The price of silver dropped by half. And then the price halved again with the Great Depression.

Nevertheless, two wars consumed lead and zinc, and that demand for locally mined minerals kept Aspen afloat. Although the government had stopped buying silver for coinage during the 1890s, people continued to treasure silverware for their homes. And photography created a new market. The gleam of silver brightened Aspen's economic future throughout the next three generations. Then, in the late 1940s, competition with low-wage workers in other countries shut down silver mines all over America.

During the Great Recession of 2008, corporations restructured their workforces and employment took a crash dive. Companies such as Home Depot, which suffered when the housing boom crashed, hired mostly part-time workers with no benefits. The auto and other industries adjusted to a parts chain supplied by lower-wage jobs in other countries. Some industries negotiated with unions for lower wages in this country. Others moved to states where unions had been weakened by "right to work" laws.

Aspen responded similarly to the financial crisis of 1894. With the sudden, precipitous drop in the silver price, mine owners cut their expenses to stay open. Before the Panic, Aspen and other towns that mined precious metals supported strong unions, notably the Western Federation of Miners. Miners stood among the first workers to force their employers to negotiate wages.

Before the panic, Aspen's miners made $3.50 a day, or $83.30 in today's dollars. That does not sound like much for a 10-hour shift. But the rate topped the list for work anywhere at a time when unskilled manual labor could be had for a dollar a day. The wage structure in Aspen's mines covered the men who drilled and blasted underground, others who trammed the ore to the surface, mill workers and men who installed timbering. Most earned between $3 and $4 a day.

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At the time, the public perceived mining companies as large corporations with many employees. The Smuggler Mine, one of the larger ones in Aspen, employed more than 300 workers.

Eventually mine owners got together and decided to change the wage to $2 for an eight-hour day, or $2.50 for a 10-hour day. The miners' union went on strike. But many mines had closed and a national recession raged onward. These conditions left highly skilled miners with few options and weakened the strike.

Swallowing lower wages, some strikers headed for new jobs in Montana where rising copper prices funded business expansion. Others took off for Cripple Creek, where gold prices had not dropped as much as silver. But they did not escape the labor/management blues. Cripple Creek suffered a bitter strike in 1904, when someone dynamited the railroad station and the crime led to martial law. Governor James Peabody sent in the state guard, which wrested union miners and their wives from their homes in the dark of night. They forced the captives onto a train headed out of state.

Labor relations proceeded more civilly in Aspen. In response to the strike, owners of the Mollie Gibson, one of the larger mines, unilaterally cut a deal at $2.33 for an eight-hour day. David Hyman of the Smuggler Mine led the other owners in refusal to pay that much. Miners ratcheted up their resistance and focused on Hyman. They burned down the house of one of his foremen and made threats.

In the end, the parties forged a compromise at $2.25 for an eight-hour day. Mines reopened under lower wages and with a reduced number of workers. When silver brought in as little as $.65 an ounce, mines still operated profitably because Aspen continued to discover and produce high-grade ore. At the time, a 7.5-ton ore shipment from Smuggler sold for almost $3 million in today's dollars. The ore held about 90 percent silver, the richest silver shipment ever made in the world up to that time.

The strike of 1894 occupies a small space on a short list of Aspen's labor clashes. Management and workers shared a desire to quickly make the most of the high quality ore, and that common goal cleared both sides of the bargaining table. Imagine a common goal that would clear both aisles of Congress.

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 redmtn2@comcast.net.

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