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The report to which your attention is respectfully invited embodies the results of many years of careful and laborious research. It is compiled from original data furnished by the most intelligent statisticians and experts known on this coast, as well as from notes made by myself during the past three years.

In many respects this report is imperfect. No reliable system has hitherto existed for the collection of mining statistics, such as the governments of Europe have long since deemed it expedient to establish. The existing system in the British colonies of Australia and North America, though not adapted to our mineral regions, or to the habits and customs of our people, is both thorough and comprehensive. Surveyors and registrars are appointed for each district, and all mining operations are carried on under their inspection. Monthly and quarterly reports are made by them, under the direction of a supervising officer, whose duty it is to collect and arrange all the data thus furnished for publication. These reports show the actual condition of every branch of mining industry from month to month and quarter to quarter, so that at the expiration of the year a complete history is given of the progress of development and the profits and losses of mining. A permanent system like this, established upon a somewhat different basis, is greatly needed in our country.

One of the difficulties already experienced in the collection of mining statistics on this coast is the disinclination of parties interested to expose the secrets of their business. Either the business is not remunerative and they desire to encourage further investments by false representations, or by withholding the truth; or, if unusually successful, they may consider it to their interest, in view of further purchases, arrangements, or contracts, to avoid giving publicity to the facts. I am inclined to believe, however, that the advantages of fair and truthful stateinents, in the encouragement of immigration, the reduction of the cost of labor, the promotion of confidence in mining enterprises, and the establishment of a more uniform system of laws, will soon become apparent. Indeed, the difficulty to which I refer is not so general, even now, as might be supposed. I have found mining companies, doing a steady and reliable business, nearly always disposed to furnish the desired information. The cases of refusal are exceptional, and there is usually a cause for it, well understood by persons familiar with mining enterprises.

Another difficulty, which, however, will not exist to go great an extent hereafter, has been the conflicting character of statements made by different parties. In many instances where the sources of information are equally reliable, but where conflicting influences prevail, it is almost impossible, after the lapse of any great length of time, to get at the exact truth. Even facts, seen from different stand-points, appear differently to the most conscientious persons. In cases of this kind, where the proofs on either side are not positive, I have preferred--sometimes at the expense of prolixity-to give the different statements, especially where there is a general concurrence of testimony as to the main facts. Thus, it will be seen that the amount of bullion produced on the Pacific coast is variously estimated by the best informed and most intelligent men. Mr. Ashburner's estimates are somewhat lower than those usually accepted by the public, but I believe they are well-considered. Gold and silver are so generally blended together under the head of "bullion," that none of the express companies or bankers have hitherto kept separate records of the products of each. It would be very difficult to obtain correct returns on this point, unless the numerous assay

offi ces and the authorities at the branch mint could furnish details of the quantity obtained by parting, or by estimating the bullion passing through their establishments—the two metals are so universally alloyed with each other.

Mr. Swain, superintendent of the branch mint at San Francisco, a gentleman possessing both the means and the disposition to inform himself on this subject, estimates the product of gold and silver for Oregon, California, Nevada, and Washington Territory. as follows: In 1861...

$43, 391, 000 In 1862..

49, 370,000 In 1863..

52, 500,000 In 1864.

63, 450,000 In 1865..

70,000,000

Well-informed parties estimate the product for 1866 as follows:

California
Montana
Idaho..
Colorado
Nevada
Oregon
Other sources

$25,000,000 18,000,000 17, 000, 000 17,000,000 16,000,000 8,000,000 5,000,000

Total ...

106,000,000

Great differences of opinion, however, exist as to the accuracy of this estimate. To some it appears exaggerated, while others pronounce it far below the actual yield. The imperfect returns received for the last nine months would seem to warrant the conclusion that it is not an unreasonable estimate. For instance, the product of Oregon is assumed to be $8,000,000. Statistical tables, supposed to be worthy of credit, show a probable yield for that State of $20,000,000. In 1865 the generally accepted estimate for Oregon was $19,000,000, though that was probably above the actual product. There is good ground for believing that the result this year will be considerably above that of the last year. The same may be said of the Territories of Idaho and Montana.

In like manner, the capital in circulation in California, and necessary for the transaction of business within the limits of the State, is variously estimated at from $25,000,000 to $50,000,000. It is believed that $10,000,000 is annually shipped up to the mines to defray the current expenses of mining; but there is no record of the return of this amount in the form of a circulating medium. Assuming the estimate of the product of bullion, as above given, to be

approximately correct, it will be seen that the States and Territories on the Pacific slope produce annually upwards of $100,000,000 of the precious metals, a quantity more than four times as great as the total product of the world less than thirty years ago. The improved processes for the extraction of these metals from their ores, made within the past two years, and the constantly increasing area over which gold and silver mines are being developed, furnish strong guarantees that there will be no abatement in the product for years to come, provided government places no impediments in the way by impolitic legislation. The recent financial panic in Europe afforded an illustration of the importance of encouraging this branch of industry. Within sixty days during that panic there was exported from San Francisco the enormous sum of $12,000,000 in gold and silver, without which, it is well known, the commercial interests of the United States would have suffered in sympathy with those of our best customers in England. The shipments of specie from San Francisco to New York during the first eight months of 1866 amounted to $27,729,010.

There is a more striking form in which the importance of the gold and silver mines of the Pacific coast on the national welfare may be illustrated.

The product of these metals for the present year exceeds in amount all the gold and silver in the national treasury, and in all the banks in all the States.

The report of the Secretary of the Treasury shows that the bullion in that department on the 1st of August last was.

$61,000,000 The banks at New York, at same date, report having.

5,000,000 The banks at Boston and Philadelphia report.

600,000 The last quarterly report of all the national banks in the United States, outside of the above cities, reports.

1,600,000 State banks outside of those cities estimated at

1,500,000

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The approximate estimate already given of the gold and silver product of the Pacific States and Territories for 1866 shows a total of $106,000,000, or nearly double the combined bullion of the government and all the banks in the country.

For convenience of reference the report transmitted to you is divided into sections and clauses, of which the following is a brief summary :

Section 1 contains a historical sketch of the discovery of gold and silver in the territory of the United States west of the Rocky mountains; the excitement consequent upon the development of rich placer diggings in California ; the crude means adopted in the early stages of gold mining on the Pacific coast; the introduction of improved processes, and the extraordinary results that followed in the sudden increase of commerce and the extension of the area of civilization. In this section a sketch is also given of the discovery of the Comstock lode and the development of the silver mining interest east of the Sierra Nevada mountains.

Section 2 refers chiefly to the geological features of California, and the prom. inent characteristics of the principal lodes in the great mineral belt. The present production of the gold mines is given from actual data derived from investigations made by Professor Ashburner, of the State geological survey, and a comparison is made between the products of California and Australia. Detailed descriptions are given of a few leading mines in Grass valley and Mariposa, showing the expenses and profits of gold mining as a permanent business.

Section 3 gives minute details and statistics of the gold and silver mining interests on the Pacific coast; the improved processes and results; the exports of treasure from San Francisco, with the amount received from the mines ; cost of extracting the ore and reducing it; the average yield; the machinery in use; capital and labor employed, and cost of working.

Section 4 gives a historical and topographical sketch of Nevada; the prominent characteristics of the principal silver mines; the alkali lakes, salt-beds, wood and water privileges, and general products. Carefully prepared statistics are given in this section, showing the expenses of silver mining, the various processes of crushing and amalgamating the ores, the number of niills in actual operation, the profits and losses, with a general review of the condition of the mining interest. It also contains brief sketches of Utah, Idaho, Oregon, Washington Territory, Montana and Arizona, with such reliable data, showing the condition and prospects of the mines, as could be obtained.

Section 5 is devoted to the copper mines of the Pacific coast. In this paper a history of the discovery of every notable copper lode is given; the extent of the veins; the quality of the ore; the process of reduction ; the costs of machinery and working; the yield, and the profits and losses. Special attention is called to the great national importance of this interest.

Section 6 contains a report on the quicksilver mines of California, with statistics of production.

Section 7 gives the history of the discovery of borax in California; the process of working the borax deposits; their extent and value; some account of

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the sulphur deposits ; and reports on the tin mines of Temescal, and the coal and iron resources of the Pacific coast.

Section 8. Mining regions, population, altitude, &c.

Section 9. An annonated catalogue of the minerals found west of the Rocky mountains.

Section 10. Mining titles ; the laws and customs of foreign governments; the crown right, and peculiar doctrines held under that right; the recent legislation of our own government; recommendations of the Secretary of the Treasury; passage of a law for the sale of mineral lands, and general approval of the policy adopted.

Section 11. Local customs; difficulties arising therefrom; the necessity of some uniform system; importance of congressional legislation for the systematic working of the mines, and the establishment of a permanent policy for the development of the great mineral resources of the country.

Section 12. A list of the most important works published in reference to the geology, mineralogy, and metallurgy of the Pacific coast.

Section 13. Population of the mining regions; agricultural resources; table of distances, &c.

From the above synopsis it will be seen that an earnest attempt, at least, has been made to meet the wishes of the department as expressed in the letter of instructions hereto appended. Want of time for a more systematic arrangement has been the only serious obstacle to moie satisfactory results.

One of the most important subjects considered in the report is the discrepances existing between the local rules and customs upon which a material part of the late mineral land law is based and the statutes of the States and Territories. The policy of granting titles to the miners in fee-simple has met with such universal approval, and the time has been so short since the law went into operation, that I have serious doubts as to the expediency of an immediate change. Attention has been called to some of the difficulties arising from the loose interpretations given to local rules and customs, and in many cases the entire impracticability of determining what they are or ascertaining where they are to be found. Some provision requiring oflicial records to be kept might, perhaps, have a beneficial effect. Reasons doubtless exist for the differences in the size of the claims in different districts. The rules which would apply to the Reese River district, where the ledges are extremely narrow and close to each other, would scarcely be applicable to districts in which the ledges are of great width and far apart. Still, without descending to details in a general law, some regard should be had to uniformity ; and especially some fixed principle should be adopted as to the local laws which shall govern in all conflicting cases. The policy of giving every advantage to the practical miner over the mere speculator will at once be conceded. This, I think, can only be carried into effect by national legislation. A general law, based somewhat upon the principles incorporated in the mining law of Mexico, but more liberal in its provisions, will probably be required before long. The holding of claims without working ; the seizure of mining property for debt; the abandonment of claims; the destruction of timber; the monopoly of salt-beds; these are subjects worthy of serious consideration.

In the preparation of a preliminary report I have been compelled to depend chiefly upon the labors of other and abler hands. To Mr. Hittell, author of a very excellent work on the resources of California, Professor Whitney, Mr. Ashburner, and Mr. Gabb, of the Siate geological survey, Professor Blake, author of various standard works on the geology and mineral resources of California, Baron Von Richthofen, the distinguished German savant, Mr. Degroot, an experienced statistician and topographer, Mr. Bennett

, a mining expert, thoroughly familiar with the mineral regions, to Dr. Blachley, of Nevada, and others, I am indebted for nearly all that is really valuable in the report.

It is my intention to visit the various mineral districts of the Pacific slope during the coming spring and summer. Personal examination of the mines, increased experience, and sufficient time for the careful preparation of the material collected, will enable me, I trust, to present for your consideration, before the next meeting of Congress, a report better worthy of your approval than that just submitted. Reliable statistics and valuable information, showing the resources and products of our new States and Territories, cannot fail to result beneficially to the country and the government. Nothing can tend in a greater degree to encourage immigration and the investment of capital.

The question arises, how can the object be best accomplished in the future ? A statistical bureau for the Pacific coast has been recommended.

It is manifest to my mind that the work cannot be properly done by bureau organization. Information derived from interested parties by means of blanks and circulars, sent out over the mining regions, would be very imperfect and for the most part unreliable.

The plan that appears to me most feasible would be

1st. To authorize the appointment in each State and Territory of an able and experienced geologist, familiar with all the operations of mining

2d Annual reports to be made by each officer so appointed and assigned to duty, under official instructions, to the supervising commissioner at San Francisco.

3d. The commissioner to make a visit every year to each mining district, for the purpose of personal inspection of the mines, and conference with his assistants; after which he would be prepared to make his annual report to the Secretary of the Treasury.

Proper measures, of course, would be taken to secure the official returns of assessors, surveyors, tax collectors, and other local State or territorial officers.

The expense would be comparatively trifling, inasmuch as the services of professional experts could be had without requiring their entire time. A small compensation to each would be an object of some importance.

An appropriation of $25,000 would probably be sufficient to inaugurate such a system, though a much larger amount could be advantageously expended.

In the hope that these suggestions, hastily made and informally stated, may at least furnish some ground for action, I have the honor to be, very respectfully, your obedient servant,

J. ROSS BROWNE,

Special Commissioner. Hon. H. McCULLOCH,

Secretary of the Treasury.

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