Swindle at the Gold Bar Mine
The strikes at
Tonopah and Goldfield attracted miners from all parts of the nation,
them were two miners from Cripple Creek, Colorado, named Ben Hazeltine and
N. P. Reinhart. Although they arrived in
Goldfield too late to capitalize
upon that rush, they soon found jobs in local mines. By the time the news
of Shorty Harris' and Ed Cross' strike hit
Goldfield, Reinhart and Hazeltine were ready for another rush, and they joined the great migration
to the new Bullfrog District.
Finding that all the close-in ground was
already staked out, the two men drifted farther afield, prospecting in the
upper Bullfrog Hills. On October 10, 1904, their persistence paid off, for
they found and located the Hazeltine claims, approximately four miles
and two miles north of the original Bullfrog.
two men worked the mine by themselves for a short while, and regularly
brought in ore samples to be assayed at
The rich results of the assay tests did not go unnoticed, and early in
1905 Reinhart and Hazeltine sold their mine for $117,000 to
promoters, headed by J.P. Loftus and
James R. Davis. The new company was
soon organized as the Bullfrog Gold Bar Mining Company.
By the end of May, 1905, after only six weeks of
exploratory work, the mine had run into ore ledges averaging $15 per
ton, and had uncovered small rich pockets, one of which assayed at
$1,458 a ton. Ordering more equipment and hiring more men, the 14
miners continued to uncover evidence of paying ore. Towards the end of
the summer, with the mine well into its development phase, a new
boarding house had been completed for the convenience of the miners,
and the Rhyolite Herald characterized the Gold Bar as "one of
the surest and most dependable properties in the district."
Good news continued through 1906 and by March three shifts of miners
were working and the mine owners were contemplating building a mill.
In April, the fortunes of the mine reached a turning point, as the
Gold Bar Company gave Charles M. Schwab, the famous steel millionaire
and mining promoter, an option to purchase the property. Descriptions
of the deal varied, but Schwab apparently had an option to purchase
the mine for $1,000,000 by May 1st. Schwab sent his engineers out to
examine the mine, prior to exercising his option, and the
Bullfrog District waited in anticipation. The control of a mine by a man with
the assets of Schwab could only mean good things for the entire
While Schwab pondered the deal, the Gold Bar continued to report
discoveries of valuable ore, and the month of April saw so much
promising development take place that the owners of the mine privately
expressed the hope that Schwab would let his option expire without
buying the mine. The Rhyolite Herald after digesting the latest
company reports, called the Gold Bar "one of the biggest things in the
far famed State of Nevada."
But the San
Francisco fire and earthquake that year dampened the mood of unbounded optimism.
Schwab requested several extensions of his option and
eventual the deal fell through. The owners put on a good face, declaring
that they were glad that Schwab had not bought. Developments at the mine
continued despite the effects of the San Francisco disaster upon financial
The Gold Bar
Company continued operations through the intense heat of the summer. The
mine now employed twenty-five men, and its main shaft reached a depth of
330 feet by the end of July. However, it was becoming apparent that the
Gold Bar was a low-grade mine, which would have to operate its own mill in
order to make a profit. Development continued and by the end of 1906, The
Gold Bar property included a hoisting plant and gallows frame, a small
engine house, a blacksmith shop, a boarding house, an office building, and
January, 1907, the Gold Bar announced that it would definitely build a
mill on its property, but no further details were released. In order to
help finance the construction, the mine began to ship ore to the newly
completed Las Vegas & Tonopah Railroad terminus at
Main shaft of the Gold Bar Mine, 1905, courtesy
In June, the
company announced it had a contract for the construction of a 10-stamp
mill. Work soon began for the mill foundations, and the company started
laying a pipe line from its spring to the mill site.
Work on the mill slowly progressed during the last months of 1907, but
despite the evidence that the Gold Bar was evolving from a developing to a
producing mine, stock prices were falling. The mill building was completed
in December, 1907, but delays in obtaining electrical power and equipment began to plague the company.
However, the delays were overcome and the Gold Bar Mill began operations
on January 11, 1908.
Unfortunately, the mill had problems with
leaking pipelines, but production continued until April, as rumors
circulated that the mine would be forced to replace the entire pipe line
in order to solve the water problem. On April 25th, the mine and mill were
closed in order to refurbish the mine and pipe line. The company soon
announced plans to replace the entire pipe line and install expensive
cyanide treatment machinery. Ominously, the company did not announce a
definite date for the beginning of the improvement work and its stock
With the benefit of hindsight, it suddenly became apparent that something
was definitely wrong with the Bullfrog Gold Bar Mining Company, and had
been wrong for some time. Its superintendent, L.E. Bedford, had quietly
resigned on March 21st, which looked strange at a time when the Gold Bar
was finally beginning to produce.
On May 6th, all suspicions were confirmed, when a large New
York brokerage firm announced that the recent decline of the
stock was due to a western bank giving instruction to sell a large block
of Gold Bar regardless of the market price conditions. Someone obviously
knew that the Gold Bar was about to fail. Three weeks later, the
Rhyolite Herald reported that over 200,000 shares of the company's
stock had been sold and the dumping continued. In the meantime, the two
principal controllers of the Gold Bar
-- J.P. Loftus and
James R. Davis, left for a two-month vacation in Europe, announcing that they would
take a look at the problems upon their return.
While the pair were abroad, however, their attorneys were
not idle. The Nevada Exploitation Company, an aptly named
concern, filed suit for an attachment on the assets and property of the
Gold Bar Company, in order to recover $36,300 which it had advanced to the
Gold Bar to finance the construction of its mill.
The owners of the Nevada Exploitation company were the very same principal
owners of the Gold Bar --
Davis were thus suing
themselves, but if they won, the Gold Bar
would become the property of the Nevada Exploitation Company, and the
remaining owners of Gold Bar stock
would be left holding the bag.
newspapers smelled fraud of the worst sort, and started screaming. The
Rhyolite Herald managed to obtain copies of company reports which
indicated that the mine superintendent, L.E. Bedford, had reported that
the values of ore in the mine were not at all what he had claimed during
past years. Principle owners,
Loftus and Davis said they were forced to
sell their stock in order to repay the debts of the company and to
close the mine and the mill because it was losing money. They
claimed that the failure of the
Gold Bar Mine was the fault of Superintendent Bedford, who had deceived
both themselves and the public for over two years concerning the true
value of the ore deposits in the mine.
The Rhyolite Herald did not believe a word of it. Bedford
had indeed been guilty of deceiving the public, but not of deceiving
Davis, who obviously were the leaders of the company. Only when
Bedford had discovered that
Loftus and Davis planned to let him carry all
the blame for the company's fraudulent practices had Bedford decided that
discretion was the better part of valor, and left town.
James R. Davis
The Rhyolite Herald could cite too many direct
quotes from Loftus and
Davis concerning the prospects and values of the
Gold Bar to believe that they were innocent. One had only to review the
directors' production statements of the last several months to prove that
point. It was evident to the newspaper that
Davis had intended
to defraud the public from the beginning, by loaning themselves money to
build a mill, releasing false claims of mill returns, dumping the
company's stock on the market, then recovering their loans by foreclosing
on the Gold Bar. Thus, they would be left with all the profits of the mill
returns and the stock sales and would lose no money at all. The public
stockholders; however, would lose every penny which they had invested in
the Gold Bar Mine since 1905.
Despite the extreme anger of the local newspapers and of stockholders
around the nation, the plans of
Davis were completed with
hardly a hitch. The Nevada Exploitation Company won its suit against the
Gold Bar Company, and in December, 1908 the
Gold Bar Mine and Mill were
sold to the Nevada Exploitation Company. Holders of Gold Bar stock, which
had plunged to 3¢ per share, were left with nothing but waste paper in
Not content with their coup,
Davis then announced a grand reorganization of the Gold Bar
Mine, proposing to reincorporate as the New Gold Bar Mining Company.
With a capitalization of 1,000,000 shares, par value $1 each,
to sell 600,000 shares in the new company to stockholders of the old, at a
special discount rate of 7¢ per share. The money thus raised, they
announced, would pay off the debt owed by the
Gold Bar to Nevada Exploitation,
after which the mine would be free to resume operations.
The Rhyolite Herald soon managed to secure an
interview with Loftus and
Davis, at which the Herald reporter questioned
them about many conflicting reports they had earlier given about the
original Gold Bar Mine. Time and again,
Davis insisted that
there had been no intent to defraud the public. Finally, the reporter
asked why the company had dumped its stock after it had determined that
the mine and mill were a failure and would have to be closed down,
concluding with "What kind of treatment is that for the public to receive
at your hands?"
Loftus' reply amply summed up the philosophy
of the Gold Bar Company. "I am not the guardian of the public. It is up to the public
to decide these things for themselves." When further pressed by the
reporter as to the lack of ethics displayed by the company, Loftus
reiterated his feelings in the best tradition of the nineteenth-century
robber barons -- "The public be damned."
The local newspapers continued to be full of various attacks upon the motivations, characters, and ancestry of
Davis. As the attacks continued, the Rhyolite Daily Bulletin
reintroduced another factor that everyone seemed to have forgotten. They
reminded the public that the contract for the construction of the
mill had been awarded by the company to the
Loftus-Davis Company of
Goldfield. It was no wonder, said the Bulletin, that the
Gold Bar Company
had been willing to accept a poorly designed and built mill, with rotten
water pipes, a lack of cyanide treatment facilities, and other defects.
The full extent of the fraud now became clear for the first time. Not only
had a Loftus-Davis controlled company
that loaned the
Gold Bar the money to build its mill,
but the mill had then been built by yet another
Company. How much of the almost $50,000 paid by the
Gold Bar to that construction company
represented a pure profit? And how did
Davis have the nerve to sue the
Gold Bar to recover the costs of
construction, when they had already paid themselves for the actual
construction work? The Bulletin's question, of course, went unanswered.
Davis inexplicably seemed to be unaware
of the extreme wave of hatred directed towards them, for they blithely
persisted in advertising for investors in their reorganization efforts.
Needless to say, their advertisements fell upon barren ground. No one who
had been burned by one of Nevada's most complete swindles was willing to
suffer again, and the reorganization plans soon fizzled out.
at about this time, the United States Geologic Survey published its report
on the Bullfrog District, stating: "Although a little rich ore has been
found in the Gold Bar Mine, it is evident that the deposit is to be
regarded as a large mass of low-grade material, such as can be worked, if
at all, only on a considerable scale and by the most economical methods
possible in this district."
Although the Gold Bar affair was now finished, it was some time before all
the dust settled. Angry stockholders continued to write letters to the
newspapers, denouncing the fleecing which they had taken, and
Davis experimented with several more attempts at reorganization for
several months. Neither had any success.
More annual reports of the
Gold Bar Company were dug out and exposed in the newspapers, including one of
June, 1906, which stated that the company had over two million dollars of
gold ore in sight.
Several individuals and companies made feeble efforts
towards teasing and reviving the mine, but all failed before they really
got started. One thing became abundantly plain--the
Gold Bar Mine did not
have any paying ore at all. The Nevada Exploitation Company; however, paid
its taxes upon the Gold Bar property in December, 1909, in order to
protects its investment in the mill and machinery located on the property,
but no work was done that year.
In June, 1910, by which time the Gold Bar
Mine had been idle for over two
years, the Nevada Exploitation Company announced that its mill buildings
and machinery were for sale, but no one seemed interested in purchasing a
poorly designed mill. Finally, in February of 1911, the company succeeded
in selling the mill to the Round Mountain Mining Company, for transfer to
another Nevada mining district. Interestingly;
J.P. Loftus was a partial
owner of the Round Mountain Mining Company. By this time,
felt safe to show their faces in the Bullfrog District when they came to
close the deal. The two men still insisted that they had been innocent all
along, and that the sole cause behind the Gold Bar's problems had been the
deceptions practiced by former Superintendent Bedford upon the company and
the public. No one believed them, but the Bullfrog District was probably
glad to see the Gold Bar mill, a constant reminder of a past failure,
shipped away in April, 1911.
Between 1910 and 1919 the Nevada Exploitation Company continued to hold
title to the ground and paid county taxes each year. The company even
performed the required $100 of labor each year on each claim, in order to
avoid still higher taxes. But, in 1920,
Davis finally gave up,
quit paying taxes, and the Gold Bar joined its Bullfrog contemporaries on
the delinquent tax list of the Nye County Treasurer.
The Gold Bar Mine rested on the county delinquent tax list from 1922 until
1942, with the exception of 1937, when the mine was briefly worked. Then,
in 1942, a man named Mike Chulick from California paid the back taxes of
the Gold Bar and took ownership and incorporated
himself as the Gold Bar Mining Corporation. Whether for reasons of
nostalgia or otherwise, the Gold Bar Mining Corporation still retains
title to the mine, dutifully paying county taxes of from $110 to $150 each
year. No serious mining endeavors, however, were ever carried out.
The story of the Bullfrog Gold Bar Mining Company is not a pleasing one.
It is, however, one that is all too typical of the mining history of the
early twentieth century. What started out as a legitimate effort to
exploit a high-grade gold deposit turned into a high-grade fraud when its
owners figured out that the Gold Bar
was a low-grade mine, and was not the sort from which fortunes are made.
The Gold Bar
Mine and Mill in 1908,
Nevada Historical Society.
Like many mining promoters before and
since, Loftus and
Davis determined to mine the pockets of stockholders
when it became evident that mining the ground would not prove profitable.
Given the boom spirit and unbounded optimism of the Bullfrog District,
which is most typical of mining camps throughout history, it is not
altogether surprising that
Loftus and Davis were so successful.
As is obvious by now, the
Gold Bar Mine was never a large
producer of gold. It is impossible to determine how much ore was ever
taken out of the ground, since the majority of the available figures are
those which were released to the press by the company itself. Two things though are abundantly clear: the private
stockholders of the Gold Bar Company never made any money at all, and
Davis never lost any. How much money those two promoters gained
from their various swindles will never be known.
Like the area around the Original Bullfrog Mine, the ground surrounding
the Gold Bar Mine was covered with other claims shortly after the
initial successes of the Gold Bar Mine were publicized. As usual, most of
these companies incorporated the words "Gold Bar" into their titles,
staked out ground as close as possible to it, and tried to attract
investors. Some of these mining companies never actually mined. All of
Chief among these companies who tried to find ore were the Gold Bar
Extension, which operated intermittently from June, 1905 to
February, 1908; the Gold Bar Annex, which existed from February, 1906 to
August, 1907; the Original Gold Bar Extension, which ran from April to
November, 1906; and the Gold Bar South Extension, with a life-span from
April, 1906 to April, 1907. None of these companies ever found any ore
although a few of them were able to list and sell their stocks for a short
period of time. Over the years the property changed hands several times.
Today the remains of the Gold Bar Mine are difficult to discern from those
of the Homestake-King Mine, which were situated next to it. The former site of the Homestake-Gold
camp is marked only
by debris, but prospect holes, dumps and shafts dot the landscape.
The Gold Bar property still reveals a few shafts, adits, and the remains
of a crude headframe, but, the rest of the operations have disappeared. The
Gold Bar mill was carted away in 1911 but, its concrete and brick
foundations still mark the site.
of America, updated January 2016.
Source: Death Valley Historic Resource Study
Bullfrog Mining District
Valley National Park
Nevada Death Valley Ghost Towns
People of the
Bullfrog Mining District
Hoisting Plant, 1906,
From Legends' Photo Shop
Photographs of the Old West - From Legends'
Photo Print Shop, you'll
find hundreds of
of the Old West
that can be ordered in prints or downloaded for commercial use. Providing
dramatic glimpses into the rich heritage of the
famous characters including notorious
and trailblazers, and more;
including covered wagons and stagecoaches;
Saloons, Gambling &
Westward Expansion, and everything in between.