Boom and bust

By Howard Shakespeare

Published in print (with additional illustrations) in ‘Scripophily’, the journal of the International Bond & Share Society, Autumn 1994

Copyright ã International Bond & Share Society 2001

Hundreds, perhaps thousands, of mining camps boomed and busted in America’s west after 1848, when the discovery of gold in California set off the world’s best-known gold rush. Some of those camps became towns of importance, including several of today’s state capitals; most were abandoned without ever taking on the trappings of a permanent settlement, and, due to fire, rain or desert winds, vanished with little or no trace remaining today.

An exception to the general pattern is Rhyolite/Bullfrog, in Nevada, just east of Death Valley and the California border. A late development, it quickly became a city of some importance, with all the conveniences and activities of a mining and commercial centre, yet flourished for only about 3 years – one of the fastest boom-and-bust cycles on record. Why, when so much was invested so quickly, did it collapse so soon ?

First, why Rhyolite/Bullfrog ? In essence, Bullfrog was where the early miners were ; Rhyolite, a mile away, was also a mining centre, but became the commercial and residential centre. 1904 saw the first gold strike in the area, and led to an immediate rush. The established gold towns of Goldfield and Tonopah were not far away, and had railroads, so access was not too difficult. This first Bullfrog was only a tent city, and, when further gold discoveries were found a few miles further east, the original Bullfrog was abandoned for a new township, also named Bullfrog, in the new diggings. While this survived for a time as a township, the neighbouring area of Rhyolite became far more important, attracting the banks and businesses which built the city up so quickly.

The year 1905 saw a mining and construction boom in Rhyolite. As the gold deposits came to look ever larger and richer, banks, hotels and a wide range of shops and businesses came into being, and permanent buildings went up as fast as materials could be brought in. Water supplies were easy – rarely the case in desert land. The telephone arrived. By June 1905 the city had no less than 50 saloons, 3 banks and 17 stockbrokers ! Transport of ore was a problem until 1906, when the railroad arrived, first the Las Vegas and Tonopah, from Vegas, followed in 1907 by two other lines (the Bullfrog & Goldfield, and the Tonopah & Tidewater).

The LV & T station was the finest in all Nevada, and is by far the best-preserved building in Rhyolite today. 1907 saw the arrival of electricity. The population at the time cannot be known for certain, but was probably around 6,000. They led a comfortable existence, with hotels, schools, churches, public swimming-pools, orchestra, opera-house, and a lively and varied social and sporting life (also a very prosperous red-light district, with girls from San Francisco).

Although Rhyolite did not have a stock-exchange until 1907, large numbers of companies were registered from spring 1905 onwards (often with Bullfrog in their name), and traded on the exchanges at San Francisco, Los Angeles, Tonopah and Goldfield. Few made any money for their investors. Although newspaper headlines were full of stories of rich ore and new strikes, arousing ever more outside interest, few companies reached the point of serious production. The Rhyolite stock-exchange had 75 members, and was very active, dealing not only in local shares but those of Goldfield and Tonopah companies, too. The best-known and richest of the local mines was the Montgomery Shoshone, located just north of Rhyolite. It was one of the first to produce commercial quantities of gold, and was the last to close down, in 1910. The shares seen today are those of Montgomery Shoshone Consolidated, consisting of the original mine, bought by famous New York industrialist Charles Schwab, and amalgamated with the original mine with the adjacent Polaris and Crystal claims.

By the end of 1908 Rhyolite was facing oblivion. Why ? Gold was there, although later strikes did not always confirm initial enthusiasm. To an extent, it was sheer bad luck. The San Francisco earthquake and fire, in 1906, consumed a lot of capital that would otherwise have been invested in promising mining developments, and this at a critical time for developing Rhyolite’s new mines. In 1907 a financial panic hit the country, causing some banks to fail, and crippling the local mines’ attempts to raise development capital. The 1907 panic continued into 1908, and became deeper ; the resultant lack of confidence and business pessimism caused local businesses to shut down, and residents moved to more established towns where work was available. The census of 1910 revealed a population less than 20% of that 3 years earlier. The closure of the Montgomery Shoshone mine, in 1910, was the final nail in the coffin, and the town was soon almost deserted.

Today, after 74 years, there is virtually nothing to see in Bullfrog, and not too much in Rhyolite. The former boasts the remains of the jail and an ice-house, the latter has the very fine railroad terminal, an extraordinary house made of thousands of bottles, the remains of a bank, a school-house, the jail, a store, and a couple of houses. The line of some streets can still be seen, and some foundations. Mine-entrances and dumps dot the surrounding mountains. Otherwise, nothing but sagebrush and sand. The neighbouring town of Beatty has an active Friends of Rhyolite organisation, to preserve what is left, but to ensure it does not become commercialised, as has happened to ghost towns in other parts of the West. Gold is mined again today, in Ladd Mountain, on the edge of Rhyolite.

What remains of Rhyolite/Bullfrog for us scripophilists ? Quite a number of certificates are available to the collectors, although none, except perhaps the Montgomery Shoshone Consolidated, is common.

The help of Rolf von Arx and Henry Hinck is gratefully acknowledged.

Copyright ã INTERNATIONAL BOND & SHARE SOCIETY 2001

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