F. Augustus Heinze - Mining Interests in Montana

Mining Interests in Montana

Heinze went to Butte, Montana, in 1889 as a mining engineer for the Boston and Montana Company. He became known for his hard drinking and fun-loving antics in Butte’s saloons and gambling dens, whilst donning society dress and having a shy demeanour and polished manners that impressed the ladies. Assisted by an inheritance of $50,000 from his recently deceased father, Heinze revelled in working hard to be a significant player. In 1894, Heinze’s Montana Ore Purchasing Company opened a sophisticated new smelter, allowing Heinze to offer low-priced smelting to small mining companies. Originally, Heinze had to lease mines and secure ore from independent companies in order to keep operating. Heinze was able to locate rich ore bodies and the Rarus Mine, purchased in 1895, turned out to be one of Butte's premier mining properties.

Heinze had arrived in Butte well after the “Copper Kings”, William A. Clark and Marcus Daly, were well established (Daly’s company was the massive Amalgamated Copper Mining Company, later called Anaconda). In order to catch up, Heinze’s strategies included reducing the working day for his miners from ten to eight hours and the miner’s considered him a hero. One of the mining laws directed that an owner could mine the veins that outcropped on his claim, and follow them underground beneath claims owned by others. This was known as the law of the apex, and Heinze maintained that his miners had the right to take out copper ore from beneath his neighbours. Using this law to his advantage Heinze would employ up to 30 lawyers at a time and tie up his opponents in the legal system with case after case.

With skilful political manoeuvrings Heinze would also ensure that that “friendly” people were appointed as judges in Montana. In one incident, a “pretty girl” was found to have offered a judge $100,000 and Heinze was implicated but never charged. Heinze also became a brilliant orator, and in speeches to the miners and public he would paint the Amalgamated Company as a ruthless and oppressive organisation.

In 1902, Heinze combined his various mining interests into a company called United Copper, valued at $80 million with capacity to produce 40 million pounds of copper a year, compared to 143 million a year produced by Amalgamated.

In 1903, frustrated when the Rarus property was subject to a court order to cease mining, Heinze’s miners moved down anyway from the Rarus into an adjoining Amalgamated property. Before being stopped, Heinze succeeded in taking out a hundred thousand tons of high grade copper ore. There was hand to hand combat with Amalgamated miners, opposition mine shafts were fouled through burning rubber and spreading caustic slaked lime, grenades were thrown, and high pressure hoses were fired. Dynamite was also set off, caving in the property and completely obliterating all the evidence. Heinze was charged with contempt of court yet he was fined only $20,000.

The actions of Heinze had severely hampered the giant Amalgamated Company. In 1906, after a decade of the mining war, John D Ryan negotiated with Heinze for Heinze to sell his Butte interests to Amalgamated for a reported $12 million. His mining days in Butte, Montana, had come to an end but Heinze had amassed a small fortune.