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Virginia City, Montana Banker Henry Elling Gold Shipment Records, 1873-1881.
Fred N. Holabird, copyright 2023
Remarkable archive of original gold bullion shipment and receipt records from Virginia City, Montana banker Henry Elling to the Kountze Bank in New York, 1873-1881.
The archive contains fully two hundred (200) receipts of gold bullion and perhaps another 200 pieces of related correspondence. The receipts come in two forms: a two page package containing a receipt from the Kountze bank that the gold was received, attached to a printed gold bullion form from the New York Assay Office after the gold was melted and assayed. A second form is simply the receipt from the Kountze bank to Elling acknowledging the receipt of a specific amount of gold and coin.
Henry Elling and his Bank
Henry Elling (1842-1900) ventured into Montana in 1864 and partnered with S. Buford in a large dry goods and general store business. Gold started flowing from the adjacent Alder Creek placer mines just after discovery in 1863. Soon lode gold mines were developed, and prospectors expanded the mining areas around Virginia City, named after the famous Comstock discoveries which were at a temporary height in 1863, catching all the world's attention. Virginia City was a carbon copy of the California Mother Lode region in the 1860s, as gold dust, nuggets and assayer ingots (bars) were the money of trade.
In 1873, Elling began a bank, which soon became the major bank in Virginia City. He received deposits from merchants and mining companies alike in placer gold and bullion bars. He also bought gold from prospectors and merchants. As a merchandising man, Elling needed the backing of a powerful banker, and approached Kountze Brothers in New York. Kountze had their tentacles stretched into California and Nevada banks, soon to add Colorado and Montana, reaping the rewards of the Western mining regions, as did other New York bankers throughout the California Gold Rush and succeeding mining rush periods.
The archive tells us much about how the gold business worked in the 1870s from the remote Montana mining region. These mining regions lie on the eastern flank of the Rocky Mountains, more easily accessible to the Midwest and East than the true western financial center of San Francisco. Most of the Montana mining regions were developed after the completion of the great Central Pacific Railroad in 1869, allowing easier, faster and more direct access to the New York Financial center of America.
The Gold Deposits. The gold deposits were of several different forms: gold bullion in dore form, gold amalgam, gold "grains" (gold dust and nuggets), and coin. Silver coin was added to most deposits if a specific amount was owed to Elling or to Kountze. The form of deposit is noted on the red printed gold bullion receipt of the New York Assay Office. Occasionally the depositor is shown on the receipt. These deposits included merchants for the most part, mining companies- including specific tests and recoveries, and from the Elling bank itself. Examples of mining companies or mining properties include the mention of "Pine Grove", John Remy & Co. on Moore Creek, and others. Mining company specifics example includes "bottom of sluice", "Battery of Nick Carrey." Merchants included: E.G. Henderson, Coney & O'Brien, Martin Peel, though these names could also be miners.
In the early days of the bank, Elling displayed gold bricks, ingots and bars, as well as silver bars. He regularly let the Press know about these instances, which ran articles all the time. In an April, 1874 article, Elling announced he had a 38 oz gold bullion bar on display from Lown & Mallory from the Red Bluff Lode in the Hot Springs District. In July of 1873, he announced a 70 ounce silver bar was on display from Platner's Lode at Moose Creek.
Silver Deposits. There are only two silver deposit bullion receipts from the Ney York Assay Office in this archive. These, in and of themselves are exceptionally rare.
Forms of Gold in the Shipment. As mentioned above, the form of gold sent to Kountze was in the form of placer gold in dust and nugget form, secured in a cloth or leather "gold bag." At least one piece of correspondence complains of "loose gold" from the bags in a shipment, thus uncertainty to which deposit to credit the gold. Much gold amalgam was shipped, indicating that many placer gold mining companies, or lode companies that might have garnered finely crushed gold grains via mercury amalgamation, were unable to convert their amalgam into dore bars. In my opinion, this would have been only true during the very early years of mining at Virginia City, where the science of smelting was not universally practiced. While simple in concept, it is much more difficult in real life application. First, special furnaces needed to be purchased that could attain high temperatures for melting - over 2000 degrees. Certain fluxes must be used to remove iron, copper and some other metals from the liquid metal mix, leaving behind a nice clean dore bar of gold and silver.
Gold bars were the most common form of gold shipped to Kountze in New York. These were bars of gold and silver in the natural ratio of gold:silver as created by Mama Nature. Those bars would have been stamped in the usual cultural accepted standard form by the assayer with the serial number, Assayer name, weight of the bar in troy ounces, Fineness in gold and silver, and finally the value in the gold standard price of $20.67 per ounce.
One exceptional and historically important piece of correspondence from Elling to Kountze involved Elling asking if the Bank would accept Western Assayer bars at par (Nov. 19, 1874 letter). The bank's response was that they only accepted bars from the US Mint or its branches, hence all bars melted at the NY Assay office at the cost of Elling. This important letter marks an important demarcation from the accepted standard practice of western mines, miners, the mining business, and the financial world surrounding the mining camps.
Western Assayer Ingots and the Financial Business of Mining Camps. There is much written on assayer ingots from the Gold Rush period onward. Until now, however, we haven't really had the opportunity to know how long these precious metal ingots were accepted as money. This letter is the first hard evidence from a major bank that directly discusses the issue. A quick synopsis:
1848-1859. California gold rush. No circulating money. Used raw gold.
Assay houses came immediately, 1848
Private coiners followed
US Assay Office formed in San Francisco, 1851
Private assay and refining firms developed for huge production that the USAO could not handle
These assay houses created thousands of gold ingots used as money in California, and were shipped to outlier ports as money for payment of debt and for the international money supply.
San Francisco Branch Mint opened in 1854.
Assay and refining works remained a necessity in the mining business.
1860-1874. Nevada, Colorado, Montana gold and silver rushes
Continued shortage of circulating US coin in the far West
Assay houses still a necessity
Placer gold regions continued the age-old practice of payment in gold dust
Continued use of precious metal ingots as circulating money and payment of debt
US Mint begins creation od US Assay offices to receive, assay and make gold payments in response to inconsistent assays from far too many independent assay houses which had no government oversight
The gold and silver bullion business was thus driven directly to the US Assay Offices when they were reasonably nearby, causing a decline in private assay houses making bullion for monetary use.
The strong need for the assay business continued, but slowly dropped their monetary functions in favor of US Assay Office houses.
1854. New York Assay Office formed. At this point, the Philadelphia Mint could not handle the huge influx of gold from California.
1850-1860. The Dahlonega and Charlotte Branch Mints were available to handler gold shipments, and did so, but in a small way because they were not in the main transportation corridors of the banking or US Mint system.
1863. Denver USAO formed at the old Clark-Gruber Mint.
1868. Charlotte USAO formed at the old Charlotte Branch Mint
1869. Boise USAO formed.
1870. Carson City Branch Mint formed.
1874. Helena USAO formed
In the case of the Elling Bank in Virginia City, Montana, the gold shipment was controlled by the Kountze Bank in New York, as well evidenced within this archive. Kountze, thus took control of the bullion from its origin (Virginia City) and shipped it through their contracted carrier (Express) Wells, Fargo & Co. to New York, rather than down to Helena to the USAO there for processing after 1874.
Other portions of this archive have surfaced over the years with bullion receipts from the Helena Assay Office. It might be postulated that those shipments involved a different bank than the New York Kountze bank, perhaps one of the San Francisco banks, and were thus able to utilize the more local Helena USAO.
Shipment of the Gold. Gold was shipped in wood treasure boxes. One letter in the archive is addressed to Elling from Kountze bank describing a box that had to be torn apart to open, inferring the bank was reusing the treasure boxes. Shipments were made through the Kountze bank's exclusive contracted express agent or company. Here, Wells, Fargo Express Co. was used each year, and there is much correspondence regarding this contract in later years. The gold was NOT shipped independently from Elling using an express company of his choice.
Gold was shipped from Elling in Virginia City six days a week, including Saturday. In some cases, there is direct evidence here that up to three separate shipments were made in a single day. The shipments were It is entirely possible that gold shipments were made daily from Elling to Kountze. It is unknown if other gold shipments were made by other bankers or merchants, or if Elling acted as the sole regional gold "buyer", though I doubt this since we do not see other Virginia City banker's names on receipts. There does not appear to be a favored day to ship gold. Secrecy was the standard, so it makes sense the gold shipments took place somewhat randomly. The gold shipments of this archive started March 3, which may correspond with the opening of the bank, though that opening date does not appear to have made the newspapers.
In another correspondence late in the archive about 1880, Kountze notifies Elling they have secured an updated contract with Wells, Fargo & Co., and were seeking Elling to guarantee at least $200,000 in gold coming to them in the coming year.
The Gold Specifics. The size of the gold ingots shipped varied widely, from 7 troy ounces to 324 troy ounces. Both of those ingots were "outliers" in the overall data as most generally fell in the approximate 20 to 120 ounce range. Of the ingots present in the 1873 partial archive, it appears only three ingots were over 200 troy ounces, and only one under 10 ounces. The fineness also varied widely, with an approximate average of about 850 fine, varying from about 713 fine to 990 fine.
Receipt of Gold in New York. The gold was received at Kountze Bank in New York and immediately transferred to the US Assay Office in New York, where the gold in all forms: amalgam, dust, grains, nuggets and bars were all melted and assayed from which a payment was made to Kountze, and thus subsequently crediting Elling, completing the circle. Original New York Assay Office gold bullion receipts are present for about 75-80% of the shipments recorded.
The Archive. This archive is not complete. It apparently had its original home in Virginia City, from which a portion was purchased by dealer Stuart Mackenzie and sold in bits and pieces over several decades. Years later, another segment of the archive was discovered and sent to us for processing. Under the heading "too good to be true", I had to keep the archive together. The story is too good.
The 1873 portion of the archive contains records of 53 gold deposits. The 1874 has 38 gold deposit records. 1875 has 29 records, 1876 has 4 records, 1877 has 16 records, 1878 - 1880 about 20 records each and a scad in 1881.
This is the best kept, and largest of any western gold/silver production record group yet discovered. Perhaps the second best was the Virginia City Van Wyck archive which originally had about 150 assay receipts for silver/gold bullion shipped to various Comstock mills in the approximate period 1863-1866. As a single archive, it tells us much that we did not know, and if time were not a problem, I would have inventoried every ounce of gold shipped.
From this archive we learned:
How Montana gold was shipped to a funding New York Bank
Why the local USAO (Helena) was not utilized
What transportation system was used
Who paid for the transport
How large the shipments were
What form the gold was in
How large the ingots were
How frequently shipments were made
Fineness of the gold bullion
Date:
Country (if not USA):
State: Montana
City: Virginia City
Provenance:
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Taxes:
| Tax | Rate | Desc. |
| NSST |
8.375% |
Nevada Sales Tax |
| CSST |
7.25% |
California Sales Tax |
Buyer's Premiums:
| From (Incl.) | To (Excl.) | Premium |
| 0.00 |
Infinite |
25% |
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