A Great Plain lieThe many fraudsters of Kansas's goldless rush
The many fraudsters of Kansas's goldless rush
By Cecilia Keating
July 19, 2018
Railroad magnate Cyrus Holliday sent prospectors to investigate around Smoky Hill River in central Kansas after seeing a map that revealed a tin mine nearby. Wikimedia
Despite no concrete evidence of mineable gold deposits in Kansas, far-fetched stories of riches have enticed adventurers, prospectors and mining investors to the state since the 16th century. But the frenzy for non-existent gold culminated at the turn of the 20th century, when a string of fraudsters capitalized on investors’ gullibility and greed with false promises and fake assay results.
Inspired by an 1851 map that revealed a tin mine on the Smoky Hill River in central Kansas, railroad magnate Cyrus Holliday sent prospectors to investigate the area’s geology in 1884. The map was a hoax, but the prospectors’ efforts piqued the interest of a high-ranking military official named Henry Artz.
Artz formed the Smoky River Mining Company in 1895, claiming to have found zinc. Two years later, he reported gold and silver. Despite many prominent assayers’ reports saying the shale contained nothing of value, Artz selectively worked with those who assured him of the opposite.
Denver assayer Aron Beam wowed Artz with his testing results, which showed that the shale promised $15 in gold and $3 in silver per ton, on top of 20 per cent zinc. He alleged he could easily extract it with the “Beam process.” As a result, prospectors flooded the area and businessmen bought options on farmland, formed mining companies and sold shares to city investors. Smoky Hill City was founded.
But Beam was a prolific fraudster, denounced regularly in mining journals and motivated by sales of his process. Kansas state geologist Erasmus Haworth repeatedly reported that state assayers could not find more than negligible gold or silver in samples. In 1898, renowned inventor Thomas Edison investigated the Kansas shale and reported no gold.
Faced with a barrage of scepticism, the shale men got defensive. Charles Holliday, Cyrus Holliday’s son, carried a three-quarter-ounce piece of gold allegedly extracted from a ton of Kansas shale in his pocket. His partner Fred Close also took up the habit, storing a five-ounce bar of gold and two small bars of silver on him as he walked around Topeka. Close bragged that he would ask the University of Kansas’s trustees to fire Haworth, who was also a professor, and that he would invest US$50 million gold-shale shares to build a better university in Topeka.
Beam sold Close and Holliday the Kansas rights to the Beam process and in 1899 the pair bought the machinery needed for a 100-ton-per-day Beam-process mill. Beam never arrived in Smoky Hill City to supervise construction, and the project collapsed.
Undeterred, the shale men offered $100,000 to anyone who could work the Smoky Hill ore. In mid-1900, W. F. Miller said he could do it, in exchange for the first week’s gold output. A mill was built to his specifications in early 1901. But Miller mysteriously left before operations began, claiming his wife was ill, and sold his interest for $2,500. The mill could not function without him and was abandoned.
The shale men then hired Charles Gage, who falsely claimed to be a professor and to have worked extensively in the United States and Australia. The Gage mill was opened near the deserted Miller mill on September 1901. After a week, during which Gage said he extracted $12 per ton of gold, he suspended operations, saying he was waiting on a new crusher and extra leach tanks.
Gage asked his employers for the $10,000 owed to him. The mill owners, learning from their experience with Miller, refused, promising payment only when he could prove the mill could function without him. Gage abandoned ship. Unsurprisingly, when the mill reopened two months later, only 22.5 cents of gold were recovered from a test run of three tons of shale.
The slow-learning Topeka investors then turned to a Philadelphia scientist named Ernst Fahrig, who boasted a gold-leaching process that required a secret chemical called bauxogen. Fahrig refused to disclose its formula or allow scientists to observe the secret process, but a local newspaper reported he charged the company $3,000 for the bauxogen needed for just one run in the test mill (approximately 450 kilograms of ore).
The opening of Fahrig’s mill stalled for nine months. The professor said there was no fault in the process, but that he simply needed more equipment and more bauxogen for the mill. He left Kansas in April 1903 loaded with rock specimens from the test mill – purportedly for testing in his Philadelphia laboratory – and never returned.
No one has mined for gold in Kansas since 1929, when two Coloradans claimed to have found a secret extractive process and “unlimited capital” near the Smoky Hill River – although nothing ever came of it. Smoky Hill City is now a ghost town.