Fire and Brimstone: The North Butte Mining Disaster of 1917 - Michael Punke

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pumped into the state in a seamless melding of politics and entertainment: political cartoonists, famous actresses, fireworks, free champagne, and even vaudeville performers, slamming Standard Oil to a catchy ragtime beat.21

      Standard Oil, hardly a naif, did not take the Heinze-Clark challenge sitting down. It began its own free-spending campaign, including a $1.5 million war chest to buy Montana newspapers.22 Though the newspapers would be important later, they were not enough to swing the election of 1900. In the end, Heinze elected and/or reelected a slate of friendly judges, and a new Montana legislature—barely a year beyond the bribery scandal of 1899—sent William A. Clark back to the United States Senate.

      Within weeks, though, the ground beneath Fritz Heinze began to shift. Standard Oil employed a tactic that would serve it (and its successors) to great effect: Divide and conquer. Senator William A. Clark provided an easy target, devoid of scruples and vulnerable to his own recent past. Standard Oil threatened to dedicate its boundless resources to a revived U.S. Senate challenge of Clark’s credentials—unless Clark broke with Heinze and dropped his opposition to Amalgamated. For Clark, it was an easy call. He shed himself of Fritz Heinze with the ease that most people change a shirt. Heinze now stood alone against the preeminent economic power of his day.23

      In the immediate aftermath of the 1900 election, another development seemed to sharpen the battle lines. On November 12, Marcus Daly died. His death, wrote historian Michael Malone, seemed “to symbolize the passing of the great captains of frontier industry and to herald the emergence of the giant and impersonal new supercorporations.”24

      From 1900 to 1906, the second War of the Copper Kings raged through Butte and ultimately through all of Montana. It was a war with dozens of battles, but two in particular are worth noting. One brought Heinze and Amalgamated into literal warfare—on a battlefield hundreds of feet below ground. The other represented, in essence, a Standard Oil coup d’état of the once-sovereign state Montana.

      The armed conflict broke out as a by-product of one of Fritz Heinze’s infamous apex claims. Just before the turn of the century, Heinze had filed a series of claims based on his ownership of a mine called the Rarus—which bordered Amalgamated property rich in copper. Pending resolution of the case, both Heinze’s Montana Ore Purchasing Company and Amalgamated were enjoined from mining in the contested zone.25

      In 1903—with the case still pending and the injunction still in place—Heinze executed one of his most outrageous legal maneuvers. He simply transferred ownership of the Rarus mine from his Montana Ore Purchasing Company to one of his other corporations, the Johns-town Mining Company. Then, with the disingenuous reasoning that the Johnstown was not subject to the court’s injunction, he secretly began to mine the contested ground.26

      Over a period of many weeks, Heinze flooded miners into the Amalgamated holdings, pulling out hundreds of thousands of dollars’ worth of copper. Amalgamated finally caught wind of the scheme when its miners, working in a nearby property, began to hear blasting—clearly coming from the “forbidden zone.” Their suspicions finally raised, Amalgamated sent spies on an underground mission to determine the scale of the pirating. They were shocked at the wholesale plunder.27

      Back on the surface, Amalgamated asked a federal judge to mandate an inspection of the property. But before the inspection took place, Heinze covered his tracks by dynamiting the cavities and filling them with waste rock. More injunctions were issued, which Heinze now blatantly ignored, continuing his extractions from the forbidden ground.28

      Below ground, meanwhile, the struggle degenerated into open warfare. Fistfights broke out when groups of Heinze miners encountered their counterparts from Amalgamated. These quickly escalated, and soon miners were fighting one another with more dangerous weapons. Dueling miners burned “stink-producing material”—including rubbish, old shoes, and rubber—to fill the enemy’s workings with smoke. They blew a powdered form of lime through air hoses to pollute the tunnels with caustic dust. They diverted water to cause flooding and used dynamite to cave in tunnels and block access points. The miners even tossed homemade hand grenades—short pieces of dynamite crimped inside tomato cans.29 Remarkably, amid weeks of running skirmishes, only two men were killed.30

      Poised on the brink of large-scale loss of life, both sides seemed to catch themselves and called a truce. After stealing more than $500,000 worth of copper, Heinze would ultimately pay a fine of $24,000—less than 5 percent of his haul.31

      While dramatic, the Rarus apex case was just the tip of Heinze’s gigantic litigation iceberg. Some lawsuits Heinze won outright. With others he secured injunctions, idling Amalgamated properties while endless proceedings plodded through the courts. Amalgamated was spending millions in legal fees, and even more significant, Heinze’s suits had tied up Amalgamated holdings valued at $70 to $100 million.32

      Building on his success in the election of 1900 and his devastating legal attacks, Heinze also mounted a relentless public relations barrage. He continued to cast himself as the local David against a heartless, foreign Goliath, and the people of Butte rallied to his side. F. Augustus Heinze was in many ways like a Butte version of Robert E. Lee—a beloved field general reeling off a remarkable string of battlefield successes against a much larger foe. Like Lee, however, Heinze faced an opponent with patience, resolve, and vastly superior resources. And for Heinze, his Gettysburg was about to unfold.

      Apex litigation may have been Fritz Heinze’s trademark, but it was far from the only weapon in his legal arsenal. Heinze was also giving Standard Oil/Amalgamated fits through the technique of minority shareholder suits. In a minority shareholder suit, Heinze allies purchased a few shares of companies being absorbed into Amalgamated. Then they devised claims as to how Amalgamated was violating their minority shareholder rights and brought suit—preferably in a court presided over by a close Heinze ally.

      In the most far-reaching claim, Heinze’s minority shareholder allies argued that the absorption of component companies into Amalgamated had been undertaken without their consent—and therefore should be quashed. As a holding company, Amalgamated was nothing without the companies it had absorbed. If Fritz and his allies won, Amalgamated would effectively be dissolved. Heinze, of course, had chosen his forum carefully. The suits were filed in the court of an old friend—the gray-bearded Judge Clancy.33

      On October 22, 1903, Judge Clancy ruled in favor of Heinze, prohibiting Amalgamated from absorbing component companies (without the permission of all shareholders) and also prohibiting the Company from paying dividends derived from the profits of the acquired companies.34 If Clancy’s ruling stood, Amalgamated was dead—along with Standard Oil’s broader play to build a copper trust.35

      With the corporate stakes now life or death, Standard Oil came roaring back. Montana wants Amalgamated shut down? Show Montana what that means. Within hours of Clancy’s decision, Standard ordered a total shutdown of all Amalgamated operations in the state. Amalgamated mines in Butte were immediately closed. The great smelter fires were extinguished in the towns of Anaconda and Great Falls. Across Montana’s forests, lumber camps were emptied. So too were sawmills, coal mines, railroads, retail stores, and dozens of other related industries. Overnight, three-fourths of Montana’s wage earners found themselves abruptly thrown out of work.36

      Having shown Montanans the price of defiance, Standard Oil issued its demand to Heinze: Sell the offending minority shares and drop the suits. Heinze, playing for time, promised to answer the next day from the courthouse steps.

      What followed was one of the great pieces of political theater. When Fritz Heinze arrived at the appointed hour to give his response, an audience of ten thousand people stood waiting outside the courthouse. It was an angry crowd. Fritz, he knew, had tapped too deeply from his reservoir of goodwill. His injudicious use of lawsuits had triggered a terrible backlash, and now thousands of workers—including the teeming mob that stood before him—faced a frigid Montana winter with no jobs.

      Heinze began to speak, his deep voice booming so that his words could be heard up and down the street. He deplored the control that Amalgamated had gained over the affairs of the state.

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