Colorado's mining industry has had a lot of glorious times, and a lot of equally glorious setbacks. Colorado's mine fortunes, depended on both silver and gold. When an ore sample was and still is assayed, there are three or even more metals in the sample, but the main ones are silver and gold. Most ores have a bit of copper in them, sometimes a bit of tungsten, and a few others of minimal importance. If silver is predominate, as it was in the 1890's, all was great. Colorado's economy was to a large extent dependent on silver mining. The U.S. government in 1890 passed the Sherman Silver Purchase Act, which required the government to purchase 54 million ounces of silver at market price, every year, from the several states which had silver, but Colorado was the prime supplier. The federal purchase took nearly all of Colorado's silver output, and the price went to a dollar an ounce. That sounds pretty low now, since silver hovers around $14.75, but a few years ago, it hit $48.78,
and in this writer's opinion, it will regain its former price and exceed it. Remember, in 1890, the dollar was worth probably a hundred times its present value, so a dollar an ounce for silver made mine owners very happy.
At that time, in the 1890's and thereabouts, India was a colony of Britain, and they were coining lots of silver coins, with the silver coming from Colorado in the main. Silver demand was so great, that huge amounts of mill tailings rich with gold were cast aside. Silver was king, and mine owners rushed to increase production by building larger mills and smelters. New mining techniques were developed to increase mine ore output also. So much silver was produced, that the market became flooded with it, and as "Stott's Law" says, "The more of anything there is, the less they will be worth." That law applies to everything, be it Model A Fords, water in the desert, homes for sale, stocks, and of course silver. The market became so flooded with silver, that the price fell to 83 cents an ounce, which was still at a profit level for most mines, although new machinery and mine equipment still had to be paid for and used, so things weren't exactly as they were when the silver price was a dollar an
ounce.
In June of 1893, the British government announced that it would mint no more silver coins, and would not purchase any more Colorado silver. Within four days, the price of silver went down to 63 cents an ounce, and most Colorado mine owners decided to shut their mines. The nation's economy was as sound as ever, but Colorado's was suffering. People withdrew money from banks and banks failed. Horace Tabor, who had one of the largest fortunes in Colorado, lost everything. Within a few months, Colorado's depression spread to the rest of the U.S. The U.S. gold reserves had sunk below the desired hundred million dollar level. The gold-silver ratio had gone from a healthy 16 to 1 to 33 to 1. People were trading their silver for gold, which lowered the U.S. gold reserves. The lower gold reserve appeared in newspapers as a desperate economic situation, even though it wasn't, but a dark cloud unfolded upon Colorado businessmen, who in order to protect themselves, laid off thousands of employees in the
mining industry. By September, half of Colorado's mines were shut, 377 businesses had failed, and 45,000 were unemployed in Colorado alone, and the gloom spread to the rest of the U.S.. Grover Cleveland had just been elected, and he figured that he would combat the increasing depression by repealing the Sherman Silver Purchase Act, which he did in August of 1893.
Actually, the entire U.S. depression, was a huge cascade, resulting from Colorado's troubles, which resulted from Grover Cleveland's destroying the silver market. The Reading Railroad went bankrupt, a billion dollars worth of bonds defaulted, 600 banks closed, and the unemployment rate was 20%.. In the month of May, 24 businesses went bankrupt every day. Banks overflowed with paper and silver money, and offered loans are very low rates, but no one was borrowing, for fear of the future. J.P. Morgan, America's richest man, loaned the government 3.5 million ounces of gold, which brought the reserves up to $100 million, which helped to slow the panic. Not to go into endless history, but William Jennings Bryan ran to bring silver-gold ratio back to 16 to 1 with his famous speech on "The Cross Of Gold.", and lost to McKinley, who promptly signed the Gold Standard Act into law in 1900, which radically slowed the government's purchase of silver. Gradually, the depression which started with Colorado's own
depression, thanks to Grover Cleveland's and Britain's ceasing purchases of silver…went away. Mine owners discovered huge riches by re-working abandoned mill tailings, and getting lots of gold from them, without having to mine it. The government still minted silver halves, quarters, dimes and even silver dollars for a decade, using its supply on hand, and when that was gone, continued to buy silver for coinage. Today, the ratio of silver to gold is 77 to one, meaning that silver is either grossly underpriced, or gold is grossly overpriced. I believe that silver is a huge bargain. Americans are fearful of the future today, and that fear is reflected in their desire for one ounce silver coins, in case of a possible barter situation. As a result of this fear, our one ounce silver rounds can be ordered and price locked in, but as of today, shipment will be December 3rd, so far backed up is the Sunshine Mint in Idaho. Gold and silver are still, and have been, real money for thousands of years.