The Rumor
Many tour guides tell a persistent story in Tombstone that the mines closed when they hit water. That is not true. Water was first encountered in July 1881 in the Sulphuret shaft at about 520 feet, surprisingly shallow given how rich the ore was above that level. The engineers from the major mining companies responded by installing large pumps: the Grand Central brought in steam pumps capable of moving 500,000 gallons per day, while the Contention added Cornish pumps capable of moving 1,000,000 gallons per day. Geologists confirmed that rich ore extended at least 100 feet below the water table, so the investment in pumping was clearly worthwhile, if the economics could support it.
The pumping worked, but the combined capacity was never fully adequate against the natural flow. Then, in 1887, fire destroyed the Grand Central's hoisting works and pumping machinery entirely. At the same time, a legal dispute over shared pumping costs had gone to court, effectively halting the Contention's pumps as well. With both primary pumping operations disabled and silver prices already in decline, the owners had no economic incentive to rebuild. The lower levels flooded and were never drained during the boom era.
The strongest evidence against the flooding myth came decades later. In 1901, a well-financed company called Tombstone Consolidated Mines formed specifically to drain the mines and resume operations. They sank a four-compartment pump shaft to 1,000 feet, installed two large pumps on the 700-foot level, and by 1903 were lifting 2,300,000 gallons of water per day, enough to run the mill at 225 tons per day. A railroad branch was built from Fairbank to Tombstone to support the operation. Pumping was finally abandoned on January 19, 1911, and the reason was not that the pumps could not handle the water. The extraordinary operating costs simply could not be justified by the price of silver. The water was manageable. The economics were not.
The Fact
So why did the mines close? This answer starts back with the founding of the United States. From the beginning, the federal government used a “bi-metallic standard” for the US dollar, both gold and silver. Over time, though, that standard seemed to shift with changing administrations, sometimes gold and sometimes silver. The Coinage Act of 1873 embraced gold and de-monetized silver. Then the Bland-Allison Act of 1878 required the US Treasury to purchase domestic silver bullion to mint coins. The mines in Tombstone began in 1878, so they reaped the benefit of the Bland-Allison Act. Also, in 1878, the United States began to issue silver certificates based on the amount of silver held in the treasury. These were boom times, indeed, for the Tombstone mines.
The declining price of silver was already straining operations years before the final collapse. In 1884, falling silver prices forced mine operators to cut miners' wages from $4 to $3 per day. Miners struck, demanding restoration of the $4 rate, and all mines closed during the four-month dispute. When the men finally returned to work it was at the reduced $3 rate. Production was practically at a standstill by 1886, two years before the next major legislative blow arrived.
The Sherman Silver Purchase Act of 1890 required the government to purchase 4.5 million ounces of silver every month, used to mint silver dollars and back silver certificates. Unfortunately, that led to overvalued silver prices and undervalued gold prices, so metals investors began to buy silver and exchange that silver for gold and then sell the gold for more than they had paid for the silver. They then repeated that process until the United States was in danger of running out of gold, so in 1893, President Cleveland repealed the Sherman Silver Purchase act.
Between 1878 and 1900, the price of silver dropped from $1.16 per ounce to $0.62 per ounce, about half of the starting price. At that rate, the mines could no longer produce a profit for the investors, so they began to close. So, the mines closed due to the federal government’s manipulation of the price of silver. Eventually, silver became too cheap to be worth mining.
Sources
- Levi F. Butler, David D. Wilson, and Dix Rasor, "Geology and Ore Deposits of the Tombstone District, Arizona," Arizona Bureau of Mines Bulletin No. 143 (1938).
- Herbert Love, History of Tombstone to 1887 (1933).