Bill of Exchange Fragments: United Metals Selling Company

The "U.M.S." in the cancels below stands for United Metals Selling Company.  Without knowing better I would be sure the S would stand for Smelting, a core metals processing activity and a business that would make the Guggenheim family wealthy.  Whatever the case, this firm is of the Selling variety, and one that worked to keep prices high.

The Sherman Antitrust Act was passed in 1890.  Given the scope and purpose of the United Metals Selling Company, established in early 1900, either the definition of restraint of trade was a bit narrower than we understand it today, or the organizers didn't care and thought they could bully and perhaps bribe their way around the 1890 law.  The New York Times article from February, 1900 below, provides a good sketch of the mission of the new firm.  At the time, many forms of restraint of trade, despite the 1890 law, seemed to be in play, perhaps the best example being John Rockefeller's monopolization of the oil industry.  What to me is most interesting about this firm is the name itself, which announces that it exists to set and dictate metal prices.

The document fragments I've included below were a part of a hoard of bills of exchange fragments that were sold by a vendor in the United Kingdom many years ago.  The front side of the document below provided just enough information to sort out the firm that canceled these stamps.

Note the R172p on the fragment below.

The front of the document fragment posted above:

From the New York Times, February, 1900:

Asbury Harpending and His Busy July 11, 1898 Check

As with most examples of the early use of R153, this check comes from the far west, this example from the National Bank of D. O. Mills & Company.  Darius Ogden Mills was a tycoon who built his great wealth from the Comstock Lode in Nevada, and the Virginia and Truckee Railroad built to get the silver out of Nevada to California.  He owned a self-named building in New York's financial district housing many NYSE firms.

But while the use of two R153s on a far west check and Mr. Mills' bank and his role in the US economy might be interesting, the signature on this check is from a man perhaps more intriguing than Mr. Mills or the use of the stamps.

A. Harpending signature from check

Asbury Harpending in 1915 when he was 76 years old.  

Harpending published his autobiography, The Great Diamond Hoax and Other Stirring Episodes in the Life of Asbury Harpending - An Epic of Early California, in 1917.  The stories are remarkable, including time as a mercenary "freebooter" or filibusterer in Central America, making a fortune in mining in California and Mexico, joining an 1861 attempt to create an independent Pacific Republic out of California, and backing Confederate interests during the Civil War.  His autobiography's title, The Great Diamond Hoax, speaks to his involvement in the artificial creation by seeding, of an alleged diamond mine in Wyoming in 1872. 

From the preface of his book:

On my return to California, after an absence of many years, my attention was called, for the first time, to the fact that my name had been associated unpleasantly with the great diamond fraud that startled the financial world nearly half a century ago. Plain duty to my family name and reputation compelled me to tell the whole story of that strange incident so far as my knowledge of it extends. I sincerely trust that a candid reading of these pages will satisfy the public that I was only a dupe, along with some of the most distinguished financiers of the last generation. Concerning two of the historians who maligned me, I am without redress. They are dead. The latest author, Mr. John P. Young, repeated the accusation of his predecessors in his history of San Francisco. This gentleman has admitted that he merely copied the story of the earlier works, having no personal knowledge of events at that period, and has handsomely admitted, over his signature, that he unconsciously did me an injustice.

To the diamond story I have added, at the request of friends, some of my experiences and reminiscences of California of the early days.

Asbury Harpending.



Augustus Heinze' United Copper Company and the Panic of 1907

UNITED COPPER CO.

MAY

2?

1902

NEW YORK.

Langlois scan

The United Copper Company was incorporated in late April, 1902.  The above stamp from May 1902 was likely used on documents regarding the incorporation of this new firm.  As you can see from the New York Times story fragment below, the incorporation of this new company was no small affair; the consolidation of the participating mining companies into United Copper required $80 million in 1902, over $2 billion in 2012 dollars.

New York Times, April 29, 1902

Augustus Heinze was a "copper king" in Butte, Montana, who arrived a bit late to the scene in 1889 but still managed to build a major mining enterprise and compete with the established "kings".  After years of building his companies and mines, he left Butte for the east coast to dabble with the fortune and companies he had created.

Augustus Heinze in 1910

In 1907, Heinze moved to New York.  United Copper was based at 42 Broadway, just around the corner from Wall Street.  Heinze entered the banking business, forming a close alliance with Charles W. Morse.  With Morse, he served on the boards of several national banks, state banks, trust companies and insurance companies.

Across the corridor from Heinze and Morse were his brothers, Otto and Arthur P Heinze, who had a brokerage firm. With the experienced Morse, Otto conceived an ill-fated attempt to corner United Mining stock in October 1907.  Otto, however decided to go forward with the cornering attempt without the capital that Morse thought was necessary to insure success.  The result was that the corner dramatically failed, and its failure was the critical catalyst in a major US financial system collapse.

Scene in front of the New York Stock Exchange in October 1907 during the financial panic.

Otto Heinze had miscalculated.  He overestimated how much United Copper that Augustus and the family controlled. When he required short sellers to buy back stock, there was more than enough United Copper stock available in the open market for the "shorts" to cover their short sales.   When the collective market realized that Otto's maneuver had failed, the price of United Copper stock collapsed.  Then panic spread as people pulled money out of banks associated with Heinze, and then from trust companies associated with those banks.  Augustus Heinze had supported his brother's cornering attemp.  Augustus' deep commitments across the financial system led to great personal losses. He would be barred from further involvement in financial institutions.

The Panic of 1907 was one of the most significant financial crises in American history.  Contributing factors included the costs of the 1906 San Francisco earthquake, yet it was the actions of the Heinze brothers that had caused much of the panic.  J. Pierpont Morgan, the premier financier of the day, was able to stabilize the financial markets through his own manipulation.  However, the US Government was not to leave the markets open to the solutions of private capital much longer.  The 1907 crash directly lead to the formation of the US Federal Reserve System in 1913.

International Pulp Company

INTERNATIONAL PULP CO.

NOV 13

1900

Langlois scan

The International Pulp Company's primary business, despite its name, was mining, and mining in New York State.  It mined numerous minerals, including asbestos and talc, though it also had interests in forest products and power generation.  The company was not the favorite of environmentalists.