Swindle at the Gold Bar Mine, Nevada
The harsh, unforgiving landscape of the Nevada desert has always held a siren song for dreamers and fortune seekers. The promise of instant wealth, glittering beneath the arid surface, lured countless individuals westward during the late 19th and early 20th centuries. While some struck it rich, many more fell victim to the volatile nature of the mining industry, and a select few, unfortunately, fell victim to outright fraud. The story of the Bullfrog Gold Bar Mining Company is one such tale, a cautionary narrative woven into the rich tapestry of Nevada’s mining history. It is a narrative that serves as a stark reminder that not all that glitters is gold, and that the allure of easy riches can often mask a darker, more sinister reality. What began as a seemingly legitimate enterprise, fueled by the hopes of striking a high-grade gold deposit, ultimately devolved into a sophisticated and calculated scheme to defraud investors, leaving a trail of broken dreams and empty pockets in its wake.
The early 1900s were a boom time for Nevada mining. Discoveries at Tonopah and Goldfield sparked a feverish rush, attracting prospectors and miners from across the nation. Among these hopefuls were Ben Hazeltine and N. P. Reinhart, two experienced miners hailing from Cripple Creek, Colorado. Arriving in Goldfield perhaps a bit late to fully capitalize on that particular bonanza, they found employment in the local mines, honing their skills and biding their time. The news of Shorty Harris’s and Ed Cross’s strike rippled through Goldfield like wildfire, igniting a fresh wave of excitement and prompting Reinhart and Hazeltine to join the mass migration to the newly established Bullfrog District.
The Bullfrog District, a sprawling expanse of rugged terrain, was quickly becoming a hotbed of mining activity. However, the most promising ground was already claimed, forcing Hazeltine and Reinhart to venture further afield, prospecting in the less-explored reaches of the upper Bullfrog Hills. Their persistence eventually paid off. In October, they discovered and staked claims, naming them the Hazeltine claims, situated approximately four miles northwest of the burgeoning town of Rhyolite and two miles north of the original Bullfrog discovery. This location, seemingly remote at the time, would soon become the epicenter of a mining venture fraught with both promise and peril. The story of the Swindle at the Gold Bar Mine, Nevada had begun.
Initially, Hazeltine and Reinhart worked the mine independently, extracting ore samples and transporting them to Rhyolite for assaying. The results of these tests were consistently impressive, revealing remarkably high concentrations of gold. These encouraging results did not go unnoticed within the close-knit mining community. In early 1905, the two miners made the decision to sell their promising mine for a substantial sum of $117,000 to a group of Goldfield promoters, led by J.P. Loftus and James R. Davis. This transaction marked a turning point in the mine’s history, ushering in a new era of ambition, investment, and, ultimately, deception. The new owners wasted no time in organizing and incorporating the Bullfrog Gold Bar Mining Company, setting the stage for what would become a classic example of mining speculation gone awry.
By the end of May 1905, just six weeks after assuming control of the property, the Bullfrog Gold Bar Mining Company was reporting encouraging progress. Exploratory work had revealed ore ledges averaging a respectable $15 per ton, along with the discovery of small, exceptionally rich pockets, one of which assayed at a staggering $1,458 per ton. Buoyed by these initial findings, the company ordered additional equipment, hired more miners, and pressed forward with development efforts. The workforce of fourteen miners continued to uncover evidence of paying ore, fueling optimism and attracting further investment. As the summer progressed, a new boarding house was constructed to accommodate the growing workforce, and the local newspaper, the Rhyolite Herald, lauded the Gold Bar as "one of the surest and most dependable properties in the district." The potential of the Swindle at the Gold Bar Mine, Nevada was still hidden behind a facade of genuine development.
The positive news continued to flow throughout 1906. By March, the mine was operating with three shifts of miners, and the owners were actively considering the construction of a mill on-site to process the ore. In April, a pivotal moment arrived when the Gold Bar Company granted Charles M. Schwab, the renowned steel magnate and mining promoter, an option to purchase the property. The terms of the deal varied depending on the source, but Schwab reportedly had the option to acquire the mine for $1,000,000 by May. He dispatched his engineers to thoroughly examine the mine, and the entire Bullfrog District held its breath in anticipation. The potential involvement of a figure with Schwab’s financial resources was seen as a boon for the entire region, promising further investment and development. While Schwab deliberated, the Gold Bar continued to announce promising discoveries of valuable ore. April saw such encouraging developments that the mine owners privately expressed hope that Schwab would allow his option to expire without purchasing the mine. The Rhyolite Herald, after reviewing the latest company reports, declared the Gold Bar "one of the biggest things in the far-famed State of Nevada." The Swindle at the Gold Bar Mine, Nevada seemed impossible when everything was going well.
However, the devastating San Francisco fire and earthquake of that year cast a pall over the prevailing optimism. Schwab requested several extensions of his option, and ultimately, the deal fell through. While the owners publicly maintained a positive outlook, claiming they were pleased that Schwab had not bought the mine, the San Francisco disaster had undoubtedly impacted financial markets and dampened enthusiasm for large-scale investments. The Gold Bar Company continued operations throughout the intense summer heat. By the end of July, the mine employed twenty-five men, and the main shaft had reached a depth of 330 feet. It was becoming increasingly apparent, however, that the Gold Bar was a relatively low-grade mine, requiring its own mill to operate profitably. Development continued, and by the end of 1906, the Gold Bar property boasted a hoisting plant and gallows frame, a small engine house, a blacksmith shop, a boarding house, an office building, and various other pieces of equipment.
In early January 1907, the Gold Bar announced its intention to construct a mill on its property, but no specific details were released. To help finance the construction, the mine began shipping ore to the newly completed Las Vegas & Tonopah Railroad terminus in Rhyolite. In June, the company announced that it had secured a contract to build a 10-stamp mill. Work soon commenced on the mill foundations, and the company began laying a pipeline to transport water from its spring to the mill site. The development of the Swindle at the Gold Bar Mine, Nevada was underway.
Work on the mill progressed slowly throughout the latter months of 1907, but stock prices began to decline despite the tangible evidence that the Gold Bar was transitioning from a developing mine to a producing one. The mill building was completed in December 1907, but delays in obtaining electrical power and equipment plagued the company. These obstacles were eventually overcome, and the Gold Bar Mill finally commenced operations in January.
Unfortunately, the mill was plagued by persistent problems with leaking pipelines. Production continued intermittently until April, amidst rumors that the mine would be forced to replace the entire pipeline to address the water issue. On April 25, both the mine and mill were temporarily shut down for refurbishment and pipeline repairs. The company soon announced plans to replace the entire pipeline and install expensive cyanide treatment machinery. Tellingly, the company did not announce a specific date for the resumption of work, and its stock price plummeted rapidly.
In retrospect, it became clear that something had been amiss with the Bullfrog Gold Bar Mining Company for some time. The superintendent, L.E. Bedford, had quietly resigned on March 21, a move that seemed particularly suspicious given that the Gold Bar was supposedly on the verge of becoming a successful producer. In May, suspicions were confirmed when a prominent New York brokerage firm announced that the recent decline in Gold Bar stock was due to a Western bank instructing the company to sell a substantial block of shares, regardless of market conditions. Someone clearly knew that the Gold Bar was on the brink of failure. Three weeks later, the Rhyolite Herald reported that over 200,000 shares of the company’s stock had been dumped on the market, and the selling continued unabated. Meanwhile, the two principal controllers of the Gold Bar, J.P. Loftus and James R. Davis, departed for a two-month vacation in Europe, promising to address the problems upon their return.
While the pair were abroad, their attorneys were far from idle. The Nevada Exploitation Company, a Goldfield concern with a fittingly ironic name, filed suit for an attachment on the assets and property of the Gold Bar Company to recover $36,300 that it had advanced to the Gold Bar to finance the construction of its mill. The owners of the Nevada Exploitation Company were none other than Loftus and Davis themselves.
In essence, Loftus and Davis were suing themselves. If they were successful, the Gold Bar would become the property of the Nevada Exploitation Company, leaving the remaining Gold Bar stockholders holding worthless shares. The Swindle at the Gold Bar Mine, Nevada was coming to fruition.
The Rhyolite newspapers immediately recognized the blatant fraud and began to vociferously denounce the scheme. The Rhyolite Herald obtained copies of company reports indicating that Superintendent L.E. Bedford had reported that the ore values in the mine were not as high as he had previously claimed. Loftus and Davis claimed they were forced to sell their stock to repay the company’s debts and close the mine and mill because they were losing money. They attributed the failure of the Gold Bar Mine to Superintendent Bedford, accusing him of deceiving them and the public for over two years regarding the true value of the ore deposits.
The Rhyolite Herald vehemently rejected this explanation. While Bedford had indeed misled the public, the newspaper argued that he had not deceived Loftus and Davis, who were the company’s leaders. Only when Bedford realized that Loftus and Davis intended to make him the scapegoat for the company’s fraudulent practices did he decide to flee.
The Rhyolite Herald cited numerous direct quotes from Loftus and Davis regarding the prospects and values of the Gold Bar, making it impossible to believe their claims of innocence. A review of the directors’ production statements over the past several months further undermined their credibility. The newspaper concluded that Loftus and Davis had intended to defraud the public from the outset by loaning themselves money to build a mill, releasing false claims of mill returns, dumping the company’s stock on the market, and then recovering their loans by foreclosing on the Gold Bar. In this way, they would retain all the mill returns and stock sales profits while suffering no financial loss themselves. The public stockholders, however, would lose every penny they had invested in the Gold Bar Mine since 1905.
Despite the outrage expressed by the local newspapers and stockholders across the nation, Loftus and Davis’s plans proceeded with minimal disruption. The Nevada Exploitation Company won its suit against the Gold Bar Company, and in December 1908, the Gold Bar Mine and Mill were sold to the Nevada Exploitation Company. Holders of Gold Bar stock, which had plummeted to a mere three cents per share, were left with nothing but worthless paper.
Not content with their initial success, Loftus and Davis announced a grand reorganization of the Gold Bar Mine, proposing to reincorporate as the New Gold Bar Mining Company. With a capitalization of 1,000,000 shares and a par value of $1 each, they offered to sell 600,000 shares in the new company to stockholders of the old at a special discounted rate of seven cents per share. They claimed that the money raised would be used to pay off the debt owed by the Gold Bar to Nevada Exploitation, after which the mine would be free to resume operations.
The Rhyolite Herald secured an interview with Loftus and Davis, during which the reporter challenged them about the numerous conflicting reports they had previously given regarding the original Gold Bar Mine. Time and again, Loftus and Davis insisted that there had been no intent to defraud the public. When pressed about why the company had dumped its stock after determining that the mine and mill were a failure and would have to be closed down, the reporter concluded with, "What kind of treatment is that for the public to receive at your hands?"
Loftus’s response encapsulated the philosophy of the Gold Bar Company: "I am not the guardian of the public. It is up to the public to decide these things for themselves." When further questioned about the lack of ethics displayed by the company, Loftus reiterated his sentiments in the best tradition of the nineteenth-century robber barons: "The public be damned."
The local newspapers continued to relentlessly attack Loftus and Davis’s motivations, characters, and ancestry. The Rhyolite Daily Bulletin reminded the public that the company had awarded the contract for constructing the Gold Bar mill to the Loftus-Davis Company of Goldfield. It was no wonder, the Bulletin argued, that the Gold Bar Company had been willing to accept a poorly designed and built mill with defective water pipes, a lack of cyanide treatment facilities, and other shortcomings.
The full extent of the Swindle at the Gold Bar Mine, Nevada had become apparent. Not only had a Loftus-Davis-controlled company loaned the Gold Bar the money to build its mill, but it had been built by yet another Loftus-Davis Company. How much of the nearly $50,000 paid by the Gold Bar to that construction company represented pure profit? And how did Loftus and Davis have the audacity to sue the Gold Bar to recover the costs of construction when they had already paid themselves for the actual construction work?
Loftus and Davis seemed oblivious to the intense wave of animosity directed towards them, as they continued to advertise for investors in their reorganization efforts. However, their advertisements fell on deaf ears. No one who had been burned by one of Nevada’s most egregious swindles was willing to risk being victimized again, and the reorganization plans soon fizzled out.
Ironically, around this time, the United States Geological Survey published its report on the Bullfrog District, stating: "Although a little rich ore has been found in the Gold Bar Mine, it is evident that the deposit is to be regarded as a large mass of low-grade material, such as can be worked, if at all, only on a considerable scale and by the most economical methods possible in this district."
Although the Gold Bar affair was now concluded, the aftermath lingered for some time. Angry stockholders continued to write letters to the Rhyolite newspapers, denouncing the fleecing they had endured. Loftus and Davis made several more attempts at reorganization, but none were successful.
More annual reports of the Gold Bar Company were unearthed and published in the newspapers, including one from June 1906, which claimed that the company had over two million dollars worth of gold ore in sight.
Various individuals and companies made half-hearted attempts to revive the mine, but all failed before they even began. One thing was abundantly clear: the Gold Bar Mine had no commercially viable ore. The Nevada Exploitation Company, however, continued to pay taxes on the Gold Bar property in December 1909 to protect its investment in the mill and machinery located on the site, but no further work was undertaken.
In June 1910, with the Gold Bar Mine having been idle for over two years, the Nevada Exploitation Company announced that its mill buildings and machinery were for sale. However, no one seemed interested in purchasing a poorly designed mill. Finally, in February 1911, the company succeeded in selling the mill to the Round Mountain Mining Company for transfer to another Nevada mining district. Interestingly, J.P. Loftus was a partial owner of the Round Mountain Mining Company. By this point, Loftus and Davis felt secure enough to reappear in the Bullfrog District to finalize the deal. They continued to maintain their innocence, attributing the Gold Bar’s problems to the deceptions of former Superintendent Bedford. No one believed them, but the Bullfrog District was likely relieved to see the Gold Bar mill, a constant reminder of past failures, shipped away in April 1911.
Between 1910 and 1919, the Nevada Exploitation Company continued to hold title to the ground and paid county taxes each year. The company also performed $100 worth of labor on each claim annually to avoid higher taxes. In 1920, Loftus and Davis finally gave up and ceased paying taxes, and the Gold Bar joined its Bullfrog contemporaries on the delinquent tax list of the Nye County Treasurer.
The Gold Bar Mine remained on the county delinquent tax list from 1922 until 1942, except for a brief period in 1937 when the mine was briefly worked. In 1942, a man named Mike Chulick from California paid the back taxes on the Gold Bar, acquired ownership, and incorporated himself into the Gold Bar Mining Corporation. Whether motivated by nostalgia or other reasons, the Gold Bar Mining Corporation continues to hold title to the mine, dutifully paying county taxes each year. However, no significant mining activities have ever been conducted.
The story of the Bullfrog Gold Bar Mining Company is a disheartening one. It is, however, a representative example of the mining history of the early twentieth century. A venture that commenced as a genuine effort to exploit a high-grade gold deposit transformed into a calculated fraud when its owners recognized that the Gold Bar was a low-grade mine, incapable of generating the fortunes they had envisioned.
Like many mining promoters before and since, Loftus and Davis opted to mine the pockets of stockholders when it became clear that mining the ground would not be profitable. The boom spirit and boundless optimism of the Bullfrog District, typical of mining camps throughout history, contributed to Loftus and Davis’s success in perpetrating their scheme.
The Gold Bar Mine was never a significant producer of gold. It is impossible to accurately determine the total amount of ore extracted, as most available figures originate from the company’s own press releases. Two facts remain clear: the private stockholders of the Gold Bar Company never profited, and Loftus and Davis never suffered any financial losses. The total amount gained by these two promoters through their various swindles remains unknown.
Like the area surrounding the Original Bullfrog Mine, the land around the Gold Bar Mine was quickly covered with other claims following the publicity surrounding the Gold Bar’s initial successes. As was common, many of these companies incorporated the words "Gold Bar" into their names, staked claims as close as possible to the Gold Bar Mine, and attempted to attract investors. Some of these companies never engaged in actual mining, while all of them ultimately failed.
Among the companies that attempted to find ore were the Gold Bar Extension, which operated intermittently from June 1905 to February 1908; the Gold Bar Annex, which existed from February 1906 to August 1907; the Original Gold Bar Extension, which ran from April to November 1906; and the Gold Bar South Extension, with a lifespan from April 1906 to April 1907. None of these companies ever discovered any ore, although some were able to list and sell their stocks for a brief period. Over the years, the property has changed hands numerous times.
Today, the remains of the Gold Bar Mine are difficult to distinguish from those of the Homestake-King Mine, which was located nearby. The former site of the Homestake-Gold Bar camp is marked only by debris, while prospect holes, dumps, and shafts dot the landscape. The Gold Bar property still features a few shafts, adits, and the remnants of a crude headframe, but most of the operations have vanished. The Gold Bar mill was removed in 1911, but its concrete and brick foundations still mark the site. The Swindle at the Gold Bar Mine, Nevada is a story that continues to echo through the abandoned landscape.