Gustavus H. Stoiber

From the National Register of Historic Places: Historic Mining Resources of San Juan County, Colorado

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[James H.] Robin approached Gustavus Stoiber, a trained mining expert with funds, and together, the men organized the Iowa Gold Mining & Milling Company in 1893. Stoiber served as president, Robin secretary, and R.W. Watson and H.W. King as vice-presidents.[207]

While the Iowa was a confirmed bonanza, developments on the Silver Lake claims a short distance north dwarfed Robin and Thayer’s relatively simple operation. After running the Stoiber Brothers Sampling Works for four years, brothers Edward and Gustavus had a significant disagreement in 1887 and divided their mutual assets. Gustavus assumed the sampling works and Edward the Silver Lake claims. Gustavus’ choice was the safer because the sampling works provided a reliable source of income, while Edward based his decision on the educated guess that Silver Lake would provide great rewards for its high risk.[208]

The Stoibers were proper, conservative Germans reared in a privileged socioeconomic climate. Edward was born in 1854, began studies in engineering at a young age, and attended the famed School of Mines at Freiberg. In 1879, he and Gustavus sought their fortune in Leadville where Edward experienced immediate success as a mining engineer and metallurgist. Competition among professionals increased in Leadville while the Animas River drainage begged for metallurgists, and so the Stoibers came to Silverton in 1883 and built their sampling works. While on business in Denver, Edward met Lena Allen Webster, described as a very liberated divorcée. Lena embodied the image of frontier woman and was well-suited for the remote and industrial environment to which Edward brought her.[209]

When Edward assumed the Silver Lake, he spent two years sampling, examining the property’s geological features, conducting assays, staking claims with Lena, and calculating the most effective manner of development. Unlike most mine owners, Edward took a primary interest in the low-grade ore and considered high-grade material to be merely a bonus. The main problem, however, was that the costs of shipping the low-grade payrock from the basin and processing it in the sampling works exceeded the returns. Stoiber realized, however, that if he could mine and concentrate the ore in large volumes with a highly efficient system, the economies of scale would render the low-grade material profitable through a nominal cost per ton. Devising an efficient system and working out the economic calculations was easy for the German engineer, and by 1890 he had a plan devised.

During the late spring when Silver Lake Basin’s snow blockade stabilized, a small army of workers with mule trains packed in thousands of board feet of lumber, tons of hardware and machinery, and the basic necessities of life. This they assembled into the largest surface plant and mill yet in the county. When finished, the mill was able to generate 50 tons of concentrates per day, which provided Stoiber his economy of scale. Because Silverton lacked a facility or storage area capable of accommodating the hundreds of tons of concentrates and high-grade ore that Stoiber expected to store at a time, he built his own. Stoiber chose the abandoned Little Dutch Smelter site on the west side of Arrastra Gulch’s mouth. While the exact structures remain unknown, they certainly included large bins, freight platforms, and a corral and stable for the constant procession of draft animals.

The crown jewel to Stoiber’s instant empire was an electric power plant that he commissioned on the Animas River. In 1890, electricity was a revolutionary technology under experimentation, and the San Juans served as a cradle for its application to mining. In 1888, the Virginius and Tomboy mines above Telluride installed the first electric plants in the San Juans, followed by John Terry’s small facility at the Sunnyside Mill in Eureka Gulch. These early power plants were small and generated direct current (DC), which was able to run variable speed motors but only could be transmitted short distances before suffering a debilitating power loss. As a result, DC current had to be consumed near the point of generation, giving mining engineers pause for thought. What, they reasoned, was the advantage of electricity if it had to be generated on-site? Even if a DC power plant could be run by hydropower, a costly steam engine and boiler usually had to be kept on standby in case the water system failed. Why not do away with the electrical equipment and merely use the steam engine alone to operate mine machinery for a fraction of the capital? Alternating current (AC) provided a partial answer to this problem. AC current could be transmitted for miles without power loss, but as of 1890, AC motors were unable to run variable speed equipment. AC current could, however, energize lighting and run constant speed motors that operated with little drag, such as those used in machine shops and some mill applications. With this in mind, progressive electrical engineers near Telluride finished the first AC power plant in the San Juans and Colorado at Ames in 1891, which set the precedent.[210]

Stoiber was not far behind. Around the same time, he completed what appears to have been the second AC power plant in the San Juans and Colorado. According to archival references, a power plant built on the Animas River, most likely at the concentrates storage terminal, and power lines carried the electricity two miles up to Silver Lake Basin, which was too far for DC current. Given this, Stoiber’s power plant had to generate AC current, which lit the interiors of the buildings and ran several small motors in the mill.[211]

At the beginning of November 1890, Stoiber started the mill and it ran to perfection, although the electrical equipment may not have been working initially. Over the course of the summer, mule skinners hauled up supplies and coal so the mine and mill could run through the winter. After around a year, Stoiber and Lena pored over the balance sheets of their Silver Lake Mines Company. The conclusion was $255,000 net, or around $5,148,286 today, which constituted around 25 percent of San Juan County’s total production. This was far from pure profit, however, because an operation as large as the Silver Lake Mines Company at an elevation of 12,000 feet was very costly.[212]

After two years of constant production and milling, Stoiber declared the Silver Lake a success. While his strong work ethic may have prevented him from the retirement sought by other successful mine owners, Stoiber instead spurred him to expand operations in 1893. Lena, personnel manager for the company, requested a second boardinghouse at the mine and increased the workforce to 130. Like the first boardinghouse, it featured uniquely luxurious amenities in such as running water and steam radiators.[213]

• 207. Colorado Mine Engineers' Reports: Iowa Mine; Iowa Gold Mining & Milling Company Stock Prospectus Denver, CO, 1896; "Mining News" MSP (11/21/91):331; Silverton Standard (8/20/92).
• 208. Bureau of Mines, Manuscripts MSS Box 640, v27 (Denver: Colorado Historical Society) 20; Sloan and Skowronski, 1975: 29.
• 209. Henderson, 1926:4 9; Allen Nossaman, Personal Interview, Durango, 2002; "Obituary" EMJ (5/5/06): 865; Prosser, 1914; Sloan and Skowronski, 1975: 29.
• 210. W.S. Burbank, E.B. Eckel, and D.J. Varnes, "The San Juan Region," Mineral Resources of Colorado (Denver: Colorado Mineral Resources Board, 1947) 396; "Mining News" EMJ (12/29/1888): 551; Smith, 1982: 98.
• 211. "Mining News," EMJ (4/26/90): 479; "Mining News," EMJ (11/15/90): 581.
• 212. Ransome, 1901: 149.
• 213. "Mining News" EMJ (9/9/93): 273.