BLACK HILLS: HOMESTAKE GOLD AND SCRIPOPHILY

In my last posting, a somewhat loquacious article, I described a small piece of native silver collected from the famous Homestake Mine in Lead, South Dakota.  Crystalline silver of any sort is rather rare in rocks of the Black Hills, including the Homestake.  My specimen was collected many decades ago and originally was in the collection of Carroll “Shorty” Withers but later was obtained by Willard Wulff; both gentlemen are famous Colorado micromounters.  Since then I have looked for specimens of Homestake gold; however, two items have held up my search: 1) most of the gold mined from the Homestake, especially in recent decades, was intimately tied up with the parent rock; and 2) the few specimens of “free gold” that I have seen are really, really expensive and often are marked “not for sale.”

So, where was an ole guy like me to find Homestake gold?  Well, believe it or not I was able to purchase several small flakes at the Sanford Museum overlooking the big open pit. According to a Certificate of Authenticity, when the South Mill at Homestake was being decommissioned in 2002, flakes of gold (67 total ounces) were discovered in the bottom of a concrete ditch that was previously used to transfer the ore slurry within the mill.  The surface of these flakes resemble nuggets; however, they were flattened in the stamp mills before taking a ride in the ditch.  Somewhere along the line these flakes were trapped in ditch crevices and Homestake believed the gold was mined as early as 1920.  Now, that is an interesting story, at least to me, but I now have some gold from the Homestake! 

Gold nuggets flattened by the stamp mill at the Homestake Mine.  Width FOV ~1.5 cm.

Up until a few years ago when I met a scripophilist, I really did not understand that a large cadre of people collected stock and bond certificates, especially those associated with western mining companies and railroads.  I actually had a couple of stock certificates stuck away in my cabinet of natural curiosities—picked up at garage sales decades ago.  I simply liked the engraving on the certificates, and the fact that both were associated with mining companies in Utah and Colorado.  Recently I picked up a couple of additional certificates closely associated with Colorado Springs and described all specimens in a posting on 12-06-2015.  I am not about to become a scripophilist since correct pronunciation of the term, and spelling, is difficult for an ole country boy like me used to single syllable words like dog, cat, pig etc.

But since acquiring the gold and silver from the Homestake, I was on the lookout for a certificate associated with the mine.  As far as I can tell, the first certificates, perhaps 500 total, for the Homestake were issued in 1878 and are almost impossible to locate.  By 1879 Homestake stock (HM) was listed on the New York Stock Exchange (the first mining company listed) and remained so until the company was purchased by Barrack Gold Corporation in 2002.  Therefore, HM became the longest listed stock in the history of the Exchange. After the initial issue of about 500 certificates, the company begin printing new design certificates that contained an image of two Native Americans (perhaps Mohawks from the New York area) peering over some rocks at a river, a bridge, a steamboat, and a train---definitely not a scene from the Black Hills.  At first the certificates were printed in black and white; however, at a later date the border and some of the type were colorized and the color varied over the years as did the border design.

Stock certificate Number 12019 from the Homestake Mine, Lead, South Dakota.  Front above with reverse below noting sale of 100 shares.  Perforations indicated certificate was cancelled.

I was not really able to find out much about the price of HM over the 125 years it was listed as a research library containing that sort of information was unavailable.  However, I did notice that HM was one of the top performers during the Bear Market associated with the “Great Depression” of the 1930s.  In October 1929 the stock sold for ~$80 and by the end of 1935 it reached $495 (http://seekingalpha.com).  That is a return of ~520%, and does not include any of the cash dividends paid to stockholders. Goldbugs are still talking about that surge in price as traders attempt to lure consumers into investing in gold stocks or bullion.

I have some difficulty deciphering all of these stock prices but it appears that on November 24, 1937, Mrs. Margaret R. Barker purchased 100 shares of HM at a price of about $350-$500.  It is difficult to determine without accurate historical date but the chart below seems to indicate that price range.

Chart supplied from http://seekingalpha.com.  The high price for HM in 1937 was about $500 per share (upper chart line) while the low was about $350.

Mrs. Barkers certificate was numbered 12019.  Three years later on December 30, 1941 Mrs. Barker sold the stock for $3,400 or $340 per share---see receipt below from Thomson and McKinnon.  The most interesting aspect of this sale receipt is the Stock Transfer Tax stamps affixed—a $4 stamp, three $.25 stamps, and three $.01.  Evidently it cost Mrs. Barker $3.78 to sell her 100 shares of HM.  In reading about the date of the sale I wonder if Mrs. Baker was concerned about stock prices during the ongoing war.  After all it was only three weeks after the onset of World War II.

Receipt showing sale of 100 shares of HM.  Note Stock Transfer Tax stamps.

And finally, I have a receipt showing that 100 shares of HM with the certificate number of 12019 were transferred to Mrs. Florence B. Nessa of Sioux Falls, SD, on January 2, 1942.

Sale of 100 shares receipt dated 1942.

So, old stock certificates (this one is nearly 80 years old) can result in an interesting story including noting the signature of Edward H. Clark, the President of Homestake Mining from 1914-1944, and learning about Stock Transfer Tax stamps..