Verde Heritage 1918: JAMES S. DOUGLAS, WELL-KNOWN MINING MAN

"When James S. Douglas first 'took on' the Little Daisy (as the local men knew the United Verde Extension company), he was not a wealthy man, as wealth is considered nowadays. To be sure, he belonged to the 'Douglas Family,' which meant that he was of the blood royal from a mining standpoint. But he was a younger son, and, though he had been getting and earning big money he was a salaried man, and he knew that it was up to him to get hold of something of his own in order to make himself really felt in the world if finances and mining."

"In Yavapai County, and in many parts of the mining and investment world, when people speak of 'Douglas' now they refer to James S. Douglas, the younger son. And, invariably they speak of him with admiration as a man who made good, and as he grew found it possible to take pleasure in making fortunes for his friends and those who stood by him when success was problematical. This thing alone singles him out as a distinctive personality, since the rule in exploitation, especially in mining, has been for the big men 'on the inside' to buy up the stock of all the little folk who haven't the means of posting themselves before the actual value of the property could become known, and, if necessary, to 'shake them out' by some device. Instead of doing this, Douglas made a point to advise his friends, and among them were many of the workmen on the property, warning them to hold when by word, he could have secured their stock for himself at a fraction of what he knew its value to be. As a consequence the stock of the United Verde Extension company is widely scattered among many small holders in Arizona and California."

"It was in 1912 that Mr. Douglas decided to finance the Little Daisy. He undertook the work at the suggestion of Major A. J. Pickrell, another man who is thoroughly familiar with Yavapai possibilities."

"At this time many know-it-alls grinned derisively at Douglas' 'foolishness.' But he had confidence in his property. He put his money in and told his friends about it. He appealed particularly to veteran mining men and engineers of his acquaintance. They had confidence in him and his knowledge of mines, and they banked on his confidence and backed him strongly. Among those who helped him in the initial financing of the property were John K. Tener of Pittsburg, George and James Douglas and his brother Walter. James Hoatson of the Calumet & Arizona company, John C. Greenway, and a score of others equally familiar with Arizona's mining history."

"Under the management of Mr. Douglas things began to hum on the United Verde Extension. One of his first moves was to bring in David Morgan as superintendent. Mr. Morgan was at that time in the employ of Frank M. Murphy. He and Mr. Douglas had worked together for many years, and they knew each other's methods thoroughly."

"Douglas and John K. Tener put up an initial $25,000. They then raised $200,000 more among their friends. They later raised another $50,000 by selling 50,000 shares of stock at $1 per share. This was used up during the summer of 1914. Then Dr. Douglas and Mr. Tener advanced the company $25,000 personally, since the company had to have the money, and they did not want to ask their friends for more."

"In the meantime a branch of the Santa Fe railroad from Cedar Glade to the new town of Clarkdale put the property into direct broad gauge connection with the outside world. This was a big advantage. It reduced the cost of supplies and insured a much lower cost of getting the ores to market when (and IF) they were found."

"This when (and IF) were beginning to loom up very large. The Arkansas and Arizona people to the north of the United Verde had quit work after spending over $600,000 in sinking a 1600-foot shaft. The Hull interests to the south and west of the United Verde were unable to get more money and had abandoned work on the Hull and Cleopatra properties. The Haynes property (later the Jerome Victor Extension and now the West United Verde), is just south of the Little Daisy. The management of this property were unable to raise the money necessary to pay their current bills and the company was forced into bankruptcy."

"On every side were properties at a standstill for lack of coin. On mines where hundreds of thousands of dollars had been spent in absolute good faith the showing was not sufficient to enable the promoters to get more backing."

"And the Little Daisy was one of the 'also rans.'"

"But 'Jim' Douglas really believed it was different. What is of more importance, Douglas was so sure that it was different that he was willing to put up the necessary money when he had to have it in order to continue the work."

"People recognize that the stock is now undervalued at the market, which is about $37 at the present writing. They should recall that there were many local people who were too 'wise' to buy it at 25 cents. It is also well to remember that, as the last $25,000 was disappearing, one of the most distinguished geologist of America, after a thorough examination, strongly advised Mr. Douglas to discontinue operations."

"No one knows what would have been the result if the management had not opened up its body of rich ore before that last $25,000 was exhausted. The strike was certainly opportune."

"And then came the reward for all the work and worry of the preceding years. It didn't all come at once."

"It took time to establish how big and how rich the new field was. Gradually, as the mine began shipping out ore that was richer than men had ever dreamed, and the company's treasury began to assume the proportions that come only to real mines, the price of the stock mounted. It was in this period that it lay within the power of Douglas to have secured for himself the stock of hundreds of small holders."

"When he established the fact to his own satisfaction that the United Verde Extension was one of the biggest rich copper mines the world knew anything about, Mr. Douglas turned his attention to making it one of the best handled mines. This, of course, would require a permanent force of miners who were permanent because their jobs were attractive. To make a job attractive, it must have good wages, the living conditions must be desirable for the wives as well as the men, and there must be good school accommodations for the children."

"Douglas at once began planning for a model town on the 'Hogback,' just below the present city of Jerome and at Verde, where the new smelter is being built. He intended to profit by the experiences and mistakes of his neighbor and establish a community where the houses would be desirable while rents, light, water and other necessities would be supplied practically at cost."

"As soon as practicable work was commenced on a smelter big enough to take care of his own ores and a large part of the ore from neighboring mines that he feels certain will come in. This smelter will be about 4 miles below Clarkdale, in the Verde Valley. A railroad has been built to the site and much of the material for the smelter is already on the ground. The steel work of the smelter is almost complete and the brick work on the big stack constitutes itself a dominant landmark to the surrounding country."

"This railroad will be continued to the mine through a haulage tunnel, which will be 13,000 feet long. At this time the tunnel is more than one-third completed. This arrangement will greatly lessen the cost of getting the ore to the surface and will mean a great saving in transportation."

"All these things were started under the immediate direction of Mr. Douglas. He could, of course, be building them all through subsidiary companies, using the United Verde Extension's funds and keeping the stock for himself. It is not an unusual thing, and would prove highly profitable, since he would be his own customer, and he could afford to allow himself to charge prices that would insure him a mighty fine profit."

"Of course, such methods would have cut down the ultimate profits of the holders of the United Verde Extension stock materially. They have not been used. The United Verde Extension now has about $6,000,000 in its treasury ---enough to pay for all the improvements. Mr. Douglas has planned and is earning more at the rate of nearly a quarter million monthly."

"Two years from now the smelter will be finished and the Little Daisy ore will be carried to its own smelter from the mine on its own railroad. Since the freight bill in 1916, when only the high-grade ore was handled, was over $960,000, and the profits on the smelting of from 60,000 to 75,000 tons of ore each month will be considered, it is easy to see the wisdom of Mr. Douglas' plans."

" He has already placed the $3,500,000 worth of stock of the Arizona Extension railway among his friends and sold the bonds to the same value. This provides the finances for a railroad direct from the mine and down the Verde Valley, to where he can connect directly with the transportation facilities of 2 competing transcontinental lines."

"With the cost of treating his ore reduced to a minimum; with the cost of marketing the product and getting in supplies greatly less than even the United Verde now has to pay; with a body of rich ore so huge that the cost per ton of production will be astoundingly low, the amounts that will be paid each quarter in dividends on United Verde Extension stock a few years hence, will be very interesting."

"In the meantime the beautiful residence of Mr. Douglas, near Jerome, stands out as an evidence of his confidence that he can carry out his ideas and make of Jerome a wonder city, in which he will find the pleasure of living, resulting from actual desirable conditions, as well as pride in a community made better and happier by his efforts."

"Mr. Douglas is an extremely unpretentious and unaffected man. Simple and direct in his manner of thinking and living, he likes simpleness and directness in others, and does big things simply and in a big way, because he is a big man. He is now 'somewhere in France,' where his particular talents have made him a very valuable adjunct to the Red Cross service. --- Yavapai Magazine."

(Bisbee Daily Review; February 24, 1918; Mining Section; pages 1 and 2.)

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