Main Street: Eureka!

Rich Wandschneider

The recent shenanigans on Wall Street and the worlds of corporate high finance are not part of my everyday concerns. We don't depend on dividends for income or on buying or selling stocks to balance our year-end budgets.

I did once take $3,000 from an insurance policy and buy into a mutual fund - on the Thursday before Black Friday. But that's another story.

I watch the business news with a sense of detachment - and amazement. Stock prices rise and fall based on the "predictions" of earnings by Wall Street touts. And then they rise or fall again based on how well actual performance meets these month-old predictions. I always wonder how and why this extra level of touting got into the system. And can only imagine that it is something like the race track. You can run races - or a stock market - without touts, but with them you create an entire new layer of jobs, and a new way to influence the odds on a particular race - or stock price.

When investigative reporters began questioning the propriety of having the predictors, now called stock "analysts," work for the same companies that audit stocks' actual performance, and suggested that there might be some conflict of interest, there was back-pedaling and righteous indignation. And then one national accounting firm collapsed amid scandal.

But the analysis business must be a good one. Stock brokerage firms have their own army of high priced touts who sometimes seem to be shills for particular stocks. For a Wall Street voyeur, last week's headlines were the best. A high flying stock analyst at Saloman Smith Barney was accused of temporarily "upgrading" a stock (and thus increasing the demand for it and the price of shares) so that his boss could gain influence with another company's leadership. In the deal, the boss passed on a healthy donation to a presitgious Manhattan nursery school, ensuring enrollment for our high flying analyst's three year-old twins.

For some reason, all of this got me to thinking about Grace Bartlett's story of Eureka Bar. Grace was Wallowa County's long-time unofficial official historian, and the author of a couple of books and many stories and articles on Wallowa County. The story of the copper strike at Eureka Bar, and the subsequent efforts to develop copper mining and smelting on the Snake River, fascinated Grace. Her account runs something like this:

In the late 1800s, mining fever was sweeping across the remote inland northwest (the reduction of lands promised to Indians in the Treaty of 1855 was largely due to pressure from ore seekers). There were some known copper deposits on the Idaho side of the Snake Rive above the Imnaha confluence.

In 1898, a visiting mining engineer spotted some interesting rocks at a stock ranch on Horse Creek along the lower Imnaha River. The stockmen played dumb until he was gone, then rushed to stake claims. And began a rush.

Over the next eight years, thousands of dollars in stocks in Imnaha mining companies were sold - some locally, but much of it in the Midwest. Construction of a large smelter near the mouth of the Imnaha was begun, a Post Office established and a saloon built to accommodate the100 residents of the new town of Eureka.

Boat traffic up the Snake from Lewiston to the site was explored, and special boats were commissioned to make the journey. Enterprise businessmen and the Wallowa County court put up money to build a road from the valley to the site (there is still a trace of this road from Buckhorn to the Snake). Railroad routes from Elgin along the Grand Ronde and from Huntington on the upper Snake were explored.

Eventually a boat was built. It made several trips up river with supplies for the smelter, and then it capsized. Another boat was built and the road was completed, but by then the fever on the Snake had subsided. The reasons are not all clear, but Grace quotes mining experts who took another look at the site during World War II and found the ore of questionable grade as a possible explanation.

It sound to me a lot like the stories of Enron or any number of dot com companies that have risen with a flash and fallen as fast. The dynamics of stock market bubbles and the old mining bubbles are kin. There were of course some out and out "salted" mines, where promoters were able to convince investors to put up money to build boats and roads and do mineral exploration when they knew that there was no real ore to be found. But more often, I would imagine, the promotion began with some real hope - a nugget, the geography, and society's demand for the product - and then generated an entire economy of miners and builders and brokers who held the company together - and made good money while doing so - until it proved or collapsed.

Even when one of the mining areas actually proved out, if my reading of the history is correct, the largest profits were rarely turned by the miners. Boat builders, contractors, railroaders, bankers, and saloon keepers did better. And of course the promoters who sold the stocks - the analysts who "upgraded" the name of old "Deer Creek" to Eureka Creek" in their bid for investors.

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