Your request will induce me to lay before you surmises and expectations about the Estate which I would not be willing to subscribe or recommend action upon, before the Trustees.

I intimated in my first letter to Mr Hoy that there was something in the manner of the people on the Estate which made me suspicious. This first impression has been confirmed. I believe that those on the Estate, regarding me as the representative of the new owners, expect me to be surprised & disappointed [and] are not themselves in the least surprised when I show that I have been led to suppose that various matters were quite different from what they have to show them to be. They are reluctant to be closely examined & when forced to state unfavorable facts, and to admit that these facts are long-existent and have been long known to them, they generally volunteer some sort of apology for not having advised visitors of them. “It was not their business,”—“They were not asked” &c. The men on the Pine Tree & at the Benton Mills perfectly understood that the Pine Tree rock was not worth mining. It was mixed at the Mill with other rock: the mixture itself was but poor, not at all profitable, but visitors thought that they saw that this was because it was “very rich in sulphates” and that these were lost at the Mill. I will find out with certainty about this before I have got through, but I don’t mind telling you that Park’s stupidity in this respect seems to me to have been a little too notorious & may have been deep wisdom with reference to the sale of the Estate.

It was made known to everybody that there was very bad management at the Mill until the Estate was sold. Then the head-miner of the Pine Tree was dismissed—a new miner was got. It was not long before the latter was represented to Mr Billings to be a bad & stupid man and to have destroyed the mine. The mine was closed & left in a condition not to be easily reopened, before my arrival. This bad miner, I find had been at the Princeton for several years & while there had the reputation of being a very good miner. I find the Josephine working with a very small force, supplying one third the stamps of Benton Mills & less gold produced per diem than the men earn. Mr Selover talks again of the waste of the sulphates, concerning which I obtained a little information today which I will presently give you.

I doubt if Mr Park knew much about it. The mines were badly managed, below ground. He seems never to have cared much how they [131]

were managed there, nor to have known or had the means of knowing what sort of ore they were driving upon. He thought of nothing but making and keeping up the credit of the Estate by a fine show of business. He drove his credit to the utmost by every possible expedient & among others made everybody on the Estate virtually a partner with him, so that it was quite well understood by more than one that it was neck or nothing for their wages of several years. It was their venture as well as his. In some respects he was exceedingly skilful and I cannot but admire the tact with which he pursued his policy from the beginning to the end. At one point he was very lucky with a mine. He never worked but two mines (Pine Tree & Josephine being really one) but everywhere he made a magnificent show of business. If gold was not seen resulting from it, it was easy enough to account for it by his want of means to get proper apparatus, or his contempt for science, or the bad management of his miners or millers. He was not a miner or a millwright or a metallurgist or even a merchant: he was a lawyer trying to make the best of a bad business of Fremont’s in which, unfortunately for himself and by no intention of his own, he had become involved.

That was his game and he pursued it most faithfully, in the mines & out, and was very lucky. I don’t think he ever pretended to know much [132] about the mines or the ores or how they should be treated. Visitors didn’t question him much. They “looked for themselves.” Of course they had guides & their guides knew more than Park. They could show where Park’s ignorance & bigotry caused waste i.e. Pine Tree sulphates. The Supt of Benton Mills is in my opinion the best man on the Estate. I have quoted Selover on sulphates & bad management to him till he is out of patience & today I provoked him to the confession that Selover (the younger who leaves here for the East tomorrow) once said to him: “I want to have them think they see a great deal of gold wasted here, but I don’t myself believe there ever was much gold in the damn’d stuff.” Did not Selover Sr sell stock rather freely before I arrived here? Selover Junior has the reputation of being “a very different kind of man from his brother”—a simple grave honest young man. He certainly appears so—I hope he is. Park does not like him very much and advised me confidentially to soft soap him & get rid of him. He does not like Park very much & thinks he knows very little about mines. Park & he both leave Cala by the same steamer & neither intends to return. Selover subscribed to the “Testimonial from the employees to Mr Park.” I should not be surprised if you heard both the Selover Bros & Mr Park express much admiration for Mr Olmsted’s honesty & simplicity of character. I assure you that I have a very great degree of admiration for their combined success as salesmen.

After all I don’t think that they went beyond the bounds of legitimate artifice in trade. There are sulphates & there is waste. There is very rich rock at Princeton, & it is somewhat more than usually uniform in quality. Any man can see that for himself & can see more too, if he is sharp enough.

I don’t conceal from you, in confidence, that I feel suspicious that they think that they have taken you in—that the Estate is not as valuable as you have been led to suppose. Perhaps I do them injustice for, again I confess to you that I feel a little angry at having been so thoroughly deceived myself, & especially at seeing how all sorts of indirect debts—& direct debts too—have been cunningly shoved along until—“when the new Superintendent gets here.” A gentleman of high standing in the county has said to me: “It is perfectly well understood here that everything has been done that was possible to avoid making expenses & to put payments forward till you came.” If this had been only for a few months I wouldn’t mind it but I can see plainly that I have come in just at the death of a long-lived policy in that way—come in just at the moment it had been arranged that I should, & that everybody here knows this.

I say that I suspect Park thinks he has taken you in. The more important question is has he? Can the Estate pay dividends on ten millions or five millions?

I want you to give me six months to consider that, & to let me spend a little in soundings. Meantime I will run the concern as cheaply [133] as I can. I feel pretty sure of this. If the Estate can be made to pay expenses now: get water upon it, & make labor twenty per cent cheaper (which it almost certainly will be when the Pacific RR is finished & there is no longer a constant & large emigration & mania in Cala toward new gold & silver discoveries on its eastern border), it will pay handsome dividends. It is not only that wages of miners are three hundred per cent higher in Cala than on the Atlantic but the unsettled state of men’s minds, the influence of wild & absurdly extravagant rumors, the entire absence of all home feeling or associations with a fixed community, the influence of example & the disposition to good fellowship with roving adventurers constantly going ahead, all this makes it exceedingly difficult, at present, to exact industry & discipline in labor. I know that I can get more work out of the men than they give now, but at the best that is probable, the cost of all labor is frightful. There is almost no running expense of consequence except for wood & labor. The canal will reduce the expense of wood more than one half. The Pacific RRd, by facilitating emigration & especially by supplying the demand for labor of the region between here & the Mississippi States will, I think it is fair to calculate, make an actual reduction of the cost of labor, by the day, & increase of its value & efficiency, in a very short time, equal to one half. I doubt if gold can be mined anywhere else with less labor than it can here. Many large mines in Mexico & Peru have been given up when the price of labor was not more than an eighth of what it is here. To those who can afford to hold it as a long investment, then, I think the Estate promises well. For the present, if my father owned stock in it, I should advise him to neither buy nor sell.

As long as I hold my present views & make no important discoveries, I shall be likely to follow a corresponding policy looking to a gradual & cautious ”development of the resources” of the Estate, multiplying risks & expecting small average profits upon them, for the time being, but also looking to the substantial improvement of the Estate& getting it ready to make the most of a good & healthy labor market as soon as that can be reached.

I should be greatly obliged to you if you would write me fully how these views strike you & how far the Company will be likely to be content with them & able to sustain them.

I have written in the confidence which you invited but there is nothing in this letter which I should be unwilling to have you communicate to any or all of the Trustees if you thought best, except that it might be inconvenient to make such explanations as Mr Park would have a right to demand if he were to read it without making such trouble in the Estate as I should prefer to have avoided. I owe a great deal to Mr Park’s frankness with me & don’t want to make unfair use of what I have learned from him of his management of the Estate or of what I have learned in a spirit of confidence from his friends & which his influence [134]was apparently used to secure to me. But if you think it important that the Trustees should be put as far as possible in possession of the facts which have given rise to the suspicions which I have expressed or which tend to sustain them, you can have me instructed to report upon the condition & management of the Estate at the time the negotiation was pending & especially how far the knowledge I shall have obtained sustains the statements & views presented in various written & printed reports by which the judgment of the Trustees may be supposed to have been influenced. I shall in any case present the Board with a report upon the condition of the whole property at the time it came into my hands.

I am inclined to think that I now see the worst of the case. Whether so or not, you may depend upon it that I shall not hold back the worst from you a moment longer than is necessary.

As I said in my last to you the Estate is producing so little & in such a bad condition for the carrying forward of productive operations, & the deferred claims & expenses are so heavy, I feel compelled until I hear from you, to avail myself of a good deal more of the old credit-system expedients than I believe the Trustees had intended that I should. Mr Park insisted that the indirect means used to defer payments of wages & to get large profits from the store & boarding houses—all very adroitly managed as they were—were not regarded by the men as discounts from their wages, but rather as a sort of Savings Bank & Protective Agency. I have the best reason for knowing that this is not the case. The whole system was a necessity of the circumstances in which Mr Park found the Estate & he has managed to give the men a somewhat confused idea of it, & especially to relieve himself from the odium of cheating them. They nevertheless do feel that in some way or other they fail to get what they think they might get elsewhere & are not merely discontented, but sometimes bitterly so.—Especially those with families & who have been led to establish themselves here. It is all a part of the 2½ per ct plan & of that system of management which runs up stone walls by cheap contracts with no lime in the mortar, upon which, when the contract is complete, the same masons are ever after steadily employed by the day to keep them from falling down, whereof this office & store in Bear Valley furnishes a notable example. The show of profits is a miserable fallacy. I should be glad to know if the Trustees were as willing now as when I left N.Y. to have all our business put upon a cash basis, but I apprehend that they were not prepared for drafts on N.Y. for this purpose & that it may not be convenient or expedient to have them made larger than is absolutely necessary.

[135]