The "Most Rotten Disgusting Creature"

Hello! This is Deep Pockets #17.

In 1925, the three richest people in America (and likely the world) were:

1. John D. Rockefeller

2. Henry Ford

3. William A. Clark

A few years earlier, Andrew Carnegie would have been #2 on that list, but he died in 1919. I chose 1925 because that’s the year the #3 person, William A. Clark, died.

Everyone knows the names Rockefeller, Carnegie, and Ford, but - be honest - had you heard the name William A. Clark prior to 10 seconds ago?

Though his name seems to have been lost to time, William A. Clark’s legacy absolutely still touches our world today. And not in subtle ways. For reasons you’re about to learn, one of the most important cities in America would not exist today without William A. Clark. In fact, I bet most people reading this newsletter have been to this city, seen his name all over, and had no idea what it was referencing.

So, who was William A. Clark? How did he earn what was once one of the largest fortunes in the world?

Oh, and btw. Here’s how Mark Twain described him:

“He is as rotten a human being as can be found anywhere under the flag. He is a shame to the American nation… His proper place was the penitentiary, with a ball and chain on his legs. To my mind he is the most disgusting creature that the republic has produced…”

😀 

DEEP DIVE: The Montana Copper King

William Andrews Clark was born in Connellsville, Pennsylvania, on January 8, 1839. He was the second of 11 children, eight of whom would survive to adulthood.

William only went to school three months a year, the winter months. During the other nine months, he helped work the family farm.

In 1856, when William was 17, the family moved to where William not only enrolled in a local high school but also took a job teaching at the local grade school. In 1860, he enrolled at Iowa Wesleyan College for a two-year law degree program. He dropped out in the middle of the second year after coming down with a fever. An infectious, debilitating, horrible fever called…

Gold Rush Fever

As you may recall from our very first Deep Pockets story about Levi Strauss, gold was first discovered in California in 1848, and by 1849, the state was in the midst of a full-on gold rush (hence the term “49er”). The California Gold Rush peaked in 1852, and by 1858, the party was over. Coincidentally, the same year California’s rush was ending, Colorado’s rush was just taking off. Tens of thousands of fortune seekers descended upon the state’s various mining camps. One of those fortune seekers was 22-year-old law student William Clark.

In Colorado, William was hit with the harsh reality that he had traded the relatively comfortable world of Iowa academia for a grueling existence performing manual labor for a large mining operation.

In 1863, William and two friends loaded up a wagon and set out for better prospects in the territory of Montana.

In Montana, William and his friends searched for gold through a method called “placer mining.” In short, placer miners dig up literal tons of dirt by hand with picks and shovels, then run water through the dirt via a large filter. If you’re lucky, a few gold flakes show up on the surface of the filter. This is placer mining:

Picks & Shovels (Eggs & Tobacco)

As Levi Strauss proved, if you want to get rich during a gold rush, you actually don’t want to be a miner. You want to be the person selling picks and shovels to the miners! And that’s what William did. But instead of picks and shovels, he sold frozen eggs & tobacco.

During the winters, William drove a team of mules back and forth between Salt Lake City and the various mining camps around Montana. He would load up on eggs in Utah for 20 cents a dozen and flip them in Montana for $3 a dozen. The only advantage the winter gave was keeping the eggs frozen for the journey. He also carried tobacco, tea, coffee, and frozen fruit, but frozen eggs were his “bread & butter,” as it were.

In 1867, he took a job as a mail carrier. The route went straight through a deadly Native American territory, so it was both a treacherous and potentially lucrative job.

After a year, William negotiated a contract with the federal government that paid $20,000 per year to keep the route operating. That’s the same as earning around $400,000 in today’s dollars. Like any good capitalist, after securing the contract, he hired someone else to do the job. In the meantime, he traveled back to Pennsylvania to look up an old flame. In 1869, after a year of courting, William married his childhood crush, Katherine Stauffer.

Immediately after the wedding, the newlyweds traveled from Pennsylvania to Helena, Montana, where William launched a wholesale grocery business with two partners.

On the side, the partners also opened a window where miners could exchange their gold dust for cash. William quickly realized the cash-for-gold business was much more attractive and profitable than the grocery business. By 1872, he had bought out the partners, abandoned the grocery business, and launched a bank. He brought one of his brothers over from Iowa, showed him the ropes, and then dispatched him to Butte, Montana, to open a second branch. William then moved to Butte himself to operate W.A. Clark & Brother, Bankers.

Just as the Clark brothers were setting up shop, the boom of Butte’s gold rush days had turned to a bust. Several local mines that had once been major producers had been basically abandoned. In that depressed environment, William decided to purchase four of what had previously been among the largest gold mines in Montana. He paid pennies on the dollar.

William knew his very brief time working as a miner did not give him the knowledge he would need to properly operate a single mine, let alone four. He also knew that all his new mines had been picked clean of the easy-to-reach gold.

So, what did he do?

He went back to college.

In the winter of 1872, the 33-year-old dragged his wife and two young kids on the arduous trek from Montana to New York City, where he enrolled in a one-year program at Columbia College’s School of Mines (today’s Columbia University). In that year, he earned essentially a master’s degree in mineralogy and geology.

When he was back in Montana, William put his degree to work.

Let’s take a quick detour to talk about copper. Prior to the 1830s, copper wasn’t considered a particularly useful or valuable element. It was too malleable to be used to make weapons and tools, so it was mostly used to make coins, plates, jewelry, and other decorative household items.

In 1837, Samuel Morse invented a revolutionary product called the telegraph. The telegraph could transmit a series of dots and dashes known as “Morse Code” very long distances… over copper wires.

In 1844, Samuel successfully transmitted the first message from Washington, D.C., to Baltimore, Maryland. The world would never be the same.

By the early 1850s, telegraph poles were popping up all over the East Coast. On August 16, 1858, Queen Victoria of the United Kingdom sent a telegram to US President James Buchanan. The message, which took five hours to arrive, was sent through an underground copper cable that took four years to build. It broke three weeks after that first message was sent and would not operate again until 1866, but from that day forward, there has been an uninterrupted communications cable connection between the US and the UK.

Within a few years of William Clark’s graduation from Columbia, Alexander Graham Bell invented the telephone (1876), and Thomas Edison patented the incandescent lightbulb (1879), both of which used copper as a core element. In 1865, France began constructing the Statue of Liberty. It was dedicated in NYC in 1886. It is made of copper. It would have been the color of a penny when it was first delivered.

At the Columbia School of Mines, two of William’s most important subjects would have been:

1. How to test a piece of ore (rock, essentially) for its composition of precious metals.

2. How to smelt those precious metals away from the ore.

The Richest Hill on Earth

At the time, if you found ore in a mine that contained 5% copper, it was considered very high quality. A mine that contained ore with 5% copper could easily justify the huge financial cost of building out a full-scale mining operation.

When William tested the ore pulled from his four Montana mines, it typically contained 50% copper!

Suddenly, those useless abandoned gold mines he bought for pennies on the dollar were among the most valuable mines on the planet.

The only disadvantage William Clark’s copper operation had was that the nearest smelter was 700 miles away by railroad. So, at an enormous personal financial risk, he built his own smelter just outside of town.

This risk paid off. A nearly endless supply of copper and a huge quantity of silver would eventually be extracted from his mines. His Butte assets became known as “the richest hill on earth.”

William had another major advantage. His bank was the biggest lender and deposit holder in the region. As such, he basically had a cheat code view into the health of all the mining operations around Montana. When a rival mine was teetering on insolvency, guess who held the mortgage and knew the potential value of the operation? William A. Clark. And he wouldn’t have to acquire the mine for a price, he would take it over through through foreclosure.

The Montana operation turned William A. Clark into a multi-millionaire, one of just a handful in the United States at the time, but his fortune truly exploded with the purchase of a copper mine in Arizona called United Verde. Once again, having access to the mine’s financials helped him see the potential at a time when the owners were struggling, and the price of copper was in a depression.

Within a few years of his 1888 purchase, with copper prices soaring again, United Verde would prove to be the richest copper mine in the world. United Verde soon generated $10 million per year in profits for William Clark. That’s the same as making around $300 million per year in today’s dollars! All of which went to one guy:

Expanding West

To prevent this story from becoming 10,000 words, I’m going to run through some personal details real quick: William’s first wife, Katherine, died in 1893. Right after her death, a local girl from Butte named Anna La Chapelle started living with William as his “ward” (as in, under his “guardianship”). When they first started living together, Anna was 16, and William was 55. 🫢 

They married in 1901, when she was 23 and he was 62. Anna and William welcomed their first daughter, Andrée, in 1902 and a second daughter, Huguette, in 1906. Both daughters were born in Paris. Tragically, Andrée would only live to 1919, dying just before her 17th birthday of meningitis. Huguette Clark lived to be 104, dying in 2011!

Spoiler alert: Huguette Clark is actually the subject of our next Deep Pockets story 😄 

Meanwhile, William’s empire continued expanding west. He bought the largest coffee producer in Mexico, a lead mine in Idaho, timber interests, railroads, ferries, hotels, and more. He bought 10,000 acres of land between Los Angeles and Long Beach. He planted sugar beets on 1,000 of those acres and built a state-of-the-art sugar plantation in a waterfront city near Long Beach called San Pedro.

The Railroad

In 1900, William bought a 22-mile railway that ran between the towns of Newport Beach, Santa Ana, and Westminster. He extended the line to connect with his sugar beat factory in San Pedro. Today, San Pedro is the Port of Los Angeles, aka the ninth busiest port in the world.

The only way to get from Los Angeles to Salt Lake City at this time was through San Francisco. A direct line would drastically cut the cost of transporting materials from William’s mines in Montana and Arizona to his port in San Pedro.

In 1901, he revealed his plan to build the “San Pedro, Los Angeles & Salt Lake Railroad.”

It took five years and involved a bitter war with the head of the Union Pacific Railroad, but on May 1, 1905, the Salt Lake to Los Angeles line had its inaugural run. William financed the entire operation without debt, using income from his mines. A truly unheard-of feat.

Here’s a newspaper ad for the line in 1904:

Because it used steam-powered locomotives, the railroad needed a maintenance depot roughly halfway along the route so the engines could be refueled with water. To reduce downtime, the railroad had a ready-to-go engine waiting when a train arrived. The locomotives would be switched out, and the passengers would be on their way.

For his maintenance depot, William chose an abandoned Mormon missionary in the middle of the Nevada desert. He bought 809 acres for $50,000. That’s the same as around $2 million in today’s dollars.

When he was done building his tracks and maintenance yards, William took 110 leftover acres and subdivided them into 1,200 lots. Residential lots sold for $100. Corner commercial lots sold for $1,750. He generated $250,000 from the sales, more than quadrupling his original investment. Can you guess what we call this city today?

.

.

.

.

.

Las Vegas

William originally called the town “Clark’s Las Vegas Townsite.” The new residents dropped the “Clark’s,” and the town became Las Vegas, Nevada.

Without looking it up, do you know what county Las Vegas is in?

.

.

.

.

.

.

Clark County

You’ve probably landed in Las Vegas before and either seen a sign that says “Welcome to Clark County, Nevada” or seen an officer with a badge that says “Clark County Sheriff.” Now you know why.

Political Career

Outwardly, Twain’s disdain was connected to Clark’s political career, which we’ll detail in a moment. Twain’s dirty secret was that he was financially supported by Clark’s biggest rival, Henry Huttleston Rogers. Rogers was one of the top executive partners at Rockefeller’s Standard Oil monopoly. In the early 1890s, Rogers led Rockefeller and Standard to launch a competing copper mining company in Butte called Anaconda. Rogers paid Twain to write negative stories about Clark in various articles. To top it all off, Twain’s $52,000 payment for services rendered was turned into shares of Anaconda. Shares that would eventually be worth millions. Anaconda even would soon acquire all of William A. Clark’s copper assets in Montana, resulting in the largest copper trust in the world.

Let’s very briefly talk about William A. Clark’s political career.

William almost single-handedly led the charge to get Montana granted statehood. Montana became a state in 1889, and William desperately wanted to be its first senator. He was defeated after a bitter campaign against an opponent who was backed by William’s biggest copper magnate rival. It’s still considered one of the dirtiest political campaigns in American history today.

He did not give up the dream of becoming a senator, but there were some bumps along the way. He was elected in March 1899. At the time, US senators were not chosen by public votes but by the members of the various state legislatures. As it turned out, William paid over $400,000 in bribes to Montana legislators to secure his election. That’s the same as spending $15 million today.

Undeterred, William’s dream of becoming a Senator came true in 1900. At first, he was appointed to the senate by Montana’s governor to fill a vacant seat then, in 1901, he won a legitimate and successful campaign. He served a single term through 1907. During his time in Washington, he mostly voted for bills that would help his business empire and against those that would hurt. Otherwise, he was absent, attending to his empire.

NYC Mansion

In 1855 he paid $220,000 for the undeveloped corner lot at Fifth Avenue and 77th Street in Manhattan. Over the next 16 years, he spent $7 million - the equivalent of $245 million in today’s dollars, constructing a mansion. The home, which was only smaller than Andrew Carnegie’s mansion down the block, featured:

• 121 rooms (including 25 guest rooms and 35 servants’ rooms)

• 31 baths

• A swimming pool

• FOUR art galleries

• A private underground rail line to bring coal for heat

• a 35-foot rotunda with a balcony that featured the country’s largest organ

The art gallery featured hundreds of masterpieces. Upon his death, much of the collection went to the Corcoran Gallery in Washington D.C., where it was housed in the William A. Clark wing for decades. After the Corcoran closed in 2014, the collection was integrated into the National Gallery, where it remains today.

The Wealth

At the height of his success, William was earning $1 million PER MONTH from his empire. That’s the same as making around $35 million per month today. And perhaps most impressively, unlike his contemporaries, Rockefeller, Carnegie, Ford, etc… who had hundreds or even thousands of partners and shareholders, William had ZERO partners. He owned and operated his entire operation personally right up to his death.

As we mentioned at the top of this story, William died in 1925. He was 86.

At the time of his death, his fortune was estimated at $250 million. That’s the direct inflation-adjusted equivalent of $5 billion today. However, when you take into account his relative wealth to the Gross National Product at the time, William A. Clark’s fortune was worth more like $50 billion today.

For context, Henry Ford was worth around $1 billion in 1925. That relative fortune had the equivalent power of around $200 billion today. John D. Rockefeller was worth $1.4 billion. That was worth $340 billion and made him the richest human of all time until Elon Musk’s net worth briefly topped $340 billion - unadjusted - in late 2021.

After 16 years of construction and the equivalent of $245 million in costs, William Clark’s NYC mansion was only occupied for 14 years. And even then, it was a part-time residence. His children sold the estate a year after his death in 1926 for $3 million (a loss of $4 million). In 1927, the next owner tore it down. Today, it’s a luxury apartment building, located at 960 Fifth Avenue.

Of his $250 million, William only left $600,000 to charity. He set aside some modest gifts for his managers and staff, but the vast majority of his wealth and empire went to his five surviving children, the youngest being 19-year-old Huguette.

He did not leave a succession plan for his business interests, so the empire was sold off, generating an even larger fortune for the heirs.

If you made it this far, THANK YOU. William A. Clark’s unbelievable (and largely forgotten) story was one of the primary inspirations for creating this very newsletter. If you want to read more about his incredible life, I highly recommend a book about his daughter, Huguette Clark, titled “Empty Mansions: The Mysterious Life of Huguette Clark and the Spending of a Great American Fortune." And speaking of Huguette, wait til you hear how her life turned out…

FINAL WORD

On the next edition of “Deep Pockets,” we’ll tell you what happened to William A. Clark’s five surviving children, with a focus on Huguette Clark.

Thanks for reading! Deep Pockets is brand new, and I appreciate you being part of it. I want it to be the best newsletter you’ve ever read.

So, hit Reply and let me know if there’s anything you like, hate, or otherwise just want to say. Thanks!