Homestake

The difference in altitude between Wall Street and the Black Hills of South Dakota--5,300 ft.--is no greater than that between the ruck of stockmarket quotations and the price of stock in Homestake Mining Co., most eminent Black Hills business. Biggest and most consistently profitable gold mine in the U. S., Homestake rose during the Depression from. $65 per share in 1929 to a point where, at more than $300 per share in 1933, it was the highest-price active stock on the New York Stock Exchange. Since then it has continued upward to the rarefied levels of its current $480 bid, $534 asked. Last week in its first independently audited annual report, Homestake showed for 1935 the highest profits in its history: $8,144,000. Year before it made $7,104,000, in 1929 only $1,044,000.

Homestake's boom began mildly in 1927, when better grades of ore were unearthed and gold recovery per ton started to rise sharply. A ton of the ore was worth $4.50 in 1929, $7 in 1932, $9 in 1933. When the price of gold jumped through the Roosevelt hoop, emerging at $35 an ounce, returns per ton rose further, and now average nearly $14. Homestake's per share earnings went up from $2.23 in 1926 to $9.94 in 1932, $19.94 in 1933, $28.29 in 1934. Last year they jumped again to $32.43 per share. Dividends have swelled from the $7 paid in 1929 to the string of monthly and extra payments that last year footed up to $56 for each & every one of Homestake's 251,160 shares.

To the city of Lead, S. Dak., where Homestake's 2,000 miners and their families live, last week's report was of less interest than the $100 bonus paid each employe last Christmas and the well-founded expectations of similar bonuses to come. Only four and one-half miles from legendary Deadwood, Lead is a wholly-owned company town with a unique mining-town tradition of health and tranquillity. It has never known a depression. There are no pool halls in Lead, no saloons, no drugstore loafers. Homestake spends $65,000 a year on its hospital, more on its recreation centre. Though Homestake is a non-union mine, miners' wages were never cut below the 1929 level, were raised 10% in 1933.

Among stockholders to whom Homestake's annual statement brought satisfaction was Publisher William Randolph Hearst, whose interest in the company is an old family matter. Homestake was one of the biggest winnings made by his mining-minded father in a long and gamesome career.* With two partners, the late Senator George Hearst bought the Homestake claims for $70,000 and incorporated them in San Francisco in 1877. In the preceding summer the Sioux and Cheyenne Indians had been driven westward out of the Black Hills by U. S. troops sent to avenge the Custer massacre, and for the first time a miner's scalp was safe in Gold Run Canyon, site of the first prospecting. The rich lodes at Homestake soon grew richer as the shafts drove deeper. Astutely managed after George Hearst's death by his shrewd widow, Phoebe Apperson Hearst, and after 1914 by her cousin's son, retiring Edward Hardy Clark, who is still president, Homestake was for years a pillar of the Hearst fortune. "W. R.'s" block, now estimated at 14,000 of the original 42,000 Hearst shares, is worth about $7,000,000, yields an annual income of $784,000.

* One of the others was an interest in Anaconda Copper, the sale of which in 1896 gave Publisher Hearst $7,500,000 to finance his loud entrance into Manhattan journalism.

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