Peter Storbo, president of the Mount Rainier Mining Company, is found guilty of mail fraud on November 22, 1930.

  • By David Norberg
  • Posted 10/13/2020
  • HistoryLink.org Essay 21110

On November 22, 1930, federal judge George M. Bourquin finds Peter T. Storbo, president of the Mount Rainier Mining Company, and Orton E. Goodwin guilty of mail fraud. In 1927, Storbo's mining company had launched a $100,000 stock campaign claiming investors would profit from the "mountain of copper" his mine in Glacier Basin would produce (Burtchard, 109). Storbo's conviction deals a blow to the already struggling mine and buoys efforts by Mount Rainier National Park to fight mining inside the park and buy out the company's holdings. The mine never fully reopens and the claims are finally acquired by the park in 1984.

Mining in a National Park

Federal legislation allowed mining in the vicinity of Mount Rainier and inside the borders of the national park itself. Congress established laws in 1866 and 1872 giving all U.S. citizens, or those who were eligible and intending to become citizens, the right to prospect and lay claim to any "veins or lodes ... bearing gold, silver, cinnabar, lead, tin, copper, or other valuable deposits" on federal lands ("An Act to Promote ..."). Miners who invested at least $500 in labor to develop claims could file for a patent and receive full title to the land. When Congress created Mount Rainier National Park in 1899, section 5 of the bill stated, simply, that all U.S. mining laws would be extended to all land in the park and the surrounding forest reserve.

The bare, mineral-streaked slopes of Glacier Basin, located on the northeast flank of Mount Rainier, attracted miners in the 1890s. More than anything else, they were looking for copper, and they filed at least 40 claims before Peter T. Storbo (1874-1956) arrived on the scene. Storbo immigrated to the U.S. from Norway, spent time in Minnesota, and moved to Enumclaw in 1902. After acquiring a dairy farm and hotel, Storbo turned to mining and bought out all claims in Glacier Basin.

With high expectations, Storbo established the Mount Rainier Mining Company in 1904 with 104 investors and rapidly developed his claims. By the end of 1906, he had built a cabin in the basin, tunneled into the hillside, and sent his first samples of ore to Tacoma. The first reports were promising. Two samples had high concentrations of copper worth $72.93 per ton and $83.04 per ton, along with traces of gold and silver. The third sample contained striking quantities of molybdenum worth $1,211.35 per ton. The company issued its first annual report the following year. Despite a tragic avalanche that killed three and destroyed the cabin, the company announced grand plans for 1907, predicted that stock prices would soar, and encouraged investors to send money "at once" if they wanted to join in on the profits (Burtchard, 26).

Mining Company vs. National Park

Grenville Allen, Mount Rainier National Park's first acting superintendent, led the opposition to mining in Glacier Basin. In 1907, in his annual report, he commented that some of the 165 mining claims in the park "were taken up in good faith" but he expressed doubt that any would ever "prove valuable" or "produce ore in paying quantities" (Burtchard, 28). He suggested that most claimants were not serious and made little investment, but he warned that companies might patent land and jeopardize the park's efforts to protect the scenery and provide recreational opportunities for the public. The following year, Allen expressed even greater skepticism. He argued that mines in the park made money only through the sale of stock and suggested that a "competent geologist" should be sent to inspect all claims (Burtchard, 30-31).

Congress and the Department of the Interior acted on Allen's calls for action. In 1908, Congress passed a law that prohibited new claims in the park and required miners to perform work and assess the value of their ore annually to maintain existing claims. In 1910, a mining inspector examined the Mount Rainier Mining Company's claims on behalf of the federal government and found that many were not properly marked, had not been properly assessed, and did not demonstrate clear discovery of mineral deposits. Accordingly, federal authorities took the company to court in 1912. Under pressure, Storbo offered to surrender 32 of his 41 claims if he could keep the rest. The Department of the Interior accepted, but emphasized the agreement did not mean that the rest of his remaining claims were legitimate.

Boom and Bust

The Mount Rainier Mining Company seemed poised for success in the late 1910s and early 1920s. It negotiated agreements with the park that allowed it, with the payment of permit fees, to use buildings on relinquished claims and cut timber for mine operations. It poured money and labor into road construction and expanded its camp and mining infrastructure. In 1924, it successfully patented its eight claims, and, in September 1927, hauled 50 tons of ore to Tacoma.

In reality, however, the company had fallen on hard times. It failed to pay the $300 per year permit fee for five years and protested when the park demanded payment, claiming that $1,500 "would simply break the company" (Burtchard, 98). Although Mount Rainier Mining Company convinced the park to accept just $50 to cover the outstanding fees, it needed more capital and hired two consultants, Charles Cresser and Orton Goodwin, to help raise $100,000.

In April 1927, Cresser and Goodwin sent out a letter, signed by Storbo, to the company's shareholders urging them to buy stock before May 15, 1927, after which the price per share would double from 50 cents to $1. The pitch outlined all the investments and sacrifices that had gone into building the mine and assured investors there was a "whole mountain of copper to draw on" and that "only a banker" could calculate the profits they were sure to reap (Burtchard, 109). The appeal assured backers that "a famous mining engineer" visited the mine and had proclaimed it "one of the greatest copper mines in the world" with veins of ore running from 7,600 feet to "below sea level" (Burtchard, 110).

Trial and Decline

Skeptical investors filed complaints, and in 1928 the U.S. Post Office launched an inquiry into the company's activities. Park Superintendent Owen A. Tomlinson backed the investigation, and outlined in an editorial that, in his opinion, "the whole affair" was "nothing but a stock selling scheme" because the area lacked "sufficient ore of value to warrant mining operations on any such scale" (Burtchard, 111). Charles Cresser did not face trial as his health was failing, but the government pressed charges against Storbo and Goodwin. The jury found Storbo and Goodwin guilty, and Judge George M. Bourquin (1863-1958) handed down a fine of $1,000 and a sentence of 18 months to be served at McNeil Island.

Public opinion rallied around Storbo after the case. Cresser and Goodwin were involved in other fraud cases, and, apparently, the people of Enumclaw felt Storbo was another one of their victims. Some 1,200 residents successfully petitioned for his release, and he left prison shortly after one year.

The Mount Rainier Mining Company never recovered, the onset of the Great Depression adding to its woes. The company failed to pay corporate taxes and had to disincorporate in 1932. New owners tried, but failed, to revive operations as the demand for minerals soared during World War II, and minor efforts to reopen the mines continued into the late 1950s without success. Ultimately, Mount Rainier National Park wanted to buy the land and eliminate all private in-holdings inside the park's borders. The park made its first offer to buy the claims in 1930, and negotiations continued until the park finally obtained them for $55,800 in 1984.

Today (2020) Glacier Basin is a popular destination used by day hikers, backpackers, and climbers headed to Camp Schurman. The Mount Rainier Mining Company's lower camp is a backcountry campground, and remnants of the company's mining equipment can be found along the 3.5-mile trail, in camp, and in the upper basin as a reminder of Peter Storbo's unrealized dreams.


Sources:

Greg C. Burtchard, Jacqueline Y. Cheung, and Robert McIntyre, Jr., Mining Glacier Basin: History of the Glacier Basin Mining District, Mount Rainier National Park (Ashford, National Park Service, 2017); "An Act to Promote the Development of the Mining Resources of the United States," Library of Congress website accessed September 15, 2020 (https://www.loc.gov/law/help/statutes-at-large/42nd-congress/session-2/c42s2ch152.pdf); Theodore Catton, Wonderland: An Administrative History of Mount Rainier National Park (Seattle: National Park Service, 1996), 698-699; "Two Guilty in Rainier Mine Fraud Trial," The Seattle Daily Times, November 22, 1930, p. 1; "Glacier Basin," Washington Trails Association website accessed September 15, 2020 (https://www.wta.org/go-hiking/hikes/glacier-basin).

 


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