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Anaconda Copper Mining Company (until 1915 known as the Amalgamated Copper Mining Company) was one of the largest trusts of the early 20th century. The Anaconda was purchased by Atlantic Richfield Company (ARCO) on January 12, 1977. Anaconda halted production in 1983 and now exists only as an environmental liability for BP, the current owner of ARCO.
Anaconda Copper Mining Company started in 1881 when Marcus Daly bought a small silver mine called Anaconda near Butte, Montana. (Anaconda would eventually own all the mines on Butte Hill.) He asked George Hearst, father of publishing magnate William Randolph Hearst, for additional support. Hearst agreed to buy one-fourth of the new company's stock without visiting the site. Huge deposits of another mineral, copper, were discovered soon and Daly became a copper magnate. Daly quietly bought up neighboring mines forming a mining company. He then built a smelter at Anaconda which he connected to Butte by a railway.
Butte, a small and poor town, became one of the most prosperous cities in the country, often called "the Richest Hill on Earth." From 1892 through 1903, the Anaconda mine was the largest copper-producing mine in the world. It produced more than $300 billion worth of metal in its lifetime.
In 1889 the Rothschilds attempted to control the world copper market. In 1892 the French Rothschilds began negotiations to buy the Anaconda mine. In mid-October 1895 the Rothschilds, French and British, bought one quarter of the stock in Anaconda for 7.5 million dollars. By the late 1890s the Rothschilds probably had control over the sale of about forty percent of the world’s copper production.
The Rothschilds' role in Anaconda was brief. In 1899, Daly teamed up with two directors of John D. Rockefeller's Standard Oil to create the giant Amalgamated Copper Mining Company, one of the largest trusts of the early 20th century.
By 1899 Amalgamated Copper acquired majority stock in the Anaconda Copper Company and the Rothschilds appear to have had no further role in the company. Marcus Daly had just become president of the seventy-five million-dollar holding company at his death in 1900.
The leading roles in the takeover were played by Henry Huttleston Rogers (John D. Rockefeller’s friend and a key man in his Standard Oil businesses) and William Rockefeller (John’s brother).They were aided by company promoter Thomas W. Lawson. Although Rogers and William Rockefeller were Standard Oil directors, Standard Oil itself did not take part, nor did its founder and head, John D. Rockefeller, who disliked such stock promotions.
Lawson later had a falling out with Rogers and Rockefeller, and wrote of the experience in a book Frenzied Finance. Although not totally objective (probably due to Lawson's bitterness) it offered insight into aspects of high finance. Publicity from revelations such as these fueled public sentiment for controls which led to U.S. anti-trust laws such as those championed by President Theodore Roosevelt.
At the beginning of the 1900s, due to electrification (and Amalgamated's maintenance of an artificially high copper price), copper was very profitable, and copper mining expanded rapidly. Between 1899 and 1915, Anaconda, controlled by Standard Oil insiders, stayed under the name of Amalgamated Copper Company.
Amalgamated was in conflict with powerful copper king F. Augustus Heinze, who also owned mines in Butte which in 1902 he consolidated as the United Copper Company. Thus, neither organization was able to monopolize copper extraction in Montana. In addition, although Butte was then the most prolific copper-mining district in the world, Amalgamated could not control other copper-mining districts, such as those in Michigan, Arizona, and countries outside the United States.
Marcus Daly died in 1900, and his widow began a close friendship with a shrewd, intelligent businessman, John D. Ryan, who assumed the presidency of Daly's bank and management of the widow's fortune. The leaders of Amalgamated turned to Ryan, famous for his negotiation skills, for help in creating a monopoly at Butte.
Control of producing mines was a key to high income. Ryan convinced Heinze to walk away with abundant compensation,and took over Heinze's properties and the properties of William A. Clark (Butte’s third copper king). The Rockefellers were then able to gain complete control of Butte's copper as they merged them all with Amalgamated. The reorganized company was again named Anaconda. Ryan became its president, and was rewarded with significant package of Amalgamated shares.
The "right hand" of John Ryan was Cornelius Kelley, a young attorney, who soon was given the position of vice-president.
Henry Rogers died suddenly in 1909 of a stroke, but William Rockefeller brought in his son Percy Rockefeller to help with leadership.
During the 1920s metal prices went up and mining activity increased. Those were really the golden years for Anaconda. The company was managed by dexterous Ryan-Kelley team and was growing fast, expanding into new areas of activity: manganese, zinc, aluminum, uranium and silver.
In 1922 the company acquired mining operations in Chile and Mexico. The mining operation in Chile (Chuquicamata), which cost Anaconda $77 million, was the largest copper mine in the world. Then it was the source of two-thirds to three-fourths of the Anaconda Company's profits.
The same year ACM purchased American Brass Company, the nation's largest brass fabricator and a major consumer of copper and zinc. In 1926 Anaconda acquired the Giesche company, a large mining and industrial firm, operating in the Upper Silesia region of Poland.
At that time Anaconda was the fourth largest company in the world. These heady times, however, were short-lived.
In 1928 Ryan and Percy Rockefeller aggressively speculated on Anaconda shares, causing them to go up at first (at which point they sold) and then to go down (at which point they bought them back). Known today as a "pump and dump", at the time it was not illegal, and was actually quite common. The prices, under the pressure of a "joint account" set up by Ryan and Rockefeller of nearly a million and a half shares of Anaconda Copper Company, fluctuated from $40 in December, 1928 to $128 in March 1929.
Smaller investors were completely wiped out. The results are still considered one of the great fleecings in Wall Street history. The American Senate hearings concluded that those operations cost the public, at the very least, $150 million. A 1933 Senate banking committee called these operations the greatest frauds in American banking history and a leading cause of the 1930s depression.
In 1929 Anaconda Copper Mining Co. issued new stock and used some of the money to buy shares of speculative companies. When the market crashed on Oct. 29, 1929, Anaconda suffered serious financial setbacks. Moreover, at the same time, copper prices started going down dramatically. During the winter of 1932-33 copper prices had dropped to $0.103 per kg, down from an average of $0.295 per kg only two years earlier.
The Great Depression took its toll with massive unemployment in both the United States and Chile (up to 66 percent unemployment rate in the Chilean mines). On March 26, 1931, Anaconda cut its dividend rate 40%. John D. Ryan died in 1933 and was buried in a copper coffin. His mighty Anaconda shares, once worth $175 each, had dropped to $4 at the bottom of the Great Depression. Cornelius Kelley became the Chairman in 1940.
Butte mining, like most U.S. industry, remained in depression until the dawn of World War II, when the demand for war materials greatly increased the need for copper, zinc, and manganese. Anaconda ranked 58th among United States corporations in the value of World War II military production contracts. That relieved some of the economic tensions.
The end of World War II brought another downturn in the copper industry.
During post-war years prices of copper dropped. At the same time mining costs had risen precipitously. As a result, copper production from Butte's underground vein mines dropped to only 45,000 mt annually. Clearly, something had to be done if mining were to continue to prosper in the Butte district. The answer was called the "Greater Butte Project" (GBP). The project would exploit lower-grade underground reserves by the block-caving method. The new method was successful, although short-lived.
In 1956 Anaconda netted the largest annual income in its history: $111.5 million. But since then ore grades were continuing their decline, mining costs were rising each year, and profits were diminishing. To stay alive, the company switched to open-pit mining, a very area-consuming method. The Berkeley Pit kept expanding and ate away at the older parts of Butte.
In 1971, Chile's newly elected Socialist president Salvador Allende confiscated the Chuquicamata mine from Anaconda. Anaconda lost two-thirds of its copper production. Two years later, a compensation of $250 million was paid to Anaconda by the Chilean government, after the military overthrow of Allende in September 1973.
Losses from the Chilean takeover, however, had seriously weakened the company's financial position. Later in 1971, Anaconda's Mexican copper mine Compañía Minera de Cananea, S.A. was nationalized by president Luis Echeverría Álvarez's government. An unwise investment in the unsuccessful Twin Buttes mine in southern Arizona further weakened the company, and in 1977 Anaconda was sold to Atlantic Richfield Company (ARCO) for $700 million. However, the purchase turned out to be a regrettable decision for ARCO. Lack of experience with hard-rock mining, and a sudden drop in the price of copper to sixty-odd cents a pound, the lowest in years, caused ARCO to suspend all operations in Butte.
By 1983, six years after acquiring rights to the "Richest Hill on Earth", the Berkeley Pit was completely idle. ARCO founder, Robert Orville Anderson, stated "he hoped Anaconda's resources and expertise would help him launch a major shale-oil venture, but that the world oil glut and the declining price of petroleum made shale oil moot."  At the time of the sale to ARCO, Anaconda had large working hard coal holdings in the Black Thunder mine at Thunder Basin, Wyoming. ARCO planned to diversify its energy business into coal. In June 1998, Arch Coal completed the acquisition of the coal assets of Atlantic Richfield.
Closing down the mines was not the end of new owner’s problems…
The area of Butte, Montana, Anaconda, Montana, and the Clark Fork River were highly contaminated. Milling and smelting produced wastes with high concentrations of arsenic, as well as copper, cadmium, lead, zinc, and other heavy metals. Beginning in 1980s, the Environmental Protection Agency designated the Upper Clark Fork river basin and many associated areas as Superfund sites - the nation's largest.
The EPA named ARCO as the "potentially responsible party". Atlantic Richfield Company was obliged to remediate (clean up) the area. Since then, Atlantic Richfield has spent hundreds of millions of dollars decontaminating and rehabilitating the area, though the job is far from finished.
ARCO, officially BP West Coast Products LLC, is now a subsidiary of BP.
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The independent documentary An Injury to One chronicles the history of Anaconda in Butte, Montana, and its efforts to suppress unionization by its workers. The short film ends with a discussion of Berkeley Pit. The 2009 documentary Butte, America covers similar themes.
The novel Sweet Thunder by Ivan Doig recounts a journalistic duel between a union newspaper and a company newspaper in 1920's Butte.
The term copper collar, coined in the late 1800s, was a metaphor used to describe a person or a company directly influenced or controlled by the Anaconda Company. “From the 1920s until 1959, journalists working at the newspapers could write nothing that clashed with the company’s business enterprises. Journalists were thus not allowed to develop and exercise their professional skills through their news judgment—lawyers and accountants made news judgments, not journalists—and were frozen for decades in this pre-professional model.” By 1920, the Anaconda Company owned several of the states newspapers including the Butte Post, the Butte Miner, the Anaconda Standard, the Daily Missoulian, the Helena Independent, and the Billings Gazette. The Anaconda Company controlled the economic and political dealings throughout Montana well into the mid-1900s.
As the state's largest employer, the Anaconda Company dominated Montana politics. In the political arena the "copper collar" symbolized influence, wealth, and power. In 1894, Montana held an election to decide which city would be its capital. Marcus Daly, an Anaconda supporter, used his power over the papers to further his cause. While campaigning, “Anaconda’s supporters portrayed Helena as a center of avarice and elitism while promoting their choice as the pick of the working man. In return, Helena’s backers claimed that if the victory should go to their opponent the entire state would be strangled by the “copper collar” of Daly’s Anaconda Copper Mining Company." Daly’s campaign was unsuccessful and Helena became the states capital. Flexing its political muscle again in 1903, the Anaconda Company closed down operations, putting fifteen thousand men out of work until the legislature enacted the regulations it demanded. Montanans were angered by this decision and from that point forward to suggest that a politician who “wore a copper collar” could cost him the election.
The copper collar symbolized oppression and control to the people of Butte. In the early 1900s, it was believed that Butte’s culture with its “perverse pride in its wide-open character was a response to the people’s belief in the all-encompassing power of the company. Butte’s bars, gambling dens, dance halls, and brothels were among the few public institutions not owned or controlled by Anaconda. It was not only the hazards of mining and the grim environment of Butte that propelled men and women to frenzied gaiety, but also the thought that here were arenas of self-expression denied them elsewhere in a city ringed by the “copper collar”.”
Choosing sides in this battle was unavoidable. According to Author Fisher’s piece, Montana: Land of the Copper Collar, “Six months is the longest one may live in Montana without making the decision whether one is "for the Company" or "against the Company." The all-pervading and unrelenting nature of the struggle admits of no neutrals. Since the territory's admission to statehood in 1889 the struggle has continued.”
The use of the term "copper collar" has found its way into historical novels from that period. In The Old Copper Collar, a tale of the course of a senatorial election in Helena in the early 1900s, Dan Cushman makes a reference to the "copper collar": “At this point the galleries packed with Bennett sympathizers commenced heckling him with suggestions he wore the Copper Collar, but these hoots and catcalls he contemptuously ignored, reiterated his freedom from all cliques, factions, and corporations and that his purpose had been purely and simply to prove or disprove unlawful practices, and sat down.” Even the suggestion that a person wore the “copper collar” created pandemonium from the crowd.
Ivan Doig also makes references to the "copper collar" in his story Work Song. In 1919, Gracie resists the powerful Anaconda Company as they attempt to bully her into sell her property. She says, "Leave this house at once, Whoever-You-Are Morgan. I’ll not have under my roof a man who wears the copper collar." The workers who are under the “copper collar” are referred to as “snakes” and the Anaconda Company is referred to as an “ogre”.
The "copper collar" symbolized different things to different people but one fact holds true, “the Anaconda Company used the tactics of an authoritarian state to quash a legitimate labor movement within its corporate fiefdom. That the press, an elemental part of democracy, was used in the assault marks a black period in the history of American journalism.” For decades Anaconda Company “mined and smelted metal, leveled forests, owned the newspapers, bribed the legislature, set the wages, murdered union organizers, exported the earnings, and finally shut down, leaving Butte and Anaconda the poorest cities in the states and the largest EPA Superfund site in the country.”
The phrase "copper collar" is also an example of metonymy when it is substituted for the act of the Anaconda Company controlling a person. It is closely related to the company because it is made of copper, which is what the company mined. A collar is device used to control, which is what the company used the copper collar for.
In the Semiotic Square for the "copper collar" (see illustration), Marcus Daly is considered the assertion and Miners is the negation in the first binary pair. The second binary relationship is created on the “control” axis. Union, the not Marcus Daly element, is considered to be the complex term, and "copper collar", the not Miner element, is the neutral term. Both a union and the "copper collar" are things that are used to gain control. The Anaconda Company used the copper collar to gain control of the papers and legislature and the Miners wanted to establish a union to gain some control over their working conditions.