Day Mines, Inc. Records, 1921-1985

On October 1, 1947, Day Mines, Inc., came into existence as an Idaho corporation, following vote of the shareholders in each of twelve separate mining companies of the Silver Valley. These firms included the Crystal Lead, Dayrock, Duluth, Happy Day, Hercules, King, Monitor, Sherman Lead, Stanley, Tamarack and Custer, Treasure Vault, and Western Union companies. Henry L. Day was a director of all twelve corporations and president and manager of all but the Dayrock, of which he was vice president and manager. Frank M. Rothrock, president of the Dayrock, was a director of all of the twelve and vice president of all except the Duluth and Crystal Lead. The rest of the directors and officers were similarly overlapping, and stockholding in all of the companies was dominated by Day Family members and their close associates. When the new conglomerate was formed, the so-called "Day Interests," which included the Rothrock and Paulsen families of Spokane, held 54 percent of the stock.

The richest of the old companies was the Tamarack & Custer, with assets worth $630,000. The poorest was the Treasure Vault, worth only $171. The new firm, Day Mines Inc., ranked among the top ten silver-lead-zinc mining companies in the United States with assets totaling $8,340,000.

The unification of the twelve companies had its origin in the first few years following World War I, when the Day Family and its allies had began acquiring additional properties as insurance against the time when the Hercules Mine would play out. Also a factor was the need for efficiency in the operation of an increasingly sprawling empire during the Depression decade of the 1930s. Under the plan of consolidation drawn up over a number of years by Henry Day, stock in each of the constituent corporations was exchanged for a prorated number of shares in Day Mines, Inc., and the new company received complete ownership of all the assets and liabilities of each its dozen predecessors, which were legally dissolved the same day.

Among the assets were ownership of two other companies, the Aurum Mining Co., which had been incorporated in 1927 to manage the mining properties of the old Northport Smelting and Refining Co. located near Republic, Washington, and the Fern Mining Co., created in 1946 to manage certain claims formerly held by the Tamarack and Custer Consolidated Mining Co. The Aurum and the Fern remained as wholly-owned subsidiaries of Day Mines until 1950, when the Aurum merged into the parent company; Fern followed suit in 1968.

Upon incorporation, Day Mines, Inc., and its subsidiaries held in Shoshone County, Idaho, 771 patented claims aggregating 10,516.7 acres and unpatented claims on 4,496.4 acres; in the Eureka Mining District in Republic, Washington, Day Mines held an additional 73 claims or 826.6 acres. Among the Coeur d'Alene mining companies, Day Mines was second only to Bunker Hill in land area.

The initial board members of Day Mines Inc. were Henry L. Day, president and manager; Frank M. Rothrock, vice-president; Paul E. Jessup, vice president and comptroller; and Eleanor Day Boyce, Clarence I. Paulsen, F. Wallace Rothrock, and Wray D. Farmin. Stephen F. Heitfeld became secretary-treasurer and Roy W. Anno assistant secretary-treasurer. All of these persons had been directors, and in most cases officers, of several of the consolidating companies. Henry L. Day remained president of Day Mines Inc. until 1970, when he became chairman of the board and Rollin Farmin, having been manager for the last five years, succeeded to the presidency. William H. Calhoun followed Rollin Farmin, first as general manager in 1970 and then as president in 1972. He would be Day Mines's last president. Henry Day retired from the chairmanship in the same year, but to the end remained as a director, a member of the board's executive committee, and the company's largest stockholder. Besides Day and Calhoun, the firm's final directorate was a more diverse group than it had been in previous decades, including Neal R. Fosseen, a Spokane banker; Piatt Hull, a Wallace attorney; John L. MacLean, a fertilizer executive; Robert C. Morel, a Mazatlan, Mexico, banker; J.D. Porter, a Seattle insurance executive; and Jack H. Salter, a retired mining executive.

There were 2,149 shareholders when Day Mines incorporated in 1947; the number reached 5,488 in 1980, the last year before the company merged into Hecla Mining Co. Out of the 5 million shares of Day Mines authorized stock, with a par value of ten cents each, 2,886,575 were issued initially. Unlike the stock of most Idaho mining companies, Day Mines shares were not assessable. Shares were traded on the American Stock Exchange in New York as well as the Spokane Stock Exchange.

Henry Day intended that Day Mines, Inc., would provide a flexible structure by which a permanent staff of about twenty-five key employees could control anywhere from 400 to 600 workers as needed. Day Mines centralized accounting, purchasing, engineering, geological, and legal services, as well as sawmilling, mechanical, electrical, and steel shops. A private telephone system connected all of the principal sites. The new conglomerate would allow efficient administration of an enterprise in transition from an independent operator of wholly owned properties concentrated in one geographical area to a company with widespread major holdings often managed through alliances with partners sometimes larger and more powerful than Day Mines itself.

Overall production from the mining properties of the twelve original companies which formed Day Mines declined from the end of World War II onward. Despite extensive exploration and development, much of it done by leaseholders, the old mines were gradually exhausted during a period of low metal prices relative to labor and development costs. The Hercules itself, whose production had peaked as early as World War I, reopened between 1947 and 1960, but without great success. The Copper King saw no ore production after 1953. The Sherman was worked out in 1956, the Tamarack in the following year. The Dayrock, for years the main producer, closed early in the 1960s, opening occasionally thereafter until closing for good in 1977. The Monitor closed that same year. When Day Mines, Inc., was born in 1947, 440 employees had reported to fourteen different sites. But by 1966 Henry Day could describe his firm as "one of the smaller operations in the Coeur d'Alene Mining District," with only 100 employees and only one mine in normal production. At that, the numbers of workers was up from a low of 41 in 1962. By the end of 1970s it would still hover near 90.

Day Mines, Inc., continued to acquire properties adjacent to its own and to swallow up their holding corporations. In 1950 it got control of the Hornsilver Mining and Milling Co., with unpatented lands three miles south of Wallace, and of the C & R Mining Co., with claims near Burke; Hornsilver merged into Day Mines in 1960 and C & R followed a few months later. In 1951, Day Mines obtained all the stock of Gold Hunter Mines, Inc., with holdings near Mullan; Gold Hunter merged with its parent in 1961. None of the properties acquired along with these firms became important ore producers. But Day continued purchasing additional properties to the end of its corporate lifetime.

Increasingly Day Mines explored new grounds, often outside the Coeur d'Alene region and often in joint ventures, sometimes as the junior partner. One of the most successful of these projects was the development of the Galena Mine, only one-half mile west of Wallace. In May 1947 the Fern Mining Co. had joined with Asarco in a lease of the Galena from the Vulcan Silver Lead Corporation, a subsidiary of Callahan Zinc-Lead Co. In this lease Fern held a 25 percent interest and Asarco 75 percent. Asarco was the managing partner. After organization of Day Mines, Fern assigned its share of the Galena lease to the parent company. Production started in 1955 and by the late 1970s the Galena had become first in silver output in the United States. In 1948 Day Mines obtained a 70 percent interest in the Sunset Lease, with six claims in the Beaver District nine miles north of Wallace. Worked by subleaseholders, this property was profitable for nearly a decade. In 1953 Day Mines leased to Knob Hill Mining Co. the Gold Dollar Mine, part of the old Aurum property near Republic, Washington, and for several years this venture provided the largest part of Day Mines' income. When Knob Hill terminated operations in 1978, Day continued to operate the property as its Republic Unit. In 1965, under a 50-50 profit sharing agreement, Day Mines and Hecla Mining Co., with Hecla as the operating partner, began development of the Day-owned Hunter Ranch, adjacent to Hecla's Lucky Friday Mine, near Mullan, Idaho. Ore production began in 1969. A dozen years later this operation would in part lead to the take-over of Day Mines by the Hecla. In 1974 Day Mines leased the Sherman Mine, near Leadville, Colorado, from the Leadville Corporation, and this mine remained a lucrative part of the enterprise for the remainder of the corporation's existence. Even more profitable was the Coeur Mine, near Wallace, Idaho, operated by Asarco with a 8-1/3 percent participating interest by Day Mines. After years of development, the Coeur began milling in 1976, and by the end of the decade it was fourth in production among underground silver mines in the United States. Day Mines undertook another out-of-state venture in 1979 when it acquired a copper-silver mine, the Victoria, near Wendover, Utah, but low copper prices ended production after only eight months.

Day Mines, Inc., produced five primary metals: lead, silver, zinc, gold, and copper. Their relative contributions to the company's gross profits varied from year to year as metal prices fluctuated and different mines were worked. In 1947 lead was dominant, zinc second, and silver a distant third. Lead gradually declined in relative importance, being replaced in first place before 1958 by gold, mostly from the Republic District of Washington State. For several years gold provided over half the corporate income, but silver reached second place in the mid-1950s and ranked first in all years but one after 1966. In the last half of the 1970s, silver furnished three quarters or more of the gross income, with gold usually in second place. Copper was always last until the Victoria Mine began production in 1980, when with 7 percent of the profits copper nosed out lead and zinc for third place.

In 1974 Day Mines, Inc., could describe itself (in its annual report) as "one of the few small companies still operating in a field dominated by large integrated corporations, . . . the only mining company of its size that is financially independent and has its own exploration, metallurgy and engineering departments." The Day Mines management prized the "quick reaction capability" which resulted from this small size in a well equipped company. But this ability would prove inadequate to preserve the corporation in an era when aggressive takeover mergers were characteristic of industrial finance.

As precious metal prices rose rapidly at the end of the 1970s and the beginning of the 1980s, Day Mines, Inc.'s extensive mineral lands, so painstakingly pieced together over the decades, attracted other mining firms. In 1981 Day Mines was America's fifth largest producer of silver. Hecla Mining Co., whose most important property was the Lucky Friday Mine, ranked second; only the Sunshine Mining Co., also active in the Coeur d'Alenes, produced more silver than Hecla. In February 1981, Hecla revealed that it had acquired 5.69 percent of Day Mines stock and intended to obtain more. To Hecla, control of Day Mines would offer several advantages, diversifying its own holdings, enhancing its limited ore reserves, and making it a more difficult takeover target for larger companies, like Sunshine and Amax Inc., which already owned substantial portions of Hecla's stock. Day Mines, Inc., responded to Hecla's announcement by leasing the Atlas Mine adjacent to Hecla's Lucky Friday and joining Atlas Mining Co.'s suit to stop Hecla from claiming extralateral rights to ore under Atlas ground. Day Mines also sued Hecla to block construction of a new shaft on Day's Hunter Ranch, which Hecla had been mining from the Lucky Friday under a lease agreement. Day believed that the Lucky Friday Mine would soon be dependent upon ores located beneath the Atlas and the Hunter Ranch. In March, Hecla proposed a merger to the Day directors; after this was rejected, Hecla notified Day stockholders that it would exchange Hecla shares for Day shares, paying 1.65 Hecla shares for each Day share. The Day Mines management vigorously resisted in the courts and in the press, but when on July 8, 1981 Hecla improved its offer to 1.8 Hecla shares for each Day share and promised protection for the jobs of Day employees, the Day directors agreed to recommend acceptance to their stockholders and to withdraw from or abandon all lawsuits against Hecla. Consummated on October 21, 1981, this stock exchange terminated Day Mines, Inc. It cost Hecla Mining Co. $105.8 million at then current stock prices and made Hecla the largest silver mining firm in the United States.

Apparently Hecla Mining Co. kept most of the high-level records of Day Mines, Inc., when the Day records were donated to the University of Idaho in 1984. The present record group contains no series of Day Mines, Inc., minutes or other general records of the board of directors. Nor are there any records of stockholding. There is a complete series of printed annual reports from 1947 to 1981, but perhaps the best source for information on the top management of Day Mines is the series of General Records in the papers of Henry L. Day. As for records of specific operations, the present group contains little pertaining to those projects still producing in the 1980s, although there are small amounts of records of several lesser joint ventures, such as the S-2 Ranch, L-D Mines, Metaline Contact Mines, and the Silver Star. For the most part, the records of Day Mines, Inc. at the University of Idaho either relate entirely to predecessor firms or are quite spotty in their coverage.