We became involved in another gold mine at Republic, Washington. As usual it was an old worked out mine that had once produced millions of dollars. It was said that there were great quantities of gold left which had not been mined. The final result was that, as usual, after spending a lot of money uselessly, the deal had to be abandoned. The only good thing about it was that Carew and I made a deal to ship the discarded tailings from the old mill to the Trail Smelter in British Columbia. The tailings from the mill contained gold which had not been recovered in the original treatment. These tailings ranged from $2.00 to $7.00 a ton. We shoveled the ore into a small dump truck and loaded it into ore cars for shipment by rail to the smelter. We made wages as long as it lasted.
I had been elected president of the corporation which had been formed for the operation of this mine. After everything was abandoned I was required to file and income tax report. I listed the stock as worthless. However, not trusting the government, I got in touch with my friend George Maxey and told him I would like to sell him 50,000 shares of my mine stock for $1.00, which I would lend him. He could not find anything wrong with the deal so we completed the sale properly in a legal manner. After submitting my tax return I was visited by an IRS agent who insisted that the stock had not been proven worthless and he would not accept my report.
I then mentioned that I had sold all of the stock for $1.00 and it was no longer mine. The investigator said that it was a subterfuge. I replied that if he felt that the stock was of some value, I was sure I could buy it back for $1.00 and would be glad to sell it to him for $1.00. This upset him somewhat and he went away mumbling about taking it up with his superiors. I was later notified that my return had been accepted.
Ed. note: The reason that the low value ore could be shipped and processed was that the Trail smelter was paying a premium for high silica ore, which this was, and the premium was enough to pay both the freight and the smelter fees, so that the net value of the gold in the ore was returned to the shipper.