He quickly became a master of Butte’s hidden treasures, and what he learned convinced him there was still a fortune to be made—even as the titans Clark and Daly seemed to tighten their grip on the town.11
By 1892, the twenty-two-year-old Fritz Heinze was ready to put his theory to the test. He used a combination of family and outside money to start a new company—the Montana Ore Purchasing Company—“as a mining, ore purchasing, and smelting concern.”12
An early Heinze business transaction reveals much about the tactics and ethics that he would bring to his career in Butte. Heinze leased the right to take ore from a Butte mine called the Estella. Under the terms of the lease, Heinze promised to pay the owner a handsome 50 percent royalty on all the ore extracted that showed at least 15 percent copper content. For any ore below 15 percent content, however, Heinze would pay nothing. As the lease played out, it turned out that none of the ore exceeded the 15 percent threshold—this in a mine known for rich deposits. How could this be? Because Heinze directed his miners to mix the good ore with waste rock, insuring the trigger for payment was never reached.13
When Heinze’s landlord discovered the ploy, he promptly sued. Heinze hired the best lawyer he could find—and won. It was Fritz’s first lawsuit and it would not be his last.
With diabolical brilliance, Fritz married his knowledge of Butte’s geology with a pernicious mining law known as the Apex Rule. According to the Apex Rule, rights to underground mineral holdings were determined by the location where a particular vein came closest to the surface, or reached its apex. If a company owned the apex, it could follow the vein below ground to wherever it led—including ground beneath another owner’s surface property. Using his knowledge of mine engineering, Heinze began to identify and purchase strategic apex properties—many of them next to Anaconda (later Amalgamated) holdings. Then he pirated their ore. Lawsuits sprang up like weeds.
Lawyers, it turned out, would be Heinze’s most important mining tool. In Butte they called him a “courtroom miner.” Heinze fielded an army of more than thirty-seven lawyers, some of whom were charged with the lucrative task of digging up new opportunities to file claims and/or sue. The highly fractured nature of Butte’s mineral veins created a lawyer’s paradise, and Fritz learned a lesson that litigators still apply today: An expert can be hired to say anything. Elaborate scale models, “some costing $25,000 apiece,” were built to support testimony. In other instances, testimony was supported by “litigation drifts”—holes dug for the sole purpose of creating courtroom evidence.14
Heinze filed his most notorious apex claim in the spring of 1899, just as Butte was awakening to the threat posed by Standard Oil’s purchase of Anaconda. Amid the convoluted patchwork quilt of mining claims on Butte Hill, Fritz and his lawyers somehow found two tiny parcels of unclaimed land. Added together, the two parcels equaled less than one one-hundredth of an acre—“the equivalent of a small room.” At this minuscule point of land, claimed Heinze, lay the apex of the great Anaconda vein. Revealing his penchant for hilarious irony, Heinze named his new mine the “Copper Trust.” It was, sputtered the Anaconda Standard, “an astounding piece of audacity.” So audacious that Butte’s courts, in a rarity, actually failed to support Heinze to the hilt.15
Most of Heinze’s claims, however, found a sympathetic hearing. This did not occur by accident. Whether or not Heinze actually bribed judges is not clear, but it is certain that he worked tirelessly to ensure the election of his allies to key Montana courts. Perhaps his greatest asset was a colorful Butte judge named William Clancy. Clancy had a cartoonish appearance dominated by a tangled, flowing gray beard. According to one story, a man once approached Clancy and said, “Judge, I’ll bet you a dollar that I can tell you what you had for breakfast this morning.”
“You’re on,” said Clancy.
“Ham and eggs,” said the man triumphantly, lifting Clancy’s beard to point out the physical evidence.
“You lose,” said Clancy. “That was yesterday’s breakfast.”16
Clancy was just as notorious for his outlandish courthouse behavior. He was often manifestly disinterested in legal proceedings, a fact he sometimes demonstrated by sleeping. When awake, he could be caustic and withering toward courtroom participants—especially those affiliated with Amalgamated. Once, irritated with a particularly loquacious witness, Clancy erupted: “It seems to me this witness is troubled with constipation of thought and diarrhea of words.”17
Whatever anyone else might think of Judge Clancy, for Fritz Heinze he was a sure bet. It was a truism with which Standard Oil/Amalgamated would soon become painfully familiar.
Fritz Heinze’s first major engagement against Standard Oil came in the context of the election of 1900. Heinze’s goal in this election flowed directly from his signature method of extraction. As a “courtroom miner,” Heinze depended upon friendly courts; he set about to ensure that his allies occupied key benches.18
Like any savvy political strategist, Fritz recognized that there is no asset like a good enemy. In this regard, at least, the Standard Oil purchase of Anaconda was like a dream come true. Nationally, “progressivism” was taking off as a powerful political movement—a reaction, in part, to the rise of abusive monopolies. Montanans, on the heels of a decade in which populist sentiment had run strong, resented and even feared the idea of control by the most notorious of eastern trusts.19
Whether Heinze was a true believer or a clever opportunist is subject to debate, but in either event, he had found a potent rallying cry: “My fight against Standard Oil is your fight,” Fritz told audiences across the state. “In this glorious battle to save the State from the minions of the Rockefellers and the piracy of Standard Oil you and I are partners.”20
In his enmity to Standard Oil, Heinze found a powerful ally—or perhaps more accurately, a marriage of convenience. Copper King William A. Clark, a man incapable of shame, strode unabashedly back onto the stage. For Clark, noisy opposition to Standard Oil/Amalgamated would provide a satisfying slap at his bitter rival Marcus Daly. But Clark sought an even greater revenge: a new path to the prize he had long coveted and long been denied—a seat in the United States Senate. While Fritz Heinze saw the election of 1900 as a way to win friendly courts, William Clark envisioned a way to win a friendly state legislature—one that would elect him (legitimately, this time) to the U.S. Senate.
Between Heinze’s political savvy and Clark’s bottomless supply of cash, the two formed a potent team. Together they turned the election into a dramatic political circus. In a way it looked thoroughly modern—hired talent pumped into the state in a seamless melding of politics and entertainment: political cartoonists, famous actresses, fireworks, free champagne, and even vaudeville performers, slamming Standard Oil to a catchy ragtime beat.21
Standard Oil, hardly a naif, did not take the Heinze-Clark challenge sitting down. It began its own free-spending campaign, including a $1.5 million war chest to buy Montana newspapers.22 Though the newspapers would be important later, they were not enough to swing the election of 1900. In the end, Heinze elected and/or reelected a slate of friendly judges, and a new Montana legislature—barely a year beyond the bribery scandal of 1899—sent William A. Clark back to the United States Senate.
Within weeks, though, the ground beneath Fritz Heinze began to shift. Standard Oil employed a tactic that would serve it (and its successors) to great effect: Divide and conquer. Senator William A. Clark provided an easy target, devoid of scruples and vulnerable to his own recent past. Standard Oil threatened to dedicate its boundless resources to a revived U.S. Senate challenge of Clark’s credentials—unless Clark broke with Heinze and dropped his opposition to Amalgamated. For Clark, it was an easy call. He shed himself of Fritz Heinze with
