Fritz Heinze arrived in Butte Montana in 1889 from Brooklyn, New York, where he worked as a surveyor for the Boston and Montana Company. It is at this job that he learned of the riches beneath Butte. Heinze observed smelting costs were excessive, so he planned to build a smelter, but financing fell through. With this, he left Butte and returned to New York where he began work as an editor at the Mining and Engineering Journal compiling copper statistics. Fate would intervene at this point. Heinze’s grandmother died and left him $50,000, with which he quickly set off to see the world, study, and ultimately return to Butte to fulfill his earlier plan by creating the Montana Ore Purchasing Company. Heinze’s most significant impact on the mining came from his legal activities, however. He utilized the Apex law to his full advantage.
Simply put, the Apex law states that if within a claim a seam of mineralization peaks, or apexes, that seam can be followed by the claimholder under any other claim. Heinze would stake small claims nearby large established claims and the engage in court battles claiming via the Apex law that the large claim was legally his. Heinze’s actions created hundreds of cases that tied up the Montana courts and curtailed mining operations (mines would be shut until ownership of the deposit was established). While these court cases caused a lot of short-term difficulty in the Butte area, it ultimately benefitted the area immensely. In order to settle these claims, extensive underground sampling and mapping needed to be done, which provided accurate knowledge on the quality and quantity of Butte’s mineral deposits. It also accelerated the amalgamation of claims. The only way to ensure your operations would not face litigation was to own all surrounding claims. Further, the cost of litigation was high. Small operators could not afford this. Thus, the general trend towards amalgamation of mining operations seen elsewhere accelerated.
Fritz himself had difficulty financing his legal battles, but always found some way to cover the costs. One of his actions had a direct influence on the development of British Columbia’s Kootenay district. The early 1890s saw a rapid increase in the value of silver due to the Sherman Silver Purchase Act of 1890. The Act allowed for both gold and silver to back US currency. The result was an increased demand for silver, as people would use it to buy US currency, which they would then sell for the more valued and stable gold. This drove American prospectors into the Kootenays, where Heinze built a smelter. He also created a newspaper, which he used to put forward his own political objectives. His use of media to achieve his goals was something all too familiar to the people of Butte. In BC, he used it to wage a war of words against the Canadian Pacific Railway (CPR) and promote his own plan to build a railway to the coast. The CPR eventually bought out his railway plans for $1,000,000 – money that would finance his battle in Butte.
Upon his return to Butte, he escalated his legal activities. To end the disruptive impact he was having on mining, Amalgamated (owners of Anaconda) incorporated the Butte Coalition Mining Company for the purpose of buying out Heinze (in 1906). The final price Heinze was paid was $10,000,000. Not bad for someone that began 17 years earlier working for $100 a month.
He left Butte for New York in 1906 and started the Mercantile Bank. In the subsequent year, he made the stock play that contributed to the crisis of 1907.