Homestead mine;

              Vhe Homestake Mine
BY ARTHUR P. METZGER
> PARTNER, SAN FRANCISCO OFFICE
Sunk more than a mile deep into the Black Hills that rise
above the old buffalo grazing lands of South Dakota is
the gold mine of Homestake Mining Company. Home-stake
has been a client since 1935 when Jim Runser, long
the partner in charge of our San Francisco Office, jour­neyed
there to make the first independent audit of the
Company.
The Homestake Mine has been a successful enter­prise
for almost 90 years. Although mining gold today
bears little resemblance to the work of the early-day
prospectors and miners, it is still confronted with prob­lems
that call for the same venturesome spirit, tenacity,
and ingenuity.
Getting gold from the earth has always been a tough
and risky business—in terms of both human effort and
economics. Miners are a hardy breed. Today, Home-stake
must bring from the depths of the earth more than
three tons of hard rock in order to extract one ounce of
gold for which it receives $35, a price fixed more than
30 years ago by the Federal government, which by law
is its only customer.
With constantly rising costs and the need to follow
the ore body ever deeper into the earth, Homestake has
had to search continually for new methods by which the
ore can be mined and milled and the gold recovered
more efficiently. Inflation and the fixed price of the
product have to some extent obscured spectacular
achievements, but the fact that the mine is still profit­able
is evidence of the Company's character and
resourcefulness.
Gold and Indians
Homestake's history begins in 1874, when General
George Armstrong Custer carried out a reconnaissance
into the Black Hills, Dakota Territory. Rumors of major
gold discoveries soon turned a minor rush into a stam­pede
of prospectors to mountains which were sacred to
the Sioux. Custer's Last Stand on the Little Big Horn
River in 1876 was not unrelated to this conflict of inter­est.
In the same year, two prospectors discovered the
Homestake Ledge or Lead (pronounced "Leed," mean­ing
an outcrop of ore); hence the name of the mining
town which grew up around the Homestake Mine.
A San Francisco group including Senator George
Hearst, father of William Randolph Hearst, and L. B.
Kellogg, an expert and practical miner, optioned the
Homestake and one other claim for $70,000, and the
Company was established in 1877. Ox teams hauled
equipment almost 300 miles from Sidney, Nebraska, the
nearest railhead of the Union Pacific. Homestake's first
financial statement for the period to August 31, 1880,
reported revenue of $1,925,000 and dividends of $600,-
000. The Homestake Mine has been in almost contin­uous
operation for nearly a century and has produced
almost $1,000,000,000 of bullion at today's price. With
annual revenue of over $20,000,000, the mine today is
one of the world's major gold mining properties and the
largest gold producer in the Western Hemisphere.
H&S in a Mining Camp
A short uphill walk from our lodgings in the Com­pany's
apartments on Main Street brings us to a rather
inconspicuous marker which pronounces the altitude to
be one mile above sea level. Looking on up the hill to
the green line of jack-pine against the snow, we recall
tales of how Jim Runser used to walk with his audit
assistants through the upper streets of Lead (once at 40
degrees below) for a break before their regular evening
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