Along came The La Monte Process in 1885, and it promised to give yields of over 90%. Today, it gets scarcely a footnote in Goldmining histories because it was an absolute failure. Despite its insignificance in the bigger scheme of things, the deeper I dug into the La Monte saga, the more fascinated I got, not so much with the mining aspects, but with human nature, the incredible energy of a con man and the vulnerability of the upper classes to overtures therefrom, especially when there was a pound to be made.
For just over a year, from May 1885, La Monte fever hit New Zealand. There was a deluge of articles in newspapers throughout the country predicting how this smelting technique would revolutionise gold recovery and, when the smelters were installed, even more articles giving a day by day account of the results of the actual smelting; some shop owners were even advertising their merchandise as being as good as the La Monte process.
Unfortunately, all was a dismal failure leaving investors very much out of pocket. Mr La Monte left New Zealand for good in April 1886 and returned to Australia.
Of course, the La Monte Process was only the first of several notable failures around this time. A couple of years later, in 1888, the New Zealand Gold Extraction Company erected a Newbery–Vautin plant in Thames, and in 1909 the Ferguson Smelting company erected a sophisticated smelter at Waiomu. Although both of these used well-proven methods, they were not suited to Thames quartz and were also disasters. It was only when the cyanide process was introduced in the 1890s that efficient gold extraction became possible; in fact, it was so successful that it is still used today.
What makes the La Monte process different from these other disasters is that the whole venture was inextricably tied to the marketing skills of one man, pushing his own product which, to say the least, was of dubious value.
Somewhat predictably, when La Monte came along and claimed he could recover 95% of the gold, he had an enthusiastically receptive audience. The basis of his process is deceptively simple and can be demonstrated by anyone using a blow-torch on a piece of gold-bearing quartz. Heat the quartz, and the gold (and silver) begins sweating out; with extreme heat, the quartz becomes molten and the gold sinks to the bottom. The attraction is that there is no need for a stamper battery, and recovery is close to 100%.
Of course, scaling this reaction up to deal with tons of poor grade quartz required considerable engineering and metallurgical skills. The first requirement was a furnace that could be heated to extreme temperatures, far greater than those in a brick lined kiln. This was achieved by using a steel blast-furnace with the walls cooled by a water jacket. The second, and more challenging issue, was mixing the quartz with lime, iron ore, lead etc. to form a flux facilitating the fluid movement of the slag, so that gold and silver separated and could be syphoned off. These additives were to be tailored for each type of ore (quartz) to be smelted. The process worked best when the ore already contained some of these additives, or when they could be readily sourced cheaply and close by. Neither was the case in Thames or Karangahake, where a second smelter was built.
In just a few months, La Monte (or rather investors!) raised an amazing amount of money, and the NZ Smelting company was formed. Times had moved on from the early days of Scrip Corner in Thames, and the key to any new venture was the backing of the Auckland Brokers Association, a small group of incredibly influential gentlemen with ties to investors as far away as London. £10,000 (approximately $2 million in today’s dollars; compare this the £100 -£150 that miners were lucky to earn a year) was quickly raised for the Thames venture and most of this would have gone into the actual construction of the furnace, no doubt by La Monte and Kahlo’s company in Sydney. A similar financing arrangement applied to the Karangahake smelter. La Monte also convinced the investors to purchase his 'patents' for some thousands of pounds; in retrospect these turned out to be essentially worthless.
So far, I have not located a photograph of the Thames smelter, but it was near the foreshore just north of A&G; Price’s foundry, on the old Imperial Crown site. If similar to the Karangahake smelter, it would be in a fairly small non-descript building.
The furnaces were manufactured by Kahlo and La Monte in Sydney. A small one, which would smelt 30 tons of ore per day, cost £750; ancillary machinery could cost upwards of £4,000. Even as the first full trials of the Thames smelter were being conducted, it was becoming patently clear that it was a dismal failure. The major problem was that the cost of all the additives plus the quartz itself far exceeded the returns on gold and silver. These costs are documented in the final definitive 30-day test of the Thames smelter in April 1886. Some 180 tons of quartz ore were smelted but the total cost of the inputs (quartz, iron ore, lime, lead, coke, coke gas, coal etc) was £1227 which equated to an average cost of £6 15s a ton, far in excess of the value of the gold and silver recovered. Even worse, nothing like the contracted 90% + recovery of gold was achieved. On the 19th of April, Mr James Lennox (later to Chair the Auckland Stock Exchange) chaired an extraordinary meeting of the NZ Smelting Company; another director at the meeting was Colonel Fraser, Mayor of Thames (1882-1887). La Monte was at this meeting. (Obviously he made no mention of the fact that a court in Sydney had just one month before, found La Monte and Kahlo liable for a debt of £103,000!) Clearly, the directors were far from happy and, although La Monte offered various modifications and financial incentives, the mood was that good money would only be thrown after bad as the company had already expended £7000 not to mention the £6000 La Monte claimed to have spent. Without doubt, La Monte had failed to carry out his contract, and the feeling was that the whole thing should be handed back to him and the company wound up. However, any final decision was put off for a few weeks. In the meantime, La Monte departed for Sydney and, as far as I can ascertain, never visited New Zealand again to conduct business.
J.M. Lennox was no longer chair, but for many years, he and other ex-Thames Brokers wielded considerable influence over this small group when it came to mining matters. However, none would be able to critique gold extraction processes such as that of La Monte and Newbery–Vautin.
The directors of The NZ Smelting Company held another meeting in early May and decided to liquidate the company, at a cost to shareholders of 7s a share. Possibly, a little money was recovered by cannibalising bits and pieces and selling the rest essentially for scrap. La Monte tried to shift the blame, claiming they did not follow his protocols etc. etc., an excuse he had already used in Australia when his silver smelters performed badly. The NZ Smelting Company took a rear-guard action against La Monte for £1500 in the Supreme Court in Auckland in September but I am not sure if this succeeded. And even as late as July 1887, La Monte, then in Western Australia, was quoted as saying that, 'He still has big interests in Waitekauri and Karangahake and thinks greatly of the future of the Thames.' It is true that trials of this La Monte smelter did persevere for some time.
Ironically, the Thames La Monte smelter site was purchased by the New Zealand Gold Extraction Company for erection of a plant treating ore under high pressure with chlorine using the Newbery–Vautin process. None of the La Monte directors were on the board which, perhaps was fortunate, as by 1892, this unsuccessful company was also wound up. By this time, Richard Spratt, a mining agent, was Chairman. Interestingly, Spratt had been involved with the NZ Smelting Company and had, in 1886, recommended that they carried on with the La Monte process. Dr August Scheidel who, aged 30, had been sent out from England to manage the plant became a naturalized citizen but after the demise of the Newbery–Vautin plant moved to Australia. Some 20 years later, in 1915, he was accused of collaborating with the Germans to source minerals. Nothing was proven but he retired to Sydney and took up painting.
Several other methods of gold extraction were tried in the next ten years, but none could cope successfully with Thames quartz. The real revolution came with the introduction of cyanide plants in the 1890s. Today, these are still in use with hard rock, such as in the Martha mine at Waihi, employing technical advances that give very high recoveries by using sophisticated methods of quartz grinding and column purification.
Unravelling the career path of La Monte proved far more difficult than I anticipated but a consistent thread through his career was the ability to interact well with the establishment, to convince them to invest and lend him, or invest in him, vast sums of money, to promise much and deliver little, and to then blame the failures on not following his instructions to the letter.
His family surname was actually Lamonte but at different times, he used various monikers such as Lamont, J.D. Lamonte, J. de la Montand even used the title Dr instead of Mr. Almost certainly he had no formal mining training, and he certainly was not a metallurgist though he described himself as such when it suited him.
John Dye Lamonte was born in 1846 in Tiago, Owego, New York State. The Lamonte’s were a well-established family that farmed a number of adjacent properties and, by all accounts, enjoyed a comfortable living. In 1851, the Rockefeller family rented one of their houses for a few years and it was there that the young John D Rockefeller first practiced his entrepreneurial skills. Whether this had any influence on John La Monte in later years is a matter of conjecture. In any case, it appears that John La Monte remained working on his father Samuel’s farm until at least 1875. Samuel later became a senator in the New York legislature and died in 1890.
Shortly after 1875, John left the farm for San Francisco, and in August 1877 he married Annie Douglass. They lived in Butte, and in 1879 he describes himself as a Merchant and had formed the Cigar and Tobacco Importing Company with George Downey.
In 1880, he described himself as a Miner and appeared to 'own' a silver mine near Ibgalia (the Mineral Slide). It is unlikely that he was physically working this mine himself as he still lived in San Francisco. By May of 1883, he was President La Monte of the Pacific Mining and Reducing Company, creating lots of hype in San Francisco newspapers and showing people around their revolutionary smelter that used the Campbell-Obitson Reduction process to purify silver from difficult ore. His public relations were superb, and many influential people toured the plant; for example, when ex-President Diaz of Mexico visited, each member of the party was presented with a freshly produced silver bar and, on the spot, he then signed an agreement setting up the Mexico-Campbell Reduction Company. One thing to note about this company was that the metallurgist was George F Beardsley who surfaced later in Australia.
Deals obviously continued, and he turned up in September 1883 as a director of the Catalina Milling Company with a capital stock of $10,000,000 in $100 shares.
Just where John D La Monte got money, if any, to invest in these companies is a bit of a mystery. The sums were large and, to put it in perspective, the total value of his father Samuel’s assets when he died in 1891 were around $19,000, and he was a successful farmer. It is also unlikely that he got significant money from his wife’s family as his father-in-law was a sailmaker. In any case, if La Monte’s later mode of operation was anything to go on, it is unlikely that his financial position was robust.
For whatever reason, he became interested in Australia in the early 1880s. The initial trigger was the processing he carried out at the San Francisco works on a shipment of silver ore that Charles Kahlo, Consul of the United States in Sydney, sent across be tested in their smelter. A visit to Sydney followed in 1883, and in 1884, he relocated permanently and, with Kahlo, set up a contract to erect smelters at Sunny Corner. The whole venture turned out to be a disaster, but they persisted in selling their 'patented' water-jacket furnace systems and drumming up business in lots of mining areas.
His wife Annie joined him in Sydney around 1884, and a second son, Douglass, was born later that year. Several trips were made back to California, and it seems Annie returned there permanently around 1886. One impressive trait of La Monte at this time was his capacity for travel, apart from the trips to the U.S.A. he made numerous trips to New Zealand and Western Australia, plus a lot of travel within each country.
Another article would be required to document the ups and downs of the various business deals that he made on these trips but suffice it to say, they virtually all failed in one way or the other. And, ironically, at the very time the Australian scene was falling apart for La Monte and Kahlo, he was making his sales pitch to the unsuspecting Thames and Karangahake investors.
A cutting obituary published in Australia after his death certainly inferred that he was a con man. The suggestion was made that only a Bret Harte might do justice to his complex character. Harte was famously known for his short stories about the colourful characters in the Californian Gold Rush.
In retrospect, the New Zealand establishment definitely would not have invested in La Monte if they had had access to the communication and information systems that we take for granted in the 21st Century. Let us look at five warning flags that would have immediately come up.
First, La Monte obviously had no formal training as a geologist, or mining engineer, let alone as a metallurgist. Yet he inferred, or outright claimed, these qualifications at various times.
Second,the patents on water-jacketed furnaces and ore processing that he licensed to various companies were trivial, almost meaningless modifications, or did not exist at all.
Third, when he did deals to sell his furnaces in New Zealand, it was probably not fully realised that he and Kahlo were principally in the business of selling as many smelter systems as they could, using sweetening deals and extracting royalties from gullible companies. This was their business model.
Fourth, and crucially important, NZ investors seemed unaware of La Monte’s disastrous involvement in the Australian silver mines, which had already resulted in a scenario which had an uncanny similarity to what was about the happen in Thames, i.e. not delivering on the contracted results, blaming others for not following protocols, then being dismissed/disappearing after selling his shares, leaving the investors urgently needing to bring in competent people to clean up the mess. This happened in 1884/85, just before the NZ ventures.
Finally, by 1885, he was committing the cardinal sin of trading while grossly insolvent.
La Monte was lucky that he would have been given the benefit of the doubt by the NZ establishment. They were well aware that the mining business was highly speculative and would accept the risks involved; so that, while some of their investments would make enormous profits, there would be others that were spectacular failures. And examples abounded of even experienced and well-qualified mining experts getting things wrong. For example, the metallurgist John Howell with a proven track record erroneously recommended the expensive expansion of the Te Aroha Silver and Gold Mining Company.
Of course, all the warning flags would not have mattered if the 'La Monte Process' had been successful in New Zealand. However, any hard-nosed experienced metallurgist would have warned that the likelihood of success was extremely low. Besides, La Monte was demonstrably incompetent even when it came to getting the process working under favourable conditions with silver at Sunny Corner in Australia. When George Beardsley was recruited from California (presumably from the company that La Monte had been president of), he had the process quickly running and generating huge profits.
All this aside, the Australian smelter side of La Monte’s activities were coming to an end around the time that the NZ Smelter Company collapsed. La Monte and Kahlo’s partnership was dissolved in March 1886, and they owed the Commercial Bank of South Australia (itself insolvent) some £103,000 (equivalent to ~$20 million today). Circumstantial evidence suggests that La Monte, unlike Kahlo, walked away from his debts; whatever the case, from then on, he kept a comparatively low profile, looking at mining ventures in Western Australia, a few involving smelting. He then established himself in Tasmania where he was involved in the Mt Zeehan railway venture and various business activities. He described himself as an investor and was a member of the Melbourne stock exchange, and it seems that only a few disputes made their way to court. In 1893, he married again and then returned to Western Australia to investigate mines, producing a superficially knowledgeable report on mining prospects there and taking an interest in some, for which he was various described as the owner, superintendent and manager. His wife travelled to join him in mid 1894 to set up house near Nannine but a typhoid epidemic took his life on November 17th 1894 at the age of 48.
So, in summary, what do we make of Mr John Dye La Monte? A cold analysis of the facts does not put him in a very good light. Multiple name changes, extreme license with the truth, promises that could not be kept, investors losing serious money, impenetrable financial affairs and a peripatetic habit of keeping ahead of his disasters. On the other hand, he displayed amazing energy, championed the development of silver mining in Australia, and in later years seemed to settle down doing nobody serious harm. In contrast to the harsh obituary mentioned above, after his death the Geraldton Advertiser noted that the deceased gentleman was known for, 'his kindly and genial disposition, and was, besides, an energetic man of business'.
Perhaps John Dye La Monte really believed in his smelters and his mining expertise but, in his quest for fame and fortune, he often extended himself beyond his abilities. Whatever the case, he lived an extraordinary life, of which the people of New Zealand got just the briefest glimpse.
John and Annie Douglass were married in San Francisco in August 1877. Their first son, Leroy was born in the 20th of February 1882 and, after the family arrived in Sydney in 1884, their second son Douglass was born on the 20th of July. At some time around 1886, Annie returned to California with the two boys; she must have divorced John and he probably did not see the boys again. In 1888, Annie married William Hayden Talbot a millionaire lumber-baron, and the boys took on the surname Talbot. An intriguing aspect of this marriage was that Annie gave her date of birth as August 1867 but when she married John La Monte it was eight years earlier, August 1859. Obviously, she was not 10 when she had married John La Monte; possibly she was 18 and she put her age down to 21 in 1888 to make herself younger than William.
In 1910, there was a scandalous divorce from William with endless bizarre twists made public by Annie, such as William imprisoning her in a house with barred windows. All this was front page news in San Francisco newspapers. Annie obtained a generous settlement but was estranged from the two boys; she died in 1915.
Charles was born in Germany and was 9 when his family moved to Ohio in 1849. He served in the Civil War and afterwards set up a very successful wagon-manufacturing business in Indiana. After a couple of years in the State Senate, Garfield (the Republican President who was elected in 1880) nominated him as Consul-General to Berlin but he chose instead the much less prestigious position of Consul of the United States in Sydney. A book of biographies of prominent men in Indiana published in 1893 describes Kahlo’s life in some detail and, although it is somewhat of a vanity article (sanitised by the Kahlo family), it allows us to piece together his involvement in Australian mining. For whatever reason, Kahlo took a keen interest in the booming silver mining industry before he left for Australia in 1881. He sent a shipment of ore back for smelting at the Pacific Mining and Reducing Company in the early 1880s and got to know La Monte, Beardsley and other mining men. Almost certainly, it was he who recruited La Monte to Australia in 1884. Together they set up and invested in a smelter manufacturing plant in Sydney. Kahlo became so involved that he resigned as the Consul (business dealings were not permitted) and he continued to plough his own money into the various mining ventures. It all failed, and, as his biography outlines, he lost his fortune but stayed in Australia for some time trying to honour his debts. 'This calamity completely discouraged him' but he returned to USA and somehow put his sons (one of whom was involved in his ventures in Australia) through medical school. His financial position must have remained pretty perilous because he was fronting advertisements for patent medicines in Australian Newspapers in the 1890s. It is likely that he did not really realise the perils of going into partnership with La Monte.
So Kahlo was one of the unrecognised founders of the Australian silver mining industry, recruiting American mining experts and investing his fortune but the partnership with La Monte ruined him.
If there is redeeming aspect to this sorry saga, it is George Beardsley. It appears that he was recruited from California when the silver-smelting ventures, a la La Monte, were running into serious problems. Kahlo probably knew him from San Francisco connections and recruited him to Australia, as he did other American mining experts. George might have had some formal metallurgy training, but his exceptional skills owe much to working with Robert Sticht, a German-trained mining engineer whom he probably first met in Montana. Competent metallurgy is absolutely crucial right through the whole process of smelting, from analysis of the crude ore, predicting the additives that would be required and measuring the ultimate yield and how much was left in the slag etc. La Monte claimed to have these skills but his analyses were invariably at serious variance from those of others. Beardsley quickly turned silver-smelting in the Sunny Corner region into profit with the Day Dream smelter. He then moved on to spend the rest of his career in Tasmania, living with Robert Sticht, who had also moved there. He married Alice Wellman, a Vassar classmate of Robert’s wife, in 1901, and they returned to the USA a few years later. In retirement, the Beardsleys travelled extensively, including in NZ, accruing a considerable number of artefacts which now constitute the Beardsley Collection in the California State University, Sacramento. Intriguingly, there is no evidence that George Beardsley collaborated with La Monte in Australia, despite working in the same company in California.
James was active in the early days of the Thames Goldfields and involved with many companies. He later settled in Auckland and had a prosperous business as a broker with many mining investments. While he would do well with early investments in mines and batteries, he was out of his depth when more sophisticated processes that were highly technical in nature came along. He, and the other investors, were probably just transfixed by two things in the La Monte proposal – a cheap method of ore-processing and very high gold recoveries.
The Auckland (Stock) Exchange was a very privileged group of Auckland gentlemen, limited to a few select members of Gentlemen’s Clubs. They met in private every day and made 'calls' on shares in various companies. To describe their operation as far from transparent would be a gross understatement, and there were increasing suspicions in the late 1880s that some of them, as directors of mining companies, were using inside information to manipulate share prices and steer investors in certain directions.
It is not clear how much James Lennox’s reputation and personal fortune suffered from the La Monte fiasco but later in life he did have money problems. By 1909, Lennox was a bankrupt, and he even took a son (James Scott) to court in an attempt to recover £10,000 that had been gifted to him. In 1911, he owed money to other brokers, and in July was expelled from the Auckland Exchange. James Scott himself was declared bankrupt (at the age of 33) a year later, blaming his demise in the collapse of Waihi share prices, and was imprisoned for 2 months for rash and over-hazardous speculation. Another son, Gordon John had the good sense to take off to India in 1907 but he returned in 1913 to take over the father’s business. The connection with Thames was not completely severed as Gordon became a director of the Kuranui Goldmining Company that employed Richard Ross in 1925 in an unsuccessful mining effort.
Trained as a solicitor in Scotland, William spent some time on the Victorian Goldfields before coming to New Zealand and distinguishing himself in the New Zealand Wars, rising to the rank of Colonel in the Waikato Militia. After that, he held a variety of positions and occupations; newspaper proprietor, warden and magistrate in Thames, Mayor of Thames (1882-1887) and finally Member of Parliament until his death in 1901. His role in the NZ Smelting Company would be purely as an investor but, as a person of influence, La Monte would be intent on cultivating him. They had a common interest in race horses; La Monte owned them throughout his time in Australia, and even when his business and finances were in ruins in April 1886, he bought a yearling filly from Fraser and shipped it to Australia. (Some of La Monte’s racing dealings in Australia were suspect, and one resulted in a friend being banned from a Racing Club.)
It is perhaps a bit harsh to suggest that Fraser was duped by La Monte, but the modus operandi was identical to that he used for the Nevada Silver Mining Company at Sunny Corner in Australia. There he got a local Mayor (Mr W.L.Davis) on side, wined and dined the investors at a site visit, after which everyone was voted a jolly good fellow amidst much backslapping. When the La Monte smelter was 'opened' on the 9th of April 1888, La Monte arranged for a boat-load of investors to come down to Thames from Auckland, inspect the smelter and then partake in a champagne dinner at the Theatre Royal Hotel, with much self-congratulatory speech making, and Colonel Fraser proposing the health of Mr La Monte.
Both Mayors were obviously badly bittened by the La Monte experience. Mr. W.L. Davis publicly denounced La Monte in October 1884 for dishonestly and dodgy practices after the Nevada Mine debacle (but this was not reported in NZ papers for some months). Colonel Fraser, in Parliament, strongly supported an amendment to the Mining Act of 1892 that banned share-brokers from being directors of Mining Companies. Several members of parliament were concerned that Auckland share-brokers might be indulging in dishonest practices.
She was the second wife of John La Monte, and little is known of her background. As Hettie Moore, she married John in Tasmania in Sept 1893 giving her age as 21, meaning that she was born around 1871. Again, this is a conundrum, as in later documents her birth date is given as 1880. Perhaps she was much younger than 21. The marriage register is notable for two other reasons, first John describes himself as a widower, which clearly, he was not and, second, Hetty’s witness was the officiating minister’s wife. Presumably, none of her family or friends were at the church. La Monte’s witness was George Gibson, a mining agent/engineer based at Zeehan.
John La Monte spent a lot of his time in Western Australia over the next 3 years, and Hettie moved across to join him in mid 1894. The local newspapers marveled at how the young Mrs La Monte was determined to live in the outback at Garden Gully where the mine was, not in town, and was even planning on taking a piano with her. Alas, John La Monte died in November before their son, also named John Dye La Monte, was born in May of the next year. It is not clear what happened over the next 15 years, and it is doubtful that La Monte had left Hettie a significant estate. She next turned up in New Zealand marrying Hamilton Cuming in 1911. He died the following year, and she then married Charles Hyne Fisher in 1913. Her son, John Dye La Monte Jnr enlisted in 1914 and was killed in the Battle of Flers in 1916. Her third husband, Charles was killed in an accident in 1935.
The last of the immediate John Dye La Monte descendants to die was Douglass Lamont Talbot in 1961.
In the 1880s, gold mining in Thames was facing a challenge, if not quite a crisis. The majority of the ore only contained small amounts of gold, typically a few ounces per ton, the quartz was hard and difficult to finely crush, and the standard recovery methods via mercury amalgam gave low yields; some of the cruder methods only yielded around 20 percent recovery of the gold in the ore, and even careful processing did not result in much more than 50 to 60 percent recovery. Recoveries from Ohinemuri ores were even more dismal.