The Mill Is On Fire !!

NW

Sparks were flying everywhere the night of May 24th, 1892.  On a lovely spring night, the Spokane Mill was on fire and burning to the ground.

Just three years earlier the entire downtown had burnt down.  The 30 blocks in the city core had smoldered in smoking debris within hours.  The town was edgy about fires.  This was a big one!

The fire started in the main shaft that had been replaced the day before.  That shaft drove the main water wheel.  It had been over tightened, and the brass spacers overheated from the very rapid rotation and caused the frictional heat.  The rapid rotation heat became so intense that it ignited the oil lubricating box above it.  The flame rapidly spread to the planer just above it which had been accumulating wood chips and shaving under it.  Fire erupted and within a few minutes the entire mill was a cauldron of flames.   Nothing could stop the fire.

The Spokane Mill was the largest employer in the community.  The community was losing a huge payroll of $20,000 a month.  The mill employed 250 men making doors and windows in the wood door and window plant.  The sawmill employed 50 men.   That payroll was about one in every fifteen families in town.  Spokane mill was the biggest employer in the community….

The Next Morning

Simon Oppenheimer looked out at a pile of rubble and burnt timbers where his beloved mill had been the night before.  The loss was $500,000 and there was no insurance. The company felt they had $325,000 in assets and $120,000 in cash and were willing to self-insure.  

EJ Brickell, the brains behind and the founder of the mill, had died the year before.  Simon had been the secretary and now was the new president and main spokesman for the mill. 

The mill had been unprofitable since when it opened in 1885.  Moritz Thomsen of Seattle bought the rights to a mill on the Spokane River in 1889, planning to open his new Spokane flour mill.  He now also owned part of these  Spokane Mill water rights.  His plan was to erect his Centennial Mill building on the north side of the river and above the island.

Roots

Simon was the grandson of Marcus Oppenheimer.  Thirty years earlier, in 1862, a scrappy 27-year-old Marcus had ventured from Portland to Colville.  He went further into the wilderness and opened a general store in a town that was fondly named after him – Marcus, Washington. 

The Oppenheimer family had deep Jewish roots in Portland and they were willing to risk their money.  The store thrived in the wilderness, selling to the few others living there or passing through.  

Ike was Marcus’s son and he continued running the store.  He often would venture to Walla Walla and load his wagon with supplies to sell in the store.  Ike gained a fine reputation among the prominent Spokane Falls and Colville early pioneers.  He was admired for his merchant skills.

With such deep roots and strong connections to the community – Ike's son Simon Oppenheimer was a natural choice to be one of the four men to start the Echo Mill six years earlier in 1885. 

Simon was wealthy.   In 1888 he bought a lot at 2221 N Pacific in Brown’s Addition and built an elegant house.   In 1891 Spokane County published a list of all the heaviest taxpayers in the county.  That year the county received a tax payment of $11,550 from Simon for real estate valued at $250,000. 

Rebuilding

Simon faced the rebuilding of the Spokane Mill. 

The pathway was incredibly complicated and tortuous and in the next four years there were many twists and turns.

At first Simon thought there was enough assets to just rebuild.   Everyone in town was told the rebuilding was imminent.

But things got a bit sticky.

AJ Brickell had died the previous fall.   Andy Cannon was aged.  In June the following spring his Bank of Spokane failed during the Panic of 1893.   With his doors locked, Andy Cannon lost all his wealth.  He was headed to old age and bankruptcy.  His immediate problem was the City of Spokane Falls had $53,000 on deposit of Spokane funds.  The pledged asset to guarantee these funds was Cannon’s part ownership of 1/5th of the river power.   While estimates varied and some valued it as much as $100,000 - It was not clear what the real value was.  The city took a personal note when the bank failed for the entire asset from Andy Cannon to secure their repayment.

Hoping to work things out, Andy went to New York to borrow money.  That was unsuccessful and he further encumbered his estate.  Subsequently he never returned to Spokane, and a year later died.

Rebuilding the Mill

In 1894 Simon was left with the task of rebuilding the physical plant of the Spokane Saw Mill. By now his partners were dead and/or gone.   Having exhausted all the easy money sources, he devised an elaborate scheme.  All the assets of the water power in the river were owned by a subsidiary of Spokane Mill.

The subsidiary was called the Spokane Water Power.   It held the river power as an asset to be easily converted.  Simon moved that asset over to a new corporation called the Northwest Power Company.  He took full ownership of the river power by converting it into his own name and the water rights were now owned by his corporation - the Northwest Power Company..  That allowed Simon to pledge the entire river water power against a future loan.

The Quest For Capital

The Spokane Mill had started a race on May, 1892 to get capital to rebuild.

It had been two years since the plant burned down and there was still need to borrow to rebuild.

Simon Oppenheimer went East to seek new funds.  On August, 1894 he claimed to have secured a promise for $400,000 in cash from New York and Boston financiers.  The old owners were to get $150,000 cash payment, mostly to Mr Brickell’s estate.  That was to give clear title to the river power to the new bond holders.  The other $250,000 was to be used to rebuild the sawmill.

The Spokane Water Power formally reorganized on June 3, 1894.  The new name became the Northwest Milling and Power Company owned solely by Simon and the new corportion supposedly had $750,000 in capital.  As secretary of one firm and the president of the other firm, Oppenheimr scammed the assets from one to the other companies.

1895

The Brickell estate, Andy Cannon and Moritz Thomsen now owned the Spokane Water Power Company.

Simon had left the group.  That meant the three men were supposedly holding title to the 27 acres in the Spokane river consisting of the water power.

A word about the Spokane Centennial Mill.  It was a flour mill intending to produce 700 barrels per day.   It was started in August 1,1889 by Sam Glasgow and Moritz Tompsen in Seattle.  The Spokane flour mill would grow to be a big Spokane employer with 42 men and 14 women working there in 1901.  It was destined to have it's own catastrophy.  In August, 1902 it burned down and the plan was to rebuild a 5 story building for $75,000.

Meanwhile, 

In desperation and by sheer fate, Simon headed to Amsterdam where he met with a group of investors.  In his possession were the shiny stock certificates of the Northwest Power Company.  Simon was a master salesman and got them to buy.  The group called themselves the Kantoor Bank and they agreed to put up $300,000 in exchange for ownership of the Northwest Power Company which owned the power on the Spokane River

Simon returned with the deal agreed to.   In August 1895 the $300,000 was forwarded to Simon who immediately left for parts unknown.  He was never seen again.

The Kantoor sent Mr Van Halle to watch over the investment.  Upon arrival he told the group all they had were shiny stock certificates showing they owned the Northwest Power Company and nothing else.     By November, 1895 the Kantoor group knew it was frauded and wanted it’s $300,000 loan returned.   They had been hoodwinked.

But there was no one to pay back the loan.  Oppenheimer had left with the cash.   The only asset of value was the water power in the river.   The Kantoor sued and got title to all assets owned by the Northwest Power Company. 

But not all the river power was free and clear in title.  The City of Spokane owned Andy Cannon’s 1/5 interest and they were not willing to sell these rights. 

For the next two years the two sides met with offers trading.  Nothing seemed to work out.  Terms went back and forth and it looked like everything would fold.  By 1897 the city was suing Kantoor in the state Supreme Court to get what they felt was theirs.

Over time it became obvious that the ultimate buyer would be the Kantoor Bank.  In order to clear the city’s ownership rights , the Kantoor offered it $17,000 cash plus some other things, making the deal worth upwards of $83,000.  The city wanted $33,000 cash and certain other things.  That also went nowhere.

Unbeknownst to everyone, there was a buyer on the sidelines. 

On August 6th, 1897 the Kantoor was in secret negotiations with Washington Water Power Company to buy all the river power.  WWP already owned about half the power on the river.  Kantoor was anxious to get the city paid off, so they could make the WWP sale.

On September 19, 1897 there was an announcement.  The city of Spokane and Kantoor Bank had reached an agreement with Washington Water Power to be the buyer of all the water power on the Spokane River.  It shocked the community.

And by fate and a little push at the right time, that is how Washington Water Power became the sole and forever owner of all the 45,000 horsepower generated at the falls on the Spokane River.

 

 

 

 

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