Early Gold Mining Law Now Favors Big Companies

"Becoming California, a series that brings the California Gold Rush
alive with the people who lived it."

by Don Baumgart

The year was 1872, the Great California Gold Rush was 23 years old. The rough and tumble rules of the early mining camps were being replaced by laws. Miners and prospectors in the California Gold Rush of 1849 found themselves in a legal vacuum. Although the federal government had laws governing the leasing of mineral land, the United States had only recently acquired California by the Treaty of Guadalupe Hidalgo, and had little presence in the newly acquired territories. In the pale shadow of a far-away federal government, miners organized their own governments in each new mining camp (for example Great Republic of Rough and Ready), and adopted the Mexican mining laws then existing in California. Miners moved from one camp to the next, and made the rules of all camps more or less the same.

Approved on May 10, the General Mining Act of 1872 codified the informal system of acquiring and protecting mining claims on public land, formed by prospectors in California and Nevada from the late 1840s through the 1860s. The U.S. federal law gave all citizens of America, 18 years or older, the right to locate a lode (hard rock) or placer (gravel) mining claim on federal lands open to mineral entry. These claims may be located once a discovery of a mineral is made. Today that step toward legalization of small mining claims is in a spotlight of controversy. Mining has become a large industry and under the provisions of the 1872 law, major corporations taking vast amounts of gold and other minerals from public lands pay no royalties, fees or other remuneration to the taxpayers who own the land.

In the nation's capitol the House Resources Committee sought to change the big business free ride into one that fairly rewards the public for use of public lands. A new committee chairman, Nick Rahall of West Virginia, is a strong critic of the current mining law. Proposed changes to the law were backed by the Obama administration. Interior Secretary Ken Salazar said, "There is a new administration in town, and we want to see the 1872 mining law reformed." Changing the law, however, faced strong opposition from Republicans, and even Democratic Senate majority leader, Harry Reid opposed change. Hardly surprising since Reid's home state of Nevada is where some of the biggest companies are taking mineral riches from public lands without payment. Reid said he might favor a plan that imposes fees on new future arrangements with mining companies. That's about like agreeing to tax Martians if they ever land on our planet. The door to change slammed shut when Reid announced that, due to other legislative priorities, no action would be taken before the present Congress adjourns at the end of 2010. This most recent attempt to get reimbursement for taxpayers from big mining corporations follows into defeat the Hardrock Mining and Reclamation Act of 2009, which would have imposed royalties. It did not come to a vote in the Senate.

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Copyright Don Baumgart, 2010