From Isaac F. Marcosson in Metal Magic: The Story of the American Smelting & Refining Company (1949), “Civilization has marched with mining. As an eminent historian of mining has pointed out, “Trade follows the flag, but the flag follows the pick.” Mining has founded financial dynasties, colonized immense domains, and opened up vast agricultural and industrial empires. Whether delved by hand in the great open spaces or gashed by giant machinery out of mountainsides, the mine has been the outpost of progress.”
Born in the Lengnau Jewish ghetto in Switzerland in 1828, Meyer Guggenheim arrived in Philadelphia, Pennsylvania in 1848. Venturing in several different businesses, it was his success in lace and embroidery which provided an opportunity to bring all seven of his sons into the new family business, mining and smelting.
Marcosson continues with an introduction to the Guggenheim family, “An eminent American once wrote: “Many men can build fortunes but few can establish families.” The Guggenheims achieved both. Although not identified with the organization of ASARCO, they were fated to play the dominant role in its expansion. Their background and approach to this stewardship, therefore, comprise an essential prelude to the history of the company.”
Here is a timeline of events that led to the establishment of the Ávalos smelter.
- 1881: Meyer Guggenheim, by chance, begins to build a silver and lead empire in Colorado with the purchase of a half-interest in two mines, the A. Y. Mine and the Minnie, in Lake County, Colorado where Leadville is located.
- 1888: Guggenheim becomes a partner in Holden Smelting and Refinery Company in Denver, Colorado. He soon sells it to establish his own smelting company.
- 1889: Guggenheim and sons incorporate the Philadelphia Smelting and Refining Company and build their first smelter in Pueblo, Colorado, chosen for its ample ores and accessibility to railroad transport. Marcosson says, “Meyer set a precedent that became an unbending rule with his sons ever afterward. It lay in the determination to employ the best brains, regardless of cost.”
- 1880’s: Two Mexican railroads, the Mexican Central and the Mexican National, provide cheap transportation for bulk shipments of ores.
- 1890: The McKinley Tariff raises the cost of imported Mexican unprocessed ores. Meyer Guggenheim pursues Mexican smelting to assure company profitability. From Metal Magic, “The new tariff dealt a two-edged blow. It practically deprived the American smelters of low-price siliceous silver ore with its valuable fluxing content, and it also struck heavily at the Mexican mining industry. The tariff, however, was an ill wind that blew good. Practical exclusion of Mexican ore from the United States meant benefit to the republic across the Rio Grande, because foreign capital would now be encouraged to smelt within the country. A new industry loomed.”
- 1890: The Guggenheim’s hire Edgar L. Newhouse, who because of his intimate knowledge of Mexican mining and smelting as well as political connections with President Diaz, steers the Guggenheim enterprise to Mexico. Putting Newhouse in charge of Mexican operations, the Guggenheims also hired, “George D. Barron, Thomas Austin, and H. M. Dieffenbach, whose experience in mining, ore buying, and Mexican business generally, was to prove highly useful.”
- 1892: From Metal Magic, “The Monterrey smelter, completed in 1892, stimulated mining in all parts of Mexico tributary to it.” Construction of the Aguascalientes plant begins.
- 1893: The Aguascalientes smelter is completed. From Metal Magic, “The possession of two smelting plants, one with facilities for smelting lead ores and he other for the treatment of both lead and copper ores, advantageously located in different parts of the republic, placed the Guggenheims in a powerful position and made them dominant in the industry. Only a company or a family with the energy, resource, and experience of the Guggenheims could have gone into Mexico and in a few years have created, developed, and maintained a business of such scope and complexity, a business made all the more difficult because of its location in a foreign country with limited transport and comparatively little available material.”
- 1894: The Perth Amboy, New Jersey refinery is built. Lead bullion from Monterrey and copper and lead from Aguascalientes is sent to the refinery.
- 1899: The American Smelting and Refining Company is established without the Guggenheims.
- 1901: The Guggenheim family wins control of the U.S. Smelter Trust, the American Smelting and Refining Company.
- 1905: ASARCO decides to build a smelter outside of Chihuahua in the ranch town of Ávalos. From Metal Magic, “Accordingly, surplus equipment was used. From the Monterrey plant came unused blowing engines and blowers; from El Paso were sent discarded crushing machines and blast furnaces. It was a hand-labor plant comprising only the essentials of a lead smelter, the future of which was in doubt. The location, six miles from the city of Chihuahua, made it necessary to build a town site and living quarters for a considerable part of the labor supply and the operating staff.”
- 1908: Ávalos smelter plant begins operations. From Metal Magic, “To the amazement of everyone, it was soon evident that the ore supply was greater than the smelter’s capacity. During the period of 1908 and 1909, the “junk heap,” as it was called, smelted 71,000 tons of charge and produced 6,000 tons of lead bullion.”