TALES AND LEGENDS OF THE MOUNTAIN KINGDOM: James Whitaker Wright

I’ve written about a lot of different characters who were important, influential people during Rossland’s mining boom back in the day. A lot of smart, creative, controversial, and kind of eccentric folks populated our town, which was arguably the most important city in the province beside the capitol at one time.

But some of the most important people who worked behind the scenes to put Rossland on the map were not hard working mining types or law enforcers; they were overseas financiers who invested heavily in local mines, trying to make riches without ever setting foot on the soil here. One such man was James Whitaker Wright, a British mine speculator who was responsible for one of the biggest stock market scams of the time, making him a virtual Bernie Madoff of the Edwardian Era.

Born in Stafford in 1846, Wright was the eldest son of a Methodist minister and at the age of 20 did a stint as a minister himself. When his father died in 1870, the Wright family emigrated to Canada, landing in Toronto, where his younger brother John Joseph eventually invented the reversable trolley pole, though he never got it patented and credit went to someone else. Lack of forethought seems to run in this family, as we will discover.

Whitaker didn’t stay in Toronto; he met and married an American woman named Anna Edith Weightman in 1878 and became and assayer. He made a small fortune speculating on mines in Colorado and New Mexico; the £200,000 he made would be worth about £10 million today. It should be noted, however, that none of the shareholders in these mines made any money at all.

Returning to England in 1889, Whitaker went about floating a series of mining companies on the London Stock Exchange. The markets at that time were good and two mining companies he created in 1896 and 1897 that owned lucrative mines in western Australia did very well.  Their success gave Whitaker a good reputation as a financier and savvy investor and made him very rich.

So rich in fact, he was compared to King Midas. Whitaker embarked upon a lavish lifestyle that almost on par with William Randolph Hearst’s. Whitaker owned two very posh homes in England--one in London and one out in the countryside of Surrey. The Surrey residence immediately acquired a reputation of unparalleled ostentatiousness. He spared no expense.  The estate had a private hospital, a private theatre, a private observatory, and, of all things, a private velodrome - you know, for indoor cycling. He had a stable large enough for 50 horses, each with their own cubicle, and in the middle of the stable there was a lounge area furnished with palm trees and leather chesterfields.

One source says, “Hills were levelled and new hills created. A theatre and a glorious ballroom were built. A vast lake, complete with a boathouse commissioned from Lutyens, was designed as a centrepiece. Beneath it, reached by tunnels, was a smoking room in the form of a subterranean conservatory, so that as they smoked his guests could watch fish, or sometimes even swimmers, disporting themselves overhead. A further tunnel led to an artificial island where, on summer afternoons, tea could be taken.” He also had marble imported from Italy that necessitated the lowering of roads to make their trip over the various bridges to his estate possible. The estate employed 600 men. It cost Whitaker £200,000 to buy and an estimated £400,000 to refurbish to his extravagant tastes. You can see photos of this underground smoking room and read more details of this ridiculous estate here. He also had a fancy racing yacht that was known for defeating the Kaiser of Germany in a regatta.

The economy soon became volatile, and Whitaker quickly turned from smarmy market manipulator into an outright scammer. This is where Rossland comes into the picture.

In 1897, he merged his two Australian companies into one: The London and Globe Finance. This company had interests everywhere in the world, including right at home in London, where it helped finance the London underground line of Baker & Waterloo. London and Globe then launched two more holding companies in 1898: the Standard Exploration Company had its interest in Australia and New Zealand, and the British American Corporation exclusively dealt with Rossland. In order to lend this company credibility and make it attractive to investors, Whitaker loaded its board of directors with prominent aristocrats and Canadian politicians. They also hired a provincial mineralogist who would manage the Rossland mines. £1 million in shares were quickly purchased by London and Globe shareholders as Whitaker promised them all riches.

Then things got sticky. The British American Corporation announced in its prospectus that it planned to purchase Rossland’s Le Roi Mine and a Yukon transportation company; however it never actually purchased them. In fact, the president of the Le Roi Mine and Smelting Company stated that he wasn’t aware that any sale of the mine had even been considered, telling one publication, “to my mind it looked much as if the people who drew [up] the prospectus used the name of the Le Roi Mine to attract the attention of the English investing public.”

This was the first whiff of scandal.

After a lot of complicated maneuvering and what a local paper referred to as a “lurid melodrama”, the British America Corporation did indeed buy the Le Roi Mine, and in December 1898 the corporation created a new company called the Le Roi Mining Company. The corporation sold the company for £950,000 after the purchase of the mine only cost the corporation £800,000. There were 200,000 shares to be bought up and in three days they all were, at £5 each. However, the company only had £50,000 in operating capital and that didn’t look good at all. Shortly thereafter, an even bigger problem was unearthed: the new general manager of the Le Roi Mine, Bernard MacDonald, discovered that the mine was actually operating at a loss of $2.64 per ton. No wonder the company hadn’t been making any money!

In 1900 there was a devastating stock market crash that spelled the end of Whitaker’s reign as King Midas. One of his other companies, Lake View Consols, was the reason for the crash as it had been the centre of a stock market battle. Shares in all Whitaker’s ventures dropped.

The Le Roi wasn’t producing dividends for any of its shareholders, and the company that was financing the London underground project lost £600,000. In 1901, Whitaker found himself liquidating all of his assets, including London and Globe and the British America Corporation, though London and Globe still owed its creditors £2.4 million. In 1902, an official investigation of Wright’s business practices began, but it found no reason to charge him with anything, which might possibly have been because of Whitaker’s upper class connections.

However, all the investors who had lost money when things went belly up for Whitaker were a little bitter, and they formed their own committee hell bent on bringing Whitaker to trial. They were successful after bringing the issue to the House of Commons and convincing a judge that Whitaker deserved to be prosecuted. He was charged with falsifying the balance sheets of London and Globe in order to deceive investors.

The trial took place in January 1904, and Whitaker valiantly attempted to defend his actions by saying he only manipulated the numbers “in order to protect the company from those who were working [for] its ruin.” No one bought it, the jury found him guilty, and the judge sentenced him to the maximum penalty of seven years in jail.

And then what did he do?  He went into a side room with his lawyer, had a cigar and a drink, and then excused himself to the toilet where he swallowed a cyanide pill and died moments later.

Humiliated and financially ruined, I guess a life in prison after living a life of obnoxious luxury in Surrey wasn’t something Whitaker could handle. Witley Park, which was what the estate was called, was sold off in lots. The underground aquarium room is now privately owned and not available to the public. The stables and some outbuildings there are now a conference centre. The rest of the mansion was gutted in a fire in 1952.

One of the biggest investors in Rossland’s mining history has a modest grave in the local church yard.

Whitaker inspired a character in an H.G Wells novel, as well as a character in the BBC TV series “Hustle.”


Sources:

1. Roaring Days, by Jeremy Mouat
2. http://www.guardian.co.uk/Columnists/Column/0,5673,1136841,00.html
3. http://www.dailymail.co.uk/news/article-2058772/Witley-Park-Surrey-The-story-Whitaker-Wright-Britains-bizarre-folly.html
4. http://en.wikipedia.org/wiki/Whitaker_Wright