John Reed

Introduction

John Reed (born April 14, 1759, in Salzberg, Landgraviate of Hesse-Kassel; died May 28, 1845, in Cabarrus County, NC), an illiterate Hessian deserter during the Revolutionary War, founded the first commercial gold mining operation in the United States around the year 1803.[1] By controlling costs and minimizing capital risk, Reed made his relatively small North Carolina mine a profitable venture. He invested the proceeds of his mine conservatively in land and slaves, and by the time of his death Reed had become one of the wealthiest men in western North Carolina.

Family and Ethnic Background

John Reed (originally Johannes Ried) was born on April 14, 1759, the illegitimate son of Anna Elisabeth Ried of Salzberg and Johann Jakob Helmerich of nearby Niederneuenstein.[2] The Ried family had lived in the towns of Salzberg and the nearly contiguous Raboldshausen for several generations. The region was poor and rural, with tenant farming the main occupation. Johannes Ried appears to have had an upbringing typical of an impoverished family. He never learned to write and signed all legal documents with his mark. In contrast to Reid’s humble maternal line, Ried’s father was a man of some status, son of the rental agent and general manager (Herrschaftlicher Pächter) of lands belonging to the lords of the castle of Neuenstein. Johann Helmerich seems to have taken little interest in his son, making no effort to raise him from the station in which he was born. In 1764 Anna Ried married the widower Adam Henrich Hahn. Johannes was confirmed as a member of the Raboldshausen Lutheran church in 1773 but soon afterwards moved to the village of Appenfeld where his uncle Johann Henrich Ried lived. Johannes left few traces of his life in Appenfeld.

In January 1776 Landgraf Friedrich II of Hesse-Kassel began calling up local militia for service alongside the army of his brother-in-law, King George III of England, who needed additional troops to help put down a rebellion in the American colonies. Ried was probably not part of this initial militia requisition, being only sixteen years old, but he later either enlisted, or was drafted, into military service in Appenfeld. According to military records he stood five feet, four inches tall, below the official minimum height of five feet, six inches, but the Landgraf was paid by the head for soldiers he sent to America and was not scrupulous with respect to such details as conforming to the height qualifications.[3] Ried would have received three to four months training before being shipped overseas to augment the Wissenback Regiment. He probably served a tour of duty in New York City before sailing south to Savannah in November 1778 as part of the forces that captured the city the following month and held it against a Franco-American counterattack the next year.[4] What is certain is that on June 21, 1782, Johannes Ried deserted his regiment from a post outside of Savannah and made his way to North Carolina, where he changed his name to John Reed and began a new life as an American.[5]

The motivations for Reed’s desertion are not hard to imagine. He was an impoverished young man with few prospects at home who had been sent overseas to fight a war he cared nothing about. In America farmland was cheap and abundant, and there were many German settlements he might join. About one out of six Hessian soldiers took advantage of this opportunity for a better life, despite the risk of death if they were captured by a British or American loyalist patrol.[6] There was a substantial German presence in and around Savannah, including a German settlement at Ebenezer on the Savannah River, which was often visited by Hessian patrols. The leaders of the settlement were loyal to the British Crown, but the community as a whole was divided in sentiment concerning the American Revolution. Two other Hessian soldiers deserted from their post in Savannah on the same day as Reed, and all three men were from the same region of Hesse-Kassel. This suggests that they may have coordinated their desertions and traveled together, receiving aid from German-Americans in the area. When Reed arrived in the region of present day Cabarrus County, North Carolina (in central North Carolina north-east of Charlotte), presumably in the summer of 1782, he would have had no trouble finding work as a farm hand, since wartime conditions had created a shortage of manpower. Cabarrus County was known as the “most German” region of North Carolina, with a large majority of the residents being of German descent, which would have eased the transition to American customs and language.[7] Reed must have impressed the locals as a promising young man, since by the end of the year he had married Sarah Kiser, the twenty-one-year-old daughter of one of the more prominent families in the area. Her father, Peter Kiser, had owned a grist mill and several farms in the vicinity of Little Meadow Creek prior to his death in 1780. John and Sarah had nine children, born between September 1783 and February 1803. Soon after his marriage Reed began purchasing land, acquiring nearly 400 acres by the year 1800, and was seemingly content with his life as a farmer.

Business Development

The transformation of John Reed from farmer to gold miner began in the spring of 1799. According to accounts first recorded fifty years after the event, one Sunday when John and his wife were attending church services, twelve-year-old son Conrad was playing with two of his siblings along the Little Meadow Creek, shooting fish with a bow and arrow.[8] Seeing a shiny yellow rock in the creek bed, he stopped to take a closer look and saw that it was wedge shaped, about the size of small smoothing iron, and unusually heavy, weighing about seventeen pounds. He took it home and showed it to his father, who was intrigued. Reed traveled to the nearby town of Concord and showed the odd stone to a silversmith, who could not identify what sort of metal it was. Reed used it as a doorstop at his home for the next three years. In 1802 he made a trip to Fayetteville, North Carolina, and showed the rock to a jeweler for a second opinion. The jeweler told Reed the rock was a gold nugget and fluxed it into a gold bar six to eight inches long. Asked to name his price for the bar Reed suggested $3.50, an amount equal to a week’s wages for a farm hand. Returning home to celebrate his windfall, Reed learned that the gold bar was worth $3,600 (approximately $78,000 in 2011$).[9] Some variations of the story have Reed returning to Fayetteville, demanding justice of the jeweler, and settling for an additional payment of about $1000 (approximately $22,000 in 2011$). Whatever the exact circumstances, gold was discovered in Little Meadow Creek, and Reed moved to exploit the resource.

In the development of his gold mine, John Reed was remarkable in his conservative approach. Unlike so many Californians in 1848, he did not become infected with gold fever, abandon his normal occupation, and become a full time miner. Reed continued to farm, but in 1802 or 1803 set up a partnership to exploit the minerals on his property. No documents exist that describe the terms of the partnership, and Reed may have operated his mine on the basis of an oral agreement, as he would do on a number of occasions in the future. His three partners were all substantial men in the neighborhood: Frederick Kiser, his brother-in-law; the Reverend James Love, a Baptist minister whose property included twelve slaves in the year 1800; and Martin Phifer Jr. a businessman and landowner of Swiss heritage, reputed to own more land than any other person in North Carolina at the time.[10] According to oral history, Reed gave his partners the right to mine the stream bed and banks of Little Meadow Creek, while his partners each supplied two slaves to work the mine as well as all of the tools and money needed for the operation. All four partners shared the profits equally. When one of the original three partners died, his share of the mine reverted back to Reed. Reed was therefore largely a silent partner in his mining venture, leaving the day-to-day work to his partners and receiving twenty-five percent of the profits without risking any of his capital. Initial placer mining was done on a seasonal basis, primarily during the summer months between planting and harvest when slave labor was readily available and a low water level in the creek made mining conditions favorable.[11] Little is known about the management of the work, but in 1803 a gold nugget was found, supposedly weighing twenty-eight pounds and worth more than $6600 (approximately $135,000 in 2011$). This spectacular find sparked a gold rush in Cabarrus and several adjacent counties and an influx of professional European miners. Some North Carolina gold mines grew large enough to employ hundreds of men and used steam power to crush ore, but the Reed operation continued as a small scale, part time operation, relying on manpower and horsepower. The Reed mine did become more efficient over time. By 1805 workers of Reed and his partners were no longer using crude half-barrel rockers to wash gold from streambed gravel. An improved model was adopted which featured sliding boxes with tin bottoms punched with holes, through which hand-powered pumps washed gravel.[12] As early as 1806 their miners were using mercury amalgamation to recover fine gold dust. Nevertheless, Reed considered himself a farmer first and restricted mining activities to areas in and around the creek bed, not allowing mining in his fields. In this he seems to have been something of a traditionalist, preferring the stability of farming to the uncertainty of gold mining, even if the latter held out the possibility of great wealth.

In 1821, James Love died and Reed evidently renegotiated his original partnership, bringing three Virginians into the operation.[13] It is not known how long the second Reed partnership operating the mining venture, but in 1824 the state geologist Denison Olmsted mentioned the Reed mine as an ongoing operation, reporting that the floodplain of the Little Meadow Creek was “nearly all dug over” and was honeycombed with pits three or four feet deep.[14] Olmsted considered the Reed miners skillful but their equipment rather primitive and suggested that “a company, with a large capital, led by men of system, aided by ingenious mechanics, would probably make this concern more profitable than it can be under its present management.”[15] Although Olmsted believed the output of the Reed mine was decreasing, other reports suggest that after the Virginians joined the partnership the fresh infusion of manpower and capital gave new impetus to gold production. Reed gold nuggets were exhibited in New York, prompting a newspaper article commenting on the 1823 surge in gold production at the mine.[16] The fame of the Reed mine reached London, where a British mining engineer wrote a letter to Reed in 1825, offering to lease his mine for ninety-nine years if he were interested in having it “explored in depth by scientific miners, at the expense of English capitalists.”[17] Reed evidently did not respond to this offer, and his partnership must have operated for several more years, since the will of Martin Phifer Jr., probated in 1828, specifies that his share in the mine should revert to Reed.[18]

Much anecdotal evidence testifies to the richness of the Reed mine, called “the bull of the gold mines.” In 1804 Reed workers were said to have found five nuggets weighing from two to nine pounds each.[19] That same year they were reputed to have collected more than $14,000 worth of gold in six weeks (approximately $275,000 in 2011$).[20] This account may be correct, since in 1804 the U.S. Mint in Philadelphia received $11,000 worth of gold from Cabarrus County, most if not all from Reed’s mine, and much of the North Carolina gold was not sent to the mint.[21] By 1824 the mining operations were said to have produced $100,000 worth of gold (approximately $2,300,000 in 2011$).[22] Although the mine was no doubt profitable to Reed, its rich reputation was likely exaggerated by the sensational finding of large nuggets at the site. Olmstead’s description of the mine indicates that it was about average in ore quality, although the unusual coarseness of the gold made it easier to recover, an advantage for a small scale operation such as Reed’s.[23]

By 1831 pot hole digging near the stream had evolved into crude shafts dug into the nearby hillside. Reed must have brought in additional partners by this time since three grandsons are mentioned as working the early shafts: Isaac Craton, John Craton, and Timothy Reed.[24] In 1832 Reed ore was shipped to the Mecklenburg Gold Mining Company in Charlotte for crushing.[25] Shipping ore twenty miles over bad roads for processing was probably a stopgap measure resorted to only until the Reed miners could erect their own crushing mills, which may have taken some time, since Reed had the reputation of being notoriously tight fisted, unwilling to spend any of his own money on capital improvements. However, to better exploit the finds Reed formed a new mining partnership in 1834. This partnership was a family affair composed of his two surviving sons, John Jr., and George; a grandson, James, son of the deceased Conrad Reed; and his five sons-in-law, Moses Kiser, Robert Motley, George Barnhardt, Andrew Hartsell, and William Craton. An oral agreement specified that each partner was to contribute his own labor and equipment and would share equally all gold found on days on which he was working the mine, less a one-third royalty paid to John Reed Sr.[26] If a partner was unable to appear at the mine in person, he was at liberty to “send one of his white family as a hand in his place.” Reed’s son-in-law George Barnhardt served as manager of the concern.

The new mine partnership got off to a brilliant start when a gold nugget weighing 13 pounds was found on the first day of work. With this success, however, came controversy. One of the partners, George Reed, had been unable to work that day and sent his son Arthur in his place. Arthur was allowed to work at the mine, but after the nugget was discovered some of the partners objected to George Reed sharing the proceeds, arguing that the sixteen-year-old Arthur had been unable to do a man’s share of the work. To clarify the rights and responsibilities of all parties, a written agreement was drawn up, reiterating the terms of the oral agreement and adding more detail, including the specification that “no children nor slave shall be received as a hand by the manager.”[27] Although all partners signed the agreement, controversy soon re-emerged. George Reed obviously thought the written agreement on substitutions referred only to future operations at the mine and would not be applied retroactively to mining work performed under the oral agreement. Other partners disagreed and George did not receive a share of the 13 pound gold nugget. Furious, he filed suit against four partners in 1835 and obtained an injunction shutting down the mine until the suit was settled.[28] John Reed Sr. attempted to mediate the squabble, offering to pay George’s share of the nugget out of his own pocket, but to no avail.[29] Ten years passed before the suit was finally decided by the Supreme Court of North Carolina in November 1844, which ruled in George Reed’s favor, awarding him a total of $533.88 in principal and interest (approximately $16,000 in 2011$).[30] Six months later, on May 28, 1845, John Reed Sr. died and was buried alongside his wife, who had predeceased him by barely a year.

Following the terms of Reed’s last will and testament, the gold mine was sold at auction in February 1846 and was purchased by his son-in-law Andrew Hartsell and grandson Timothy Reed for $18,070.00 (approximately $500,000 in 2011$). The new partners hired as many as twenty workers and extended the shafts and tunnels but were unable to pay a mortgage taken out on the mine. The mortgage holder foreclosed on the mine in 1852 and sold it to George Barnhardt and Caleb White for $3005 (approximately $90,000 in 2011$), who sold the mine a year later for $10,000 (approximately $300,000 in 2011$) to James Osborne and Emmer Graham of Charlotte. In July 1853 the mine was sold for $25,000 (approximately $750,000 in 2011$) to New York residents Charles Gilbert and Samuel Jones as trustees for the Reed Gold and Copper Mining Company. The new owners put the mine under the direction of a mining expert, installed modern equipment, and greatly expanded operations. Yet the mine did not make a profit and within two years the company went bankrupt. Thereafter, the mine was sporadically operated by a succession of owners. Lucky strikes occurred now and then, the most dramatic being a nearly twenty-three-pound nugget in 1896, but consistent profits could not be obtained and by 1900 mining on the Reed property ceased. The abandoned mine was acquired by the state of North Carolina in 1971 and is now open for tours as a historic site.

Personality and Social Development

Although the bare outlines of Reed’s life and activities are well documented, his personality remains elusive. He wrote no letters that might reveal his character, and until gold was found on his property there was no reason for anyone in his neighborhood to take particular notice of him. Even after the discovery, little was written about Reed the man. Few of his neighbors would have had any inclination to write letters or keep diaries, North Carolina being notorious for its backwardness in learning (“the Rip Van Winkle state”), with the western counties the most deficient in this regard. “Regretfully nine-tenths of the people of North Carolina are buried in brutish ignorance,” wrote a correspondent for the Raleigh Register in 1800.[31] Reed was evidently illiterate, signing all legal documents with his mark.[32] However, since his sons could sign their names, they must have received some education. The parochial schools in the area were too far away for the Reed children to attend easily, but an itinerant teacher may have taught school in the area or Reed may have engaged a neighbor as a tutor.

Available evidence indicates that Reed was a solid citizen, a successful farmer, and a man of steady habits. He dismissed some of the fantastic stories about his mine as fables, but during his long life was said to enjoy regaling family members with the story of the gold mine’s beginnings.[33] As with most people, he was sometimes struck by the beauty of mineral specimens he found.[34] His illiteracy did not prevent him from buying and selling land, at least twenty-one transactions being recorded. He presumably relied on trusted advisors such as James Love to read documents for him and attest to their accuracy. Unlike some other North Carolina farmers who found gold on their land and promptly squandered their profits or sank into alcoholism and ruin, Reed invested his money wisely. He bought a total of 2,091 acres over the course of his life and owned 795 acres of farmland at the time of his death.[35] By comparison, in North Carolina in the year 1860 only two percent of the farms were larger than 500 acres.[36] After Reed’s death his estate was valued at $40,000, an amount comparable to approximately $1,380,000 in 2011 dollars. United States census records show that Reed owned no slaves in 1800, a few years before he started his mining business. By 1810 he owned thirteen slaves, and in 1840 he owned eighteen slaves. Possession of so many slaves marks Reed as almost one of the planter elite. In 1860 only one out of three farmers in North Carolina owned any slaves, and in the Piedmont region where Reed lived only one in fifty slave owners had as many as twenty.[37] There are hints that the presence of slaves at the Reed farm may have caused some strained relationships. In April 1830 the Cabarrus County Court Minutes states: “Sally Reed, a girl of color bound to Daniel Linker till age 18. He agrees to teach her sober and industrious habits; to give her freedom, a bed and bed clothing, [a spinning] wheel and cards and a good freedom suit.” Sally was another name for Sarah, Reed’s wife. Daniel Linker was the son of a Hessian deserter, Henrich Lincker, who lived in the neighborhood. There was a close relationship between the Reed and Linker family: Reed’s granddaughter Keziah Motley married Henry Linker, grandson of Henrich. Had Reed taken a mistress from among his slaves and found it desirable to move an illegitimate child out of his house? That such a situation was not uncommon is shown by the restriction of mine substitutes to members of a partner’s “white family.” Certainly Reed was no Quaker who refused to own slaves, but if the slave Sally Reed was indeed his daughter, neither was he a man indifferent to her plight. The girl was placed in the care of a neighbor as an indentured servant with the provision that she be freed and provided for upon reaching adulthood.

Though confirmed in the Raboldshausen church in Hesse-Kassel, there is no evidence that Reed joined any church in America or had his own children baptized or married in one. Nevertheless, his obituary describes him as a religious man: “He was a good citizen, a kind parent and neighbor, and a helper of the poor. As a Christian he was exemplary, and died in the triumphs of faith; looking forward to the reward which await the faithful in heaven.”[38] Reed’s charitable nature towards his family is shown by his actions when his son Henry died intestate in 1827. As Henry’s father, Reed was the heir to his son’s estate, but he sold that right of inheritance to his eight surviving children for the token sum of $10. His mining venture in 1834 was also intended to benefit his children and grandchildren, and he tried to mediate the controversy that shut down the mine. Reed was no sentimentalist, however. Son-in-law William Craton was once among his favorites, often witnessing Reed’s land transactions, but when Craton failed to repay some debts he owed Reed, Reed cut him out of his will, specifying that his daughter Fanny would not receive her portion of the estate until her husband died.[39] The Craton family must have caused Reed considerable anguish. Grandson John Craton was apparently also a favorite of Reed’s, being a witness to Reed’s last will and testament in 1837.[40] Six months before Reed’s death, however, John Craton was charged with murder in a sensational sex scandal.[41] In his will Reed prudently appointed a trustee to manage his daughter Polly Kiser’s portion of his estate, because she had proven incapable of managing her affairs.[42]

Despite his long residence in America, Reed did not become a citizen of the United States until April 1842, when at the age of eighty-two he made a thirty-six-mile round trip to the town of Concord to take the oath of allegiance to his adopted country and formally renounce his allegiance to William II, Elector and Prince of Hesse-Kassel. Why he took this action is a mystery. There was no hostility to Hessians in Reed’s neighborhood and no obvious legal reasons prompting him to become a citizen. His status as a Hessian deserter must have been well known and had caused no problems in his business dealings. As many as ten Hessian deserters lived in the area, and Reed was the only one to become a U.S. citizen. In fact, in the fifty years prior to Reed’s action, only one foreign-born resident of Cabarrus County had gone to the trouble and expense of formally swearing allegiance to the United States. Perhaps as Reed drew close to the end of his life, he felt the desire to make his attachment to his country a matter of public record. However, there is one tantalizing piece of evidence that suggests that Reed did not abandon all contact with Germany during his sojourn in America. In the church record book of Salzburg, Hesse-Kassel, beside the entry which recorded Reed’s birth there is the sign of the cross (indicating death) with the notation “6/3 45.” Reed died on May 28, 1845, and was presumably buried a few days later. John Reed may have become a celebrity in his hometown, a poor boy who struck it rich in America. Perhaps Reed had kept up some sort of communication with relatives in Hesse-Kassel, and after his death one of Reed’s children wrote to them with the news that Johannes Ried had died and that his funeral had taken place on June 3, 1845.

Immigrant Entrepreneurship

Because of the paucity of evidence concerning Reed’s life and character, speculation must often take the place of hard facts when it comes to analyzing his entrepreneurship. However, at several points in his life there are indications of an entrepreneurial bent. His desertion from the army demonstrates boldness and initiative, and his success in making his way several hundred miles north to a friendly German enclave in North Carolina shows either good planning or great determination. Soon after arriving in Cabarrus County he married into the local elite, which indicates his ambition and shrewdness. Despite the handicap of being illiterate, Reed bought and sold many tracts of land during his life. His behavior after discovering gold on his land clearly shows him to be an entrepreneur, though a rather conservative one. He formed various partnerships to mine the gold, each of which was organized in such a way as to minimize his capital outlay and labor costs.

By the time he started his mining venture, Reed had been living in North Carolina for more than twenty years. All outward indications suggest that he became thoroughly Americanized: he settled in the area, married an American, bought a farm, and eventually took the unusual step of formally swearing allegiance to the United States. However, in his gold mining business he may have shown a preference for choosing partners with German connections. Of his first three partners, Frederick Kiser was almost certainly of German descent (Kiser being an English spelling of Kaiser), and Martin Phifer Jr. (an English spelling of Pfeifer), was descended from Swiss immigrants who identified themselves with the German community and were accepted into it. On the other hand, James Love, a partner and one of his closest confidants, was a Baptist minister with no apparent German family connections. His status as a clergyman and a relatively wealthy individual must have made him an attractive choice as a partner. Nothing is known of the ethnic identity of the three Virginians that joined the partnership upon the death of James Love.

Family relationships were probably more important than ethnicity in Reed’s choice of partners. Frederick Kiser was Reed’s brother-in-law, and two children of James Love married children of John Reed. Grandsons were working at Reed’s mine by 1831, and his final mining venture, organized in 1834, was strictly a family affair, each of the eight partners being a son, grandson, or son-in-law. Reed’s first partnerships seem to have operated smoothly and successfully for thirty years. In contrast, Reed’s final mining venture was a debacle. The working partners quickly fell out among themselves in a controversy over dividing the profits, and the mine was shut down for ten years during the ensuing lawsuit. Reed had initially attempted to run this operation on the basis of an oral agreement between the partners as he had done in his previous ventures. After the dispute arose, a written agreement supplanted the oral one, but this came too late to resolve the problem that had arisen. It is perhaps remarkable that Reed’s informal business arrangements, depending on mutual trust and cooperation, sufficed for so long, more than thirty years, which suggests that Reed was a good judge of character. Reed’s last, unsuccessful partnership had more members than any of his previous ones, which may have put a strain on the working arrangements, giving rise to more opportunities for differing interpretations of the oral agreement.

Conclusion

Reed’s mining businesses were small-scale affairs but highly profitable. During his life Reed was content to operate his mine in the simplest and most cost efficient manner, minimizing his capital investment while “skimming the cream” from those mineral deposits most easily recoverable and using the proceeds to augment and finance his farms. The subsequent failure of a well-financed corporation to make a profit by intensively developing Reed’s mine suggests that on this point the business instincts of the illiterate Hessian were sound.

Notes