Not Your Grandfathers Mining Industry, Nova Scotia, Canada

Mooseland Scam

Gold, beer, scams, spies, smuggling and the American civil war. This story has it all!

On July 23, 1865, Charles J. Anthony of Worcester, Massachusetts, was in a New York court room, accused of defrauding New Hampshire’s former governor in relation to a gold mine in Mooseland, Halifax County.

The previous year, Anthony had met with Edwin Barrett, Governor Joseph Gilmore’s agent in New York, and asked Barrett to invest some of Gilmore’s money in the Mooseland mine.

According to Barrett, Anthony claimed “the property was very valuable…that it had mills on it for crushing quartz, a dwelling-house, and many other valuable improvements; that $50,000 had been expended on the buildings, etc., and that the property was paying $500 a day, would pay regular dividends, and was, in fact, a safe and profitable investment.”

Barrett was impressed and agreed to invest $10,000 of Governor Gilmore’s money in the company. Anthony later claimed another investor had backed out and asked Barrett if he would invest more of Gilmore’s money in the mine. Barrett agreed to invest another $5000, for a total of $15,000 (about $265,000 today).

It was not long, however, before Barrett became concerned that the deal might be a scam.

Barrett paid the $15,000 by selling some of Governor Gilmore’s stock in the International Coal Company but got a short-term loan to cover the cost of the investment while the stock sale was done. Barrett was told the loan was provided by John C. Mallory, who had an office with Anthony, but Barrett later said, “I subsequently learned Anthony had loaned the money to Mallory, and I inferred that he used Mallory merely to blind me.”

Anthony asked Barrett if Governor Gilmore might serve as a director of the company. Barrett declined on Gilmore’s behalf but agreed when Anthony then asked Barrett to serve as a temporary trustee to facilitate “a preliminary transaction.” Barrett later became concerned that only two other trustees were ever appointed, not the larger group he expected.

Given his role as trustee, Barrett visited the company’s lawyer, William Norton, to review the company’s legal papers. The meeting raised more red flags.

Anthony had claimed that purchasing the mine would cost $100,000 but, according to Barrett, “Mr. Norton at first said that he had a deed showing the amount of $50,000 paid, but afterward remembered that he did not have one, he was sure that the amount paid was $100,000, in our currency, himself having paid it.” (Later, there were rumours that Anthony only paid $18,000 for the mine and Anthony’s clerk and agent, Isaac Biggs, testified at the trial that Anthony told him the mine cost $50,000.)

The documents Barrett reviewed with the lawyer also included paperwork showing that William H. Newman and Alexander Keith, Jr. had staked the mine’s claims. Another document showed that Keith Jr. had sold his interest in the claims to Newman for $3,500 on June 11, 1864. Barrett pointed out that the date was incorrect – that it should have been April 11 - and the lawyer changed the date on the document as Barrett watched.

William H. Newman was a jeweller and silversmith who, like many in those trades in Halifax in that era, used Nova Scotia gold in his work.

The Alexander Keith name is well-known in Nova Scotia and elsewhere because, ever since 1820, the name has been a brand of beer. Alexander Keith Jr. was the nephew of the famous brewer, and son of Alexander Keith’s brother John, who was also a brewer but much less successful.

Alexander Keith Jr., born in 1827 in Scotland, was named after his uncle but adopted the “Jr.” to further capitalize on his uncle’s name.

Keith Jr. worked for his uncle and was part of Halifax’s political and business elite. However, his extraordinary career as a criminal had already begun even while in his uncle’s employ.

According to a book by Ann Larabee, a professor of American studies at Michigan State University, Keith Jr. blew up his uncle's gunpowder magazine in Halifax in 1857, probably to cover up a series of swindles involving railroad contracts. Instead of delivering high-priced gunpowder from the magazine to work sites along the rail line, Keith Jr. had bought cheaper gunpowder on the market and pocketed the difference.

When the American civil war started in 1861, Keith Jr. became a Confederate sympathizer (a supporter of the South, as many in Halifax were) and saw the potential to make himself rich by smuggling goods past the Union blockade to the southern US. He stopped working for his uncle in 1863 and became the Halifax agent for the Importing and Exporting Company of the State of Georgia. In reality, he became a blockade runner and spy for the South.

In 1863, Union codebreakers deciphered two letters addressed to Keith Jr., which revealed his involvement in a variety of schemes, including sabotage, arms smuggling, counterfeiting, piracy, and a plot to burn New York City to the ground.

Keith Jr. was also involved in a plan to ship trunks full of yellow fever-infected clothing and bedding to cities throughout the North in the hope that yellow fever would spread and hamper the North’s ability to fight the war. Biological warfare, in other words.

The conspirators also planned to send a suit and shirts exposed to yellow fever to President Abraham Lincoln, but the delivery man, with whom Keith Jr. met at least once, lost his nerve.

In 1864, Keith Jr. saw that the South was going to lose the war, so he hatched a plot to double cross it and further enrich himself. He got three separate Confederate spies to fund the purchase of locomotives that would supposedly be destined for Scotland but would in fact be shipped to the southern United States. Keith Jr.’s plan was to spend one-third of the funds on buying the locomotives and keep two-thirds for himself. (The plan was discovered because the locomotives’ gauge matched that of Southern railways, not those in Scotland.)

This was the man Edwin Barrett may have gotten Governor Gilmore’s money tied up with. While the paperwork suggested Keith Jr. was no longer involved in the Mooseland mine, having sold his share of the claims to Newman, Keith Jr. was a smuggler and spy, and we know of at least one other case in which he used someone else to front a deal. (He arranged for Robert Lang of Halifax to be the supposed purchaser of the locomotives.) So, we do not know whether Keith Jr. was still involved in the Mooseland mine.

Barrett’s lawsuit against Anthony continued through the summer.

Isaac Biggs, Anthony’s clerk and agent, testified that Anthony eventually sold the mine under a foreclosure, meaning the mortgage on the property had not been paid. Biggs was puzzled by this - the company did not have any debt so how could it be under foreclosure? “Anthony replied that a small debt had been contracted for that purpose,” testified Biggs, and Anthony’s goal was to sell the company under foreclosure in order to restructure it and “cut Gilmore off.”

Biggs said the company’s stock was worthless at the time of the trial and that, to his knowledge, no dividends were ever paid to shareholders.

In early September, William Barnes of Nova Scotia testified. He said he was a mining engineer who had worked at the Mooseland mine in Fall 1862. He said the mine had log cabins, a mill and some miners' tools, valued at about four or five hundred dollars.

He also said that mining in 1862 produced little gold. The best ore produced only about half an ounce of gold per ton of ore, a modest output, and the cost of mining likely exceeded the revenue generated. Barnes also said three men had worked the property in July 1862, about three months before Barnes worked there, but only earned 15 cents each for days of work. The average wage for a miner back then was about $1 per day.

Barnes’ testimony suggested the mine was a failure, at least in 1862. While that does not rule out the possibility that it was doing better in 1864, when Anthony called it a “safe and profitable investment,” the weight of evidence suggests the whole enterprise was likely a scam, as Barrett alleged.

The trial adjourned after Barnes' testimony and was scheduled to continue a week later, starting at 9:00 a.m. However, Barrett and his lawyer had not arrived by 10:00 a.m. and the judge dismissed the case. It is not known why Barrett failed to show, especially since the trial seemed to be going his way.

As for Alexander Keith Jr., he committed too many evil deeds to describe them all here, but his final one is too awful to leave out.

He continued to be involved in shipping and trade after the American civil war but several ships carrying his goods sank, which allowed him to collect insurance payouts. This inspired a new scheme: he would export worthless goods and over-insure them, so when the ship carrying them sank, the insurance payout would be pure profit.

The obvious problem was that he needed the right ship to sink at the right time – not just for a random ship to sink in a storm. To accomplish this, he would use an early version of a time bomb by combining newly-invented dynamite with a clock timer.

On December 13, 1875, Keith Jr. was traveling under the name William King Thomas. At the time, he was living in Germany with his wife, having fled North America to escape punishment for past crimes.

He packed a timebomb in a barrel and left it with porters to be loaded on a ship called the Mosel, which was docked in the German port of Bremerhaven.

Outside on the busy dock, the porters loaded the barrel into a horse-drawn wagon and wheeled it toward the ship. They were attaching it to a winch when it suddenly fell, hit the dock and exploded.

Eighty-one people were killed in what many called the crime of the century. Keith Jr. would later be known throughout Europe as the Dynamite Fiend.

When he heard the explosion, Keith Jr., knew his plan had failed and that he would not escape punishment this time. He shot himself in the head but lived another week in misery before dying.

See the story of the Mooseland gold district, the site of Nova Scotia’s first documented discovery of gold in 1858: https://notyourgrandfathersmining.ca/mooseland