The Nevada State election took place in November. The Democratic ticket, headed by "Honest" John Sparks for Governor and Denver S. Dickerson for Lieutenant-Governor, was victorious. The Republican ticket, headed by J. F. Mitchell, a mining promoter and engineer, backed by United States Senator Nixon, the Republican political boss, suffered humiliating defeat.
Denver S. Dickerson was the candidate of the labor unions. During a former labor war in Cripple Creek Mr. Dickerson had been confined in the "bull-pen" when the Government intervened to quell the labor riots there. Goldfield miners to a man very naturally voted for him. Governor Sparks had accepted the renomination at the urgent request of the L. M. Sullivan Trust Company, and his victory, as well as the complexion of the ticket, was credited largely to the activities in politics of the trust company.
The trust company, while not a banking institution in the sense that it accepted deposits of cash from citizens of the town, having confined its operations to the financing of mining enterprises, loomed large on the political and business horizon because of its increasing financial and political power. The trust company carried all of its moneys in banks that were not affiliated with the Wingfield-Nixon confederacy and worked at cross-purposes with it in this particular, too.
The Wingfield-Nixon crowd had pyramided a gambling house in Tonopah and a little one-horse bank in Winnemucca into ownership of control of the $36,000,000 Goldfield Consolidated; into ownership of John S. Cook & Company's bank in Goldfield, which was credited with deposits aggregating $8,000,000; into a new bank in Tonopah, known as the Tonopah Banking Corporation, and into a newly formed bank in Reno, called the Nixon National. In politics it had succeeded in seating Mr. Nixon in the United States Senate, placing at his command the Federal patronage which goes with that exalted office.
The confederacy was reaching out.
In Goldfield it had overcome such strong banking opposition as the Nye & Ormsby County Bank and the State Bank & Trust Company, both of which were in business before John S. Cook & Company were dreamed of. It had accomplished this by loaning large sums of money to Goldfield brokers and other citizens on mining stocks of the camp at a time when this class of securities was not so readily accepted by the other banks as good collateral. In Tonopah the newly-established Nixon bank, known as the Tonopah Banking Corporation, was making gradual headway against both the Nye & Ormsby and the State Bank & Trust Company, which still carried about 75 per cent. of the business of that camp. In Reno the Nixon National found it hard to compete with such old institutions as the Bank of Nevada, the Washoe County Bank and the Farmers & Merchants National, but rumors were already in the air that the Nixon bank was soon to buy out and consolidate with the powerful Bank of Nevada.
In Goldfield the power of the confederacy was strongest in all lines except politics. There it already had its grasp on the throat of the mining and financial business of the camp, and through the out-of-town draft collection department of its bank held its finger on the pulse of the mining-share markets. Its sore spot was politics.
Wingfield and Nixon's market operations were clouded in mystery. No one knew exactly where they stood. Brokers in Goldfield and San Francisco, who had compared notes, were convinced that the two had unloaded many millions of shares of the smaller companies not included in the merger, and had raked in not less than $10,000,000 during the boom as the result of this selling. The disposal of huge blocks of stock by Wingfield and Nixon, however, was not interpreted as meaning that stocks were selling too high. The general idea prevailed that the proceeds were used to enable the confederacy to finance its stock purchases in the integral companies that were turned over in the making of the merger and to finance its new chain of banks.
About the middle of November the market for Goldfield securities took a turn for the bad. Prices gave indication of having reached a stopping place. Goldfield promoters began to complain that they were compelled to lend strong support to the market because of selling from many quarters that could not be explained. There was much market pressure. In a few days the market became unsteady, then soft, then wobbly again. In camp Wingfield and Nixon were reported still bullish.
The securities of the Sullivan Trust Company were under attack in all markets. Salt Lake and San Francisco were reported to be spilling stock. Great blocks were being thrown over.