Redstone's Sociological Experiment
1902-1909
by Mary Boland
By this time, 1902, virtually all the improvements at Redstone, the company , the company built houses, clubhouse, Inn etc. were all in place, and by comparison with other isolated coal communities it must have seemed like paradise to its residents.
Osgood hardly had time to enjoy his achievements, however, before he was sorely pressed by outside interests. Chicago financier John W. Gates acquired stock in the Colorado Fuel and Iron Company during 1901 and claimed he had enough shares to control the Board of Directors. However, he also professed at first a desire to leave Osgood in charge of the enterprise as long as Osgood would agree to undertake an expensive program to expand and modernize the steel works at Pueblo. Osgood did start the steelworks improvements program, possibly to his later regret, but harmony between Osgood and Gates lasted only a short while nonetheless.
In acquiring what he claimed to be a controlling interest, Gates ran up the price of the corporation’s stock on the stock exchange, and many of Osgood’s supporters could not resist the opportunity to sell their shares at good profits. This left Osgood and his “Iowa gang” in the position of having to solicit support from eastern investors in order to maintain control of the company.
During the latter part of 1901 and first half of 1902, Gates and Osgood battled in earnest for control of the Board of Directors, the battle involving a series of complex legal maneuvers tedious to relate. As these legal battles received considerable publicity, abetted by public charges the two made against each other, prices of the corporation’s shares then fell sharply on the stock exchange, causing Gates to lose so much money be finally gave up the battle before the close of 1902. And the various investors, mostly eastern, who now hold most of the stock voted toward the end of that year to retain the Osgood management.
Despite this victory, Osgood was now in real trouble as at least one of his associates, John Jerome, tried to warn him. The steelworks improvements now underway were both costing many times what had been expected and disrupting current production and therefore income to an unforeseen degree. Jerome warned Osgood that the bonds issued the previous year to finance the improvements had brought in nowhere near sufficient revenue to see the projects through, and that the company was thus headed for a financial crisis.
Osgood did not take heed, however, until insolvency became an immediate threat early in 1903. Finally in June of that year Osgood could find no recourse but to go to major shareholders George Gould and John D Rockefeller and offer to relinquish control of the company to them if they would save it from insolvency. Gould and Rockefeller accepted this offer and Osgood and the “Iowa gang” then resigned as directors and officers of the company.
Osgood retained ownership and control of not only Cleveholm and some 4200 acres of beautiful surrounding countryside, but the town of Redstone including the 84 cottages, the Inn, the Clubhouse, and another lodge, the Big Horn, he had built for important visitors. But after he lost control of the Colorado Fuel and Iron Company, and thus the mining and coking operations at Coalbasin and Redstone, he left the Crystal valley and only occasionally visited again.
With Osgood out of the picture, the Colorado Fuel and Iron Company’s “sociological work” apparently languished for lack of financial support, and CAMP AND PLANT magazine ceased operation in 1904.
The Corporation kept the Crystal valley mines another six years, but little information about them is available for the period after 1904. Then in 1909 the company closed down all operations at Coalbasin and Redstone, probably because of unfavorable market conditions. The market for coke had suffered a continual decline with the decline of smelting in the state.
For some unknown reason, Coalbasin residents were suddenly told in January, 1909, there would be only one more trip out on the High Line; thus they were forced to abandon much of their household furniture and any other bulky items when they left. Colorado Fuel and Iron Company crews returned later to strip the mine and pull the High Line tracks, but they did not bother removing any of the belongings left behind by their former employees, leaving them instead to vandals and rot.
When Coal operations ceased, Col Meek was able to arrange to lease the Crystal River Railroad so that he could continue to get his marble to Carbondale and thus that railroad was not dismantled until after the marble operations ended in 1941.
Author Mary Boland (1936-2017), moved to Carbondale in 1973. She was Glenwood Bureau Chief for the Grand Junction Sentinel, a Professor at Colorado Mountain College and prolific writer for many national and local publications. This is one article, reprinted with permission, from her publication THE HISTORY OF THE CRYSTAL VALLEY.
RHS Notes: The policies of “Social Betterment,” also referred to as “Welfare Capitalism,” effectively incentivized Osgood’s CF&I employees not to participate in the Colorado’s 1903 United Mine Workers of America strike; the ten month strike failed. Furthermore, union activity was effectively kept the out of Colorado until 1912. Research by Redstone Historian Darrell Munsell, author of FROM REDSTONE TO LUDLOW, clarifies that Osgood’s “Social Betterment” philosophy was rooted in his opposition to unions. Notably, Osgood totally abandoned this philosophy after he lost control of CF&I in 1903 and went on to develop his privately owned very anti-union Victor Coal Company in Colorado’s southern coalfields. He was influential in swaying the two other coal barons to aggressively keep union organizers out of Colorado. Osgood never again held a publicly traded company.