Verner Zevola Reed (1863–1919) was one of Colorado’s most successful businessmen, playing a central role in the development of mining operations during the Cripple Creek Gold Rush and for the US oil industry.
Early Life and Business Ventures
Born in 1863 on an Ohio farm, Reed grew up in Iowa. By age ten, he was already helping to support the family. He was virtually self-educated, making his later achievements all the more remarkable. The young Reed wanted to be a writer, but family obligations forced him into the world of business, where his exceptional talent soon became apparent.
In 1885 Reed moved to Colorado Springs with his half-brother Joseph, who was suffering from tuberculosis. At the time, Colorado Springs was home to many health seekers but was slowly evolving from a resort and spa into a permanent city. Reed quickly sized up the available opportunities. He started as a writer of colorfully worded tourist folders but soon realized the potential of real estate. Colorado Springs’ growing population needed housing, so for a 10 percent commission, Reed platted and sold neglected lots for seventy-five dollars each. After accumulating enough capital, he began to build small homes, which he sold on installment. Reed soon made enough money to bring the rest of his family to Colorado.
From 1890 until 1895, Reed’s real estate business was known as Reed Brothers, with his father, Hugh, and brother, Raymond, as partners. After 1895 Hugh and Raymond continued with their own real estate firm, while Verner sold his part of Reed Brothers and consolidated his private holdings into the Reed Building. He was soon acquiring and developing properties throughout the state. He lived with his family until 1893, when, at age thirty, he married seventeen-year-old Mary Dean Johnson, daughter of another Colorado Springs realtor. While he continued to help members of the Reed family throughout his life, for the most part, they were not integral to his growing enterprises.
Cripple Creek Gold Rush
In 1891 prospectors struck gold at Cripple Creek, kicking off Colorado’s last great gold bonanza just twenty-seven miles west of Colorado Springs. Unlike other Colorado booms, this one began slowly, as the gold deposits lay in deep rock formations that required complicated extraction techniques.
In the early years of Cripple Creek, Reed made investments in a number of mines, with limited success. He continued to develop real estate in Colorado Springs while accumulating important new friends, including Winfield Scott Stratton, a carpenter whom Reed had employed on his early building projects. In 1891, after seventeen years of scratching about, Stratton discovered the Independence Lode in nearby Victor, destined to become the Cripple Creek District’s most famous mine. In 1895 Stratton helped Jimmie Burns, Jimmie Doyle, and John Harnan establish their claim on the Portland Lode. Rather than hire a lawyer, Stratton hired Reed, who shrewdly untangled the litigation surrounding the contested property and brought the warring factions together in the Consolidated Portland Mining Company. Reed then sold shares to eager investors, clearing a $25,000 profit for himself, as the Portland became the most valuable property on Battle Mountain. Reed was now the leading stockbroker for the Cripple Creek District.
The next few years brought more successful consolidations and promotions of Cripple Creek mining properties. Reed engineered the sale of the C.O.D. Mine for Spencer Penrose, Charles Tutt, and Charles MacNeill, all of whom went on to dominate ore processing in Cripple Creek. Reed and lawyer Clarence C. Hamlin formed the Reed & Hamlin Investment Company, with offices at 58 Lombard Street in London. Reed spent time abroad making even more contacts, such as those with English financier Cecil Rhodes and Rhodes’s consulting engineer, John Hays Hammond, the most famous mining engineer of his day.
In 1899 Reed convinced Stratton to sell his share in the Independence Mine for $10 million, netting himself a commission of $1 million. Shares in the new mining operation sold briskly for a time and then slumped, although the mine continued to produce prodigious amounts of gold. The sale of the Independence Mine spurred another speculation boom in Cripple Creek properties. By 1900, despite Stratton’s claims that a second motherlode existed deep within Battle Mountain, signs of decline became evident. By the time of Stratton’s death on September 14, 1902, Reed had already moved to Europe, where he indulged his ambition for culture and travel while drumming up new investors for his projects.
During the next twelve years, Reed, his wife, Mary, and their three small children—Margery, Verner Jr., and Joseph—wandered about the continent, living in Paris, Rome, Baden-Baden, Wiesbaden, Nice, and a chateau outside Nantes, France. Reed made three or four yearly trips back to the United States to check on his investments and maintain his contacts. The Colorado press usually caught up with him while he was in the state, and Reed obliged them with romantic tales of family life and travel, as well as his ever-ready booster speech.
At a time when most Cripple Creek fortunes were fading fast, Reed noted that those who diversified their interests tended to be more successful in the long term. In 1910, two years after the introduction of Henry Ford’s Model T, the petroleum industry moved into its second stage of development. By 1911, for the first time, America would use more petroleum for fuel than for illumination. With huge new discoveries in Texas, Oklahoma, and California, the focus of exploration moved from the old oil regions of Pennsylvania to the West.
Rocky Mountain oil history nominally began in 1862 in Florence, Colorado, west of Pueblo, but the region’s isolation and transportation problems slowed the industry’s growth. As early as 1885, the Wyoming state geologist realized the oil-bearing potential of the Salt Creek Basin; for the next twenty-five years, claimants fought over the right to explore and develop that immense oil field. In 1910 Reed stepped in to play a part similar to his role at Cripple Creek—as a consolidator and attractor of capital and talent, seeking to realize the basin’s potential through development.
Midwest Oil and Wartime Labor Activism
On October 8, 1910, Reed began buying up leases, and by February of 1911, he had accumulated enough capital from his own resources and from a group of French acquaintances to organize the Midwest Oil Company. By 1912 Reed had staked most of his assets in oil. His judgment was quickly vindicated, as a pipeline and refinery were soon in place and profits rolled in. The company’s headquarters soon moved from Casper, Wyoming, to the more luxurious confines of Denver’s First National Bank Building. While maintaining homes in Colorado Springs and Paris, Reed purchased a Denver mansion at 1022 Humboldt Street, called Stoiberhof, as the family’s primary residence.
Reed’s business and social affairs only kept him partly occupied. In 1915 he attempted to solidify and express his thoughts on larger issues. Labor problems were on the minds of many Coloradans at the time. The previous year, a United Mine Workers’ strike against the Colorado Fuel & Iron Company (CF&I) ended in the Ludlow Massacre, a violent clash between miners and state militia that killed five miners and a militiaman. Two women and eleven children also died when the miners’ camp caught fire. In September 1915, Reed hosted a party attended by John D. Rockefeller Jr. and William Lyon Mackenzie King, owner of the CF&I. The titans of industry were in Colorado to investigate questions raised by the strike and redeem the Rockefeller reputation after the massacre at Ludlow. Reed’s belief that laborers had an innate right to union representation did not enjoy much support among his guests, and the situation did not improve.
In 1915 Reed also spoke and wrote about the ongoing war in Europe. The war had special meaning to Reed, who drew on his experiences in Europe while arguing that America should not get involved in the conflict. He delivered an address at the University of Denver on January 5, 1915. In the speech he listed the basic causes of the war as “racial evolution, need of more room to grow, petty rivalry, desire for revenge, and religion.” In an article for The Denver Post on July 4, 1915, he declared, “America must be maintained free of the mad war virus” and should not sell arms to the belligerents.
In 1917 Reed’s interests in labor and the war came together. During the early stages of the war, Reed preached isolation for America while giving generously to relief efforts in both France and Germany. When the United States declared war, he immediately pledged a large sum for war bonds and offered his services to the government. President Woodrow Wilson accepted by appointing him to the President’s Mediation Commission, a committee headed by Secretary of Labor William B. Wilson. Reed traveled the country in his private railcar helping to settle labor disputes, which were harmful to the war effort. When the war and his role in it ended, Reed experienced a rapid degradation of his health. In the winter of 1919, he traveled to California seeking relief. He passed away in Coronado Beach on April 20, 1919—the five-year anniversary of the Ludlow Massacre—at the age of fifty-six.
Adapted from Sharon Elfenbein, “Verner Z. Reed: Colorado’s Millionaire Romantic,” Colorado Heritage 10, no. 2 (1990).