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THE MONEY PIT

part 2 of 2
Caldwell, who even friends say sometimes has his own way with the truth, swears he met William Muchow in the White House during the Kennedy administration. A land developer, Caldwell claims he was there at Kennedy's request coordinating a program aimed at improving relations between the United States and the youth of the world. Caldwell says he witnessed an exchange between Kennedy and Muchow in which Muchow pounded on the President's desk, railing about the stranglehold the government had kept on the mining industry through price controls and other restrictions since the outbreak of the second world war.

Following the chance meeting, says Caldwell, he and Muchow found their companies were headquartered on the same street in Chicago. As they got to know each other better, Muchow often came to him for business advice, says Caldwell. When the older man's health began to decline in the late 1960s, he pressed Caldwell to become trustee of the Chain O' Mines. Caldwell says he resisted because the price of gold was frozen by the government at a level far below what would support a mining operation. Also, the Chain's properties were constantly incurring taxes, while the company had no income. Slowly the old man won him over, Caldwell says. "He used to say, `Who's going to take care of the children if you don't?'" Caldwell recalls, explaining that the paternalistic Muchow viewed the Chain's stockholders and aging employees as his dependents.

Caldwell came to admire Muchow. "Muchow was so muddy big to Harold," says Ron Ramsey, a current business associate of Caldwell's in a venture to extract gold from mill tailings. By the time Muchow died, Caldwell had taken over the company--as a caretaker trustee, Caldwell says. Frank Thoma, a Chicago resident who was a member of Muchow's board of directors, recalls that the board followed Muchow's wishes in appointing Caldwell trustee. "Dr. Muchow was sure he was the only one who could be trusted to take over the mine," says Thoma, noting that he's been with the Chain for more than forty years and trusts Caldwell completely. "He's another man like Dr. Muchow, who devoted his life to the company," Thoma adds.

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Betting that price controls on precious metals eventually would be rescinded, Caldwell says he paid the Chain's bills, using profits from development projects he was running on Padre Island off the coast of Texas in the 1960s and '70s. From there Caldwell's account gets hazier. What is clear is that he came to live in Colorado in the 1970s and became more directly active in the mining scene in Central City. The going wasn't easy for the newcomer, says Ron Ramsey. Twice, he says, Caldwell found himself looking down gun barrels held by miners who said the company owed them money.

One time, says Ramsey, retelling a story he heard from Caldwell, a pistol was held to the head of the Chain O' Mines boss as he sat in Muchow's former office at the Glory Hole's mill in Russell Gulch. The phone started ringing, persisting until the gunman told Caldwell's foreman to pick it up. No one was on the line, but the call broke the tension in the room, and Caldwell was able to talk the gunman out of violence. In a similar standoff in the same room a few years later--"probably with some guy who didn't get paid either," says Ramsey--Muchow's favorite chair, sitting empty, began to rock. It distracted the gunman, enabling Caldwell and his foreman to disarm him.

Caldwell credits both escapes to Muchow's ghost, says Ramsey: "Harold believes old Doc Muchow is still watching out for him."

But Muchow's ghost wasn't much help with the mining business. Thanks to inflation and the cost of modern hard-rock mining, gold mining in the 1970s had become a lousy way to make any money. And the Chain O' Mines had no cash, only assets buried hundreds of feet deep. Caldwell tried to use those assets to generate income, but his plans tended to overreach.

In one short-lived enterprise, Caldwell tried to inaugurate a hot-air balloon ride staged on the Glory Hole's tailings pile, which lies a block or so from downtown Central City. Three attempts were made at liftoff, each ending with the balloon being quickly forced down by the winds that routinely rake the hilltops surrounding the town. Caldwell also briefly touted the mine as a sightseeing destination for tourists, a project that apparently chilled after the unlucky picnicker fell down the shaft.

In the late 1960s, the Glory Hole's tailings had been bulldozed into two terraced Central City parking lots set one above the other. It is those tailings that Caldwell claims contain tens of millions of dollars' worth of extractable gold. By the mid-1980s, however, the Environmental Protection Agency was more impressed with the parking lots' heavy metal content and designated the area a Superfund site.

Caldwell's most reliable means of making money in the 1970s and '80s was to lease out Chain O' Mines properties to other parties. It required no capital and let him keep his hand in the game should an old mine suddenly strike it rich. Trouble was, Caldwell didn't appear to care who leased the mines, as long as he got paid. One of his renters was the California con man who used the Glory Hole to set up his bullion scam.

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