Gainey Goldmine, part 2

By Craig Hilmer

East of St Charles, there is a boarded-up mine shaft that for a brief time at the start of the last century captured the attention of St Charles residents.

Mines aren't too common in this neck of the woods. Save for limestone and gravel the mineral deposits aren't of the valuable kind. In 1910, however, the Gainey family of St Charles thought their land held something different.

M.W. Gainey, owner of the gold mine

Louisa Hemmelberg Gainey, wife of Mike Gainey, was an entrepreneur. Its been said that some of her enterprises were less than on the up and up. In this case, the mine that she convinced the family to dig on the family farm certainly cemented that idea. Louisa enlisted a psychic to convince the family there was gold on the property and by 1910 a mine shaft was dug into the hillside.

By 1924, and 830 feet into the hillside, the only gold found was for the Gainey family and was in the form of monies collected in stock certificates sold for shares in the gold mine. Over 116,000 shares of $1.00 stock were sold in the mine, in addition to an unknown number of $2.00 shares, according to a report in the Winona Republican-Herald dated November 11th, 1924.

The Gaineys had been denied a permit to sell stock in the mine, in the newly organized Commerce Commission as of 1923. When the family continued to sell stock Louisa’s brother, A.A. Hemmelberg, was arrested and charged with grand larceny in the second degree for selling unregistered securities.

The Gaineys and the Gainey Consolidated Gold Mine Co were denied stock issuance because the ore samples taken from the mine proved to be worthless. A University of Minnesota assayer had been called to take samples from the mine determined the samples were “fool’s gold”. That was in contradiction to samples taken earlier in the decade by A. Mills Beam, an assayer from Colorado, hired by the Gaineys.

A.A. Oberg said, “The assay returns of the samples from the mine show no gold or silver value and no merchantable gold or silver ore.”

Oberg, a Minnesota Securities Commission investigator, reported, “Charles Stearns of Pontiac Michigan” was the superintendent of the mine and noted that his experience in mining is minimal, but that “he is better equipped at this (mining) than any of the Gaineys.”

A November 21, 1925 Winona Republican-Herald article called the mining operation a “Smooth Swindle Game.”

The Gainey’s used monies from sale of mine stock to buy personal items, farming equipment and livestock, and ultimately spent about $20,000 that could be attributed to the mine.

An early questionable purchase was one of the first gas-powered engines in the area that the Gainey’s bought with mine money, but used in threshing on the farm. Eventually, under pressure, the Gainey’s reimbursed the mine $10 per day for use of the engine. When not being used for farming the engine was used to dig and to haul debris out of the mine.

Nearly 100 years later the Gaineys are gone. William Gainey, owner of the land the mine sat on died on May 4th, 1925, at the height of the legal troubles. The land has been sold several times and little remains to show that once the Gainey’s and a lot of area and nationwide shareholders once rested their hopes on the supposed gold in the hills east of town.

The last of the Gainey brothers died in 1945. He was receiving government aid at the time of his death, otherwise penniless.