In 1915, Edward A. Whitney, founder of Whitney Benefits, made a list of his ranch properties. Always concerned about economy, he made the notes on the back of a used envelope.
At the time, Whitney was one of the wealthiest, if not the wealthiest man, in Sheridan County. He made his money in various ventures in Iowa then in Wyoming, mostly Johnson and Sheridan counties. Land development formed the core of his investment and revenue stream. Yet Whitney did not purchase ranches, at least not directly. Instead he invested in cattle, town lots and shares of reservoir water. He loaned money to plenty of stockmen, however. They pledged their land as collateral. And, as it happens sometimes, some of these cattle operations folded. Whitney received title to the land.
He estimated the value of these ranches at $208,370, or nearly $6 million in modern money. Whitney had an unusual gift: he made the right decisions in the right place at the right time. In 1915, Whitney judged the price of agricultural land in Sheridan County was reaching its apex. He was off by just a few years. Four year later, deflation caused by the end of World War I caused land prices to plummet.
Whitney made a note to dispose of some ranches, including one he simply called, “Ash Creek pasture,” a parcel close to the Montana border. Sell the surface on these 1,400 acres, he wrote, “keep the minerals.” He suspected — but had no empirical evidence — that coal lay under these acres. It was a good hunch. There was indeed coal. Mining it, or attempting to mine it, eventually spawned a lawsuit of historical proportions.
For more than 50 years, the seam remained untouched. But in the 1960s, energy prices started to climb. From 1965 to 1980, the amount of coal mined in the U. S. would quadruple. Oil imports to the U.S. between 1971 and 1975 nearly tripled.
It was almost as if the Whitney coal tract had been waiting for the right market. Private ownership made the Whitney tract of coal particularly valuable. The majority of coal production in the northern Rockies came from seams owned by the federal government. Mining privately owned coal required less red tape and reduced federal oversight.
In 1972, Whitney Benefits board member Henry Burgess suggested the Big Horn Coal Company, who was mining a neighboring tract of coal, “drill some holes and find out what we have on these coal leases.”
Big Horn Coal obliged. Their rough analysis: A total of 214 million tons of coal lay beneath the surface. In August 1973, Whitney Benefits board leased out the mining rights to the Des Moines-based Mid-American Pipeline Company. It was a non-competitive bid.
Trustee Homer Scott, then an engineer and former director with the Omaha-based Peter Kiewit Sons, was not present at the meeting. He was not pleased with the board’s action. A competitive bid, he said, was critical to receive fair market value. The board had not yet finalized the contract with Mid-America and decided to reopen the bid.
Samuel Western is a Sheridan-based freelance writer focusing on the economic and demographic history of the West and western communities and locavore food issues.
