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Comstock Industries Case Study

Conflict between western hardrock miners and management has its roots in the Comstock. In May 1863, Comstock miners initiated efforts to form an association. The following year, the Storey County Miners' League became the first sustained attempt at unionization of miners in the American West. Organized during a local depression, the League called for a $4 minimum daily wage for underground work and demanded "closed shops," insisting companies hire only union members. Mine owners crushed the incipient movement on the Comstock by blacklisting union members and relying on territorial governor James Nye to use military force. According to historian Guy Rocha, the incident established a "heritage of conflict" that defined relations between management and hardrock workers for decades throughout the West.

The experiment inspired union advocates to change the situation as they reorganized and founded new unions throughout the Comstock in the mid to late 1860s. It is no coincidence that 1864 saw the formation of Irish militias, filled with pro-union miners. By controlling fire departments, pro-union volunteers could threaten to ignore burning structures owned by mines that opposed union demands. In addition, electing union members or pro-union candidates to office, particularly those related to law enforcement, would nullify future efforts to quash a miners' union. As Rocha points out, "beginning in 1868, and for more than a decade, the Storey County sheriff was either a president or past president of the Gold Hill or Virginia City miner's union." The union dominated other offices as well as the local militias. Among those who rose to prominence in this way was Irish immigrant William Woodburn, who became Storey County district attorney in 1870 and was subsequently elected to several terms in Congress.

After the initial experiment, Comstock miners organized so effectively that they were able to dictate terms without resorting to violence or strikes. A strike would stop pumps and result in flooding in the mines. Without the ability to call on militias or law enforcement, mine owners had little alternative to acceding to labor's demands. The union achieved its goal of a guaranteed $4 minimum for an underground, eight-hour shift, making Comstock miners some of the best paid industrial workers in the world. Fearing wages would be undercut, organized labor also reaffirmed an 1859 declaration prohibiting Chinese from underground work.

Many later historians looked at the Comstock's labor history, and seeing a lack of strikes or violence, concluded that the 1860s and 1870s represented a golden age of labor-management relations. They maintained labor could act civilly, without resorting to the violence that occurred in turn-of-the-century Goldfield, Nevada, Cripple Creek, Colorado, and other places. On the contrary, the Comstock labor movement initially faced military suppression. Miners reacted to the threat of armed opposition with a carefully crafted approach that seized control of the situation. If there was less violence on the Comstock, it was because the union was so effective.


MU1 Module 1: Test your knowledge

1. Which of the following is included in the elements of scope (nature of work) in the current IIA standards?a. Assessing internal controlsb. Assessing the competence of managementc. Assessing the reliability of the company’s annual financial statementsd. Assessing the extent to which corporate objectives are achieved2. Which of the following is the


description of the purpose of the internal auditor’s review of internal controls for effectiveness?a. To verify that the controls ensure the organization’s risks are contained within thetolerances established by its risk management processesb. To test whether the controls in place are operating efficientlyc. To establish that assets are properly safeguardedd. To verify that financial reports are reliable3. Which of the following represents the

most important 

benefit of an internal auditing departmentto an organization’s management?a. Assurance that published financial statements are accurateb. Assurance that frauds will be detectedc. Assurance that the company is complying with all laws and regulationsd. Assurance that management has reasonable control over operations4. Which of the following is


the scope of internal auditing?a. Assessing the organization’s effectivenessb. Verifying compliance with laws and regulationsc. Safeguarding the organization’s assetsd. Reviewing the processes involved in producing internal financial reports5. Internal auditing is a dynamic profession. Which of the following


describes the scope of internal auditing as it has developed in the last 50 years?a. Internal auditing involves assessing effectiveness and efficiency.b. Internal auditing involves assessing compliance with laws, regulations, policies, andprocedures.c. Internal auditing involves assessing the existence of assets and the means used tosafeguard them.d. The focus of internal audit has shifted over time from a financial focus to more of an operational focus.6. Which type of audit would be conducted in response to a request from the president of acompany that the internal auditors review the purchasing process to assess whether the companywas getting maximum value for its purchasing dollars?a. Compliance auditb. Financial auditc. Operational auditd. Full-scope audit7. The IIA 

Rules of Conduct 

require which of the following combinations of qualities of IIA members

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