Posted by Tom Foremski - August 3, 2011
Tales of sunken treasure have fascinated the world since perhaps the first sunken ship, but few can claim a story of their own.
Ken Privitt is a technical marketing engineer at Intel who happens to have built a small submarine with his father years ago. Now, a lot of Intel employees have interesting hobbies and stories to tell, but Privitt's may be among the more unique. His story involves a nearly 150-year-old shipwreck, the submarine, the Supreme Court, and a fortune in gold. It even has an interesting twist.
The short version goes like this: Fifteen years ago this August, 564 gold $20 double eagle coins were recovered from the wreck of a paddle-wheel steamer named the SS Brother Jonathan using a small submarine. Privitt built that sub - a 15 ½-foot, 5,000-pound steel craft named the Delta - with his dad, Doug, a long-time machinist.
The younger Privitt designed the pressure vessel and electrical, life support and propulsion systems from scratch using a self-built computer with core memory ("Pretty amazing for 1979," Ken said), and those contributions enabled the Delta to go down to 1,320 feet, making the mini-sub ideal for the job.
The before and after give this treasure tale its punch, albeit at the expense of 225 souls who perished in what remains one of the worst maritime disasters in U.S. history.
On Sunday, July 30, 1865, the Brother Jonathan was headed to Portland from San Francisco carrying 244 passengers and millions of dollars in newly minted gold bars and $20 Double Eagle gold coins. Under Capt. Samuel J. DeWolfe and clear blue skies, the ship made a brief port call to the near-halfway point of Crescent City.
About a half-hour after re-embarking, the paddle steamer ran into a seasonally unusual severe storm. Enduring massive waves, some cresting at 30 feet high, terrified passengers begged the captain to head back to Crescent City, which DeWolfe did. Nearing the harbor, the skies cleared but not the mountainous waves. A strong tailwind made navigating unstable and the ship struck an uncharted rock, the impact sending the nine-story mast through the hull and ensured that the Brother Jonathan would founder.
As screaming passengers were being washed off the decks by the waves, efforts were made to launch the six lifeboats capable of carrying all passengers and crew. Alas, due to the huge waves, only one lifeboat made it safely to shore.
"Because some of the 19 survivors were the crew, we know the details of what happened," said Privitt, 55. Information included what cargo was aboard - goods that lay somewhere on the ocean floor. "A lot of gold was on that. There were shipments that included a U.S. army payroll and an Indian treaty payment, and all the money was in gold coins or bullion. The ship was loaded, some believe overloaded. Back in 1865 there were no shipping rules for packing."
Fast-forward about 125 years and we come to where Privitt enters the story - a part that usually happens only in adventure novels, movies and video games. Aware of the submarine built by Privitt and his father, a representative of Deep Sea Research came knocking at the elder Privitt's machine manufacturing and marine fabrication operation - named MARFAB - in Santa Ana, Calif.
"This guy came in talking about treasure," the son recalled. "He wanted to use our sub to find the SS Brother Jonathan. My dad brushed him off at first, but since the sub was being used for oceanography research in Alaska and was passing Crescent City after dive season anyway, he figured 'What the heck. No skin off my nose.' When the man offered 4 percent of whatever they found, it was a deal."
Ken Privitt poses with the Delta sub he designed with his father. Photo taken in 1982, the year the Delta made its maiden launch.
During the initial salvage mission another contractor's mini-sub, the Snooper, actually found the Brother Jonathan, its gravesite unknown until technology could outsmart Mother Nature's challenges of rocky and dark underwater passageways, treacherous weather and mighty currents, plus human miscalculations of where the ship might have eventually settled.
About a year later, with salvage rights secured, or so one thought, the Privitts' mini-sub would make history roughly 2 miles south of what is now called "Jonathan Rock." On Aug. 30, 1996, the Delta brought to the surface a cigar box-sized container found near the wheelhouse.
"That's where the purser was and my dad figured that's who you'd give valuables too," Privitt said.
When the salvors opened up the box on the team boat, found in mint condition were $2 million in one-ounce $20 double eagle gold coins. The one person who was not there for the big moment was the Delta's co-builder, and for ironic reasons.
"I get seasick," Ken Privitt shared with a laugh. "Before the Brother Jonathan thing, we'd be out on dives for a week and they didn't care I was over the side chumming a bit. I had to work. I was on the boat! Literally, I was seasick 24/7 because I'd get sick in my sleep, too. I would dream that I was working."
As for the sunken treasure, eventually 1,207 gold coins were recovered along with numerous artifacts. Some of the coins were encrusted from a century-plus of sea life, but the reason why many were found in mint condition, and, thus, more valuable, was they were discovered still wrapped in protective oil paper.
As for divvying up the booty, the salvors faced another series of challenges, only this time on land and mostly in the courtroom. Descendants of passengers, shippers and even the salvors themselves all battled for a share of the treasure, but the loudest voice came from the state of California, claiming it not only owned the rights to the wreck and everything located close to its shores.
A long legal battle between the recovery team and the state over ownership of the coins went all the way to the Supreme Court before being unanimously decided in favor of the finders. The appropriately nicknamed "Golden State" threatened to appeal, but in 1999 dropped the matter when it settled for 200 of the $20 double eagles, estimated at $5,000 per coin or $1 million.
The remaining 1,006 coins were sold in a public auction and raised $6.3 million, the low end of what the auctioneers had estimated. After taking their fee, about $4.6 million was left. Deep Sea Research, saddled with all the costs and legal expenses, wound up with a very small return on investment. As for the Privitts, Dad earned $40,000 "and a helluva story," said the son, who received zilch, but a helluva story.
"The money my dad made went into MARFAB, so he really didn't get anything either," he said. "As for me, I enjoy telling the story even though the only active part was in building the submarine. If I hadn't built it none of that would have happened."
The younger Privitt did wind up with three of the auctioned double eagles. The man who helped get them there didn't even merit a discount. Successfully bidding between $2,000 and $2,500 for the three coins, he gave one of them to his mom before she passed away. Dad, 78, now possesses it. The other two gold pieces are earmarked for his two children, ages 22 and 21. Asked why he hasn't given the coins to them yet, he replied with a playful smirk, "They'll get them some day, eventually."
The first in his family to go to college, Privitt earned his bachelor's and master's degrees in engineering from UCLA. His destiny of going in that direction was pretty much set at the age of 4, when his father, a curious and adventure-seeking machinist, heard about a man named Ed Armstrong who was building a submarine just down the street in their Torrance neighborhood.
"They immediately hit it off," Privitt said. "I'd say he and my dad built 7 to 11 submarines before they broke off after disagreeing on my dad's new design that put the ballast tanks on the front and back instead of the sides for more stability. My dad's design was correct."
With Dad on his own, the son, who started out as a studious observer, became more hands-on over the years. In fact, during and after college he worked for his dad at MARFAB as a project engineer. His experience designing and building receivers and acoustic beacons helped him land a job at Magnavox, but not before finishing and launching the Delta.
After 5 years of GPS design, working heavily with Intel microprocessors, Privitt left Magnavox for Intel as a field application engineer. That was in 1985 and he's been with the company ever since, earning a prestigious Intel Achievement Award along the way for his contribution to InfiniBand, an architecture and specification for improved data flow between processors and I/O devices.
Though he maintains an office at Intel's Folsom, Calif. campus, not far from where he resided from 1980 to 2006, he now works as a technical marketing engineer out of his home in the San Diego community of Pacific Beach. He lives with Nancy, his wife of 5 years and who he met while studying at UCLA.
Just four years from the sesquicentennial of the Brother Jonathan disaster, there's a murmur among the salvage community about a return to the wreckage that lay a couple of miles off Crescent City. Some say that four-fifths of the treasure remains down there just waiting to be discovered. Should an expedition team be formed with plenty of money and legal rights, don't expect the younger Privitt to be a party to the salvage mission at sea.
"I like working, but I'm just a Joe Average engineer," he said. "Plus, it's the constant bobbing up and down of being at sea. If I had sea legs I would be a submarine operator. It's a very profitable business. I'm at Intel because I get seasick."