Thorkildsen was determined not be be cast aside like this, make the best of his situation, and make Smith pay in the process. In one plot he secretly wrote to Mather explaining that he and Stephen could skim profits from ore transportation costs by signing a long-term rail contract for less costs, then charging Smith the regular price. Thorkildsen boasted to Mather that they could make $10,000 each on an annual basis and according to Thorkildsen in August 1897, “This is my best scheme I know of up to date.” At a time when a good annual salary was $1,500, this was a fortune. There is no indication as to whether or not Mather ever acted on any of Thorkildsen’s “fancy dreams” as he put it, but it did not discourage Thorkildsen from enlisting Mather’s support. Near the same time Thorkildsen wrote to Mather stating, “Why should you handicap yourself when you are being treated so shamefully by Mr. Smith? Mr. Smith does not care how he treats you or how he fulfils his promises to you. It is all self with him. It is now time to turn the tables.”
All the elements of a storm were brewing over Pacific Coast Borax and the following year, in 1898, Thorkildsen was caught backdating order forms after price increases were implemented. He did this as a favor to friends and preferred customers. Smith was infuriated with him and demanded his resignation but as Thorkildsen stormed out, he announced he was going to start up his own borax company. Smith’s response was to return the threat by stating that if Thorkildsen did such a thing, Smith would, in essence, bury him. Both threats would prove to be true, but not quite as one might expect.
Later that same year, Thorkildsen took his life savings of $17,000, left Chicago and heading west to Southern California, he purchased a borax mine on Frazier Mountain in Ventura County. It’s apparent that this move wasn’t based on mere impulse, but had been on his mind for a period of time. Thus, Thorkildsen’s termination of employment from Pacific Coast Borax simply sped up the process.
Although Mather stayed on with Pacific Coast Borax in Chicago, he became president of the newly formed Thorkildsen-Mather Borax Company in 1898. Stephen Mather and his father, Joseph, secretly financed the new mining operation while Stephen used his industry contacts with Pacific Coast Borax to advance the interests of the Frazier Mountain mining operation.
A couple of years later, in 1900, Smith wrote to Stephen Mather, perplexed as to how to track Thorkildsen’s shipments of product from the Ventura mines. Smith states to Mather, “…possibly a large portion of the Boracic Acid which goes through Thorkildsen’s hands goes directly to the pork packers. Our trade in that direction, as you know, has fallen off materially. It is evident that Thorkildsen‘s trade in the East is very limited; therefore, his trade must be West, in your territory, and naturally from buyers who formerly bought of us, certainly, very largely from these people.” Although Smith was correct in his assumptions, he had no idea that the culprit was the recipient of his letter, Stephen Mather. Smith then asks of Mather, “I wish you would put your wits to work in this direction and see if you cannot give us some information, either definite or otherwise, on these lines.” Smith, blindly, had put the fox in charge of investigating the hen house. In the end, Mather’s secret alliance with Thorkildsen was successful and the Frazier Mountain mining operation became lucrative.