Greatest Mining Hoax ever in the United States

Prospectors Philip Arnold and his cousin John Slack sold a false American diamond deposit to prominent businessmen in San Francisco and New York City. Triggering a diamond prospecting craze in the western states of Colorado, New Mexico, Wyoming, Utah, and Arizona. The Great Diamond Hoax of 1872 was one of the biggest cons of its time.

Clarence King (far right) and his men helped foil one of the boldest prospecting hoaxes in history.Photo byU.S. Geological Survey Photographic Library / Edited by Colorado Martini

In 1871, cousins Philip Arnold and John Slack traveled to San Francisco to report a diamond mine, while producing a bag full of diamonds. Causing a stir among prominent financiers.

The cousins lead a mining engineer, hired by many financiers to their diamond field. Before leading the group to a remote location in the northwest Colorado Territory, they planted diamonds for the engineer to find.

After the success of the first trip. In June 1872, they led the eager investors to the site. The trip started by train from St. Louis, Missouri and continued onto Rawlins in the Wyoming Territory. From Rawlins, they continued on horseback south into the Colorado Territory. In keeping the location secret, Arnold and Slack led the group on a confusing four-day journey through the countryside. When the group finally arrived, they found a field with planted gems on the ground.

Charles Lewis Tiffany evaluated the stones as being worth $150,000. Yes, it is that, Tiffany. The founder of Tiffany and Co. With this endorsement and an engineer’s report, several other businessmen wanted in. Including banker Ralston, General George S. Dodge, Horace Greeley, Asbury Harpending, George McClellan, Baron von Rothschild, and Charles Tiffany.

Cousins Arnold and SlackPhoto byPublic Domain

Arnold and Slack had led the engineer and the group of investors to just north of what is now called Diamond Peak, Colorado in the remote northwest corner of the Colorado Territory. The engineer submitted a highly optimistic report, which found its way into the press.

Soon the investors convinced the con artists to sell their interest for $660,000 ($16.8 million today). The investors formed the San Francisco and New York Mining and Commercial Company. A New York corporation known as the Golconda Mining Company was set up by the investors with capital stock of $10,000,000.

The jig is up

Geologist Clarence King and his team were alarmed at the reports of such a prominent diamond field. They had recently surveyed the area and this area was not found to be a wealth of gems. King and his crew located the site and quickly concluded that it had been salted. King stated that the various stones claimed to have been found would never be found together in a single deposit. He immediately notified investors.

It turns out that Arnold and Slack bought cheap diamonds used in gem cutting in London and Amsterdam for $35,000 and scattered them to "salt" the ground. The diamond-company investors sued Arnold and he settled for an undisclosed sum.

Arnold returned to his home in Elizabethtown, Kentucky, and became a successful businessman and banker. Years later he died of pneumonia after he was wounded in a shootout with a rival banker.

John Slack dropped from the public eye. He moved to St. Louis, where he owned a casket-making company. He later became a casket maker and undertaker in White Oaks, New Mexico, where he lived quietly and died in 1896 at the age of 76. He is buried in White Oaks.

Diamond Peak, Colorado

Named for the famous con and the approximate location of the hoax’s gem salting (planting). Diamond Peak can be found in the Green River Basin of Colorado. It is a 9,665-foot (2,946 m) peak that is located 51.0 miles (82.1 km) northwest by west of Maybell, Colorado in Moffat County. Digital coordinates: 40.950239, -108.878171.

______________

Click for more NewsBreak articles from Colorado Martini

Please subscribe so you don't miss another exciting article. It would be greatly appreciated if you would be so kind to “heart” this article.

References

Philip Arnold

Great Diamon Hoax

Crime Reads

Find-a-grave John Slack

Find-a-grave Philip Arnold

Diamond Peak, Colorado