The Great Diamond Hoax: Unveiling a Colorado Territory Scam

In 1872, Prospectors Philip Arnold and his cousin John Slack sold a false Colorado diamond deposit to several prominent businessmen from San Francisco and New York City. This scheme was so they could triggering a diamond craze in Colorado, New Mexico, Wyoming, Utah, and Arizona. The Great Diamond Hoax of 1872 was one of the biggest cons of its time.

DiamondsPhoto byPublic Domain

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

Soon after, they led a mining engineer, hired by many financiers to the diamond field in a remote location in northwest Colorado Territory. unbeknownst to the engineers, the cousins had planted the area with diamonds.

After the success of the first trip, in June 1872, they led several eager investors to the site. From Rawlins, Wyoming 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.

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 on the investment. This group of investors included banker Ralston, General George S. Dodge, Horace Greeley, Asbury Harpending, George McClellan, Baron von Rothschild, and Charles Tiffany.

Arnold and Slack had led the engineer and the group of investors to an area just north of what is now called Diamond Peak, Colorado. At the time, this was in a 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.

Clarence King (far right) and his men helped foil one of the boldest prospecting hoaxes in history.Photo byPublic Domain / U.S. Geological Survey Photograph

The Con Revealed

Geologist Clarence King and his team were alarmed at the reports of such a prominent diamond field. King and his crew (pictured above) had recently surveyed the area. No gem fields in this area were found during their survey. King and his crew located the site and quickly concluded that the area had been salted (planted). 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 grave in the ghost town of White Oak, New MexicoPhoto byFind a Grave

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 (Billy the Kid country), 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 located 51.0 miles (82.1 km) northwest by west of Maybell, Colorado in Moffat County. Digital coordinates: 40.950239, -108.878171. Close to the Colorado-Wyoming border.

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References

• Great Diamon Hoax
• Crime Reads
• Find-a-grave John Slack
• Find-a-grave Philip Arnold
• Diamond Peak, Colorado
• Philip Arnold