Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1873-01-02
The Great Diamond frauds.

The Great Diamond frauds.
The official report of Clarence King,
United States Geologist, to the Board Of
Directors of the San Francisco and New
York Mining and Commercial Company,
and the supplementary report Of the min
ing pert, Henry Janin, to the Trustees
of the same Company, fully and COM
pletely disclose the details of the great
diamond swindle in California. The de-
velOpments made by Mr.. King, by Janin,
whowas completely duped, and by the
CONCESSIONS of one or two Of those prom
inently engaged in the swindle, show it
to have been one of the most ingenious
and barefaced frauds of modern times,
and, if not as successful, fully as skill
fully arranged as the ~ecent colossal bank
srindle perpetrated by Spitzeder, the
Bavarian actress. The first discovery. as
alleged, was made by Philip Arnold, who,
shortly after, in company with one Slack,
appeared in San Francisco, with several
rough diamonds, which they alleged they
had found in a certain locality which was
literally blazing with precious gems
! They Offered to guide any one to the
| spot, and gradually interested the mon
eyed men Of San Francisco in the pro-
ject. Among others, William c. Ralston,
the Cashier of the Bank Of California
and heavy capitalist, was induced to
send Janin, who is mining engineer
and expert, to investigate the discovery
Janin pr0spected the diamond fields
under the supervision Of Arnold and
found about $50 600 worth Of gems,
and, upon this prospect, he re-
turned to San Francisco and made
q glogingly favorable report. The
1ay1f intn
on the Strength Of it, Arnold made con
tract with Mr. Harpending, of San Fran
cisco, for the sale of the discovery, and
harpending transferred an interest in
that contract to William NJ Lent, of the
san1ecity The first payment to Arnold
was 41O0, 600. The property then under
went various subdivisions, the bulk of it
being held by Lent, who paid about $780,
OOO. Other interests were sold out to
yaTi0us parties, so that the result was,
that Arnold and his confederates Melted
about $3.50, 900 The purchasers at once
Organized the San Francisco and New
York Mining and Commercial Company,
with capital stock Of 100000. The
leading stockholders were w &. Ralston,
Milton S. Latham, Albert Ganse, Lewis
Slot George d. Roberts, Maurice Dore,
WAN M. Lent, A. Harpending, and D.
y N0ltOn, of San Francisco; and S. l..
M1erlow and George B. Mcclellan, of
Neg1Y crk. The stock, however, was
n0Krut upon the market. It was taken
- 80 rate of $40 per share, with the di
xcoeunderstanding that the stock should
EeonAin in the hands of W. G. Ralston,
md should not be sold or put upon the
market until the value of the property
shOuld be fully ascertained
Tn
sure, Dir. Clarence King, United State S
6eolOgist, was requested to make a care
1ul survey of the Arizona diamond fields.
He has done so, and made his report,
which has just been published, showing
that The whole affair. from first to last,
has Been huge and ingenious swindle
HIS 1usplclOns We're aroused in the second
Gays work, and he at once made an
exhaustive series of prospects, applying all
the geological tests known to science, the
results OF which he sums up as follows:
That the gems exist in positions where nature
Il aione n Sonia q, never haze placed them.
2. lnat they do not exist where, had the occur
must have carried them ~
=; Finaly, that some designing hand has
sailed them with deliberate fraudulent intent
4 Furtnerr-ore, this is the work of no common
swlndieFs put OF one who has known enough to
selec. spot where every geological parallel add,
ed isesn probability of honesty.
Immediately after deciding that the
9 diamond discovery was a fraud. Mr.,
King announced the fact to Mr.. Janin.
: who Was still convinced Of the genuine.
: ness OF the discovery. ,Janin at once set
out for second exploration of the
. fields. examined all the points tested by
: Mr.. King, and made numerous analyti-
cal tests, which satisfied him that Mr..
King was right in his conclusions. that
the ground was not only not diamond
bearing, but absolutely worthless in any
respect, as connected with the production
OF gems, and that ne had been the victim
60 fraud.
Inc Two reports have pricked the bub-
ole, and the case is now in the hands of
the Grand Jury for investigations. 4
more patient, ingenious and bold swindIe
mas never been concocted in this country.
Every element of the plot was calculated
10 deceive. The spot selected for the
saltlng of the gems was geolosicallv
favorable. The company which was or
CAMEO was composed of gentlemen of
! wealth. and responsibility, who would not
znoWlngly lend their names to fraud.
Inc oIlgInators of the plot did
j not seh out until the locality had
Deen reported upon by experts en-
P,oycu nY the purchasers. The peo-
PIE OF california may we'll thank Mr..
: King that they have been saved from q
! e!eat 1n n calamity. The San Fran
cisco ChTontcte asserts that it was the in.
tcntion TO have put one hundred and
eigntYmilllons of diamond stock on the
markM and had it not been for Mr..
Aln&1 discovery, and his honesty and
IeAIle8nes IN announcing it, five long
MONT -December to May-would have
J eiaps1Q before the exposure could have
oeenx, made. During that time, with
capltailsts and ,nillionaires to aid the
scneme, and brokers to initiate the market
me slock would have risen to high figures,
the popular excitement would have