The Forest Republican. [volume] (Tionesta, Pa.) 1869-1952, 1878-09-18
A COLOSSAL DIAMOND SCHEME.

Its Promoter Severely Wounded In Ken
tucky-DIamOnds strewinE the Ground
by the Bushel - Leading Capitalists
Duped-The Exposure.
Noting street brawl in Elizabeth,
KY, during which a banker named
Arnold was severely wounded by anoth-
er banker, New York Sun correspond
ent gives the history Of remarkable
diamond swindle with which the wound
ed man was identified. The CORE
spondent says:
Philip Arnold, the man who engi-
neered the great diamond scheme of
1912 to success, lies in his beautiful
home at Elizabethtown, this State, with
load of buckshot in his right breast
and shoulder. Arnold had been out of
the public eye since Lent and Ralston
compromised their suit against him for
$3.50, 900 cash, yet he has made himself
prominent man among his neighbors,
and his bank is the most hourishing in
that section of Kentucky. He enter
tains largely, his stable is noted for its
fast stock, and his fruit farm is the boast
of Hardin county. Though he got his
wound in the course of a promiscuous
street fight, and though another citi-
zen, passive bystander, was perhaps
mortally wounded by a shot from Ar
nold's pistol, fancy that no very vigor-
GUS prosecution will be made against
him.
1t is hard to say Just why the man has
come to be in such fair repute among a
crime of the Arnold sort. They forgive
kON soIn II
honesty or the suspicion of dishonesty.
Perhaps it was the very daring of it that
found favor in the Kentucky heart. And
it was the most daring swindle since
George Laws South Sea scheme.
Besides Arnold was a Kentucky boy,
and his neighbors at Elizabethtown,
who knew his respectable father before
him, fancy that Aruold's scheme may
not have been so black as it was painted,
and they gave him the benefit of the
doubt. He was hatter's apprentice in
Elizabethtown, but went to California
when lad. What he did during the
interval is not clearly known, but he
suddenly appeared in Elizabethtown six
or seven years ago and opened big
account in the local bank; but before
that it had been reported that he had
discovered a new Golconda somewhere
among the Western mountains, and was
only in Kentucky to enjoy some part of
the millions he had gained. Then after
while came the exposure. J. B.
Cooper, the San Francisco bookkeeper,
made oath that Arnold had planned the
swindle and had persuaded him to help
in it.
Arnold had sailed for London with
some $40, 600 in his pocket. On board
the vessel he had bribed two sailors with
$500 apiece to go out among the Lon
don jewellers on their arrival there and
purchase what they could of diamonds
in the rough. In this way he got to-
gether $37, 900 worth of cheap stones
something like bushel of them and
sailed back again flor San Francisco.
Several months later George d. Rob-
erts, Gen. George S. Dodge, William
M. Lent, and William Ralston, all nota-
BILE among the wealthy spectators of
California, we're successfully let into
the tremendous secret that Arnold and
one Slack-also from Elizabethtown,a and
playfellow of Arnold's when boy
while prospecting in the mountains, had
stumbled upon a valley in which dia-
monds, rubies, emeralds, sapphires, and
gems of all kinds and values were to be
picked up as pebbles along the ocean
beach. They had brought back all they
could carry, and bag full of the jewels
would be emptied before the astonished
beholder. At Roberts house, Gen.
Dodge said that they covered one end of
the billiard table an inch deep.
These California financiers invested a
large sum almost at the first sight of the
Jewels. Then Arnold and Gen. Dodge
went on to New York and laid their
scheme for forming a stock company
with $40, 600, 900 capital before certain
chosen erich men of the metropolis.
These were Mr.. s. Il. M. Barlow, Mr..
Augustus Belmont, and Mr.. Charles
Tiffany, of the great iewelry firm. Ar
mold had brought his bushel of gems
with him and carried them from the
Fifth Avenue Hotel to Mr.. Barlow's
Office and back again wrapped up in
brown paper, and that again in little
red bag. They were daily spread out on
the office table, and Mr.. Tiffany was in
trusted with some of them to test. He
was incredulous, for, as he said, there
was curious diversity in the Jewels to
have all come from the same locality.
Mr.. Belmont also fought shy of invest
ment, but Mr.. Barlow, Gen. Mcclellan,
and perhaps others in New York, bought
from $50, 900 to 800, 900 of the stock.
An expedition, equipped with arms,
provisions, and baggage for a sixty
days trip rendeyvoused at Denver, Col
orado. Henry Janin, the best known
and most trusted expert on the Califor-
MIA coast, had been engaged to superin-
tend the investigation, and with Gen.
Dodge, Harpending, another California
capitalist who had large block of dia-
mond shares; Arnold and a young
Englshman named Rubery, started from
Denver, May %, 1872, out into the will
derness. Arnold had positively declined
10 give even a hint Of where his mesa