By Phil Roberts
One day in 1871 two miners, Philip Arnold and John Slack, walked into a bank in San Francisco and asked that their bags laden with large rocks be placed in a safe deposit box. One blurted out that the rocks were uncut diamonds. The stage was set for the “Great Diamond Hoax” and the locale of the purported find was the two-year-old Wyoming Territory.
The two miners initially refused to give details about the diamonds but after some coaxing, several prominent California financiers got them to tell their story. The two weather-beaten miners finally agreed to take two investigators to the site where diamonds, rubies and sapphires were lying right on top of the ground. The investigators chosen by the financiers had to agree to be blindfolded for the last crucial miles to the site.
After a long train ride to somewhere in Wyoming the investigators, with their eyes covered, were led on a zig-zag course where they found exactly what the miners had said. Diamonds were so plentiful that a man could kick them loose with his boot. When the party returned to San Francisco, one financier sent samples to a famous New York jeweler. The gems were authentic and of good quality, the report said.
Excitement grew. The financiers formed a corporation and hired the foremost mining expert in the world to check out the site. The expert, Henry Janin, a Californian who had studied mining in Europe, accompanied Arnold, Slack and three others to the “diamond field.” They got off the train at a small station near Rawlins and after four more days of travel by horse, they came to the site. It seemed too good to be true but after two days of investigating, Janin was convinced. (He had been given a significant share of company stock before the trip.)
When word got out that a huge diamond field had been found, speculation fever mounted. The richest men in New York and California (and even Baron Rothschild in Europe) purchased stock. Horace Greeley and Gen. George McClellan eagerly bought in, too, while the two miners sold their interests for $300,000 apiece. Arizona and New Mexico were said to be the sites of the yet-undisclosed mine location but company insiders knew it was in Wyoming. A map in company headquarters in New York showed the features of the site already named Ruby Gulch, Diamond Flat and Sapphire Hollow.
By October 1872, newspapers around the country including the Laramie Independent were printing articles on “Lessons in Diamond Mining.”
Clarence King, a government survey employee, became interested in the curious circumstances. He decided an investigation was in order and after gathering clues from a chance meeting with company officials, King concluded that Wyoming was the location of the diamond find.
Even though winter was approaching and travel would be treacherous, King knew the story had to be substantiated before wild speculation sent the markets out of control. From his experience as a survey leader in the West, he pinpointed the areas as southeast of Rock Springs in what is now Sweetwater County. His guess proved correct when he and two associates, after a brief search, found a water claim notice signed by Henry Janin tacked to a tree. Excavations were barely necessary because they, too, saw diamonds lying on the ground. King was puzzled by the fact that for each diamond found, a dozen rubies were also found. When he spotted one diamond perched on a knob of a rock, it was enough to convince him that the area had been “salted.”
Diamond hysteria was mounting nationwide and King took the first train back to San Francisco to tell company officials of his findings before word leaked out and short sales of company stock caused even more problems. The company officials were convinced that they had been duped. Other evidence of a hoax had been accumulating. An investigation revealed that Arnold had visited Amsterdam the previous year and had purchased cast-off diamonds from South Africa for about $35,000.
The truth was finally out. Press reports not only condemned Arnold and Slack, the perpetrators of the hoax, but also the men who had been duped. While no Wyoming citizen was implicated in the scheme, the press reports tainted the young territory’s image.
Philip Arnold returned to his native Kentucky where he purchased a bank with part of the $300,000 he had received from the scheme. Although he successfully fought attachment by law officers, he died the next year after suffering a wound in a fight not related to his diamond hoax adventures. His partner, John Slack, disappeared when the hoax was uncovered and was never heard from again.
Clarence King the hoax discoverer became the first director of the U.S. Geological Survey in 1879. He died Christmas Eve, 1901, after a distinguished career.
Buffalo Bones: Stories from Wyoming’s Past
This article was written in 1979 and syndicated in the first series of the column, Buffalo Bones: Stories from Wyoming’s Past, sent to some 35 Wyoming newspapers by the Wyoming State Archives, Museums and Historical Department in Cheyenne