Field of Schemes

A gem of a story about diamond mines--real and fake!

Associated Press, September 27, 1997: A dime-sized finished diamond that tips the scales at more than 16 carats, found in a Colorado mine, may be the biggest cut stone of its kind from North America.

Rocky Mountain News, November 19, 1872: The Denver Diamond Company has "had prospectors in the field for some time past, and are fully assured of the richness of these western territories in precious stones. They have possession of some of the richest ground in the diamond region. Their prospectors, who have recently returned to Denver, bring the most positive reports of discoveries."

Dan Hausel, senior geologist, State of Wyoming: In my opinion, the Great Diamond Hoax delayed the discovery of diamonds in Colorado. For decades after, nobody in his right mind would have believed diamonds could have been found anywhere in this region. People would've been laughed out for proposing that there were diamonds in Colorado.

In 1977 and 1978, corporate geologists told me that what was going on was just another hoax.

In the summer of 1871, John Slack and Philip Arnold stepped off the west-bound Central Pacific Railroad train at Lathrop, California, where they met up with a San Francisco businessman named Asbury Harpending.

No one in the party was burdened by a sterling character. Harpending was trying to rehabilitate his reputation, which had declined considerably after his conviction for privateering during the Civil War. Yet at their meeting, it was Slack and Arnold, a barely literate native of Kentucky who'd been drawn to California by the gold rush, who looked the worse for wear.

"Both were travel-stained and weather-beaten men, and had the general appearance of having gone through much hardship and privation," Harpending later recalled in his autobiography. "They said they had luckily struck a spot which was enormously rich in stones, which they estimated to be worth two million dollars."

That was enough information for Harpending, who was always looking for an investment with a quick and multiple turnaround. Several days later he traveled to New York, where, armed with the promise of easy riches, he lured a who's who of the city's rich and powerful to a lawyer's office on the East Side. Included in the group was Charles Tiffany, of the jewelry house; former Union general George McClellan; Horace Greeley, owner of the New York Tribune; and a handful of prominent New York bankers. Harpending dramatically emptied a bag onto a table in the middle of the businessmen and relished their reaction.

"Tiffany soberly sorted the stones into little piles, held individual stones up to the light with the air of a professional connoisseur, gave them a thorough examination, and displayed all the nuances of the jeweler's art," noted one account of the meeting. "After satisfying himself of the genuineness of the stones before him, he confirmed that they were, indeed, diamonds, rubies, emeralds, and sapphires...Two days later, Tiffany returned to say he had placed a valuation of $150,000 on the entire lot."

As the appraised gems accounted for only a tenth of the stones that Arnold and Slack supposedly had gathered in only a matter of days, word of a mine of unimaginable wealth whipped through New York like a strong wind. Back in San Francisco, Arnold was under intense pressure to reveal the site of the gem fields but managed to deflect questions about its location for several months, claiming that deep snows and frigid temperatures made travel there impossible.

While they waited for the first thaw, the moneymen took steps to ensure that they wouldn't have to share the lucrative find with interlopers or, for that matter, the public at large. They formed a prospecting company and hired Henry Janin, then the country's most prominent geologist, to confirm the find.

In exchange for 1,000 shares in the new company, they also bought the services of another general serving in Congress, Benjamin Butler. That partnership soon paid off; in May 1872, at Butler's urging, Congress passed "An Act to Promote the Development of Mining Resources in the United States."

The new law contained wording favorable to anyone thinking of prospecting that summer: "All valuable mineral deposits in lands belonging to the United States, both surveyed and unsurveyed, are hereby declared to be free and open to exploration and purchase." In case anything about that was too vague, three months later the U.S. attorney general clarified that "the terms 'valuable mineral deposits' used in the act of May 1872...include diamonds."

By early summer the investors were well on their way to raising the $10 million they calculated would be necessary to clean out the diamond fields. But they were most eager to see the treasure for themselves. So on June 1, 1872, a group of a half-dozen disembarked from the train in Rawlins, Wyoming, mounted horses and fell in behind Arnold and Slack as they headed to the fabulous discovery.

The trip took four days. "The spot was at a high elevation, about 7,000 feet above sea level, I think," Harpending wrote. "Physically, it embraced a small mesa or rather gently sloping basin, littered here and there with rocks comprising about thirty or forty acres."

Although most of the riders didn't know it at the time--Arnold and Slack had taken a purposely circuitous route--the location turned out to be in northwestern Colorado, on a 3,000-acre mesa just south of the Wyoming line and barely east of the Utah border.

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