Diamond hoax of 1872
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The diamond hoax of 1872 triggered a brief diamond craze along the borders of Wyoming and Colorado, USA.
In 1871, would-be-prospectors and cousins Philip Arnold and John Slack traveled to San Francisco. They reported that they had found a diamond mine and produced a bag full of diamonds as a proof. They deposited the diamonds on the vault of the Bank of California.
Prominent financiers heard about the find and convinced the two to speak. At first Arnold and Slack were reluctant but eventually offered to lead investigators to the field in Wyoming. Investors hired two mining engineers to accompany the cousins to examine the diamond field. The cousins forced the engineers to travel blindfolded to protect their find. Eventually the engineers saw a huge diamond field with various gems on the open ground. One could scoop up gems with his bare hands.
When the engineers made their report, more businessmen expressed interest. They included William C. Ralston, Horace Greeley, George McClellan, Baron von Rotschild, General George S. Dodge and Charles Tiffany of Tiffany and Co. Tiffany's evaluated the stones as being worth $150,000. They convinced the cousins to sell their interest for $660,000 and formed their own mining company. Financiers sent mining engineer Henry Janin, who had also bought stock in the company, to reevaluate the find, and he sent wildly optimistic reports to the press.
US government geologist Clarence King heard about the find and decided to inspect the unusual field with his team. King uncovered a stone that was partially polished and definitely not natural. He also noticed that the field had diamonds, rubies, emeralds and sapphires in the same area and many of the gems were clearly in places they could not have reached in any natural means. King contacted the investors, who had to face the fact they had been defrauded.
Further investigation showed that Arnold and Slack had bought cheap cast-off diamonds, refuse of gem cutting, in London and Amsterdam for $35,000 and scattered them to "salt" the ground. Most of the gems were originally from South Africa.
Arnold returned to his home in Elizabethtown, Kentucky and became a successful businessman and banker. Would-be investors sued him, and he settled the cases for an undisclosed sum. Years later he died of pneumonia after he was wounded in a shootout with a rival banker.
John Slack disappeared into the ether. In the 1890s it was discovered that after the unveiling of the hoax Slack made his way to St. Louis, where he took up employment constructing caskets. He became an undertaker in New Mexico, where he died in 1896 at the age of 76.
