|Home -> James H. Barry Press -> The Great Diamond Hoax - Chapter XXII|
Briton With Oriental Imagination Seeks to Lure Investors With Tales of Mountain of Silver.
New Promotion Company Tells Truth, But Editor Samson Frightens Off Public at Critical Moment.
When I reached Salt Lake City after examining the Emma mine, I found awaiting me a telegram from Mr. Ralston to the effect that the president of the Bank of England, a Mr. Green, then traveling in the Far West, would be in Cheyenne on a certain day. He asked me to meet the gentleman, and in his name, as president of the Bank of California, extend to the visiting banker any courtesies that his time and inclination might permit. So I journeyed to Cheyenne in quest of Mr. Green.
I stopped at the principal hotel and one of the first persons my eyes rested on was about the most impressive looking man I ever saw. He must have been six feet six in his stocking feet; he was richly caparisoned, handsome, debonair, evidently a Briton and looked like the president of the Bank of England and the Prince of Wales rolled into one. I took a chance, approached the stranger and asked him if he were Mr. Green, president of the Bank of England. The gentleman laughed and said I had made a close guess, but had missed the mark a trifle. He introduced himself as Mr. Morgan, an Englishman of leisure, making a sight-seeing tour of the Far West. Later I discovered that Mr. Green had passed on without stopping and was then well along on his journey east.
One of my objects, besides inspecting the Emma mine, was to examine a property I had acquired in New Mexico near the headwaters of the Gua river. I had made an investment on the strength of huge outcroppings of mineralized ledges that gave indications of a great mining property. But besides that there was a large valley, covered waist deep with grass, interspersed with black walnuts into which luxuriant wild hops twined, and traversed by a fine stream of water. In addition to the mining claims, I had secured the water rights and taken the preliminary steps to acquire a vast acreage of fertile land. Development work had been going on for some time and I was anxious to see for myself just how the property was showing up. I had several chats with Mr. Morgan after our first odd meeting, and learning of my projected trip to New Mexico he asked and readily received my consent to go along.
Arrived at our destination, Mr. Morgan at once became infatuated with the country-ledges, land, water and all. Some of the prospect work showed ore of high values. The Englishman took many samples and had them tested by my assayer. My impression is that, like every beginner in the mining business, he always chose the best. Finally, he made me a business proposition. He said he had important financial connections in England, that a great diversified property like this could be floated for an immense sum - named $3,000,000 as a fair estimate, and offered to form a company on an equitable basis to finance and develop its resources.
With a cooler head, I advised Mr. Morgan that the mines were still only in the "prospect" state; that they might turn out something great, but more likely nothing at all. Concerning the land and water, there was no question. Properly handled and developed their value must be great.
After some negotiations, we hit upon a bargain. Morgan was to go to England post haste. I was to follow by more leisurely stages, a month later, and by the time of my arrival everything was to be arranged.
I stopped a few days in New York to see the sights. While there I met another Englishman by the name of Dalton, a member of Parliament. I told the gentleman something of my contemplated trip to England. When I mentioned the name of Morgan, he seemed a bit amused. He said Morgan was all right; that he had excellent family connections, but that he hardly figured as a financier. He said that his imagination was of an oriental type, prone to exaggeration and very apt to make a mess of any large transaction. "If Mr. Morgan fails," he added, "you had better come to me."
When I arrived in England, I found that Mr. Dalton's prediction had already come true. Morgan had issued a prospectus that put the tales of Baron Munchausen in the shade. He actually described the mines as mountains of silver, and by his very extravagance of statement doomed the enterprise from the start. Meanwhile, I had various meetings with Mr. Dalton, who was a man of standing in the business world and through him met a great firm of brokers, Coates and Hanky. Mr. Coates was the son of a manufacturer who won fortune and immortality by his exploits in spool cotton. These gentlemen agreed to place my proposition before the investing public. Morgan floundered around for a short time but was soon discouraged. I offered him an interest in the new exploitation, with the understanding that he keep mute.
Coates and Hanky now undertook the enterprise in a business fashion. The New Mexico Land and Silver Mining Company was formed, with a high class directorate. One of the directors, I recollect, was a retired admiral of the British navy. The prospectus was flattering enough, but would stand investigation. Among other things, it dwelt more on the unquestioned value of the land and water than the probabilities and possibilities of the mines. The capitalization was six hundred thousand pounds.
The London Times was then, as now, the great newspaper authority of England. Its financial editor, whose suggestive name was Samson, was currently said to have more power than the Queen. Five lines favorable from Samson's pen in the financial columns of the Times assured the success of an enterprise. Five lines unfavorable were equivalent to a death warrant. It was customary with promoters to submit their plans to Mr. Samson before submitting them to the public. The directors of the New Mexico Land and Silver Mining Company followed this custom and received a somewhat cryptic answer which, however, they construed to be favorable.
The issue was brought out with the skill of trained hands. Everything pointed to a successful outcome. But the very next day, Samson came out with a doublebarreled blast. Before the Times reached the country, a small avalanche of subscriptions poured in. But in the city, after a large first day's business, the promotion fell flat. Nevertheless, the directors stood manfully by their guns. They received space in the Times to answer. They put up a bulldog sort of fight. The old admiral in particular was as belligerent as when he paced a man-of-war. There was somewhat of a reversal of public opinion in our favor. More, than half the capital stock was subscribed for and we might have pulled the issue through, but it seemed to me that the company was overburdened to start with, that it must labor under too many handicaps of distrust to operate successfully, and against the judgment of the directors I withdrew the properties and the incident was closed. All the subscribers received their money back, without cost or abatement. No investor lost a cent.
An incident shortly after my arrival served to illustrate in a pleasant way my relations with W. C. Ralston at that time. I was asked to call at the Oriental Bank, the agency for the Bank of California, and going there the following day, was ushered into the presence of the president, an impressive looking man of affairs. "I have here," he said, "a cable from W. C. Ralston, president of the Bank of California, advising us to give Mr. A. Harpending credit for any sum he wants. This is an unlimited order and as you probably intend to make heavy drafts on us, I thought it advisable to inquire beforehand how much you were likely to want." I laughed and told him I had all the money I needed, but if I happened to want accommodation I would certainly call for more. The story is immaterial in itself, except as an illustration of Ralston's offhand way of doing business, and his confidence in me as his friend.
Another pleasant incident was the renewing of my acquaintance with Alfred Rubery, who again becomes a leading figure in this story. He was the same old Rubery of the "Chapman days." John Bright, his illustrious uncle, was at the height of his prestige and power, and Rubery himself was in the swim with the biggest kind of social and political fish.
And still another incident was that I came in personal contact with the famous Baron Grant, the overlord of financial London.