The Great Diamond Hoax - Asbury Harpending, Edited by James H. Wilkins

We returned direct to New York; that is to say, all of the original party except Rubery and Slack. Of course, Mr. Ralston was advised by wire of the substantial results of our examination. Likewise, of course, we advised our New York friends who had been previously in our confidence, that our best expectations were exceeded. Where so many are cognizant of a secret, it very soon becomes public property, and in a brief space of time all New York and, for the matter of that, all the civilized world, knew that vast diamond fields had been discovered on the North American continent, had been inspected by a mining engineer of great reputation and pronounced genuine. Something like the profound excitement that stirred the mighty Argonaut movement began to take form everywhere.

As an evidence of this fact, almost immediately after I had reached New York, Baron Rothschild of London, who had previously made inquiries of us, arranged for what amounted to a cable interview. He informed me that he had just received a cable from Mr. Ralston. (This, I presume, related to the agency he accepted at a later date.) He stated further that he had heard of the Tiffany appraisement, also that I had personally made a visit to the mines with a leading expert. He wished me to confirm the result of our observations. I answered Baron Rothschild that half the truth had not been told; that the diamond fields were rich beyond calculation; that every doubt and shadow of a doubt had been absolutely removed, so far as I was concerned. The Baron thanked me, saying he was pleased to hear the good news.

In fact, after the Tiffany valuation, the personal examination of the mines and the statements of Mr. Janin before he promulgated his famous report, every suspicion gave way to an unbounded enthusiasm. Mr. Lent afterward made a written statement, still in existence, that Mr. Janin assured him he could wash out a million dollars' worth of diamonds a month with the assistance of twenty rough laborers. Mr. Janin never went that far with me; in fact, he afterward questioned the entire accuracy of Mr. Lent's figures, and Mr. Lent himself admitted that he might have made an error. But before leaving the diamond fields Mr. Janin assured me that the discovery location alone, which we had partially examined, was certainly worth many million dollars, with countless possibilities besides.

Who wouldn't become enthusiastic with such a showing? It fired the imagination of all financialdom. It upset the caution of the wisest heads in the old world, as well as in the new. There was a wild scramble to get on board, almost at any price.

Some statements have been made to the effect that I used my influence to have the headquarters of the company at New York instead of San Francisco. There is this much truth, to the statement, that it was debated very seriously. This was a plain matter of business, a question of dollars and cents - not patriotism. In launching a concern of such tremendous importance, probably destined to affect profoundly a vast industry, it is always deemed vital to have the support of the largest financial center possible. New York was then, as now, the great haunt of capital in the United States. Many of its leading men were only too anxious to identify themselves with the new exploitation. I did not think that the question of headquarters was one deserving mature consideration, especially inasmuch as San Francisco, controlling the stock issues, would necessarily be the great beneficiary in the long run.

But this point was easily settled. Mr. Ralston and myself owned a majority of the property. This we had held from the outset. I simply telegraphed to Mr. Ralston, laying the matter before him, without prejudice. Mr. Ralston's answer was decisive. He said that San Francisco stood ready to furnish any amount of capital required. There was no further argument on that head. To San Francisco the headquarters went, but this much was conceded to New York - that branch offices were to be maintained in that city, and that Samuel P. Barlow and General George B. McClellan were to be resident directors; which arrangement was later carried out. The New York connection was clearly indicated by the company's name.

The scene now shifted to San Francisco, where Mr. Ralston had the situation well in hand. A company was regularly organized under the laws of California, entitled the San Francisco and New York Mining and Commercial Company, with a capital stock of $10,000,000, divided into 100,000 shares. Its powers were of the largest possible description; not alone to engage in the business of mining and owning mines and their accessories, but also to engage in every class of commercial business, including the preparation of precious stones for the general market. The apparent intention of the organizers was to move the great lapidary establishments of Amsterdam to the Pacific Coast, and the truth is that this design caused no small concern in the Low Countries, where the cutting of gems is an industry hundreds of years old.

San Francisco was certainly ripe for the new company. Hardly a business man of any considerable wealth would not have considered it a rare privilege to be admitted to participation in the enterprise on the ground floor. It was only a case of choosing the highest class of names in the community, to launch the great undertaking under the most brilliant auspices. Twenty-five gentlemen, representing the cream of the financial interests of the city of San Francisco, men of national reputation for high-class business standing and personal integrity, were permitted to subscribe for stock to the amount of $80,000 each, and this initial capital of $2,000,000 was immediately paid to the Bank of California.

At a stockholders' meeting the following board of directors were elected to manage the affairs of the corporation: Wm. M. Lent, A. Gansl, Thomas Selby, Milton S. Latham, Louis Sloss, Maurice Dore, W. F. Babcock, William C. Ralston, William Willis. George B. McClellan and Samuel P. Barlow were at the same time elected directors, with headquarters at the City of New York. Mr. Lent was then chosen president, W. C. Ralston, treasurer, and William Willis, secretary. David D. Colton resigned from his position with the railroad to become general manager.

Only old timers can recognize what these names meant. All the owners of them are long since dead. Some of them went into a financial eclipse before they died. But in 1872 they stood as the last word in the financial and commercial world of the Pacific Coast. I might mention here for the benefit of the later generation that A. Gansl was the representative of the House of Rothschild on the Pacific Coast.

Such was the lineup. The biggest men of San Francisco were solidly behind the enterprise. Two distinguished citizens of New York represented the company as resident directors there, and in the Old World the famous house of Rothschild became the company's agents. The interest of Slack and Arnold was wiped out finally by a cash payment of $300,000, which was turned over to Arnold personally, he having a properly executed power of attorney to act for Slack. Thus, the decks were cleared.

Home -> James H. Barry Press -> The Great Diamond Hoax - Chapter XXIX



Chapter XXIX. Public Soon Hears of Wonderful Find and Gossips Carry News Until Whole World Is Keenly Interested. Company to Develop Diamond Fields Includes Great Lords of Finance and One Noted Union General. We returned direct to New York; that is to say, all of the original party except Rubery and Slack. Of course, Mr. Ralston was advised by wire of the substantial results of our examination. Likewise, of course, we advised our New York friends who had been previously in our confidence, that our best expectations were exceeded. Where so many are cognizant of a secret, it very soon becomes public property, and in a brief space of time all New York and, for the matter of that, all the civilized world, knew that vast diamond fields had been discovered on the North American continent, had been inspected by a mining engineer of great reputation and pronounced genuine. Something like the profound excitement that stirred the mighty Argonaut movement began to take form everywhere. As an evidence of this fact, almost immediately after I had reached New York, Baron Rothschild of London, who had previously made inquiries of us, arranged for what amounted to a cable interview. He informed me that he had just received a cable from Mr. Ralston. (This, I presume, related to the agency he accepted at a later date.) He stated further that he had heard of the Tiffany appraisement, also that I had personally made a visit to the mines with a leading expert. He wished me to confirm the result of our observations. I answered Baron Rothschild that half the truth had not been told; that the diamond fields were rich beyond calculation; that every doubt and shadow of a doubt had been absolutely removed, so far as I was concerned. The Baron thanked me, saying he was pleased to hear the good news. In fact, after the Tiffany valuation, the personal examination of the mines and the statements of Mr. Janin before he promulgated his famous report, every suspicion gave way to an unbounded enthusiasm. Mr. Lent afterward made a written statement, still in existence, that Mr. Janin assured him he could wash out a million dollars' worth of diamonds a month with the assistance of twenty rough laborers. Mr. Janin never went that far with me; in fact, he afterward questioned the entire accuracy of Mr. Lent's figures, and Mr. Lent himself admitted that he might have made an error. But before leaving the diamond fields Mr. Janin assured me that the discovery location alone, which we had partially examined, was certainly worth many million dollars, with countless possibilities besides. Who wouldn't become enthusiastic with such a showing? It fired the imagination of all financialdom. It upset the caution of the wisest heads in the old world, as well as in the new. There was a wild scramble to get on board, almost at any price. Some statements have been made to the effect that I used my influence to have the headquarters of the company at New York instead of San Francisco. There is this much truth, to the statement, that it was debated very seriously. This was a plain matter of business, a question of dollars and cents - not patriotism. In launching a concern of such tremendous importance, probably destined to affect profoundly a vast industry, it is always deemed vital to have the support of the largest financial center possible. New York was then, as now, the great haunt of capital in the United States. Many of its leading men were only too anxious to identify themselves with the new exploitation. I did not think that the question of headquarters was one deserving mature consideration, especially inasmuch as San Francisco, controlling the stock issues, would necessarily be the great beneficiary in the long run. But this point was easily settled. Mr. Ralston and myself owned a majority of the property. This we had held from the outset. I simply telegraphed to Mr. Ralston, laying the matter before him, without prejudice. Mr. Ralston's answer was decisive. He said that San Francisco stood ready to furnish any amount of capital required. There was no further argument on that head. To San Francisco the headquarters went, but this much was conceded to New York - that branch offices were to be maintained in that city, and that Samuel P. Barlow and General George B. McClellan were to be resident directors; which arrangement was later carried out. The New York connection was clearly indicated by the company's name. The scene now shifted to San Francisco, where Mr. Ralston had the situation well in hand. A company was regularly organized under the laws of California, entitled the San Francisco and New York Mining and Commercial Company, with a capital stock of $10,000,000, divided into 100,000 shares. Its powers were of the largest possible description; not alone to engage in the business of mining and owning mines and their accessories, but also to engage in every class of commercial business, including the preparation of precious stones for the general market. The apparent intention of the organizers was to move the great lapidary establishments of Amsterdam to the Pacific Coast, and the truth is that this design caused no small concern in the Low Countries, where the cutting of gems is an industry hundreds of years old. San Francisco was certainly ripe for the new company. Hardly a business man of any considerable wealth would not have considered it a rare privilege to be admitted to participation in the enterprise on the ground floor. It was only a case of choosing the highest class of names in the community, to launch the great undertaking under the most brilliant auspices. Twenty-five gentlemen, representing the cream of the financial interests of the city of San Francisco, men of national reputation for high-class business standing and personal integrity, were permitted to subscribe for stock to the amount of $80,000 each, and this initial capital of $2,000,000 was immediately paid to the Bank of California. At a stockholders' meeting the following board of directors were elected to manage the affairs of the corporation: Wm. M. Lent, A. Gansl, Thomas Selby, Milton S. Latham, Louis Sloss, Maurice Dore, W. F. Babcock, William C. Ralston, William Willis. George B. McClellan and Samuel P. Barlow were at the same time elected directors, with headquarters at the City of New York. Mr. Lent was then chosen president, W. C. Ralston, treasurer, and William Willis, secretary. David D. Colton resigned from his position with the railroad to become general manager. Only old timers can recognize what these names meant. All the owners of them are long since dead. Some of them went into a financial eclipse before they died. But in 1872 they stood as the last word in the financial and commercial world of the Pacific Coast. I might mention here for the benefit of the later generation that A. Gansl was the representative of the House of Rothschild on the Pacific Coast. Such was the lineup. The biggest men of San Francisco were solidly behind the enterprise. Two distinguished citizens of New York represented the company as resident directors there, and in the Old World the famous house of Rothschild became the company's agents. The interest of Slack and Arnold was wiped out finally by a cash payment of $300,000, which was turned over to Arnold personally, he having a properly executed power of attorney to act for Slack. Thus, the decks were cleared.

Thomas S. Selby Founder of Selby Smelting Works, director Diamond Co.