Hometown History

Hometown History

San Francisco, California: The Great Diamond Hoax of 1872 | Hometown History

In 1871, two Kentucky drifters named Philip Arnold and John Slack walked into a San Francisco mining broker's office carrying a buckskin pouch of rough stones: diamonds, rubies, and sapphires they claimed to have pulled out of American soil. What followed was one of the most audacious swindles in American history. By Asbury Harpending's account, the stones were pronounced genuine by Charles Lewis Tiffany himself, though only a tenth of the sample was sent for appraisal. Civil War General George McClellan, Congressman Benjamin Butler, and newspaper editor Horace Greeley joined as investors only after the appraisal came back. Mining engineer Henry Janin, who had inspected more than 600 mines and never endorsed a failure, called the diamond field wonderfully rich. Bank of California founder William Ralston and a syndicate of the wealthiest men on the West Coast paid Arnold and Slack $660,000, roughly $17.7 million today. The scheme came apart only when geologist Clarence King, leading a federal survey of the fortieth parallel, went to the site near the Wyoming and Colorado border and found cut gems mixed in with the rough ones. The field had been salted with stones bought in London and minerals gathered from Navajo country in the American Southwest. Timeline of Events 1829: Philip Arnold is born in Hardin County, Kentucky. Early 1871: Arnold and Slack deposit their stones at the Bank of California. 1871: Charles Tiffany examines a tenth of the sample and pronounces the stones genuine; the appraisal comes back at $150,000. Summer 1871: Arnold travels to London and buys rough gems from Leopold Keller. June 1872: Henry Janin inspects the salted mesa near the Wyoming and Colorado border and declares it wonderfully rich. Summer 1872: Arnold and Slack are paid $660,000 for their claims. October 1872: Clarence King investigates and finds cut gems and impossible gem ratios. November 25, 1872: King's telegram exposes the fraud and the hoax collapses. 1873: Arnold returns $150,000, keeps the rest, and becomes a banker in Elizabethtown, Kentucky. 1875: William Ralston drowns in San Francisco Bay during his customary swim; whether it was a stroke or something he chose remains disputed. February 8, 1879: Arnold dies of pneumonia after being shot the previous August. 1896: John Slack dies in White Oaks, New Mexico, working as a coffinmaker. Historical Significance The Great Diamond Hoax exposed a fatal weakness in Gilded Age investment culture. The same hunger for the next big strike that had built San Francisco could be turned against its wealthiest citizens. Charles Tiffany's humiliation led directly to his hiring of George Frederick Kunz, America's first true gemologist. Clarence King became a national figure and was later appointed the first director of the United States Geological Survey. The case proved that scientific evidence could beat speculation and greed, at least once. The salted mesa is still called Diamond Peak, and hikers occasionally turn up remnants of Arnold's planted garnets more than 150 years later. Sources Smithsonian Magazine WyoHistory.org, Wyoming State Historical Society Newspapers.com archives of 1872 San Francisco press coverage Reports of the United States Geological Exploration of the Fortieth Parallel If you liked this: Episode 174, Osage County, Oklahoma. Another story about what sudden mineral wealth does to the people standing closest to it. Hometown History explores forgotten stories from small-town America. The overlooked events, hidden triumphs, and buried tragedies that shaped the country we live in. New episodes every Tuesday. Find every episode at mythsandmalice.com/hometown-history Episode 212 | Hometown History | Hosted by Shane Waters Advertising Inquiries: https://redcircle.com/brands Privacy & Opt-Out: https://redcircle.com/privacy