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Tuesday, July 24, 2012

The Great Arizona Diamond Swindle


Ship Rock close to the diamond fields


The guys that dreamed up the Great Arizona Diamond Swindle sure did a good job of it, and one that sucked in some smart money from both coasts.  Its locality was way out in the boonies of New Mexico.  Bluntly it was salted with uncut stones from Africa where vast amounts of diamonds were found in the newly discovered kimberlite deposits.  The so-called rubies that accompanied the diamonds turned out to be garnets that were mistaken for rubies. The swindlers salted so many diamonds of the property that even after the swindle was exposed people were still finding diamond crystals on the site.

This was a well organized swindle based on the idea in many American’s heads that the West was a treasure house of riches waiting to be tapped.  At the time companies were organized to tap these riches, and the locality the swindlers chose in New Mexico was made for a swindle.  At this locality there were not only diamonds, but rubies, emeralds and sapphires too.  This scheme got off the ground in 1870 that was represented in San Francisco by Phillip Arnold and John B. Slack who claimed to have found precious gems in the Territory of New Mexico.  On their part they showed off more then 80,000 carats of rubies and a large quantity of diamonds including one crystal weighing 108 carats.

A large group of investors visited the diggings and collected a large number of gemstones that were literally scooped off the ground, and returned to San Francisco where the gems were put on display so other suckers could be reeled into the scheme. At the time someone remarked it was not expected they could pick them up by the bushel, but there they were.

They even roped in the Federal Government because on May 10, 1872 a bill was passed in Congress in the interests of the diamond miner who had made the discovery.

A larger expedition was planned that included a mining expert that had graduated from the Royal School of Mines in Freiberg, Germany.  This expedition was expected to last for sixty days.  This expedition left Rawlings, Wyoming on May 28, 1873 going southwest to the gem mines, but after a while they claimed they had lost their way and proceeded northwest for several days.  Some of the party began to doubt the truth od the scheme, but finally after a circuitous route then finally arrived at the site, and the mountain promised to be a real Golconda.  Everybody found gems, and gems aplenty with their hope rising accordingly.

A third party set out late in the season to return to this fabulous locality, but never got there, and this expedition was abandoned.  When Clarence King the head of the United States Geological Survey heard this third expedition had come to naught he organized an expedition of his own.  It was King’s expedition that proved the whole scheme was a Humbug and brought the whole scheme crashing down around the ears of the plotters. It's estimated this pack of crooks got around $750,000 in 1870s dollars.

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