USA > Colorado > History of the State of Colorado, Volume II > Part 11
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He was re-elected in September, 1872, by a majority of thirteen hundred and thirty-six over his opponent, Ex-Governor A. C. Hunt.
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CHAPTER VI.
1872-HISTORY OF THE GREAT DIAMOND SWINDLE-UNIVERSAL EXCITEMENT-HOW THE PLOT WAS ENGINEERED-THRILLING REPORTS OF WONDERFUL DISCOVERIES -GEMS WORTH MILLIONS-DISCOVERY OF A MYSTERIOUS CITY-DIAMOND STOCKS IN SAN FRANCISCO-GOVERNOR GILPIN'S LECTURE ON THE SUBJECT-JEWELS BY THE CART LOAD-CLARENCE KING EXPOSES THE FRAUD-FOREIGN BRILLIANTS PLANTED IN SUMMIT COUNTY, COLORADO-WHERE AND HOW THEY WERE OBTAINED-INTENSE INDIGNATION-PHIL ARNOLD PROPOSES TO OPEN COURT WITH A HENRY RIFLE-GAMBLERS AND GAMBLING.
Beginning in the month of May and running sporadically through the summer of 1872, mysteriously whispered reports of a nature well calculated to allure the unwary and to create widespread excitement, were circulated throughout the West hinting at the discovery at some point on the frontier, precisely where, was not revealed until after the first rumors had taken effect, of large deposits of diamonds, rubies, emeralds, sapphires and other valuable gems. When such tales are set afloat upon the whispering winds, they instantly become open secrets which, however apocryphal, thousands accept blindly and follow wherever they may lead. All reports of great discoveries, whether true or fictitious, invariably have this element of attractiveness ; the point is always in a wild region remote from existing settlements, and are generally announced by the same process as was employed in this instance.
Various localities were named without disclosing the true one. At length it began to leak out that the jewels were to be found in North- eastern Arizona. Indeed, all the signs pointed in that direction. As already indicated, the original rumors were vague and shadowy, there- fore extremely fascinating to the average intelligence. Large quantities
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of diamonds and rubies were said to have been gathered in 1869, by Maj. J. Cory French, agent for the Navajo Indians ; that they were scattered over the surface of the ground at points near the pueblos of the Moquis, about three hundred miles from Santa Fé, and that the fields were very extensive, covering an area of about forty miles square.
When the public mind had been thoroughly inoculated, each indi- vidual to whom the astounding secret had been imparted being sworn to secrecy, a man named Phil. Arnold, whom nobody knew, appeared in Laramie City, and while there caused himself to be "interviewed" by the editor of the Laramie "Sentinel," in which statements were published that electrified the country. As this constitutes the actual beginning of one of the most interesting phases of Western history, and was literally filled with startling surprises and phenomenal adventures, it is proper to follow its ramifications through its brief but dazzling career.
In the published account, Arnold announced himself to be the discoverer of wealth in precious stones which surpassed the wildest extravagances of the Arabian tale of Aladdin and the wonderful lamp. He declared that the diamond fields extended over a wide range of country in New Mexico and along the northern border of Arizona. Some three years previous he had been shown two large, rough dia- monds by a Pimas Indian in Arizona, and by him had been guided to the spot where they were found. Captain Slack, an old California miner, accompanied him. They worked the mines for two years, keep- ing the secret inviolate. Finally, two other Californians were informed of the find, and united with them in the scheme. They had extracted from their claim no less than two and a half million dollars worth of precious stones, about half of which had been deposited in the vaults of the Bank of California. This fabulous result was the work of but thirty days in the mines, that were as rich as the world renowned deposits of Golconda, which, according to Arnold, produced one hundred and thirty million dollars worth of sparkling stones in six months' time. He forgot to mention that Golconda was not a mine but a fortress,
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where the diamonds produced in the Madras presidency were deposited for safe keeping. He said the largest diamond taken out of the Arizona mines weighed one hundred and eight carats, for which, though uncut and unpolished, he had been offered ninety-six thousand dollars.
To establish his standing, and to verify his statements, this ingen- ious fabricator proceeded to inform the editor of the "Sentinel," who we may safely conclude was deeply absorbed in every detail of the astounding revelation,-that he stood at the head of a company com- posed of some of the wealthiest men in New York and San Francisco ; the Rothschilds, Gen. McClellan, S. L. M. Barlow and other distin- guished people had embarked their names and fortunes in the enterprise, having first satisfied themselves of its genuineness. Stock to the amount of two and a half millions had been issued and put upon the market, where it rapidly sold at forty dollars per share. Three thousand acres of land containing the gems had been surveyed and claimed as the prop- erty of this aristocratic corporation. Thousands were going to the fields, and they would soon be overrun by diamond hunters. To protect the interests of his company, he had sent to the coast for a guard of one hundred well-armed men who would pass through Denver, outfit in Pueblo, and proceed thence to the mines by the most practicable route. He indicated rather than stated, that the wonderful fields were on Flax Creek in the San Luis Valley. He gave a glowing description of great tracts of land literally glistening with diamonds in such marvelous abundance they could be shoveled up. Doubtless other discoveries would be made, possibly even richer than those claimed by him, for there was an immense range of country which showed like indications.
The appearance of this thrilling narrative in print, was the signal for its reproduction in thousands of newspapers all over the Union, where it awakened the liveliest activity among all classes, but more especially the drift which is ever ready to take up and pursue any pros- pect that looks to the sudden acquisition of wealth. Multitudes plunged headlong into the enterprise. Countless columns of marching men and canvas-covered wagons poured out upon the plains through Kansas,
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Colorado, Utah and New Mexico, into Arizona. The leading journals of the country blazed with accounts of marvelous discoveries ; diamond stocks were eagerly grabbed up as soon as issued ; expeditions were organizing on every hand. There was something so bewildering, so entrancing about the reports and prospects, the contagion spread to all classes. There was a wild rush of humanity, each endeavoring to out- strip his neighbor in the race to get there first and capture the cream of the harvest when diamonds could be gathered by the wagon load. This prevailing frenzy seemed destined to exceed all precedent, even that of the actual discovery of the richest gold mines ever known.
As a sort of supplement to the rumors instigated by Arnold and Slack, a man named Moorehouse, gifted with extraordinary powers of imagination, launched upon the breezes some amazing discoveries of his own, which he declared had been made in an isolated region far remote from any traveled highway, when he visited "a strange city, rivaling in splendor the wildest visions of the Oriental dreamer, drunken with the fumes of opium, or steeped in the languors of the lotus." One day, so the story ran, while himself and two companions were ascending a mount- ain in pursuit of game, they emerged from a thicket of chapparal into a great city of ant hills or tumuli, covering many acres. The spectacle was amazing beyond human conception. The whole insect city was " corruscated with a blaze of precious stones throwing back the sunbeams from ten thousand facets, over which myriads of inhabitants were hurry- ing in their forays into the chapparal in search of food." They gathered a bushel or so of rubies, sapphires and other gems which were subse- quently given away to friends who held them as curiosities. Since they cost nothing, the donors could afford to be generous.
But this report, extravagant as it was, soon found a counterpart in the recital of one of Dr. H. P. Swein of Santa Cruz, California, who passed through Denver, en route to St. Louis, about the first of Sep- tember, 1872. It was said that while in the latter city he exhibited a large diamond, estimated to be worth more than three million dollars. According to his veracious (?) account, it had been found by his son 9 II.
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some years previous at the mouth of a gulch near Santa Cruz. At first it was regarded as only a brilliant quartz crystal without special value, but its true character had been demonstrated since the breaking out of the Arizona diamond craze.
About this time two Californians published a card in some of the Coast newspapers, sharply analyzing Arnold's interview in the Laramie "Sentinel," and positively asserting that he,-Arnold,-had never set foot in Arizona, that he was a liar and a swindler, etc., etc. But it produced no effect. The dazzling story had taken too deep a hold on the popular mind. It was too rich to be easily relinquished,-another illustration of the fact that people love to be deluded, if the delusion be sufficiently attractive to hold their attention, and at the same time strongly appeal to their cupidity. Therefore, Arnold's admirers, who loved him for the tales he told, stood manfully by him, and in confirmation of his veracity, declared that Gen. George B. McClellan had been in close conference with their idol at Laramie City, and would publish his confidence in the diamond fields. It is needless to add that Gen. McClellan, though identified to some extent with the New York and San Francisco Com- pany, was not heard through the press on the subject.
As time sped on the agitation, to speak mildly, though it conveys but a faint impression of the actual state of feeling, increased with the continuous repetition of highly flavored statements. The Santa Fé papers pronounced it the greatest excitement ever known in that quarter of the globe. The editor of the "New Mexican," in com- menting upon the discoveries, professed to have known for years that rubies, sapphires, garnets, opals, etc., were common in the valleys west of Santa Fé, but he had never so much as dreamed that the sparkling white stones so abundant there were anything more than crystallized quartz or silica. There was some reason for the credulity of the Santa Fé people, from the fact that gems of various kinds, some of them very beautiful, have always existed in the neighboring mountains, whence for centuries fine specimens have been taken by.the Mexicans and
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Pueblo Indians, brought into the town, cut, polished and set in attractive gold jewelry.
In the regular course of events many persons turned up here and there who were perfectly familiar with the fact that in the comparatively unknown regions whence sprang the reported deposits of jewels there were places where precious brilliants might be secured in unlimited quantities. It was related that the venerable trapper, Jim Bridger, had informed various parties several years before that diamonds and sapphires could be picked up on the gravel plains of Southern Colo- rado and Northeastern Arizona. It is more than probable, however, that Jim Bridger was about as familiar with the problems of Euclid as with uncut diamonds and sapphires. But that made no difference; the story gained immediate confirmation by the association of his name with it.
Again, it was related that somebody had somewhere seen in the hands of an Apache Indian "a diamond an inch long and half as thick as a man's thumb." J. H. Beadle, the somewhat celebrated corre- spondent of the Cincinnati "Commercial," a brilliant writer who had spent many years on the frontier, more especially in Utah, where he produced the most complete and interesting expose of the Mormon hierarchy ever written, sent to his paper the statement, which was wholly true, that in some portions of New Mexico and Arizona the lands abounded in beautiful curiosities, petrifactions, fossils, rubies-otherwise finely colored garnets, agates and similar stones. The same have also been found in many parts of Colorado.
In the latter part of August, 1872, when the frenzy was still running high, but had not yet reached its climax, Mr. Wm. N. Byers wrote: "As regards the tales set going, which have created a wide- spread and popular excitement, we have good reason to believe that the scheme was planned and projected in Denver a few months ago. We have learned from an authority of unquestioned veracity that Gen. Rosecrans, the veteran soldier, who it will be remembered stopped at Charpiot's Hotel last winter, knew all the secrets of this discovery, and
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was really here on a mission relating thereto. At that time only a few persons in the United States had been intrusted with the secret, and among them was an ex-Governor of Colorado and his next friend, a well-known Denver physician, from whose lips the secret never issued until since the publication of the facts in all the newspapers. During last May, probably about the 20th, Messrs. Lent and Roberts, the prin- cipals in the San Francisco scheme, were in secret consultation with New York parties at the Sargent House in Denver, and subsequently journeyed south as far as the boundary line between Colorado and New Mexico. It was about this time, or a little later, that the uncut diamonds which have lately been exhibited in San Francisco were brought through Denver from the South.
"The expedition that is fitting out in San Francisco, and which it is proposed to dispatch via Denver to explore this new Golconda thor- oughly, will be likely to provoke hostilities with the Apaches, who swarm like bees in the country where the diamond drifts are supposed to exist."
The epidemic extended to all classes. It was so strong and sweeping few escaped its ravages. Even the Attorney General of the United States, a Cabinet Minister, several Senators and Representatives in Congress, an ex-Governor of Colorado, to say nothing of the hundreds of others in high standing, were drawn into the whirlpool. Neither argument nor incredulity, however emphatically expressed, availed to check the tide. It rose in great billows, forcing its way onward with irresistible impetuosity. It seems inexplicable that it should have prevailed from May to December without exposure by some of the expert lapidaries of the country. While many tests were made, the certificates from these sources almost invariably attested the genuineness of the stones submitted for testing, which naturally aug- mented the excitement and dissipated unbelief.
The furore was as strong in Colorado as elsewhere. Several parties were organized to explore and prospect this wonderland so near our own borders. The confidence inspired here was due in large degree
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to the report of a reputable citizen, who announced that he had spent some time in Arizona in 1854, and knew whereof he spoke. In that year he visited Fort Defiance, a military station situate about one hundred and seventy-five miles west of Albuquerque, and even at that early day the soldiers had knowledge of precious stones in that vicinity. They made a practice of stealing away from the post at every oppor- tunity and gathering them. They were traded off to the sutler for whisky and other luxuries not in the regular army bills of fare. He had seen many pounds of these stones at Fort Defiance, but they were chiefly rubies and emeralds.
At length, the second week in September, the great California expedition arrived in Denver. There were twenty robust, well-armed fellows, headed by Mike Gray, formerly sheriff of Yuba County in that State. They passed on to Pueblo, where their equipment for the long journey was completed. Simultaneously with their appearance upon the scene, there came to Denver an astonishing display of diamonds. While such appearances and exhibits had for some time been frequent, at this particular juncture they were conducted less secretively ; indeed, the pos- sessors opened and spread out their collections with a good deal of ostentation, evincing a desire to attract the greatest possible attention. Arnold himself had been here for some time, deepening the mystery by affording occasional sly peeps at the handful of brilliants carried about in his pockets. Some of these being tested by C. C. Houck and A. B. Ingols, experts in jewels, were pronounced genuine, though none of them were very large or valuable. Nevertheless, their verdict only served to increase the furore. It gave confirmatory color to all the state- ments made, established Arnold's reputation, and caused him to be a marked and envied figure upon our streets. He did not say these diamonds had been picked up in Arizona, nor did he deny it. He simply permitted the witnesses to form their own conclusions from the hints they had received. But he did assert that in the country men- tioned, a man could find quarts of diamonds.
Then came another veracious pilgrim from the Southwest who anni-
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hilated all doubts and set everybody crazy. A man named Crossland, a resident of Chicago, who claimed to have just returned from the diamond fields, exhibited a precious stone alleged to have been found in Arizona. It was examined by our lapidaries and pronounced a genuine diamond, worth, in the rough, about five thousand dollars. The reader may imagine the effect of this announcement, for it cannot be described. The people, already wrought up to the highest pitch of feeling, were inclined to emigrate en masse, when the judgment of the experts here was confirmed some days later by a certificate from well-known jewel cutters of Chicago to the same effect, and who estimated its value at about eight thousand dollars.
In the same connection arose a new element of scarcely less exciting a nature, owing much, however, to the manner and source of its dis- closure. While outfitting in Pueblo, Mike Gray gave out the state- ment that he had not come from California in search of diamonds, but to take possession of one of the most astounding gold mines ever seen by mortal eyes. He was following the lead of a Frenchman who affirmed in the most solemn manner that he had visited a valley where gold in nugget form could be gathered by the bushel. Three years previous, in company with a party of Mexicans, this Frenchman had penetrated the region where the treasure lay, when all but himself and two others were slain by Apache Indians. A white woman who had been held in cap- tivity for years by the Utes, knew exactly where the gold was to be found, and used to gather it herself. But the Indians, apprehensive that she might disclose the valuable secret, murdered her, and thus destroyed the last dangerous possessor of it outside their own tribe. Notwithstanding, this interesting Frenchman pledged his life to Gray and his comrades, to be sacrificed in any manner they might elect if he failed to guide them to this marvelous gold mine. What became of him has not been related, but certain it is that Gray never found the mine.
Soon the locality of the wondrous diamond fields began to change. It was given out that the modern Golconda was not in Arizona, neither was it in New Mexico, but in the southwestern part of Colorado. There
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was a mysterious coming and going of armed men who gave no sign, but their sealed lips and speaking eyes indicated that they were on the trail and had possession of facts which could not be wrenched from them. They were after diamonds and knew where to find them. Diamond stocks to the amount of two and a half millions had been issued and sold by the New York and San Francisco Diamond Company on the strength of the published reports. But the only matter of surprise was that the supply was so limited. Anything in the shape of stocks, well advertised and put forth by the leaders on the Stock Board, found eager purchasers. It was a period of extravagant speculation. Every one who could, indulged in it. Immense fortunes were made by the operators, while the common herd lost and went into liquidation when the crash came. Among the rumors that intensified the stock jobbing was one that a large lot of Arizona diamonds had been purchased in London ; another that the New York and San Francisco Company were working a large force of Central American negroes and Mexican peons and taking out millions. Attorney General Williams was deluded into writing an elaborate opinion respecting the rights of diamond miners on the public lands. In November, 1872, Ex-Governor Gilpin, always an enthusiast on Colorado, which he believed to be the seat and center of the wealth of the world, and who never missed an opportunity to pro- claim his faith, delivered a lecture to a large audience in the Denver theater, tracing on a series of maps prepared for the occasion, the geolog- ical formations of the continent from Alaska down by Frazier River through Colorado to the City of Mexico, and indicating to his auditors the lines where lay the greatest deposits of precious metals and stones that existed anywhere on the face of the globe. "Not," said he, “ on the Cordilleras, nor out upon the plains, but upon the great plateau situate about equi-distant between them, is where the richest treasures lie, where the incandescence of the country has moulded the carbon into the sparkling gem in the Sierra La Plata of the San Juan country in the Territory of Colorado." Having made his first discovery of mineral in the Rocky Mountains of the San Juan, while plunging about in deep
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snows after Navajo Indians, he was naturally partial to that section. Anyhow, on this occasion he gave the world to understand that if dia- monds and rubies really existed on this continent, they must inevitably exist in greater quantities, be of larger dimensions, and shine more lustrously in the San Juan country than elsewhere. He traced the country, rich in bright metals and glittering gems, from the San Juan to Mexico and South America, but the former region was bound to develop more diamonds than any other locality in Christendom. He declared the southern portion of our Territory to be prolific in the precious metals and the " largest and purest diamonds."
Soon after there arrived in Denver, Captain John Moss, another California miner, who evinced great enthusiasm while dwelling upon the diamond fields from which he had recently emerged. He said, as if to confirm the statements already made, that an ordinarily industrious man, not necessarily "a rustler" who tore up the ground as he rushed over the face of nature, but reasonably attentive to the business in hand, might pick up five hundred to five thousand dollars worth daily. He mentioned two men who realized thirty thousand dollars from two days' washing. He had been with a man named Stanton when the latter picked up a large ruby and was present with him in Santa Fé when an expert sent out by Tiffany of New York, pronounced the ruby worth two hundred and fifty thousand dollars.
Human credulity seems to have no limit in periods of excitement when instigated and kept aflame by forces such as were employed in this affair. The fancy riots in visions of suddenly acquired wealth, with no desire to be undeceived. Following is an incident that, when published, bore external evidence at least, of sincerity, but its absurdity is so manifest we can scarcely credit the writer with any deeper motive than a desire to throw all the stupendous narratives of the time com- pletely into the shade. Under date of December 3d, 1872, this writer, who dates his letter at Fort Angelo, Colorado, said, "Our little com- 1 munity was thrown into a state of intense excitement by the arrival of
Dr. Wallens and party direct from the newly discovered diamond fields
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in the San Juan country. They brought two gunny sacks full of rubies and sapphires, with a considerable mixture of inferior emeralds, amethysts and opals, and a camp kettle full of large diamonds of the first water. Singular to relate, they thought nothing of the diamonds compared with the inferior colored stones, thinking they must be only large quartz crystals, but under the infallible tests applied to the gems by Professor Brown,-late of Harvard, and now out on a meteoro- logical visit to this post, it was proven beyond the possibility of cavil that they were genuine and remarkably large diamonds. One immense gem, weighing upward of seven hundred carats, as estimated by Fro- fessor Brown, and having no serious flaws, was entirely destroyed by the Professor yesterday afternoon. Wishing to make a spectrum analysis, he placed it between the highly charged poles of a Bunsen battery. The effect was startling, 'a vapor arose,' the diamond vanished amid the most dazzling flashes of light, and a piece of pure carbon as large as a biscuit remained in its place. That it was a diamond was undoubtedly proven, but at what a terrible cost ! The value of a nation ! untold millions had disappeared from our gaze while we drew our breath ; disappeared forever, and a piece of worthless charcoal occupied its place."
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