The Great Diamond Hoax

Diamonds have great financial value. A single diamond, if it is of sufficient carat, clarity, color, and cut can be worth millions of dollars. Can you imagine what a diamond mine is worth? How about a field where diamonds are lying on top of the ground just waiting to be picked up….what do you think that would be worth?

Back in 1872, two crafty grafters decided to find out what a field of diamonds would be worth. Philip Arnold and John Slack, who were cousins, traveled to San Francisco with a bag of diamonds. They talked about that bag of diamonds and deposited the bag in the vault of The Bank of California. (So far…so good….but the hoax was just beginning.)

Philip and John were good conmen, so they pretended to be reluctant to speak about where the diamonds had been found. Investors looking for an easy buck lined up. The cousins "gave in" and accepted investors, and the investors hired an investigator to go the diamond field that Arnold and Slack claimed was in Wyoming. The two grafters led the investigators to a huge field where there were various gems lying around on the ground (the field had been "seeded" earlier by Arnold and Slack). Stones were gathered and valued by Tiffany's at $150,000 (a LOT of money in those days).

Now the big boys of finance were interested. William C. Ralston, Horace Greeley, George McClellan, Baron von Rothschild, General George S. Dodge, and Charles Tiffany of Tiffany and Company all invested. Wildly optimistic estimates were floated by some very influential people.

 Tiffany's finally convinced Philip Arnold and John Slack to sell their interest for $660,000….and that would amount to a lot more zeros today.  BUT (you knew it was coming)….a government geologist, Clarence King, was sent to inspect this wonderful field. Mr. King uncovered a partially polished stone that was certainly not natural. The field had diamonds, rubies, emeralds and sapphires all in the same area and many of the gems were in places they could not have reached by any natural means. King notified the investors.

But it was a "done-deal". There were lawsuits of course….lots of them. Arnold went on to become a successful business man while John Slack simply dropped out of view. But the Great Diamond Hoax of 1872 still stands as one of the biggest cons in history.