Large ImageThe Great Diamond Hoax of 1872: The History of 19th Century America's Most Notorious Fraud
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Description
*Includes pictures
*Includes contemporary accounts of the hoax written by victims and newspapers
*Includes online resources and a bibliography for further reading
*Includes a table of contents
"[T]he most gigantic and barefaced swindle of the age." - The San Francisco Chronicle's description of the Great Diamond Hoax of 1872
It's only natural that people have always been attracted to get-rich-quick schemes, and in spite of their best efforts, almost everyone has been tempted at one time or another by a promise of riches that can be obtained with little or no work. The attraction is even stronger during periods when ordinary people have indeed struck it rich, particularly the California Gold Rush and the Yukon Gold Rush in the mid-19th century and late 19th century respectively. Having heard stories of men who went west with nothing and returned as millionaires, people were more inclined than ever before to believe that "there's gold (or silver or diamonds) in them thar hills."
It would take decades of research to fully understand that most of the miners in the West did not strike it rich, and that those who fared best were mining companies and those who sold goods to miners. But regardless, fraudsters also understood that the best way to make a profit off the gold rush was to fleece the people trying to find the gold, and before long a large number of shysters hoped to make their own pot of riches in a far less honorable way. As Patricia O'Toole, author of Money and Morals in America: A History, noted, "I see the Diamond Hoax as one in a long line of scams made possible by the fact that the United States truly was a land of opportunity. Many a legitimate fortune seemed to be made overnight, so it was particularly easy for a con artist to convince a gullible American that he too could wake up a millionaire."
There were many schemes carried out in the 19th century, and even professional con men like Soapy Smith, but perhaps no fraud in the region was as infamous as the Great Diamond Hoax of 1872. It began with a major, legitimate diamond strike in South Africa. From there, the fever quickly spread to America, spurred on by tall tales told by trappers from Jim Bridger to Kit Carson of diamonds and other precious gems that could be picked up by the side of the road as one walked through the deserts of the West. Most of these men told these stories as harmless tall tales for the amusement of their audiences, but there were a few that had bigger and, at least in the own minds, better ideas. They decided to use the rumors to line their own pockets.
That is where two cousins entered the picture. With the help of a friend, cousins Philip Arnold and John Slack managed to take otherwise sensible people, including highly successful businessmen and politicians like former Civil War General George McClellan, for nearly half a million dollars. They accomplished this by playing the long game, reinvesting initial sums of money to salt the ground they claimed was rich in minerals with enough diamonds and other gemstones to convince a few respected experts that they really had struck it big. They then sold shares in the land to investors before skipping town with their ill-gotten gains.
In the end, the scam was only discovered because of a coincidental meeting on a train, one that sent a renowned geologist back to their claim, where he quickly determined it to be a fraud. Of course, by then the cousins had their money, and thanks to the embarrassment that most of their victims felt, Arnold and Slack were able to keep the money. There were hearings and lawsuits both in the United States and England, but in the end, almost no one got back any of the money they had invested under false pretenses.
The Great Diamond Hoax of 1872: The History of 19th Century America's Most Notorious Fraud chronicles the story of one of the most infamous scams in the history of the United States.
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