all circumstances, he, more than any other person, induced San Francisco speculators to invest and was as much interested as any in what was to be made out of their investments.

The first open move in the somewhat complicated game was the appearance of Arnold and Slack in San Francisco, with a bag of precious stones, including diamonds, which they claimed to have found in the fields discovered by them, and which they said were only a specimen of what the region round about produced in large quantities. These stones were deposited with Harpending; and he immediately made it his business to call upon a few of the largest capitalists, particularly those engaged in mining stock speculations; announce the discovery, and exhibit the specimens that had been placed in his keeping. He of course referred to Arnold and Slack as his informants; and they on their part, professing to think they had one of the largest things on earth, begged, while disclosing the locality where they had found the gems, that it should not be divulged until proper measures should have been taken to secure title to the ground, which they represented as very extensive and of incalculable value. Their proposition was, as they had no adequate means of their own, to form a company and dispose of only enough stock to procure the necessary legislation making diamond fields patentable, and to take up all the country where they had gathered their stones, and everything in the neighborhood of similar geological character. Under no circumstances, however, would they dispose of any more than was barely sufficient to put the enterprise on a working basis; and it was particularly desirable that nothing should be made public about the find or its location until everything in the way of exclusive title to the ground should have been properly secured. In the meanwhile, if any information should unfortunately leak out about the gems and their great value, it should be represented that they had been found in Arizona or Utah or any place other than where they had been picked up.

The San Francisco capitalists, impressed with the representations made to them and especially with the sight of the bag full of rough diamonds, rubies and emeralds, which Harpending lavishly spread out before their eyes-and of which there was said

35 VOL. IV.

to have been about a peck-concurred in the plan of keeping the discovery a secret; but, in accordance with their usual practice in reference to mines and to satisfy themselves of the genuineness of the find, they determined to have the stones produced examined by good judges and then send experts to visit and report upon the fields. To this proposition, Arnold and Slack made some judicious objections; but they were soon satisfied with coin; and the next public move was to carry the bag of stones to New York and submit them to lapidaries, employed by Tiffany & Co. of that city, who reported that a number of the pebbles shown them were genuine diamonds, and that the lot taken together was worth about one hundred and fifty thousand dollars. The report on the genuineness of the gems was of course expected by the schemers; but they were probably themselves somewhat surprised at the value placed upon them. Having passed this test with such remarkable success, they anticipated no trouble with the mining experts who were selected to examine the fields. The chief one of these was a well-known mining engineer of good reputation, named Henry Janin, who was furnished with a few thousand dollars in money and an option to purchase at a comparatively low figure a certain quantity of the stock of the proposed new company. He and one or two others, accompanied by Arnold and Slack, who still made some further judicious objections, were at last taken in a roundabout way to the locality and pointed out the spot where the diamonds had been found; and, upon digging, they discovered many more and still richer than those exhibited. At this, it was suggested that other spots not far distant, which had a general resemblance to the spots searched, might be rich; and upon examination they proved quite as valuable—and in fact some of the costliest stones were picked up in the new diggings. It had been reported that a number of the first discovered gems were found on ant-hills, and the impression intended to be produced was that the insects, in excavating for their subterranean galleries, coming upon the obstructions, had carried them to the surface and dumped them out of the way; and in the new discoveries, accordingly, many stones were found scattered on ant-hills as if the industrious little miners had had difficulty, on account of the superabundance of

precious pebbles, in finding passages for their habitations. At any rate the gems in the places searched were plentiful; and the experts, having no special knowledge of diamond mining, were completely deceived. When Henry Janin, whose judgment of ordinary gold and silver mining ground was first-class, came to make out his report—without giving any explanation of the geological formation or referring to the possibility of deception-he spoke mainly of what he had found or what was found in his presence, and then began to discuss the question whether, with a field so extensive as that he had seen and in which diamonds had been so abundantly discovered even with the rude tools used, the value of the gems would not materially fall when working should be commenced on a large scale and with proper appliances.

Janin's report and the production and exhibition of a new bag of precious stones, and especially the unquestionable authority of Tiffany & Co.'s lapidaries that the gems were genuine, settled the business for the time. But there were still a few moves in the game to be made. With great skill Harpending and Arnold now insisted that the company should be organized in New York and not in San Francisco; and for some time a very interesting controversy went on between them and the San Francisco capitalists on this question. A few New York speculators of prominence, who had heard of what had been going on, bid for stock, and some shares seem to have been disposed of. But, as was doubtless intended from the start, the San Francisco men were determined not to allow the uncounted millions of which Janin spoke to slip from their grasp; a few hundred thousand dollars more or less were a mere bagatelle; and solid Californian gold carried the day. In the meanwhile information of the find reached the geologist and explorer Clarence King, who had been employed by the government some years previously to make a survey of the country along the fortieth parallel of latitude near which the new diamond fields were located. He had examined the region sufficiently to be satisfied that there was no diamond-bearing ground there and at once suspected fraud. To make entirely sure, he at once revisited the location and, upon a very brief investigation, found, as he had suspected, that the ground had been "salted" and par

ticularly around large rocks and other permanently fixed objects that could be used as marks. In fact, some gems were found on the top, or in crevices of, such rocks, where they had evidently been carelessly dropped or overlooked by those engaged in “salting" the mine. About the same time, word came from London that some of the Harpending stones, that had been forwarded for examination there, were identified as African diamonds; and it was also ascertained that, not a great while before the date of the discovery, a large purchase of gems in the rough, including African diamonds, Brazilian stones and some rubies and emeralds, had been made in England and carried to America.

King's report, backed up by the disclosures from London, put an immediate stop to the speculation in diamond shares and convinced the San Francisco capitalists that they had been most egregiously swindled. Their money, consisting of many hundred thousands of dollars, was gone; but they had the consolation of knowing that they had been taken in by one of the neatest, most skillfully planned and adroitly managed frauds of that day of questionable speculations. Fortunately for the general public, however, the deal had not progressed far enough to embrace the common people, whose savings, small in individual sums but large in aggregate amount, had been and continued to be the prey of the so-called bonanza manipulators and speculators of the ordinary mining stock excitements. Meanwhile the pretended discoverers managed to keep away from California. Possibly, if they could have been reached in time and prosecuted in the local courts, there would have been some very rich developments; but for this they were careful to afford no opportunity. Subsequently, indeed, a suit for three hundred and fifty thousand dollars was commenced against Arnold, Slack and others in New Jersey, based on their alleged fraudulent practices; but it amounted to little or nothing; and the victims of the great "diamond swindle," as it was called, were obliged to pocket their wrongs and charge them up in their balance sheets on the wrong side of their profit and loss accounts.'

But the mining-stock excitement of 1872, violent as it proved

San Francisco newspapers of December, 1872, and particularly Evening Bulletin of December 6, 1872.

to be so violent in fact as to float not only the diamond swindle but many other schemes quite as fraudulent and only smaller in amount was far surpassed by that of 1875, which followed the discovery of a bonanza, of supposed unlimited extent and value in the Consolidated Virginia mine on the Comstock lode, at a period when the Crown Point and Belcher were still paying immense dividends. While the old bonanza was yielding at the rate of about ten millions of dollars a year, the new bonanza was said to have ore in sight that would yield fifteen hundred millions. At this news, as may well be imagined, there was no limit to the popular frenzy. The Louisiana scheme of France and the South Sea bubble of England seemed to be repeated, with the difference that in this case there was some foundation of solid silver, though small in comparison with popular supposition; while in the other cases there was no solid foundation whatever. If people were wild in those cases or in the excitement of 1872, they now became, so to speak, insane. The race for wealth, which was simply a race to secure stock in the bonanza mines, attracted nearly everybody. The man or woman, who had or could raise money and did not invest, was the exception. Not only the profits of common trade, manufactures and agriculture but often the principal, the slow accumulations of industry, the hard-earned wages of labor, the salaries of professors and preachers, the fees of lawyers and physicians, the deposits in savings banks, the produce of mortgaged homesteads, the money that was inherited or that could be borrowed-nearly all found their way into the miningstock market; and the value of the Comstock shares, as quoted and traded in the market, rose for a couple of months at the rate of a million of dollars a day.

The chief managers of the Consolidated Virginia bonanza were what was known as the bonanza firm, consisting like the Central Pacific railroad managers of four persons-James C. Flood, William S. O'Brien, John W. Mackay and James G. Fair. Flood and O'Brien had for many years kept a popular drinking saloon on Washington street in San Francisco and themselves waited on their customers. Like many others, they were induced to invest in Comstock mines and, by their aptitude for the business, began to make profit out of their operations. With an eye to surer as