The Great Diamond Hoax of 1872: Two Prospectors Who Fooled Tiffany

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John Slack died in 1896 as a coffin maker in White Oaks, New Mexico, keeping quiet about one of the boldest swindles in American history. In the early 1870s he and his cousin Philip Arnold walked into San Francisco banking offices with a handful of garnets and flawed diamonds, played the part of ignorant country prospectors, and let the financiers believe they were the ones taking advantage. With the expedition money, the cousins sailed to London, bought cheap uncut South African diamonds, and had Charles Lewis Tiffany appraise them at $150,000.

This episode follows the con from that appraisal to a remote sandstone outcrop near Diamond Peak, Colorado, where the pair pressed European gems into mud, crevices, and anthills. Investors bought them out for $660,000, formed a company with a former Union general on board, and had federal mining law amended to protect a field that did not exist. Then a government geologist looked at the dirt.

• The first stones were pyrope garnets and chrome diopsides, indicator minerals that made a diamond find look geologically plausible to anyone who knew mining.
• Tiffany was a master of cut and polished gems but had little experience with rough stones, and his word silenced every later doubt among the investors.
• Mining consultant Henry Janin inspected the salted ground in June 1872 and declared it wonderfully rich, with a stake in the company riding on his answer.
• Backers included George B. McClellan and a Rothschild, and Congressman Benjamin F. Butler, paid with a thousand shares, pushed language covering valuable mineral deposits into the General Mining Act of 1872.
• Geologist Clarence King exposed the fraud in November 1872 after finding diamonds, rubies, and emeralds lying together in sandstone, some still bearing lapidary marks. Arnold died in a shootout in 1878.