San Francisco, California: The Great Diamond Hoax of 1872 | Hometown History

About this episode

In 1871, two Kentucky drifters named Philip Arnold and John Slack walked into a San Francisco mining broker's office carrying a buckskin pouch of rough stones: diamonds, rubies, and sapphires they claimed to have pulled out of American soil. What followed was one of the most audacious swindles in American history. By Asbury Harpending's account, the stones were pronounced genuine by Charles Lewis Tiffany himself, though only a tenth of the sample was sent for appraisal. Civil War General George McClellan, Congressman Benjamin Butler, and newspaper editor Horace Greeley joined as investors only after the appraisal came back. Mining engineer Henry Janin, who had inspected more than 600 mines and never endorsed a failure, called the diamond field wonderfully rich. Bank of California founder William Ralston and a syndicate of the wealthiest men on the West Coast paid Arnold and Slack $660,000, roughly $17.7 million today. The scheme came apart only when geologist Clarence King, leading a federal survey of the fortieth parallel, went to the site near the Wyoming and Colorado border and found cut gems mixed in with the rough ones. The field had been salted with stones bought i