In 1872, a group of prominent San Francisco businessmen was presented with an opportunity to invest in a secret gem field reportedly teeming with diamonds, rubies and emeralds. The promised treasure seemed almost too good to be true — and, as it turned out, it was.
The spectacular gemstone bonanza was a carefully staged fraud, and it took the cunning of a Yale-educated geologist named Clarence King to expose it. His detective work helped save investors from a financial disaster and made him a national celebrity.
The scheme was the brainchild of two Kentucky prospectors, Philip Arnold and John Slack, who understood the get-rich-quick mentality gripping America in the decades after the California Gold Rush. With fortunes being made seemingly overnight from gold, silver and other mineral discoveries, the promise of a vast American diamond field was almost irresistible.
Arnold and Slack began by showing small bags of rough diamonds and other gemstones to San Francisco businessmen, claiming they had found a secret deposit in the West. They carefully guarded the location, encouraging curiosity while building excitement. Their growing circle of investors and collaborators included William C. Ralston, founder of the Bank of California, prominent mining entrepreneurs, former Union Army commander George B. McClellan and even Charles Lewis Tiffany, founder of the famous jewelry house. Sample gemstones were presented to Tiffany for appraisal, and his favorable assessment helped give the supposed discovery an aura of legitimacy.
The con men had a simple but effective trick: They bought thousands of inexpensive, rough industrial-grade diamonds, rubies and other stones in Europe, then secretly scattered them across a remote site near the Wyoming-Colorado border. When investors and a respected mining engineer visited, they were led to the planted gems and encouraged to believe they had uncovered an extraordinary natural deposit. The investors were so convinced that they organized a company and prepared to sell $10 million in stock.
Enter Clarence King.
Since the late 1860s, King had been leading the US government's Fortieth Parallel Survey, a team that was meticulously mapping the region. Reports of an enormous diamond discovery in territory his team had examined immediately raised suspicions. He sent fellow geologists Samuel F. Emmons and A.D. Wilson ahead to investigate, then joined them in the field.
What they found was a geological detective story waiting to be solved. Diamonds, rubies, emeralds and sapphires were clustered together in ways that made no natural sense. King knew that these different gemstones formed under vastly different geological conditions and would not occur together in such an arrangement. He also noticed that the stones appeared only in disturbed ground. Some rubies were tucked into anthills, where closer inspection revealed suspiciously broken soil and holes that appeared to have been made deliberately.
King and his team dug deeper — literally — and found no evidence of a genuine deposit. The area had been salted with gems.
Rather than quietly share his discovery, King rushed to San Francisco to warn the investors and stop the planned stock sale. His report exposed the gem field as worthless and helped bring the company down. Newspapers celebrated the young geologist for preventing a potentially enormous financial calamity. The San Francisco Chronicle declared that the public had escaped disaster thanks to King.
The Great Diamond Hoax made King an international celebrity. His reputation for scientific rigor and integrity helped lead to his appointment in 1879 as the first director of the United States Geological Survey (USGS).
Credits: Clarence King photo by USGS, Public domain, via Wikimedia Commons. King and the Field Party of 1864 by Silas Selleck Silas Selleck, CC0, via Wikimedia Commons.
