Lecture #20: On Serendipity: The Great Diamond Hoax

Suggestions for Further Reading:

Eliot Lord, Comstock Mining and Miners (1883). available online at
https://archive.org/details/comstockminingmi00lord

Rodman Wilson Paul & Elliott West, Mining Frontiers of the Far West 1848-1880 (1963; 3rd ed., 2001).

William H. Goetzmann, Exploration and Empire: The Explorer and the Scientist in the Winning of the American West (1966).

Thurman Wilkins, Clarence King: A Biography (1958; revised and enlarged edition, 1998).

Bruce A. Woodard, Diamonds in the Salt: The First Authentic Account of the Sensational Diamond Hoax Chicanery (1967).

 

I. Introduction

Let's pick up where we left off at the end of last lecture: talking about another great gold or silver rush, the Comstock Lode in Nevada.

Look at these stock certificates of companies put together to capitalize and profit from mines in the California gold fields. The point I want to make about these that will run through this entire lecture, is that the narrative of individual prospecting miners ("forty-niners") is misleading. It wasn't just individuals who went out to mine, but also investors who decided to invest their capital—their financial resources—in the massive mining enterprise that was emerging in the West during this period. Today I want to look at the labor of mining, but I also want to follow the capital, individuals whose investments made possible the mining landscapes that are the subject these two most recent lectures.

There are several narrative arcs running through this and last lecture that I need to pick up from the last lecture and move forward in this one. One arc narrates the movement from an initial discovery of gold (e.g. James Marshall's discovery at Sutter's Mill in 1848) to an initial wave of prospectors, to the movement of additional people into areas beyond the place where gold was originally found. Another arc was from low amounts of capital investment and low amounts of labor to the increasing quantities of capital and larger wage workforces needed to conduct mining as its scale expanded and engineering challenges increased. We can also track a technological arc from simple technologies costing small amounts of money (a pan or a washer) to larger enterprises involving more miners and more equipment (flumes, hydraulic mining, extensive underground mines), to much larger enterprises involving hundreds of workers and hundreds of thousands, eventually millions, of dollars.

Remember that the geology of mining deposits partially drove this difference in costs: placer deposits washed into streams are generally much easier to mine (with simpler tools, fewer workers, lower investments) than extracting mineral veins from the hard matrix rocks in which they're embedded. Mining ore bodies themselves was often called "quartz mining" (because gold was deposited in rock fissures that were otherwise filled with quartz) and "hard rock mining" because of the extreme hardness of the rocks in which these minerals occurred.

Extracting gold from veins of quartz in granite or other very hard metamorphic rocks--as was often the case in Sierra Nevada and other parts of the West--was enormously difficult, requiring lots of workers and elaborate machinery ... and hence was very expensive.

The more expensive the technologies involved in mining became, the more money was needed to purchase those technologies and the labor needed to operate them. That's where investors came in: they put their capital at risk to buy stakes in promising mining claims, purchase equipment, and hire workers. Such investors came from all over the world--especially places like New York, Boston, and Philadephia on the East Coast, and London and elsewhere in Great Britain ... but it was San Francisco that became the metropolis channeling such global capital flows toward the mining areas, with its own investors growing wealthy in the process. These were highly speculative investments, very risky—but if you were lucky enough to struck it rich, you could really strike it rich. Such stories fueled the mania that characterized not just prospecting but investing in mines as well.

Part of what I want to look at today are these "capital rushes" of large amounts of money heading toward mining landscapes. I'll tell the story of one of the most famous of these, then step back to reflect on a number of other themes relating to mining and other matters that apply to this course as a whole.

As Susan Johnson brilliantly demonstrates in Roaring Camp, mines in the southern Sierra Nevada were poorer and more racially diverse; the mines in the northern Sierra Nevada were larger, wealthier, and less racially diverse. San Francisco functioned as the center for moving capital to the mining camps. The story I'm going to tell you now took place in Nevada, east of Lake Tahoe. It was on the routes of the Overland Trail and the Central Pacific Railroad—but notice that what I'm about to narrate happened 10 years before there was a railroad, in the mountainous environment of the Sierra Nevadas that made the eventual construction of the Central Pacific so challenging.

The story is about Mt. Davidson and the town that grew up on the flank of that mountain: Virginia City. It was site to one of the greatest gold and silver strikes in all of American history — the Comstock Lode. You'll find an overview with lots of good illustrations in Wikipedia:
https://en.wikipedia.org/wiki/Comstock_Lode

 

II. The Comstock

In 1859, prospectors living in the shanty town called Johnstown on the south flank of Mt. Davidson included:

  • James Fennimore ("Old Virginia")
  • Henry T. P. Comstock ("Old Pancake")
  • Peter O’Riley & Patrick Mclaughlin ("the Irishmen")

O'Riley and McLaughlin staked their claim on Gold Hill, joined by Old Pancake. They began finding gold in veins of blue sand and blue-grey quartz. They threw out the blue stuff until some of it went to a local assay office and was found to be very rich in silver, rather than the gold that prospectors sought. This was the first time that silver had been found in large quantities in the American West.

A rush began at once, and a community named for Old Virginia – Virginia City – quickly sprang up. The lode itself was named for Old Pancake: the Comstock Lode. Note that the second largest city in Nevada, the Town of Reno, wouldn't come into being until 1868, when it was chosen as the railroad station on the Central Pacific that would connect Virginia City with the transcontinental railroad. Here's another observation about the railroads to add to what we've already been learning from Nature's Metropolis: railroads opened up mining by making it possible to transport heavy, bulky ores to market, and also to transport heavy equipment and supplies to mining areas that had neither the equipment nor the food to support themselves without such things.

17,000 claims were located on the Comstock Lode in an orgy of speculation, stocks were floated in San Francisco—and most came to nothing. Half of the total production from the Comstock, and 4/5 of dividends paid to all investors, came from just two pairs of adjacent mines – Crown Point & Belcher, and Consolidated Virginia & California. Other claims and mines proved far less profitable if they yielded any income at all.

It's worth noticing the complexity of the ore bodies that these mines were trying to reach. Here's a diagram:
https://en.wikipedia.org/wiki/Comstock_Lode#/media/File:ComstockShafts.jpg
Hard-rock claims began to develop a new legal concept for mining that has bedevilled American land law ever since – claims were not orthogonal to the surface of the earth, but instead gave the stakeholder the right to follow the underground vein wherever it led, even if it went beneath an adjacent piece of property. So whereas Anglo legal tradition says that if you own a plot of land, you own whatever minerals are directly underneath it (i.e., its boundaries theoreticallu extend downward to the center of the earth but not laterally across adjacent property boundaries), in this emerging legal tradition, whatever vein you found was yours to follow to wherever it surfaced. The whole body of laws governing mining in the U.S.—particularly state laws—has created many messy legal situations like these.

One other complication: silver mining is very different from gold because silver is far more chemically reactive than gold. Silver joins chemically with any acid, so never occurs in placer deposits the gold does. Normally it has to be broken from ore and refined in smelters using expensive and complicated chemical processes. In the Nevada mines of the eastern Sierra Nevada, there were no base metals (e.g., lead, copper, zinc) associated with the silver ore, so the relatively simple techniques used in California to crush and amalgamate could be used – this was very lucky, and it was also lucky that gold and silver were equally present in Comstock ore.

One of the first to arrive at the Comstock was George Hearst (father of the powerful Los Angeles newspaper publisher William Randolph Hearst), who had been an unsuccessful placer miner and storekeeper.
https://en.wikipedia.org/wiki/George_Hearst
He was working a quartz claim when he heard of the blue stuff at a place called the Ophir Mine. Hearst bought a 1/6 interest, hauled 38 tons of the blue material out of the Ophir Mine using oxen and horse-drawn wagons via Sacramento to San Francisco—a load that netted him a profit of $91,000. (Multiply that by 20 to get the approximate value in today's dollars, $1.8 million from just one shipment of ore!) Some ore was even smelted in England because the mining techniques for doing so did not yet exist in the U.S.

Hearst recruited mining engineer Almarin B. Paul to solve the challenge of how best to process Comstock ores in the Comstock itself. By spring of 1860, Paul had erected 24 stamp mills in Virginia City for crushing ore. He made contracts with San Francisco foundries to set up processing machines, all hauled over Sierra Mountains by oxen, and the timber had to be brought over 20 miles from the Sierra Nevadas.

Once ore was out of the ground, the techniques for processing it were borrowed from Mexican mining experience: pulverize ore in an arrastra (a king of mechanical mortar and pestle); then boil it in a vat with mercury because mercury almagamates with gold to separate the silver and gold from each other; then spread the hot material on a patio with salt on a flat tray called patio and have horses trample it. As you can imagine, the horses died quickly and in large numbers from mercury poisoning. It's not hard to see why these processes were hard on human workers as well.

Paul wanted to mechanize and remove horses from this process, replacing animal power with machines as we've already seen happening in farming and logging. He improved traditional arrastra technology by using hot steam to speed the process, then had mechanical iron pestles stir the mix in a pan while heating, accidentally adding iron filings that actually proved helpful in refining the ore. By 1862, he had perfected the Washoe Pan, the name for this increasingly elaborate means of separating gold from surrounding host ore.
https://en.wikipedia.org/wiki/Pan_amalgamation

Here's the larger point: new technologies, growing scientific expertise, and long-distance transportation of heavy materials all required increasing amounts of money. So capital investment was necessary to make ore processing at a place like Comstock. Soon the Washoe Pan process was used around the world – a fundamental American innovation in mining technology.

Processing ore cost lots of money, which was where investors came in, forming a link to San Francisco. One of the most important investors was William C. Ralston, an Ohio merchant who went to California as a steamship company partner in 1854. In 1864, he and D. O. Mills and others founded the Bank of California, which became for a time the West’s leading financial institution. The Bank of California made major investments in the Comstock and came to coordinate the investments of many San Francisco capitalists. It also funneled money back to San Francisco to support hotels, foundries, and factories.
https://en.wikipedia.org/wiki/William_Chapman_Ralston

Working for Ralston as an agent in Virginia City was William Sharon, who came to be virtually the emperor of the Comstock for several years. Not only did he dominate the richest mines, but in 1867, he and Ralston set up Union Milling & Mining Co., to handle Comstock mining ore. Union Milling & Mining Co. monopolized the market, processing their own ore so as to siphon off substantial parts of profits. Here was another example of the kind of choke point that allowed the formation of monopoly control that we saw Frederick Weyerhaeuser achieved at Beef Slough in the Chippewa River Valley or that John D. Rockefeller achieved by buying oil refineries in Ohio.

For a while, the Union Milling & Mining Co. dominated milling in the Comstock, controlling not just the refining process but also the water and timber supplies that mines needed to operate. We’ll reencounter portions of their empire in just a moment. For now, let's consider other elements of boomtown mining processes and the problems associated with them.

 

III. The Resources of Mining

Virginia City became one of the U.S. West's classic boomtowns, growing from a population of 500 in 1860 to 3284 a year later. By its peak in 1873, nearly 25,000 people lived in the area of the Comstock Lode.

The town was fundamentally urban in its social organization: dense, crowded housing; urban services; wage work; and a merchant presence. Of men in city, 70% could be classed as workers of one kind of another, whether miners, carpenters, machinists, or waiters.15% were merchants, 5% were professionals, and less than 1% were elites (capitalists, superintendents, etc.).

At the base of this economy, of course, were the miners, who did brutal labor deep underground. A majority immigrants – Irish, Cornish, over 1/2 of them not US-born. They typically worked for about $3.50/day.

Over time, the workforce of the mines became more ethnically and racial diverse. Much of the investments of the capitalists who owned the mines went to paying wages, and even more of that money went to equipment. As mining shafts went deeper, hoisting machinery was needed to lower workers down the shaft in which they were working, and to haul ore out. As machines bigger, buildings and foundations to support them also grew.

The deeper the mines went, the more water became a problem, with miners facing a growing threat of drowning by hitting a pocket of scalding water and flooding the mine. In some mine shafts, heat rose to well over 100 degrees. As heat rose to as high as 130 degrees, miners worked naked and had to cool themselves with ice. The Yellow Jacket Mine reached as high as 167 degrees at 300' depth. In 1878, every man in two key mines consumed three gallons of water and 95 pounds of ice in a single eight-hour shift. The strain on men and machines was enormous.

Such deep mining required machinery on a scale that California mines had never seen. Some of this engineering work was done in Virginia City, but almost always with San Francisco ownership and capital.

Over time, mining shafts went deeper and deeper, finally 2000-3000’ down. Simple systems like bells and level indicators were used to communicate over these thousands of feet, creating a danger of error with little in the way of safety equipment. In 1863, the 80 deaths at one mine included: one from overwinding, five from falling cages, and twenty-two who were crushed by elevator cages.

Deep underground, miners faced the stope alone. Here, versus in the mine shaft, was a different problem: Comstock mines soon discovered that ore bodies expanded underground as the tunnels removed the matrix rock keeping them in place. Crumbling rock faces and frequent collapses meant an ever-present threat of injury or death.

The problem of crumbling rock faces caught the attention of a German mining engineer named Philip Deidesheimer in the early 1860s.
https://en.wikipedia.org/wiki/Philip_Deidesheimer
He developed a system for erecting timber box frames one atop another that was the major mining innovation of decade. The Deidesheimer Timber System involved simply errecting a new frame as the rock face being worked on moved outward. The innovation represented an intersection of resource, labor, capital, and technological innovation.

Such timber frames didn't always prevent collapse, and they eventually failed when mines were abandoned. Because they were constructed of wood, they also increased the underground threat of fire. 49 out of 295 deaths between 1863-80 resulted from fires caused mine timbers (and the facts that the lanterns miners used involved open flames).

We can learn much about the overall complexity of the mining process, and eventually the urban-industrial nature of mining, by tracing the routes traveled by commodities without which the mines couldn't operate.

Take timber, for instance. Wood was used in mining not just for buildings and square-set timbers, but for fuel. The fire hazard of mining was suggested by buckets on the roofs of structures around the mouth of mine shafts. Where did all this wood come from? Wood traveled to Virginia City via flumes, by mining railroads, or by horses and oxen hauling lumber to where it was be milled, and then shipped downstream.

In addition to timber supply and transportation, other crucial infrastructure on the Comstock included water and ice supplies that were critical to the mines, especially given the underground temperatures at which men worked. And, of course, silver ore required complex metallurgical processing, so large, complex smelters and refineries had to be constructed for this purpose. Because mercury was required for the amalgamation phase of the refining process, mercury had to be hauled over the Sierra Nevada from the New Alamaden mine.

Enormous amounts of capital were invested in all of these process, much of it being provided by Ralston's Bank of California. As a result, by the early 1860s, Ralston's bank controlled much of this infrastructure. But in the late 1860s, Ralston’s control of this empire was being threatened by four Irish immigrants who had been very successful as California miners: John W. Mackay, James C. Flood, James G. Fair & William S. O’Brien. These men decided to try to break Ralston’s milling monopoly. They invested in the Hale & Norcross mine, earning enough to set up their own mill. They then quietly began to buy up shares in the Consolidated Mine and started sending out exploratory tunnels from its existing shafts.

Their explorations yield the biggest bonanza strike ever seen on the Comstock. The price shares in the Consolidated Virginia mine rose from $1 in 1870 to $15 in 1872 to $700 in 1875. By 1876, the mine was earning $50,000 per day, paying out $74 million in dividends between 1874-81. These profits made these four Irishmen among richest men in the world and broke Ralston’s monopoly.

Despite the success of the Consolidated Virginia mine, however, overall Comstock production began to decline precipitously: 1876 -- $38 million 1878 -- $20 million 1879 -- $7.5 million 1881 -- $1.4 million By the 1880s, the Comstock boom was petering out.

What's the lesson here? The story of Virginia City in many ways illustrates some of classic, recurring patterns of mining country, not just in the American West and not just in North America, but all around the world: boom and bust. The Comstock was a forerunner of the patterns we’ll see in many other parts of mining West.

Here's how the cycle of boom-and-bust typically unfolded:

  • Prospectors wandering around the landscape looking to strike it rich;
  • An initial discovery and a rush;
  • Increased capital, increased technology (but simultaneous persistence of low-capital placer miners);
  • The emergence of boomtowns and the urban networks associated with them, initially characterized by transient populations and male-dominated communities;
  • Increasing wage work, and growing presence of female labor in the boomtown marketplace;
  • Growing intensity of resource use;
  • Decline of production, collapse of the mining economy, and creation of a ghost town.

 

IV. Thoughts on Wikipedia as a Tool for Landscape History

I want to pause for a moment and reflect on the Wikipedia mining entries we've asked you to explore as a "wandering exercise" sometime in the next couple weeks, along with the readings about mining that we're discussing in section this week. Here I want to return to some themes I introduced earlier in the course and during the review session for the midterm exam, about the ways historians and geographers go looking for patterns when we explore documents that have come down to us from the past. That's what you're all now doing as you finish your place papers.

What historians are confronted with when they look at remnants of past is a near infinitude of information. Their job is to organize this seemingly chaotic infinitude together into meaningful patterns. This is a daunting task: since information about the past is almost literally infinite, and constantly subject to changing interpretation, it would drive anyone crazy who tried to hold all of it together in their minds in its raw form all at once.

So historians think in terms of patterns, connections, and contexts.

What we do when we read historical documents might seem like assembling a jigsaw puzzle, pieces with pictures on them that need to be realigned with one another and reassembled, even though some key pieces in the puzzle are inevitably missing. In reality, as you probably discovered in researching your place papers, assembling historical documents is much more complicated; documents are more like having a whole bunch of photographs of a city, taken at many different times of day and night in different seasons and weather conditions, using many different cameras, with different types of film, some filtered, some not. Making sense of all these different photos can seem a little like the story of the blind men and the elephant, each of whom understood the animal differently depending on the part of the elephant they touched.

A person trying to reconstruct what a city looks like might lay all the pictures out on a rug, thereby realizing that despite apparent differences, some overlap but capture different aspects of same object, some capture only portions of an object; in others, the existence of an object can only be inferred: the shadow cast by an invisible building; the exteriors but not the interiors of houses; the existence of an electrical generating station implied by the presence of power lines, etc., etc.

That’s what doing history is like, with one additional source of complexity: we're trying to reconstruct this city not just in three dimensions but in the fourth dimension of time as well. We want to know how the city changed over time, so we're forever trying to figure out when each photo was taken and how it relates to earlier and later photos.

Remember, nothing in this course--nothing in history, nothing in life--will make sense if you don’t approach your readings and these lectures with this constant search for patterns in mind. That's I hope you'll do as you explore the Wikipedia entries I sent you in my email last night, and that you'll also find at the end of Monday's note sheet (#19) and in our course website's email archive. In doing this week's readings for section, and in browsing Wikipedia entries about mining, I'd like you to look for patterns, see connections, and place the details of particular events and times and places in their larger contexts.

Your goal in perusing these entries in Wikipedia is not to answer any particular question. This isn't searching. It's browsing. Your goal should just be to enrich your knowledge of mining landscapes (and any other topic that interests you) by following your curiosity, asking questions, and looking for connections and contexts in a spirit of play and serendipity.

To illustrate what I mean by this, for the rest of today's lecture I'm going to take one of the quirkiest oddities I know in the history of western mining and ask what kinds of contexts and connections we can discover in it. I'm going to tell you the story of "The Great Diamond Hoax."
https://en.wikipedia.org/wiki/Diamond_hoax_of_1872
https://www.smithsonianmag.com/history/the-great-diamond-hoax-of-1872-2630188/

But first, I want to flag some patterns from today's lecture.

 

V. Ruminations on Rushes

We can make this lecture an exercise in looking for important themes of mining landscapes in the nineteenth-century West. In the quick surveys we've made of the California Gold Rush and the Comstock Lode, we've seen a set of patterns that arguably characterized all mining rushes. They form a kind of narrative arc, a recurring story that one can tell about most mining landscapes:

  • prospectors wandering the landscape;
  • discovery of gold;
  • a gold or silver rush involving hundreds and thousands of prospectors;
  • instant cities;
  • placer mines;
  • hydraulic mining;
  • increased investment and linkage to metropolitan economies;
  • quartz mining and control by big capital;
  • monopolistic or oligopolistic control of chief mines, mills, resources;
  • collapse of the mineral resource base;
  • abandonment of mines, communities fading into ghost towns.

Virginia City nearly ran its course between 1859-79; within 20 years, it rose from nothing to a thriving city of 11,000 (25,000 in region as a whole), and then production dropped to 1/27 its former size in just five years. Some mining continued, but the population plummeted, and the city became essentially an occupied ghost town which now supports itself via the trade of tourists.

Other Great Basin towns had even more precipitous histories, with abandoned mines and ghosts towns scattered everywhere. Wikipedia is full of their stories:
https://en.wikipedia.org/wiki/List_of_ghost_towns_in_Nevada
https://www.atlasobscura.com/articles/ghost-towns-of-nevada
There's even a commercial website covering all of North America for people who enjoy this kind of tourism:
http://www.ghosttowns.com

We can attach other themes to the overall trajectory of mining, which is the job of this lecture and which is reflected in some of the entries I sent you as possible entries to peruse in Wikipedia:

1) Opening of other mineral areas of the west ... 2) Increasingly capital intensity and corporate control of mines, and connected to it ... 3) Increasingly scientific nature of mining process connected to it ... 4) Rise of base metal mining … 5) Increasing role of government.

Most mining areas were opened up as “rushes” of one kind or another.

  • 1848 – California,
  • 1859 – Virginia City, Pike’s Peak, CO;
  • 1862 – Boise Basin, Idaho; Bannack, MT;
  • 1876 – Black Hills;
  • 1877 – Leadville, CO, Tombstone, AZ

 

VI. Tracking Down a Hoax

In February 1871, two Kentucky prospectors, Philip Arnold and John Slack, turned up at the office of a prominent San Francisco businessman, George D. Roberts. They showed him a leather bag that they said contained something very valuable that they intended to deposit in the vault of the Bank of California the next morning. They didn't want to tell Roberts what was in the bag, but when he pressed them, they eventually said that it contained "rough diamonds" that they had found on a mesa somewhere in the West. They wouldn't tell him where the mesa was, but they said it was the richest mineral strike they'd ever seen, filled not just with diamonds but with emeralds, rubies, sapphires, and other precious stones (none of which had yet been found in the American West).

Roberts was doubtful, but when they dumped out the contents of the bag on his desk, it did indeed contain dozens of uncut diamonds.

The next morning, they showed up at the Bank of California, where they again expressed great reluctance to tell anyone what was in the leather bag. They simply wanted to store it for safekeeping in the bank's vault...

... but soon they were showing William C. Ralston, the wealthiest and most powerful financier in San Francisco, what was in that leather bag. Diamonds had not yet been found in the American West, but they had been discovered in South Africa in 1867, provoking diamond rushes there very much akin to gold and silver rushes in the United States. So Ralston was prepared to believe what he was being told. When he asked to see the contents of the bag, to his great wonder, out spilled emeralds and rubies and diamonds, wealth beyond anything he had ever seen.

He asked where they had found these stones? Their vague reply with a gesture toward the east was, "Out there." Would they sell their rights to the find? Not a chance, but they did need some financial help and would be willing to sell partial stakes in their find to raise the money they would need to develop the site. Slack agreed to sell his share in the diamond field for $100,000 (worth just under $2 million in today's dollars), while Arnold played hard to get. Ralston said he would pay $50,000 to Slack up front, and $50,000 when they brought more gems from their remote site. They agreed, disappeared, and a few weeks later returned with another bag of gems, whereupon Ralston paid Slack the rest of his $100,000.

Ralston still wanted to do his due diligence, so in October he took samples of the rough-cut stones to NYC to confirm the appraisals of San Francisco jewelers, one of whom had offered to buy a 103 carat diamond for $96,000. At Tiffany & Co. in New York, Henry Lewis Tiffany's assistant appraised the value of the samples at $150,000, which, if true, would mean that the gems already in Ralston's possession were worth $1.5 million -- $21 million in today's dollars.

Ralston was now really excited that he was in on the start of another fabulously wealthy rush, perhaps bigger even than the Comstock itself. Investors in San Francisco and New York City were already lining up to participate, including Civil War General George McClellan and newspaper editor Horace Greeley. But Ralston was careful enough to recognize that before the find could truly be declared authentic and full-scale preparations for financing it could begin, the remote mesa where the gems had been found needed to be visited by a competent mining engineer. So he got the prospectors to agree to allow one of California's most experienced mining engineers, Henry Janin, to visit the site.

The prospectors took Janin to the site with a small group of investors in late May 1872, traveling via the Union Pacific from St. Louis to Wyoming, then spending four days on horseback via a circuitous route that was difficult both to describe and to retrace, then finally arriving at a remote mesa in northwestern Colorado. In terms of contexts and connections, you should note the role of the Union Pacific in making this trip possible, demonstrating once again the ways in which mining was dependent on this new transportation technology. When he reached the remote mesa, Janin found precious stones scattered by the dozens all over the ground, confirming that find was genuine.

Ralston promptly founded the San Francisco & New York Mining and Commercial Company, capitalized at $10 million. Janin’s report of the authenticity of the diamond site convinced other investors to form at least 25 other companies capitalized at $200 million. Here's another pattern to notice: the phenomenon of wild speculation and overcapitalization occurred repeatedly in mining operations, with capitalists as an analogue to the prospector’s migration…perhaps comparable to today's Internet companies? Slack and Arnold were paid $600,000 by Ralston’s company, more by others, for partial rights to the land claim.

Investors began to swarm in large numbers, staking claims to sites on the remote mesa as Arnold took growing numbers there to see it for themselves. Janin believed the site to be so rich that it would likely be able to control the world market for diamonds and other gems. The stones were put on display in windows in prominent San Francisco jewelers, and public excitement grew by the day.

Quite a story, huh?

By itself, this is the kind of romantic and colorful tale that antiquarians love. Western history is full of such stuff. But it becomes meaningful only when we as historians can connect it to larger and more important patterns. We’ve already begun to do so – by linking it to the hysteria, speculation, rushes, and transportation systems characteristic of mineral booms.

But serendipity provides an unexpected connection which links this anecdote to another of the major themes I specified for the lecture: government surveying and the figure of Clarence King, the first director of the U.S. Geological Survey, who we've encountered before in this course, and who I included on the list of Wikipedia entries you might peruse.

The Great Diamond Hoax ended in a curious way. Out in Colorado, a government survey was in progress on the 40th parallel, led by Clarence King.
https://en.wikipedia.org/wiki/Clarence_King
King was a fine geologist, interested in the science of geology not just with the goal of discovering mines, but of understanding the wider earth processes that produced the landscapes and resources he was surveying. He was also already becoming known as a writer, having published his classic Mountaineering in the Sierra Nevada in book form 1872, earlier as a series of articles in the Atlantic Monthly.
https://archive.org/details/mountaineeringin02king/page/n7
For the previous decade, King had been conducting a semi-private, semi-public exploration of the 40th Parallel (funded by Congress) to map the mineral and other resources in that part of the American West. His survey eventually resulted in a detailed series of maps of mining areas of the West, and some of the first high-quality geological maps of the route along the Union and Central Pacific railroads. King's own volume on Systematic Geology of the route became a classic of American geology.
https://archive.org/details/reportofgeologic01unit/page/n5
You may also be interested in volume 3 of the survey, which reported on the mining industry, including on the Comstock Lode:
https://archive.org/details/reportofgeologic31871unit/page/n11

King was understandably concerned that a major mineral find like Slack and Arnold's diamonds had occurred in precisely the area he had been surveying for so long without his having discovered those diamonds himself during his geological reconnaissance efforts. So he set out to determine the location of the mesa where the diamonds had been found to investigate it for himself. Given his intimate knowledge of the region, he was able to figure out the mesa's location from Slack and Arnold’s sketchy reports. When he got there, he found that the ground there was in fact covered with quite genuine diamonds and other gemstones. He even found anthills with gems inside them. But being a scientific geologist rather than an engineer, he began to try to work out the geology of the bedrock to determine the strata in which the diamonds originated. In the process, he made a curious discovery: all the diamonds were located right on the surface of the soil. None were in the bedrock. The ones in anthills were only in locations with human footprints nearby.

And at least one diamond had jewellers' marks on it

It was all a hoax! The jewels had been salted, fraudulently placed at the site to make it look rich in ore. A report soon came from London that Arnold and Slack had repeatedly purchased inferior South African gems there over the preceding couple years (something which--just to notice another pattern--they could only do because steamships were now regularly crossing the Atlantic at much faster speeds than sailing ships had previously been able to do).

Arnold retired to Kentucky a wealthy man after a minimal settlement, and Ralston ate his losses. Ralston's bank never recovered, collapsing in 1875. The next day, Ralston went out for his regular morning swim in San Francisco Bay, and a few hours later his body washed up on shore, the victim either of stroke or suicide.

Clarence King became even more famous as a result of his role in this story, a fact that contributed to his being appointed the first director of the United States Geological Survey when it was created a few years later in 1879.

Perhaps this story has carried us too far afield, but let’s end by laying the photographs out on the rug to look for patterns and connections that might give this quirky tale greater historical significance:

  • how dependent mining landscapes were on underlying geological processes, plate tectonics, the historical accidents of location that concentrated valuable ores in particular locations where prospectors and miners could find them;
  • how important new transportation technologies like the railroad (and the steamship) were in making western mining possible and enabling the Diamond Hoax itself, with Arnold shuttling back and forth between his investors and the suppliers in London from whom he bought the South African gems he used to salt the diamond fields on that remote Colorado mesa;
  • how uncertain and unstable mining economies necessarily were based on these historical accidents;
  • how mining rushes tended to be driven by manias and enthusiams not just for prospectors and miners but for capitalists and investors as well;
  • how speculation and over-capitalization were inherent aspects of mining, suggesting the shaky nature of western finances and economies;
  • how this narrative may give us a window on William Ralston’s personal character and biography, including the shaky finances of the Bank of California and his own possible suicide;
  • how mining by the closing decades of the nineteenth century was becoming more corporate, more highly capitalized, more controlled by professional financiers and engineers;
  • how the new science of geology was transforming the understanding of miners and capitalists about the nature of mining landscapes;
  • how surveys financed by the federal government, and the maps and reports they yielded, dramatically increased scientific knowledge of western landscapes.

It’s like the photographs on the rug – we’ve looked at a single incident, but it contains multiple images depending on how we view it – it's a jigsaw puzzle with many more than just one picture, almost like a hologram. We as historians give the “fact” of the diamond hoax its significance. The patterns we choose to reveal in it determine the stories we'll tell about it, the conclusions we'll draw, the morals we'll find in those stories.

This is how I want you to use Wikipedia, our assigned readings, these lectures ... and what I want you to do in your own place paper.

I hope this digressive, wandering lecture knotted you up. I designed it to maximize connections, to show you the ways confusion is really just a sign of the myriad nested patterns that we always find when we go wandering in past and present landscapes. I've offered you lots of twists and turns here because the central lesson, however tangled, is very simple: in history, you can almost always start at any one point and connect it to any other. Doing history means discovering relationships, patterns, connections, contexts, without getting too frustrated, even when things at first seem obscure or disconnected.

Learn to trust serendipity. Start with the Diamond Hoax and wander around inside it to figure out all the interesting connections you can make with it. Spread your photographs out on the rug, and begin exploring them in a spirit of play. Learn to relax, enjoy the not knowing, the figuring out, the discovery, the play.

And never forget that wonderful line from E. M. Forster's novel Howards End: "Only connect...."