DIAMOND FRAUD LOSS FALLS ON SHOULDERS OF ORIGINAL DUPES;
RALSTON REIMBURSES ALL STOCKHOLDERS.
_Gossips Make Unjust Charge Against Men Who Acted in Good Faith and
Were Deceived by Swindlers._
The losses growing out of the diamond fraud fell on the shoulders of
the original dupes--W. C. Ralston, William M. Lent, George Dodge and
myself. My impression is that the money obtained by Mr. Lent from
Arnold very nearly, if not quite, balanced his account. Perhaps he may
have given a portion of this to General Dodge, his business associate.
Mr. Ralston promptly paid the twenty-five stockholders who subscribed
$2,000,000 for a half interest in the company, dollar for dollar. Not a
man of them lost a cent. This involved a sacrifice of the last $300,000
paid to Arnold and Slack. Mr. Ralston had the receipts in full of the
various parties neatly framed and I am told that it was one of the
mural decorations of his private office in the Bank of California. The
remaining balance of loss was borne by Mr. Roberts and myself.
The diamond fraud story has covered acres of newspaper space. This,
however, is the first time that the narrative has been told from start
to finish, all the facts assembled in connected form. From what has
gone before, certain points stand out in bold relief.
The scheme, or rather the execution of the scheme, was anything but
the work of a far-seeing, skilful and well-informed mind. Nothing can
illustrate this better than the supreme folly of planting diamonds,
rubies, emeralds and sapphires in the same matrix. A capable rogue
would have consulted the history of mining for precious stones and
would have readily discovered that they are never found associated
in the same formation. This would have enabled him to avoid a raw
monstrosity that should have led to exposure at the very start. Much of
the other work was raw, as, for instance, the diamond and ruby spangled
ant-hills and the flat rock, whose fissures were studded with precious
stones. A plain, unornamented diamond field would have presented a far
better baited hook.
It can be shown by authenticated documentary evidence that Slack and
Arnold were the sole beneficiaries of the loot. In fact, some doubt
exists whether Slack was a participant at all. Outside the sum that
Lent collected, the balance was transmitted to Arnold’s heirs, as the
records of Hardin county, Kentucky, prove.
Again, if any other actor in the drama had the least foreknowledge of
the fraud, he surely would have parted with his interest while the
market was booming--before the frail bubble burst. When the coarse
diamonds were sent to London, nothing could be more certain than their
immediate identification as nearly valueless South African stones. Yet
not a share of stock was sold. Every reasonable presumption pointed to
the entire good faith of all, so far as the San Francisco and New York
Mining and Commercial Company and its stockholders were concerned.
Finally, it is conceivable only on the basis of downright madness,
that any man with wealth, reputation and self-respect, in short,
with everything to lose, could have conceived and carried out such
a reckless plot. If by any chance it had succeeded, if the diamond
company’s stock had been exploited on the stock market, there was not a
place upon the earth so desolate and remote but that the vengeance of
mankind would have found him out. It was the evident design of a rather
crude intelligence utterly regardless of consequences, and counting on
obscurity to make good.
Nevertheless, no matter how plain a case may seem, no matter how free
from doubt or complication, if it be only big enough the world loves to
build around it a fairy structure of mystery or romance. Nothing could
be more evident than that Arnold and Slack were the architects of their
own work. Yet the public saw fit to cast grave suspicion on those who
were clearly victims and heavy losers--the only ones who lost a cent.
Even Ralston, although he paid over $300,000 to make good the losses of
the stockholders, was more or less under a cloud. Lent, Roberts, Dodge
and myself were in turn suspected. At last public opinion seemed to
settle down to a conviction that the guiding--“the master mind”--was
mine.
There was not an atom of valid evidence on which to raise the
accusation. On this side of the Atlantic it was never remotely charged
in any responsible paper, to my knowledge. The conclusion seemed to be
reached very much because of the largeness of my business undertakings
and my well-known spirit of venture in commercial lines. Therefore,
not a few assumed that because I was always willing to take what might
be called by some a long chance, therefore, I must have been the power
behind the scenes with Arnold and Slack.
Not arguing the case, this conclusion had to put aside many well known
facts, as I said before. I was a man of large wealth, making money as
rapidly as was good for anyone, so that the financial inducement was
not there. I was young, only 32, had a family of which I was proud, had
the best possible standing with business men, both in San Francisco and
abroad. Honor bright, does it not seem incredible that a man situated
like myself, full of ambition and with everything to live for, would
have engaged in an ignoble plot to fleece his friends and the public,
a plot absolutely certain to drag him and all belonging to him through
the dust?
The story would have died a natural death beyond any question just as
it did in the case of my fellow victims, had not the London Times made
a direct accusation of complicity in the diamond fraud against Alfred
Rubery and myself, which became the basis of a famous libel suit.