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Mining the Investor - Page 2

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Early in 1899 there was excitement along the Grand Canyon, where had been staked a large area of lime-carbonate capping, thought to have been valuable for platinum. The bubble was punctured by Professor W.P. Blake, Director of Mines of the Territorial University, who after careful assays reported that the "ore" sent him was a carbonate, containing only silica, calcium, magnesia, iron and a little alumina. Not a trace of platinum could be found, though similar rock elsewhere submitted was reported to have returned values of $300 a ton in platinum. While deploring the influence of his report upon the prospectors who thought they had found wealth, he said, "the people of Arizona generally do not propose to profit by ignorance, pretense or misrepresentation." It is probable that the excitement all started through efforts made to assure trail holdings down into Cataract Canon.


Miners at the Grand Canyon.

Miners at the Grand Canyon.




Another notable swindle was that of the Two Queens and Mansfield Mining companies. The former had several prospects, near Winkelman, about 100 miles southeast of Phoenix. The latter had a mine in the Patagonia District of Santa Cruz County. The Post Office department secured the arrest of several Kansas City, Missouri stock brokers, who had been selling shares in the two companies, by means of extravagant full-page advertising. As is usual in such cases, strong defense was made on the basis of testimony taken in Arizona, but the defendants finally were convicted and were sent to jail in May, 1909, though, as usual in such cases, they received relatively light sentences.


Another typical instance concerned a temporary resident of Wickenburg, Arizona, who had bought a mining claim a few miles from town. He sold at least $100,000 worth of stock in several villages along the Hudson, near West Point, and, in order to show his good faith, brought out a Pullman carload of selected stockholders to view the wonderful mine from which he was to make them fortunes. After showing the potential investors the mine, stock was quickly sold and the men returned the east. The following day, Sheriff Hayden of Maricopa County appeared on the same ground with an attorney and formally sold, under a judgment of debt, all the property owned by the promoter or his company in that vicinity. Hayden afterward was filled with regret that he had permitted the attorney to delay him one day on the sale, or he would have been on the ground at the same time as the investors' party.


The Great Diamond Swindle


A company with a capital of $10,000,000 was organized in San Francisco in 1872 for the exploitation of a diamond field somewhere north of Fort Defiance in Northeastern Arizona. The reputed discoveries of the field were two miners named Arnold and Slack, who exhibited in New York and San Francisco some magnificent rough diamonds and some very good rubies. The San Francisco company included a number of the wealthiest men of the city, with significant mining experience. They sent out some agents who returned with more diamonds, picked up from the surface of the ground. Just the location of the find was disputed; however, for it was told that locations made north of Fort Defiance were merely for the purpose of diverting attention, when in reality, the field where the diamonds had come from was south of the Moqui villages.


Clarence King

Clarence King (far right), who later became head of the  U.S. Geological

 Survey, and his men helped foil the  Great  Diamond Swindle.


The whole scheme was a fraud on a gigantic scale. It was uncovered by Clarence King, the noted western geologist, who first demonstrated that the diamonds were not of the same character, bearing characteristics both of the South African and Brazilian fields. King visited the Arizona field and confirmed his own belief that it had been salted with stones brought from abroad. It is probable that the two "discoverers" were merely tools of much more wealthy men, who expected not only to get back the gems that had been "planted," but to sell stock to the unwary small investor. There was another fake diamond "discovery" down on the Gila, not far from Yuma, but this was on a much smaller scale and excitement died even more quickly.  


(Editors note: The Great Diamond Hoax was exposed on November 26, 1872 when the San Francisco Evening Bulletin published Clarence Kings findings. William Ralston, who formed the New York Mining and Commercial Company to invest in the reported Diamond Mine, had given $600,000 to Arnold and Slack, but was never able to recover it. Arnold reported lived his few remaining years in Kentucky, and Slack blew his money in New Mexico).


A Basket Soon Emptied


One of the many short-lived boom camps of Arizona was Quijotoa, located 65 miles west of Tucson, by the side of a mountain shaped like a basket. The name came from the Papago word, "kiho," meaning basket. The first mining locations were made early in 1879 at the bottom of the hill, renamed Ben Nevis by a man named Alexander McKay, one of the pioneers of the boom camp. On May 11, 1883, Charles Horn or Alexander McKay discovered rich croppings at the summit of the hill and then the excitement began. It was claimed that five tons of the ore gave a return of .$2,500 at the Benson smelter. Tunnels were started into the hillside to cut the ledge at depth, but failed, for there was no ledge. In the language of a San Francisco mining man, the deposit was ''merely a scab on top of the mountain."


McKay gave a bond on the property to the Flood-Fair-Mackey-0'Brien syndicate of San Francisco at a price of $150,000, but the option was not taken up at maturity. A half-dozen companies were formed in San Francisco, each with ten million dollars capitalization, for the working of the Quijotoa mines, and the news broadcasted that Arizona had found another Comstock Lode. As a result, thousands of men flocked in, despite warnings that the mines were only in the development stage. Around the original Logan town site were four or five additions. In January, 1884, at Quijotoa, were only a couple of tents, ten miles from water. Two months later, several thousand people had come and there were many marks of a permanent town, including a weekly newspaper, "The Prospector," published by Harry Brook. The time the boom broke is indicated best by the fact that the printing office was moved to Tucson in the fall of 1884. Soon thereafter, J. G. Hilzinger of Tucson bought the mines, a mill that had been moved over from Harshaw, and all the other property of the principal corporation for $3,000.


Written by James Harvey McClintock in 1913, compiled and edited by Kathy Weiser/Legends of America, updated November 2013.


Also See:  


Mining and Miners in Arizona

Mining in the American West (main page)

Treasure Hunting In Arizona

Prospectors, Miners and Mining Photo Gallery


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Notes and Author:  This article is primarily a tale told by James Harvey McClintock between the years of 1913 and 1916, when he published a three volume history of Arizona called Arizona: The Youngest State. However, the article that appears here is far from verbatim. While the story remains essentially the same as originally published, heavy editing has occurred for spelling and grammar corrections, revisions for the modern reader, and updates to this historic tale. 


McClintock began his career working at the Salt River Herald (later known as the Arizona Republic). He later earned a teaching certificate, served as Theodore Roosevelt’s right-hand-man in the Rough Riders, and become an Arizona State Representative. He died in California on May 10, 1934 at the age of 70.


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