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Sunday, July 17, 2011

THE SECRET LIFE OF CAPITALISM Part Three

I suppose the simplest way to describe Henry Janin (above - not him) would be to call him a “hale fellow, well met.” His fellow mining engineers described him as “Cool as a cucumber...self-reliant, determined, and confident”. However the same publication hastened to point out, “He is not a stayer...his brilliant work, genial temperament and brilliant wit made him the “spoiled child” of many a social circle...with his extraordinary talents and accomplishments he might have been great; but at least he always remained dear.”.
Said another publication, “He accommodates himself gracefully to a given situation; lives well...drinks only the best of wines, and smokes only the best of cigars. Aristocratic in his tastes, gentlemanly in demeanor, and careless of the opinions of those he does not esteem, Mr. Janin (above - still not him) enjoys the confidence of those who appreciate merit and worth “ Still, somehow, amongst all that praise, it is difficult to find either profile as positive toward his talents in his life's work. That ambivalence seems to stem at least in part from his work at Diamond Mountain. He was, all things considered, the worst possible man for this job.
Henry Jannin took William Ralston's (above) job offer at his standard salary, ($2,500), and an option to buy 1,000 shares in the venture at a greatly reduced fee. As soon as half of the final sale price ($660,000) had been deposited in an eschrow account, Philip Arnold and John Slack agreed to lead Jannin to the claim, along with Asbury Harpending, General Dodge, one of the builders of the transcontinental Railroad, and...
...for some reason, a gadabout Englishman named Alfred Rubery (above), whose only claim to fame up to this time was having been convicted of outfitting a raider for the Confederacy in a San Francisco, having been  sentenced to ten years in prison for this,  but then having been pardoned by President Lincoln and expelled from America. He had come back after the Civil War, and now claimed to be "on vacation". But if this were another time and place, I would suspect "Ruby" was a secret agent of the British government.
August 20, 1872, found Arnold and Slack once again on a train bound for their Diamond Mountain, this time leading the party of investors and Henry Jannin. At Rawlings Springs station they left the railroad, hired horses and pack mules, and headed out across “ a mass of clay or sand and alkali--a horrible and irreclaimable desert”. According to Harpending (above) their four day journey was hindered, because “At times our leaders seemed to be perplexed, to have lost their way. At times they climbed high peaks, apparently in search of landmarks....The party became cross and quarrelsome. At last, on the fourth day, early in the morning, Arnold set out alone, to get his bearings, as he said. He returned about noon, said everything was all right, and we set out again with high hopes. By four o'clock we pitched camp on the famous diamond fields.”
It was, said Asbury Harpending, “...a small mesa...littered here and there with rocks comprising about thirty or forty acres (above), through which a small stream of water ran. It was located in one of the most unfrequented parts of the United States....once...on a very still day, I thought I heard something in the far distance that sounded like the ghost of a whistle. When I mentioned this to Arnold, he merely smiled. The railroad was at least a hundred miles away, he said.”
The party could barely contain their greed, and wasted little time making camp before they began their search for jewels. “We all went to work with our primitive mining implements- picks, shovels and pans. Everyone wanted to find the first diamond. After a few minutes Rubery gave a yell. He held up something glittering in his hand. It was a diamond, fast enough. Any fool could see that much. Then we began to have all kinds of luck. For more than an hour, diamonds were being found in profusion, together with occasional rubies, emeralds and sapphires.”
There wasn't the usual row over who should cook supper, who should wash the dishes, who should care for the stock, which little incidents of camp life had brought us to the verge of bloodshed during the three previous days. On the contrary, good will and benevolence were slopping over...Mr. Janin was exultant that his name should be associated with the most momentous discovery of the age, to say nothing of the increased value of his 1,000 shares; while General Dodge, Rubery and myself experienced the intoxication that comes with sudden accession of boundless wealth.”
Everywhere we found precious stones - principally diamonds - although a few sparklers of other kinds were interspersed. It was quite wonderful how generally the gems were scattered over a territory about a quarter of a mile square and of course we were only doing surface examination. No one could tell what depth might produce...Two days' work satisfied Janin...The important thing (he said) was to determine how much similar land was in the neighborhood...this new field would certainly control the gem market of the world and (it was)...all-essential...for one great corporation to have absolute control. So we started on a widely extended prospecting trip. We staked off in a rough way an enormous stretch of the country, set up notices of claims....”
Unnoticed by the civilians, Henry Jannin managed to stake a private claim to one of the few water ways which bisected the incredible diamond Mountain, a feat which, if upheld in a court of law, might have given the engineer a strangle hold over the entire operation. He was probably not alone, but with his favorable report, the second half of the $660,000 was paid to Slack and Allen, and the first half held in eschrow was released. Jannin's report, made public on September 3, 1872, in the Engineering and Mining Journal. The respected endgineer claimed to have washed a ton and a-half of gravel off the platau, which produced 1,648 carats of diamonds, and 7,200 carats of ruby. “"I do not doubt that further prospecting will result in finding diamonds over a greater area...and that I consider any investment at the rate of $4,000,000 for the whole property a safe and attractive one".
What Jannin neglected to mention was that he had no practical experience at panning, either for diamonds, sapphires or gold. So he had left that back breaking, tedious work to the only practical miners in the group - Philip Arnold and John Slack.
In retrospect it seemed the investors were so busy trying to cheat each other, they made it easy for the professionals.
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