I would like to see every PhD.. candidate in economics required to make at least one pilgrimage to the Unita Mountains in Utah. The humble range can be found about 100 miles due east of Salt Lake City. There, among the headwaters of the Green River, a wind swept conical peak looms over a 7,000 foot high green mesa called Diamond Mountain Plateau (above).
There are no diamonds on the Diamond Plateau. Never have been. But amongst the scrub brush, gravel, and oppressive isolation there (above) the academic acolytes might find, if they looked hard enough, a a zircon of veracity, a small brilliant shinning baguette illuminating the fundamental and eternal truth behind capitalism – greed makes you stupid.
Our story begins in 1846, when 17 year old Philip Arnold (above, left) left his home in Elizabethtown, with his cousin John Slack (above, right). They joined 4,700 of their fellow Kentuckians volunteering to fight in the Mexican war.
Both men were mustered out in 1848 in Texas, and rather than returning east, they joined the California gold rush. But, like the vast majority of prospectors, they found no gold.
Eventually Philip found employment in San Francisco at the new Bank of California - owned by William Chapman Ralston. Phillip became an appraiser of other prospector's gold claims. It was not the romantic adventure Philip had dreamed of. But as the precipice of middle age yawned open before him, Philip Arnold found it less physically demanding and better paying than prospecting itself.
He eventually found even more sedentary employment, as an assistant bookkeeper for “General” George D. Roberts, at his Diamond Drill Company.
And it was at the diamond drill company that Philip saw his first diamonds, in the diamond dust used in the rock drills.
From this reasonably secure pedestal Philip also watched as the pattern established in California during the 1850's was repeated in the gold and silver strikes in Nevada of the 1860's. Out of the thousands of prospectors who rushed in, a mere handful of the early arrivals actually found any gold, and they were quickly bought out or squeezed out by the banker run mining conglomerates which followed.
Hundreds of aging desperate 49's, knowing nothing about diamonds, immediately sailed for South Africa. They all arrived in Capetown months too late to strike it rich. Meanwhile the smart ones, those who hadn't already drifted back to "the states", stayed in California. But they all dreamed about the new fortunes, this time in Diamonds.
And being reasonably smart, in 1870, forty year old Philip Arnold (above) gathered his life savings, quit his job at the Diamond Drill Company, and along with his cousin and old partner John Slack, went prospecting for diamonds in America. They disappeared for two years. And over time, their fate became a mystery.
In early February of 1872, two dusty unshaven prospectors carrying a battered raw hide bag stumbled into a crowded San Francisco saloon, ordered drinks and sat alone.
Their furtive whispered arguments and their sheltering of the tattered bag immediately drew attention from the boozy crowd. A few of the denizens recognized them as the long missing John Slack and Philip Arnold. After several minutes, the pair paid their bill, gathered their bag and left.
But they repeated their argument at several saloons before finally presenting themselves, now reeking of whiskey, at the main office of the Bank of California - Phillip Arnold's old firm. Without a word of explanation, they presented their bag for deposit. It was accepted and recorded by the bank manager as being filled with diamonds, rubies and other sapphires. It took about twenty minutes for the whole town to assemble the story and that story to be afire with rumors.
The bank manager immediately notified his boss, William Ralston. And after Ralston made inquires about the two men, he then urged Major George Roberts to contact his old “friend” Philip Arnold.
But Philip was reluctant to talk, and John Slack was virtually mute. Only after being plied with whiskey for hours, did Philip finally admit that some where in the great desert wilderness of Utah territory, just before winter drove them back to civilization, he and John had found a mountain literally peppered with diamonds and sapphires. The bag deposited in Ralston's bank was just a sample of what they had picked up in a few hours. Right off the ground, just like that Hottentot in South Africa. Arnold explained they had filed on the claim and were now the legal owners of a diamond mountain.
It was an unbelievable story. But Ralston (above) and Roberts both knew, or thought they knew, Philip Arnold as a trustworthy and honest employee. And John Slack was also know around town as a dull but hard working man. And there was a logic to finding yet another massive, rich deposit of wealth in the American west, where everything was possible. The biggest problem at this point was getting information out of the two prospectors.
Over the next few weeks banker Ralston and a small group of close investors managed, by befriending the two miners, to convince the pair to allow two local jewelers to examine the contents of the bag. The pair had never seen a diamond in the rough of course, or a ruby. But they pronounced the contents as worth $125,000.
This inspired Ralston to offer $50,000 for one half of one percent interest in the claim, if it were first examined by two experts of his choosing. One was to be David Colton (above), part owner of the successful Amador gold mine, and the other expert being "General" Roberts. Reluctantly, Philip Arnold and John Slack agreed to take these experts to their claim.
In early March, after Slack had gone ahead to secure travel connections, Arnold, Colton and Roberts traveled by railroad from San Francisco to Sacramento. Because of missing bridges, that was as far west as the transcontinental railroad reached at the time. There the trio boarded the Central Pacific Railroad line, climbing over the Donner Pass, down into the Nevada basin and thence across the Utah desert Promontory Summit, in mountains north of The Great Salt Lake. Here the trio switched to a Union Pacific train to continue their journey eastward.
From now on, Arnold insisted, Colton and Roberts must wear blindfolds at all times, and the pair meekly complied. Then, after 36 hours on the train, just before dawn, at a small seemingly abandoned station, the train pulled to a stop for water and coal.
Here they met John Slack. Philip and John helped the two men, still blindfolded, off the train and onto horseback. Immediately they continued their journey. For the next two days the experts, softened by life in San Francisco, suffered on horseback in the oppressive heat by day and endured freezing temperatures each night.
They were allowed to remove their blindfolds only well after sunset. And before sunrise each morning, they were required to replace their blinders. And then, just as they had grown so frustrated they were on the verge of demanding to return to the train, the horses were brought to a stop and their blindfolds were removed.
What was revealed was a flat desert mesa, covered in scrub brush and gravel, with an odd thrust of a mountain at it's foot. Colton and Roberts wandered about, staring at and kicking the nondescript terrain until, suddenly, Colton reached into what appeared to be an ant mound and pulled out a small hard brilliant crystal. In an instant the two excited experts agreed. The Great Diamond Mountain was real!
They spent several hours collecting gems – diamonds and sapphires – before Philip Arnold and John Slack re-blindfolded the men and led their horses back off the mesa. It was a two day journey back across the horrible desert until they reached the railroad tracks again, Arnold flagged down the west bound transcontinental passenger train. Colton and Roberts were accompanied by Arnold and Slack as far west as Oakland. There the prospectors collected their $50,000 down payment and then returned to their "diggings". But the two experts continued on to San Francisco with the two bags of jewels they had collected.
With those jewels in hand it seemed obvious to William Ralston (above) that the Diamond Mountain was going to make him even richer than he was already. It was the usual two step plan for this master of high finance, one he had already perfected in California and Nevada. First he had to squeeze Philip Arnold and John Slack out of the deal as quickly and as inexpensively as possible. Then it would be just a matter of piling up the riches in his bank accounts. And you know, Mr. Ralston was half right.
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