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Contents


                        Page
  PREFACE
  CHAPTER I               11
  CHAPTER II              18
  CHAPTER III             25
  CHAPTER IV              32
  CHAPTER V               40
  CHAPTER VI              45
  CHAPTER VII             55
  CHAPTER VIII            65
  CHAPTER IX              73
  CHAPTER X               78
  CHAPTER XI              83
  CHAPTER XII             89
  CHAPTER XIII            98
  CHAPTER XIV            109
  CHAPTER XV             114
  CHAPTER XVI            120
  CHAPTER XVII           128
  CHAPTER XVIII          139
  CHAPTER XIX            146
  CHAPTER XX             159
  CHAPTER XXI            168
  CHAPTER XXII           174
  CHAPTER XXIII          180
  CHAPTER XXIV           185
  CHAPTER XXV            191
  CHAPTER XXVI           201
  CHAPTER XXVII          206
  CHAPTER XXVIII         212
  CHAPTER XXIX           217
  CHAPTER XXX            224
  CHAPTER XXXI           230
  CHAPTER XXXII          243
  CHAPTER XXXIII         250
  CHAPTER XXXIV          255
  CHAPTER XXXV           259
  CHAPTER XXXVI          267
  CHAPTER XXXVII         271
  CHAPTER XXXVIII        278




[Illustration: YOURS WITH BEST WISHES, ASBURY HARPENDING

JUNE 20, 1915--AGE 76]




    THE
    Great Diamond Hoax
    AND
    Other Stirring Incidents
    IN THE LIFE OF
    ASBURY HARPENDING

    □□□□

    EDITED BY
    JAMES H. WILKINS

    □□□□

    Copyright by
    A. HARPENDING, 1913

    □□□□

    The James H. Barry Co.,
    San Francisco.

[Illustration: HARPENDING CREST]




To my friend, unassuming John A. Finch, of Spokane, Washington, a
man of great ability, possessing, according to my ideals, all the
attributes of greatness, as a token of my deep esteem, this book is
dedicated.

    THE AUTHOR.




PREFACE.


On my return to California, after an absence of many years, my
attention was called, for the first time, to the fact that my name
had been associated unpleasantly with the great diamond fraud that
startled the financial world nearly half a century ago. Plain duty to
my family name and reputation compelled me to tell the whole story of
that strange incident so far as my knowledge of it extends. I sincerely
trust that a candid reading of these pages will satisfy the public that
I was only a dupe, along with some of the most distinguished financiers
of the last generation. Concerning two of the historians who maligned
me, I am without redress. They are dead. The latest author, Mr. John P.
Young, repeated the accusation of his predecessors in his history of
San Francisco. This gentleman has admitted that he merely copied the
story of the earlier works, having no personal knowledge of events at
that period, and has handsomely admitted, over his signature, that he
unconsciously did me an injustice.

To the diamond story I have added, at the request of friends, some of
my experiences and reminiscences of California of the early days.

    ASBURY HARPENDING.




CHAPTER I.

EARLY YEARS--MY VOYAGE TO CALIFORNIA.


My father was one of the largest landed proprietors of Kentucky,
in the southwestern section of the State. That was still on the
frontier of the Far West. Beyond stretched the land of enchantment and
adventure--the plains, the mountains, the unbroken solitudes, the wild
Indians, the buffaloes and the Golden State on the shore of the Pacific.

Youngsters whose minds are occupied today with baseball and tennis
and who still retain a lingering love for taffy, sixty years ago on
the frontier were dreaming of wild adventures that were nearly always
realized to some extent. We lived on the border line, where the onward
wave of emigration broke and scattered over the vast vacancies of the
West, and it is hardly saying too much to assert that fully seven boys
in ten were caught and carried forward with the flood before they had
gone very far in their teens.

For myself, I simply gave up to the spirit of the times. At the age
of fifteen I ran away from college to join an aggregation of young
gentlemen but little older than myself, who enlisted under the banner
of General Walker, the filibuster. The objective was the conquest of
Nicaragua. The Walker expedition sailed to its destination and what
followed is a matter of well known history. But for my companions and
myself, numbering 120 in all, it ended in a humiliating disaster.
For, as we sailed down the Mississippi River the long arm of Uncle Sam
reached out and caught us, like a bunch of truant kids. I managed to
elude my captors, and after various wanderings and strange experience
made my way to the paternal home in a condition that made the Prodigal
Son look like 30 cents.

That didn’t abate the wandering fever in the slightest and in order
that I might not commit myself to another Walker expedition, my father
consented that I should try my luck in California and I started with
his blessing and what seemed to me a liberal grub stake. I had just
turned sixteen.

Instead of going to New York and taking passage from that port, I
decided to travel down the Mississippi River, have a look at New
Orleans and leave on one of the various steamers there that connected
with the Pacific Mail at Darien.

Here an unforeseen calamity very nearly upset all my plans. My money
consisted of currency, issued under the auspices of the various
States. A financial storm of some kind had just swept the country and
the currency became legal tender only in the borders of the State of
issuance. All that I could realize on my bills was barely enough to buy
a steerage ticket to California. That, together with five dollars in
gold coin and a revolver comprised my earthly possessions.

[Illustration: THE AUTHOR AT 16

Taken just before his migration to California]

At Panama we were crowded into a small steamer designed for about 400
passengers, but nearly 1,000 were crammed into it. Conditions in the
steerage were appalling. Besides, the ship was under-provisioned and
we soon ran short of anything like vegetables and fruit. The purser
had thriftily laid in a large private supply of oranges and bananas for
sale in San Francisco. These he had divided into two caches. The hungry
mob seized on one of them, located between decks, in the night, and
cleaned it up to the uttermost peel. The purser knew only too well that
the next night would witness the disappearance of the balance of his
property. He was in despair. An inspiration seized me.

“How much will you take cash for the lot?” I asked him.

“Give me $10 for them and it’s a bargain,” he answered.

I fished out that lonesome $5 piece, paid it on account and made some
vague excuse about getting the other five from my bunk. I was given
permission also to hold a fruit auction sale on the upper deck.

Being a fruit peddler shocked my southern ideas of a gentleman’s
employment. Nothing but downright poverty could have driven me to it.
However, I took the edge off the thing as far as possible by employing
an itinerant gambler, also dead broke, to act as general salesman and
orator while I took in the cash. He had a voice like a fog horn and the
gall of a highwayman. He cried our wares with such success that in a
few minutes the whole ship’s company was engaged in mad competition to
buy oranges and bananas at five for a half. It would have been just the
same if I had made the price five for a dollar.

Money rolled in faster than I could count it. I could see that my
chief of staff was “knocking down” on me in a shameless way, but I
didn’t have time to check his activities--in fact, I didn’t care. In a
little over an hour, the last orange and banana had vanished. I settled
accounts with the purser and counted my capital. I had a little over
$400 to the good, enough to make a decent start in California.

I do not tell this incident because it is noteworthy in itself.
Instances were then so common of needy gentlemen who extricated
themselves from the financial bog by some shift which in other days
they would have thought ignoble--almost disgraceful--that this event
would not be worth recalling; but in the peculiar way that destiny is
worked out, it had a decisive part in directing very important matters
of the future. And it has been my observation that the most impressive
movements in the lives of most of us have been determined more by
chance than by a fixed purpose.

Among those who watched my fruit sale with interest was a gentleman
named Harvey Evarts. He was a successful plumber in California and
was returning from a trip to the “States,” whither he had gone with a
party of bankers, mine owners and others of fortune commensurate with
his own. Plumbers were not in 1857 the financial giants that they have
become today. Still their stars were in the ascendant and Mr. Evarts
was one of the brilliant luminaries in the sky.

This gentleman approached me after the sale. I had transferred at once
from the steerage to the upper deck, as became my altered fortune, and
he congratulated me in a pleasant way on my extraordinary good luck.
I told him all about myself in boy fashion and when we reached San
Francisco we had become so well acquainted that Mr. Evarts invited me
to accompany him to Camptonville, then a great mining district, now
off the map, so far as the yellow metal goes, where he had important
interests.

Placer mining was on the toboggan in 1857, when I arrived in
California. All the great “bars” and gulches had been located and
worked out. Very few individual strikes were made after that date.
I do not know whether it was good judgment or just a case of pure
“nigger luck,” but at all events it happened that even in those days
of declining fortune, every suggestion that Mr. Evarts gave me turned
to gold. He advised me to take a chance at the head of a couple of
abandoned gulches. In both cases I struck it rich enough to add $6,000
to my working capital. Again he suggested a lease of a hydraulic mine
on what was known as Railroad Hill, which had been the ruin of several
experienced miners. I followed his advice and after being brought
to the verge of bankruptcy struck it rich, to my way of thinking,
and cleaned up finally with $60,000 to my credit, all before my 17th
birthday.

I visited the newly discovered Comstock Lode. Didn’t like it, for deep
mining seemed too slow a way of making money. Later I had a spectacular
race with Jim Fair, then a hustling prospector, to locate a mining
claim in Utah. But the tales of mountains gorged with wealth vanished
when we got there.

Then I began to listen to a lot of mining camp talk about Mexico and
its riches. California and Nevada were growing dull to my way of
thinking and I turned my thoughts to the land of Montezuma.




CHAPTER II.

MY EXPERIENCE IN MEXICO.

_How Luck Again Brought Me Fortune._


All the early gold seekers of California had some knowledge of Mexico.
The great argosies of the Pacific Mail Steamship Company stopped at
various points, such as Acapulco, Manzanillo and sometimes at Mazatlan.
Thus the passengers gained a sort of hurricane deck impression of the
Latin nation to the southward. But it extended no further than these
glimpses of the coast. A veil of profound mystery and romance shut out
a view of the vast interior. Only, we knew that it was immensely rich
in precious metals, but so utterly lawless and overrun with bandits
that nothing short of a standing army could protect an investment.

Thus none of the adventurous pioneers attempted to explore and prospect
the west coast of Mexico, which later poured its hundreds of millions
into California. I may be mistaken, but I have a strong impression that
I was the first of a long line of miners who went from San Francisco to
Mexico and laid the foundation there for mighty fortunes.

Very much like Jason, when he pushed his classic junk from Greece, I
started on my ventures in Mexico. I bought a small trading vessel,
hired an excellent crew, several of whom spoke Spanish, took very
little money along, but a large cargo of goods suitable to the wants
of the country. In other words, I figured to make the expedition
finance itself. In this I was fairly successful. After sailing up
the Gulf of California and stopping at various ports, we arrived at
Mazatlan, my original objective point, my cargo sold out.

There was a small American colony at Mazatlan and several groups of
foreigners of other nationalities, all of them of the trading class.
When I suggested a prospecting expedition into the interior, they
assured me it was little better than suicide; that the country was in
the absolute possession of outlaws of the most desperate type, and that
a prospector’s life would not be worth ten cents among them.

But I met a Mexican gentleman by the name of Don Miguel Paredis,
who told me a very different story. He said that the dangers were
grossly exaggerated--that there was really little to fear for anyone
who understood the people. As a guaranty of good faith he offered to
go with me, for at the time he happened to be broke--not an unusual
incipient in the life of a Mexican gentleman. Moreover, he promised
to lead me to a mine of fabulous riches, in the mountains of Durango,
about two hundred miles from Mazatlan. So we set out with a complete
mining outfit, powder, steel, tools, general equipment and provisions
for six months.

Don Miguel certainly understood his business. We really were in no
more real danger than if we had been traveling through one of the New
England States. We did meet some uncommonly tough-looking citizens,
armed to the teeth, but Don Miguel always rode forward to meet them,
handed out some specious palaver in Spanish, whereupon the whole party
would disembark from their mules or horses, embrace each other on the
trail, pass around some more palaver and part with mutual esteem. The
Don was a marvel as a peacemaker and I might add that for genuine
good-fellowship and clean dealing in all respects he was one of the
finest men of any nation I have met in a long life.

Finally, we reached his mine. This was known for years after as the
Guadaloupe de los Angeles mine. He hadn’t exaggerated its riches,
hadn’t told half the truth. The vein ran straight up the almost
perpendicular face of a narrow gorge. It was merely a case of breaking
down the ore as in an open cut. There were no shafts, tunnels, drifts,
and winzes that take the heart out of quartz mining as a rule. And the
ore was so rich that with careful sorting it was possible to make large
cargoes average $500 or $600 a ton.

We never attempted to “beneficiate” or reduce the ore on the spot. Don
Miguel was altogether too shrewd for that. Had bullion trains gone
through the mountains from our camp it would have taken a standing army
to protect them. We simply bought mules and burros, loaded them with
rock that no bandit wanted, though it was worth perhaps five hundred
dollars a ton. It very seldom failed to reach the seaboard, where there
were crude reduction works and plenty of purchasers of ore.

Even our inbound pack trains of costly supplies were unmolested. Don
Miguel was forever practicing diplomacy. If a robber appeared at our
hacienda he was received like a friend and brother, had the best of
everything, couldn’t say “mas vino” too often, was handed a liberal
“gratification” or tip and limitless “felicidades” on his departure.
By the exercise of these arts, the management became so popular that
on several occasions our pack trains were actually protected by
professional bandits against marauding amateurs.

We never had a bit of trouble in our camp with the large number of
people assembled there. This also was due to Don Miguel’s forethought
and knowledge of his people. As far as I can recollect, give the
average Mexican plenty of grub, plenty of music, plenty of dancing, a
little cheap finery in dress, and the rest of the world can wag on as
it will, for aught he cares. He does not take kindly to abstractions,
doesn’t worry over his “wrongs,” has no inclination to reorganize
society; only wants to be let alone to enjoy the good things of life
according to his own simple plan. And when you get down to brass tacks,
his is not a bad philosophy, after all.

Don Miguel arranged it so that our little army of employees never
had time to meditate mischief. He bought them all kinds of musical
instruments, including a brass band on which they became proficient
in a wonderfully short time. Every night there was a “baile” in the
plaza at which the people danced till they fell from exhaustion. He
offered cash prizes--mighty stiff ones--for the best dancers, male and
female--the choice to be determined among themselves by a plebiscite
or by select committee. Also, on Sundays, we had a bull fight. It
wasn’t of the sanguinary description; the bulls weren’t killed, but
were thriftily kept in cold storage to fight another day. It made a
satisfactory sport for the people, and was also inexpensive. Added to
this, we paid high wages in hard cash and kept in stock at our store
an assortment of articles for personal decoration at prices that were
highly profitable but not prohibitive.

Thus our enterprise became a big success from every standpoint. At
a time when nearly all the mines in the Sierra Madre were closed
down--practically abandoned--we were swinging along under a full head
of steam, without the slightest interruption, with the general good
will of all with whom we came in contact. Besides, we were making money
at a rate sufficient to turn one’s brain. I doubt if ever such a return
was made on the trifling sum invested. There had been no development
expense. The mine paid from the very day we began to operate it.

While I was the “capitalist” and owned, by our agreement, two-thirds
of the property, I allowed Don Miguel an absolute free hand in all
matters of policy; wherein I showed a wisdom superior to my years. And
I followed his advice in one matter so important that I must mention it
for the general good of mankind.

The women of the Mexican Sierra are remarkable for their
physical charms. There were many real beauties resident in our
camp--“simpaticas,” they used to call them--which doesn’t mean
“sympathetics,” but “good lookers.” Now, I have always believed that a
good looking woman was made to be looked at, to be admired; otherwise,
wherefore was she created? Down in Mexico I could no more fail to
notice a “simpatica” as she passed by, than I could close my eyes to
the beauties of nature.

Observing which, Don Miguel gave me a piece of advice which every
reader of this chapter who may happen to visit Mexico should write down
for future reference.

“Leave our women alone,” he counseled me. “They are romantic,
soft-hearted and will meet you half way, but no matter how innocent
your intercourse, it will rouse jealousy, ill-will and serious danger.
Nearly all the foreigners who get into trouble in Mexico can trace it
to this source.”

I realized the truth of this later when a young friend of mine called
Eaton, who was a fine fellow but an ardent imitator of Lothario the
Gay, was shot down in a lonely spot, jealousy being the evident motive.

In the fall of 1860 I returned to San Francisco, as I thought for a
brief trip. Just to show myself, in fact. Among other things, I brought
a few tons of ore that sold for $3,000 a ton, the sight of which made
the town delirious. I found that my fame, or rather various romances,
had preceded me. I wasn’t quite twenty, couldn’t vote, couldn’t make
a legal contract, yet I had over a quarter of a million in hard cash
to my credit in bank, and my mine in Mexico was worth a million more.
These were the actual facts, which were exaggerated and distorted
beyond all resemblance to the truth. My wealth was at least quadrupled,
and I was dragged through a series of bloodcurdling experiences in
Mexico without a parallel in fiction.

Thus, you can see how the orange and banana sale incident set the
wheels of fate revolving. If I had come to California with sufficient
money. I would have made some kind of a blind stagger at luck, thrown
up the sponge in disgust after a few months, and written to my father
for a remittance to come home.

As it was, I quietly took rank with the great figures of the State
before I had reached my majority, and became a leading actor in an
unwritten page of history, when the destinies of California hung by the
veriest thread.




CHAPTER III.

  STORY OF SOUTHERN PLAN TO MAKE CALIFORNIA SECEDE FROM THE UNION
    IS TOLD FOR FIRST TIME.

  _Narrator Describes His Invitation Into Band of 30, Which Planned
    to Organize Republic of Pacific._


I had barely reached San Francisco when the election of 1860 took
place, resulting in the choice of Abraham Lincoln as President of the
United States. All through the South this was accepted as the signal
for a civil contest. The work of organization went ahead with feverish
haste and long before the inauguration of the new President the
authority of the Federal Government was paralyzed in most of the slave
States.

The attitude of California was a matter of supreme moment, not
understood, however, at the time. Had this isolated State on the
Pacific joined the Confederate States, it would have complicated the
problems of war profoundly. With the city of San Francisco and its then
impregnable fortifications in Confederate hands the outward flow of
gold, on which the Union cause depended in a large measure, would have
ceased, as a stream of water is shut off by turning a faucet. It was
the easiest thing in the world to open and maintain connection through
savage Arizona into Texas, one of the strongholds of the South. It does
not need a military expert to figure out what a vital advantage to the
Confederacy the control of the Pacific would have proved.

History relates in a few brief words how the secession movement here
was extinguished by a wild outburst of patriotism. I am now going to
relate for the first time the inside story of the well-planned effort
to carry California out of the Union and by what a narrow margin it
finally failed of accomplishment when success was absolutely secured.

I was young, hot-headed, filled with the bitter sectional feeling that
was more intense in the border States than in the States farther north
or south. It would have been hard to find a more reckless secessionist
than myself. I moved among my own people, got off all sorts of wild
talk about spending the last dollar of my money, and my life, if
need be, to resist the tyrant’s yoke, and so forth, and was actually
about to leave for my home in Kentucky to be ready for the impending
struggle, when a quiet tip was given me that more important work was
cut out where I was. My exaggerated wealth and the irresponsible
stories of my Mexican exploits, made me an actor in a great, silent
drama, despite my years and boyish look.

One afternoon I was told to be at the house of a well-known Southern
sympathizer at 9 o’clock in the evening. It was well apart from other
buildings, with entrances in several directions. The gentleman who
owned it lived alone, with only Asiatic attendants, who understood
little English and cared less for what was going on. A soft-footed
domestic opened the door, took my card, and presently I was ushered
into a large room where a number of gentlemen, most of them young but
well established, were seated at a long table. I recognized among them
leading men of San Francisco of various walks of life.

The spokesman, a great man of affairs, told me that I was trusted, that
I had been selected as one to lead in an affair of great peril, an
enterprise on which the future of the South might depend, and asked me
if I were ready to risk life and fortune on the turn. I answered with
an eagerness that satisfied my hearers and took an oath, of which I
have a copy, reading as follows:

“Do you, in the presence of Almighty God, swear that what I may this
night say to or show you shall be kept secret and sacred, and that you
will not by hint, action or word reveal the same to any living being,
so help me God?”

The answer, of course, being an affirmative, I repeated after the
spokesman the following objuration:

“Having been brought to this room for the purpose of having a secret
confided to me and believing that to divulge such secret would imperil
the lives of certain Southern men as well as injure the cause of the
Southern States, I do solemnly swear in the name of the Southern
States, within whose limits I was born and reared, that I will never,
by word, sign or deed, hint at or divulge what I may hear to-night. Not
to my dearest friend, not to the wife of my bosom will I communicate
the nature of the secret. I hold myself pledged, by all I hold dear in
heaven or on earth, by God and my country, by my honor as a Southern
gentleman, to keep inviolate the trust reposed in me. I swear that no
consideration of property or friendship shall influence my secrecy,
and may I meet at the hands of those I betray, the vengeance due to a
traitor, if I prove recreant to this my solemn obligation. So help me
God, as I prove true.”

This oath was committed to memory by every member. At subsequent
meetings it was solemnly recited by all, standing and with right
hand uplifted, before proceeding to further business. Several years
afterwards, while it was still fresh in my recollection, I set it down
in writing and preserved it to the present day. Thus I became one of a
society of thirty members, pledged to carry California out of the Union.

I might say here, in parenthesis, that I have long been a reconstructed
“rebel.” The old flag floats over my home on every national holiday and
also on Labor day, for I take an interest in the ideas it represents.
I am mighty glad now that my efforts to disrupt the Union failed and
still gladder because it has been my good fortune to see the awful
heritage of hate that so long divided two brave and generous people die
out and disappear.

The Southern mind has a wonderful capacity for secret organization
and for conducting operations on a vast scale behind a screen of
impenetrable mystery. This had a fine illustration in the workings of
the Ku-Klux-Klan, in reconstruction days, which destroyed carpet-bag
rule and negro supremacy in the South and restored the government of
the white race. The operations of the committee of thirty of which I
became a member demonstrated the same peculiar trait.

The organization was simplicity itself. We were under the absolute
orders of a member whom we called “General.” He called all the
meetings, by word of mouth, passed by one of the members. Anything in
the way of writing was burned before the meeting broke up. The General
received the large contributions in private, never drew a check,
settled all accounts in gold coin and accounted to himself for the
expenditure.

Each member was responsible for the organization of a fighting force of
say a hundred men. This was not difficult. California at that period
abounded with reckless human material--ex-veterans of the Mexican
war, ex-filibusters, ex-Indian fighters, all eager to engage in any
undertaking that promised adventure and profit. Each member selected
a trusty agent, or captain devoted to the cause of the South, simply
told him to gather a body of picked men for whose equipment and pay he
would be responsible, said nothing of the service intended, possibly
left the impression that a filibuster expedition was in the wind. These
various bands were scattered in out-of-the-way places around the bay,
ostensibly engaged in some peaceful occupation, such as chopping wood,
fishing or the like, but in reality waiting for the word to act. Each
member of the committee kept his own counsel. Only the General knew the
location of the various detachments.

Our plans were to paralyze all organized resistance by a simultaneous
attack. The Federal army was little more than a shadow. About
two hundred soldiers were at Fort Point, less than a hundred at
Alcatraz and a handful at Mare Island and at the arsenal at Benicia,
where 30,000 stand of arms were stored. We proposed to carry these
strongholds by a night attack and also seize the arsenals of the
militia at San Francisco. With this abounding military equipment, we
proposed to organize an army of Southern sympathizers, sufficient in
number to beat down any unarmed resistance.

All of which may seem chimerical at this late day, but then, take my
word, it was an opportunity absolutely within our grasp. At least 30
per cent. of the population of California was from the South. The large
foreign element was either neutral or had Southern leanings. We had
already, under practical discipline, a body of the finest fighting men
in the world, far more than enough to take the initial step with a
certainty of success.

And those who might have offered an effective resistance were lulled
in fancied security or indifferent. It is easy to talk now, half a
century after the event, but in 1860 the ties that bound the Pacific
to the Government at Washington were nowhere very strong. The relation
meant an enormous loss to California. For all the immense tribute paid,
the meager returns consisted of a few public buildings and public
works. Besides thousands were tired of being ruled from a distance of
thousands of miles. The “Republic of the Pacific,” that we intended to
organize as a preliminary, would have been well received by many who
later were most clamorous in the support of the Federal Government.

Everything was in readiness by the middle of January, 1861. It only
remained to strike the blow.




CHAPTER IV.

  SOUTHERN GENERAL, ALBERT SIDNEY JOHNSTON, PLAYED IMPORTANT PART
    IN PREVENTING ORGANIZED REVOLT FOR SECESSION.

  _Discovery of Comstock Lode With Its Vast Hoard of Gold Another
    Factor in Keeping This State in the Union._


General Albert Sidney Johnston was in command of the military
department of the Pacific. He had graduated from West Point in 1826
and saw seven years of active service on the frontier, especially in
the famous Black Hawk war. He resigned from the service on account
of his wife’s failing health, and settled in Texas. On the uprising
against Mexican rule, he had enlisted as a private soldier in the army
of his new country, but through the compelling force of genius soon
became commander-in-chief of the republic’s forces. At the time of the
annexation of Texas, he was its secretary of war. When the war with
Mexico broke out, he offered his services to the United States, fought
in many of the severe engagements, rose to the rank of general, was
sent to Utah to suppress what was known as the “Mormon Rebellion,”
which he accomplished with firmness and tact. In January, 1861, he was
placed in command of the Department of the Pacific.

[Illustration: ALBERT SIDNEY JOHNSTON

Commanding the Military District of the Pacific in 1861]

Johnston was born in Kentucky but he always in later years spoke
of and considered Texas his State. Thus he had a double bond of
sympathy for the South. This was the man who had the fate of California
absolutely in his hands. No one doubted the drift of his inclinations.
No one who knew the man and his exacting sense of honor doubted his
absolute loyalty to any trust.

In all of our deliberations. General Johnston only figured as a factor
to be taken by surprise and subdued with force. We wished him well,
hoped he might not suffer in the brief struggle, but nobody dreamed for
an instant that his integrity as a commander-in-chief of the army could
be tampered with.

One of the most brilliant members of the early San Francisco bar was
Edmond Randolph. He was a man of rare talents and great personal
charm. Born in Virginia, a member of the famous Randolph family, he
was naturally an outspoken advocate of the South. He was one of our
committee, and on terms of social and professional intimacy with every
one of Southern leanings. He was on the closest terms with General
Johnston and there is hardly a doubt that, purely on his own motion, he
approached the General with some kind of a questionable proposition.
What happened at that interview no man knows, but Johnston’s answer
made Randolph stark crazy. He indulged in all kinds of loose, unbridled
talk, told several of our committee that he had seen Johnston, that the
cause was lost and otherwise, in many ways, exhibited an incredible
indiscretion that might easily have been fatal to our cause. No amount
of warning was able to silence his unbalanced tongue.

This situation was discussed at several meetings and finally it was
decided that a committee of three should visit General Johnston
in a social way, not to commit further folly by any intimation or
suggestion, but to gather, if possible, some serviceable hints for
future use. I had become prominent in council through my zeal and
discretion, and to my great joy I was named as one of the three.

I will never forget that meeting. We were ushered into the presence of
General Albert Sidney Johnston. He was a blond giant of a man with a
mass of heavy yellow hair, untouched by age, although he was nearing
sixty. He had the nobility of bearing that marks a great leader of men
and it seemed to my youthful imagination that I was looking at some
superman of ancient history, like Hannibal or Cæsar, come to life again.

He bade us courteously to be seated. “Before we go further,” he
said, in a matter-of-fact, off-hand way, “There is something I want
to mention. I have heard foolish talk about an attempt to seize the
strongholds of the government under my charge. Knowing this, I have
prepared for emergencies, and will defend the property of the United
States with every resource at my command, and with the last drop of
blood in my body. Tell that to all our Southern friends.”

Whether it was a direct hint to us, I know not. We sat there like a
lot of petrified stoten-bottles. Then in an easy way, he launched into
a general conversation, in which we joined as best we might. After an
hour, we departed. We had learned a lot, but not what we wished to
know.

Of course the foreknowledge and inflexible stand of General Johnston
was a body blow and facer combined. There was another very disturbing
factor--the Comstock lode.

While we were deliberating, that marvelous mineral treasure house
began to open up new stores of wealth. Speculation was enormous.
The opportunity for making money seemed without limit. Many of the
committee were deeply interested.

Now it had been determined absolutely from the outset that our
ambitions were to be bounded by the easily defended Sierra. We knew
enough about strategy to understand that it would be simple madness to
cross the mountains. That meant, of course, the abandonment of Nevada.

This had been accepted with resignation when the great mines were
considered played out. But when it became apparent that the surface
had been barely scratched and that secession might mean the casting
aside of wealth beyond the dreams of avarice, then patriotism and
self-interest surely had a lively tussle. If Nevada could have been
carried out of the Union along with California, I am almost certain
that the story of those times would have been widely different. We
certainly had the organized forces to carry out our plans.

That’s the only way I can size up what followed. The meetings began
to lack snap and enthusiasm. Just when we should have been active and
resolute, something always hung fire.

The last night we met, the face of our General was careworn. After the
usual oath, he addressed the committee. It was plain, he said, that the
members were no longer of one mind. The time had now come for definite
action, one way or another. He proposed to take a secret ballot that
would be conclusive.

The word “yes” was written on thirty slips of paper; likewise the word
“no.” The slips were jumbled up together and were placed alongside of
a hat in a recess of the large room. Each member stepped forward and
dropped a slip in the hat. “Yes” meant action; “no” disbandment. When
all had voted, the General took the hat, opened the ballots and tallied
them; then threw everything in the fire. “I have to announce,” he said,
“that a majority have voted ‘no’. I therefore direct that all our
forces be dispersed and declare this committee adjourned without day.”

Not another word was spoken. One by one the members departed. All I can
say is that they kept their secret well.

Two days later, all the various bands had been paid off and dispersed.
The “great conspiracy,” if you wish to call it so, had vanished into
the vast, silent limbo of the past.

Only the General knew the extent of the disbursements. My own
impression is that they far exceeded a million dollars. I contributed
$100,000 myself, which, of course, was an incident of the financial
recklessness of youth.

Many of the committee rose to great social and public prominence. The
“General” died not so long ago, full of years and honors.

Besides myself, there is one survivor, whose name would surprise the
nation.

(Since the above was first printed, this survivor has died.)




CHAPTER V.

  RANDOLPH BETRAYED CONSPIRACY FOR REVOLT IN CALIFORNIA, AND
    WROTE LETTER TO LINCOLN THAT CAUSED JOHNSTON’S REMOVAL.


I could not close this phase of the story without further reference
to Edmond Randolph, for I sincerely want to set him right. I said he
went mad. Everything later proved it. He not only committed the gravest
indiscretions, but in addition he, a Southern man, with a couple of
centuries of Southern traditions behind him, actually wrote a letter to
President Lincoln warning him of a vast conspiracy to carry California
out of the Union and questioning the trustworthiness of General
Johnston. Nothing but downright lunacy could have inspired the act.
This was sent to President Lincoln by pony express and reached him just
about the day of his inauguration. The story has been often printed
before or I would not revive it now. Its accuracy has indeed been
questioned by Randolph’s friends. I am inclined to believe it true.

As a consequence General E. V. Sumner was sent on a tug from New York
with sealed orders and placed on board a Pacific Mail steamer in
midocean. On the steamer the orders were opened. They directed him to
proceed to San Francisco and relieve General Johnston of the command of
the Department of the Pacific. History relates further that General
Sumner was taken from the steamer by a Government vessel outside
the Golden Gate, hurried to Alcatraz, where General Johnston had
headquarters, and, in a sensational manner, relieved him of his command.

The latter part is purest fiction. General Johnston never had
headquarters on Alcatraz. He lived with his family on Rincon Hill,
near the residence of Louis Garnett. Sumner arrived in San Francisco
on the steamer, publicly, like anyone else. General Johnston, informed
of his arrival, at once arranged for a conference and the two met in
perfect amity at the old army headquarters, located on Bush street, if
I recollect aright. The transfer of authority took place the next day.
There are abundant living witnesses to these facts. General Johnston’s
resignation was in President Lincoln’s hands long before Sumner reached
California and the same was accepted a few weeks later.

One of General Sumner’s first acts was to order arms from the arsenal
and organize patriotic citizens for an expected crisis. But they
were simply fighting windmills. The real crisis had disappeared of
itself two months before, through General Johnston’s firmness--and the
Comstock lode.

As a further proof of Randolph’s madness, he straightway developed
into an outspoken, rabid secessionist, made speeches of the most
inflammatory nature and it was highly significant that he escaped
imprisonment in Alcatraz. He died within the year, a physical and
mental wreck. In my humble judgment he deserves sincere pity, not blame.

That some one of important station wrote a mysterious letter to
President Lincoln which caused the retirement of General Johnson is
beyond dispute.

One of the versions of the story has never been published, to my
knowledge. In 1880, when Mr. Justice Field was candidate for President,
he flooded the South with literature concerning his friendship for that
section, as evidenced by various decisions of the United States Supreme
Court in the dark days of reconstruction. In the North, principally
among the Grand Army, a pamphlet was circulated to the effect that
he had saved California to the Union by a timely letter to President
Lincoln, which resulted in General Sumner’s hasty mission. Whether it
was authorized by Judge Field, I do not know. But it fell into the
hands of the Southern leaders and doomed his candidacy in the section
where he counted on support. Not at all because he had saved the Union,
but because of the implied aspersion on the memory of one who will
ever be dear to the South--a gentleman of unimpeachable honor, a great
soldier who died a soldier’s death, fighting for the Lost Cause.

After he resigned, General Johnston earnestly advised many Southerners,
some of them still alive, to do nothing that would bring war to
California. “If you want to fight, go South,” was his constant counsel
to all. Many followed his advice. Hundreds, perhaps thousands, of them
were cut off by Indians in Arizona, where the savages had full swing,
all the frontier army posts having been abandoned. General Johnston
stayed in California till his State--Texas--seceded. Then with a few
followers he traversed the savage wilderness and after many adventures
reached the South.

There is a rather pathetic sidelight to the story that illustrates
the simple devotion of the old-time slaves to their white masters.
General Johnston had freed all his slaves before he came to California.
One of them, called “Rand,” brief for “Randolph”--he had no other
name--followed him as a body-servant to the Pacific. When Johnston left
for the South he ordered “Rand” to stay behind. He was a famous cook
and could have commanded big wages in a high-class restaurant. But the
faithful body-servant would not be denied. He fought his way with his
former master through the Apaches of Arizona and was with him at Shiloh
when he died. He hung over the dead body of the fallen leader in a wild
passion of primitive grief.

Later some hundred colored body-servants of General Johnston’s appeared
at various parts of the South. The real “Rand” settled in Louisville,
where he was an object of solicitous regard on the part of the Johnston
family and others of the old regime.

“Rand” proved himself no less great in peace than war, for he married
a widow with seven children, an act that needed moral courage of the
highest sort. His career was somewhat checkered, but he was always well
looked after, and “looking after” “Rand” was often quite a job.

He became something of a character in the border city; resolutely
declined to be “reconstructed” and remained an unrepentant rebel to
the last. He was very bitter in his talk about the “poor white trash”
of the North. When he uncorked the vials of his wrath he called his
adversary an “abolitionist” as the last word of scorn.

In his final illness tender Southern hands smoothed his way into the
hereafter. Mrs. H. P. Hepburn of Louisville, once of San Francisco, was
present when the curtain rang down on “Rand.” He raised his feeble head
and said: “I’se ’gwan to meet ole Marse Johnston,” then sunk back on
the rough pillow, closed his eyes and died.




CHAPTER VI.

  PERILOUS TRIP ACROSS MEXICO AND VOYAGE ON BLOCKADE RUNNER ENTER
    INTO NARRATOR’S EXPERIENCES ON VISIT TO JEFFERSON DAVIS.

  _Southerners in California Form Plan to Intercept Gold Shipments on
    Pacific Mail Liners from San Francisco to Capital._


I was broken-hearted at the turn of affairs in California. Needless
to say, I was one of those who voted “yes” on the memorable night
when the committee disbanded. The actions of General Sumner, which
were needlessly severe and autocratic, tended to make the tension
more severe. Just for some idle expression of sympathy for the South,
all sorts of really inoffensive people were clapped into Alcatraz and
subjected to indignity and loss. President Lincoln later on realized
that Sumner was only making matters worse and sent General Rice to
relieve him, who at once adopted a policy more pacific and wise.

But this is no part of the story. The idea of interrupting the gold
shipments by the Pacific Mail, very essential to the Government at
Washington, again took form. This was to be effected by seizure on
the high seas. A number of prominent men were interested and I was
requested to become one. I had no stomach for downright piracy, though
ready for any risk. I stipulated that I must first receive a regular
commission from the Confederate Navy. This being agreed to, the sum of
$250,000 was subscribed, of which $50,000 was mine.

In company with H. T. Templeton, a well-known Californian, later a
familiar of the Crocker family, we traveled by steamer to Acapulco.
Mexico was then in an uproar over the threatened French invasion. The
American Consul, a son of John A. Suter, advised us that it was little
short of madness to cross the country to Mexico City, which we gave as
our destination. But Templeton was brave as a lion and I was young,
reckless and confident in my luck. Heavily armed, with a single guide,
who, by the way, fled in terror at the first sight of danger, we set
out on a venturesome journey.

That trip would make some story by itself. We had several pitched
battles with small bands of “ladrones” or robbers. Once both our horses
were shot from under us. My previously acquired knowledge of Spanish
stood us in good stead in securing fresh equipment, knowledge of the
way and sometimes hospitality, and shelter. Finally, after great
hardships and danger we reached Mexico City, and thence proceeded
without incident to Vera Cruz, which was a sort of rendezvous for
blockade runners. Here Templeton and I parted company with mutual
regrets. He took a ship for New York and returned to California. I
boarded a blockade runner and during a rainy night we slipped past the
Federal warships into Charleston.

I had no difficulty in reaching Richmond, Virginia, the Confederate
capital. It was a vast, hustling, military camp. Troops were marching
and counter-marching, officers on horseback dashing to and fro on
mysterious missions and everywhere the atmosphere of war.

It was a couple of days before I saw President Jefferson Davis. I laid
my plans before him fully, to his great interest, and later we had
several interviews. He did not come to a swift conclusion. To my way
of thinking at the time he was over-deliberate in making up his mind.
That was a youthful illusion. I think of him now as a very great man,
lacking only one thing--luck.

He fully realized the importance of shutting off the great gold
shipments to the East from California. President Davis said it would
be more important than many victories in the field. At the same time,
he saw grave difficulties in the way. He did not believe that a vessel
could be outfitted for the purpose in any of the Pacific ports without
arousing suspicion, disclosure and capture. He warned me that my
associates and myself were taking an awful risk, almost sure to result
in ultimate disaster. Moreover, he was uncertain whether under any
circumstances the enterprise could be justified under international law
and whether the proceeding would not fall under the head of piracy,
against which he resolutely set his face.

All these questions were submitted to one of his Cabinet officers,
Judah P. Benjamin. Mr. Benjamin was of Jewish ancestry and one of the
ablest men who guided the way of the Confederacy. After the general
breakup, he escaped to England, became a leader of the bar of London,
counsel to the Queen and won the highest honors of his profession
before he died. This distinguished gentleman examined with great care
the questions involved, particularly on the piracy point, and he gave
an opinion that it would be entirely within the scope of international
law to equip and sail a vessel out of any port of the United States
provided no overt act against commerce were committed before a foreign
port was reached, letters of marque exhibited there and the open
purpose of those in command declared. So for what followed I had at
least the advice of eminent counsel and I still believe that the advice
was absolutely sound.

In due course of time I received a commission as a captain in the
Confederate Navy. I had never been on a man-of-war in my life, but that
made no difference. A fresh water naval hero may be as good as the salt
water kind. Also I received letters of marque in blank, the names to be
filled in when the vessel reached a foreign port. Besides that I was
intrusted with quite a bundle of mail, addressed to leading Southerners
in California and doubtless of a highly compromising character.

[Illustration: JEFFERSON DAVIS

The able and illustrious leader of the Lost Cause]

This literary consignment nearly got not only myself but many other
people into a peck of trouble, which I might as well tell of now,
although it is somewhat ahead of my story. Returning to California,
liking not the route through Mexico, I had the blockade runner land me
at Aspinwall, where I joined the passengers of a Pacific Mail liner
and embarked at Panama for the run north. As we were approaching San
Francisco I became uneasy about my documents, fearing that enough about
my movements might be known to cause a close personal search.

On board the steamer was a lady long famous in California, Mrs. Charles
S. Fairfax. Her husband was the lineal Lord Fairfax of the British
peerage. She was a niece of John C. Calhoun, a woman of great beauty,
wit and resourcefulness and an intense Southern sympathizer. We became
rather confidential on the way up and I told her about the package and
my fears.

“Why, what stupid fools men are, anyhow,” she laughed, “give that
package to me and set your mind at rest.” The suggestion looked good,
for, of course, I could assume responsibility if the documents were
found. That night Mrs. Fairfax left her door just a bit ajar and as I
passed it something was slipped to her. No one saw the transfer.

When we reached San Francisco what I feared came true. Not alone
my luggage, but my person were subjected to a search that hardly
overlooked my soul. While I was in the hands of the minions of the law,
who seemed sadly disappointed over their fruitless quest, Mrs. Fairfax
swept by in her stately way; all the same I seemed to catch a twinkle
of humor in her eye.

Two days later, the lady handed me the package. The seals were broken,
but the contents intact. “You gave me a lot of bother,” said the lady,
“I had to sit up all night sewing these wretched papers in my dress.
What was worse still, I never dared to change it. Just imagine what the
other women thought of me.”

I passed the letters around to various leading lawyers, bankers,
financiers, and so on. Without mentioning any names I told them how
near they came to falling into Federal hands. Many a cheek paled and
jaw dropped as they heard the story.

We have been told much of what women did for the North, very little of
what the women did for the South. That is a noble and inspiring story
that remains to be told.

But to return to Richmond. The Confederate cause seemed at its zenith.
Everywhere was abounding confidence in the final result. And now came
a whisper that a great battle would soon be fought that ought to be
decisive. I was eager to see something of the war game and with letters
from the Secretary of War, hurried westward, arriving at Corinth,
Miss., on April 4, 1862. Here a small Confederate army was assembled
under the same Albert Sidney Johnston, not exceeding 5,000 men. Nine
miles away, General Grant was encamped at Shiloh with 35,000 men,
confidently awaiting the arrival of General Buell with 30,000 more, to
begin the invasion of the South.

At the risk of criticism by experts I am going to tell briefly what a
great, old-fashioned battle seemed like to a raw looker-on.

[Illustration: JUDAH P. BENJAMIN

One of the ablest Confederate Statesmen]




CHAPTER VII.

  THE GREAT BATTLE OF SHILOH AND THE SOUTH’S IRREPARABLE LOSS IN
    THE DEATH OF GENERAL JOHNSTON.


War, fifty years ago, was bad enough, but it wasn’t the plain,
cold-blooded deviltry that it is to-day. When men met face to face
and leaders led, in fact as well as theory, I can understand the
inspiration, the enthusiasm, the wild love of glory, that invited the
best blood to a military life. But now, when victories are to be won
by pressing buttons, switching on or off electric currents or dropping
bombs from the sky on the heads of helpless women and children, while
it may attract those of a mechanical turn of mind, it has ceased to be
a business that should interest a gentleman.

My recollection is of the old fighting days. I said that when I arrived
in Corinth on April 4, 1862, not more than five thousand men were
assembled there. But all that night and the next day troop trains were
unloading enormous reinforcements and some were arriving by forced
marches on foot. By the night of April 5, between twenty-five and
thirty thousand soldiers were in camp, the flower of the fighting
army of the South. General Albert Sidney Johnston, with his heroic
figure and magnetic presence, roused the men to a height of martial
exultation very hard to describe. Everyone knew that a great battle was
impending. Most of them guessed that the morrow would be the day. But
they hardly seemed able to wait. They were like war dogs tugging at the
leash, confident in themselves, confident in their cause. One would
have thought they were bound for a holiday excursion instead of a death
grapple from which many would never emerge.

Very much to my disappointment, I was assigned to the staff of General
Beauregard, second in command. I had hoped to be with General Johnston,
where the fighting would be the fiercest. Nevertheless, I had enough.

The troops retired at an early hour on the night of April 5. But in the
darkness flitted shadows of alert men, making busy preparations for
a great event. At two o’clock in the morning, the troops were roused
from their sleep, had hasty refreshment in the darkness, and then fell
in, company after company, like so much clock work, and the march to
Pittsburg Landing, or Shiloh, nine miles away, began. The infantry was
well in front, separated by perhaps half a mile from the artillery and
more noisy equipment.

The nature of the country was admirable for a secret movement. It was
well wooded, with abundant cover to screen our presence, and it seemed
almost uncanny how the thousands of men marched forward with scarce
noise enough to stir the early morning air. Not a word was spoken.

[Illustration: MRS. CHAS. S. FAIRFAX

Wife of Lord Fairfax, niece of John C. Calhoun

[Reproduced from an old photograph.]]

It was just daylight when we drove in the Federal pickets. Before us
lay the army of General Grant. It seems to me that it was not more than
two hundred yards away. Breakfast was being cooked, the officers and
men totally off their guard. Nothing in the nature of surprise could
be imagined more terrible and complete. Quick commands were given,
there was a rattle of musketry, the “rebel” yell rang out--a sound that
might well start the resurrection of the dead--and the next instant I
saw what appeared a long line of racing apparitions in gray, with fixed
bayonets, clear the intervening space and fall like a cloudburst on the
men in blue.

Nothing saved the army of General Grant from utter destruction but
the presence of several gunboats in the Tennessee river. These were
splendidly handled, and the fire was deadly and precise. It gave the
Union forces an opportunity to recover somewhat and put up a gallant
fight. Field artillery was concentrated on the gunboats. Sharpshooters
climbed into nearby trees and picked off the gunners at their posts.
The fire became less frequent, less precise.

Anyone could see the line of General Johnston’s strategy. Grant’s army
was encamped on rising ground beyond the Tennessee. Behind it the
ground fell off rather abruptly to a narrow plain along the river bank,
beyond which was no retreat. The object of the attack was to force the
Federal line to the river bank and then drive in the wings until the
Union army became a huddled mass on the low ground where it could not
fight effectively, and be at the mercy of artillery fire. Then it must
either surrender or be wiped out. The first step was accomplished by
the initial bayonet charge. The second required more time.

The battle raged into the afternoon. The field was covered with dead
and dying, but the strategy of General Johnston was rapidly bearing
fruit. The gunboats were almost silenced, the Federal columns showed
apparent signs of disintegration. Another hour would have seen a total
rout. General Johnston had been everywhere, the directing genius,
exposing himself to needless dangers. Just in the moment of triumph, he
fell headlong from his horse.

It seemed as if the news of this irreparable loss spread through the
army like wildfire and caused, not a demoralization, but a general
pause. Beauregard took command, evidently under a great mental strain.
To the surprise of many, he gave orders to retire. I heard him say:
“To-morrow we will be across the Tennessee river, or in hell.”

He had another guess. Early the next morning General Buell crossed the
Tennessee with thirty-five thousand fresh troops, and all day we were
fighting our way back to the strong position at Corinth. The great
opportunity was lost.

[Illustration: CHARLES S. FAIRFAX

Last Lord Fairfax in direct male descent

[Reproduced from an old photograph.]]

Thus I saw the bloodiest battle of the war and I think the most
decisive--far more so than Gettysburg. Had Johnston overwhelmed Grant
at Shiloh, met Buell with an army flushed with victory, with no
gunboats to contend with, there might have been another tale to tell.
With Tennessee liberated, Kentucky and Missouri might have joined the
Confederate cause and influenced the final outcome profoundly. When I
look back at the long series of mishaps and unforeseen misfortunes that
seemed to haunt the Lost Cause, I cannot but conclude that God’s will
was there. After many years of bitter recollections, we are all of
one mind--that the outcome was best for the country, and best of all
for the South.

I saw General Johnston’s body on the field, where he fell. The wound
that caused his death was of a trifling nature. A rifle ball had cut an
artery in his leg. A surgeon with a tourniquet could have stopped the
hemorrhage. But he never sought assistance. He stood by his post like a
true soldier, and slowly bled to death.

History has classed Johnston as a great military genius. Years after,
the Government of the United States erected a shaft with a suitable
inscription on the spot where he fell at Shiloh. His tomb, with a noble
equestrian statue, is in New Orleans. Most of his direct descendants
live in California, the State that he saved from the desolation of war.

Concerning the battle of Shiloh, I have better testimony than my
own. A score of years later, I met General Grant in New York. Out of
an acquaintance, an intimate friendship developed. During his first
financial embarrassment, of which the world never knew, I piloted him
to a safe haven. Grant’s genius was entirely one-sided. In matters
of business, he was the veriest child. He had tied himself up in
Wall Street ventures and was facing ruin when he sought my advice. I
took his account to my brokers, Henry Clews & Company, where I had a
balance of nearly two millions to my credit, and, by careful nursing,
brought him out, not only even, but ahead. The General and I often
spoke of Shiloh, and he admitted, with a soldier’s frankness, that only
Johnston’s death saved his command. He also added that he learned
a lesson in war that fateful day, the most important in his long
experience.

In this era of good-will and reconciliation, when the old boys in blue
and gray are meeting in comradeship on the scenes of their former
struggle, why cannot someone write a trustworthy and impartial history
of the great drama--the greatest of our national life--which our boys
and girls may read and learn the truth? The text-books of our schools
are still deformed by a spirit of intolerance and prejudice, most
unfortunate and misleading in an age that has happily outlived the
bitterness that divided us in the past.

[Illustration: U. S. monument and marker on battlefield of Shiloh,
indicating spot where General Johnston fell.]




CHAPTER VIII.

  NEPHEW OF CELEBRATED ENGLISH LEADER TAKES HAND IN CONSPIRACY,
    AND ALSO FIGURES IN AMUSING NEAR-DUEL.


I did not return to California after my visit to the seat of war until
late in the month of July, 1862. Everything seemed in regular shape
for outfitting a privateer. But again the Comstock Lode interfered.
Speculation was fast and furious. Of those who subscribed to the fund
of $250,000 to carry on the enterprise only two remained steadfast, Mr.
Ridgley Greathouse and myself. Greathouse was connected with some of
the well-known families of the South and of California. He was a man
of unusual courage and determination. We laid our heads together and
decided to go ahead alone.

At this point we gained an unexpected ally. As he cuts quite a figure
in this story, especially in the great diamond hoax, I might as well
explain the strange way in which we met.

Mr. Alfred Rubery was a young English gentleman of fortune and culture,
with the roving disposition and love of venture that was part of the
make of high-strung Englishmen of his day. Traveling in the South just
before the war, he had acquired an admiration for its aristocracy. Thus
happened something that seemed paradoxical. Rubery was the favorite
nephew of John Bright, the great English statesman and publicist.
It was due to his influence and leadership among the laboring masses
that England declined to interfere in favor of the Confederate States
when its industries were ruined and the industrial classes starving,
because the cotton staples from the South, on which they depended, were
suddenly cut off. Thus, while John Bright, across the Atlantic, was
resolutely upholding the North, his dear nephew in San Francisco was
openly expressly sympathy for the South.

Sectional feeling at that period was so intense that the slightest
word brought on a quarrel. One evening Rubery met a young officer,
Lieutenant Tompkins, stationed at Fort Point, scion of a prominent
family of New York. Somehow the subject of the war was broached. High
words followed, and Tompkins made a remark that touched Rubery’s honor.
The latter simply said, “You will hear from me, sir,” and left the room.

The code duello was still in full force. Though a cause of instant
dismissal from the army, no officer would hesitate for a moment to
refuse satisfaction to a gentleman who considered himself aggrieved.
Rubery sought a friend of mine and asked him to bear his challenge.
He was on the point of leaving for Oregon to attend to some of my
business. For that reason he turned the young Englishman over to me.

[Illustration: ALFRED RUBERY

Nephew of John Bright, the great British publicist

[Reproduced from an old photograph.]]

Now, when a man chose his second, he placed his life entirely in
his hands. It became at once my duty to examine certain details.
The challenged party had the right to name the weapons, and I knew
Tompkins to be an expert swordsman. I asked my man about his saber
experience. He admitted that he had some knowledge of carving ham, but
as to carving anything else he was as ignorant as a child. I tried him
at pistol practice and found that, with extra good luck, at ten paces
he could hit a barn.

To go into a duel under such conditions was downright madness. I told
Rubery that I could not suffer him to be a chopping-block for a Yankee
or to be coolly potted while he was shooting at the sun. I advised him
that he must take time to practice with swords and pistols. But the
Englishman would not be denied. I never saw a man so determined. He
said he would rather die a thousand times than survive an unresented
public insult. Having no alternative, I carried Rubery’s challenge to
Tompkins at Fort Point.

Lieutenant Tompkins referred me to his friend, Quartermaster Judson,
whom I met without delay. I found he had little stomach for the duel,
not because he or his principal were afraid, but because they dreaded
dismissal from the service. He admitted that his principal was in
the wrong and asked if there were any reasonable terms to adjust the
difference. I told him I was instructed by my principal to accept
nothing but a written retraction of the offensive language. “That is
out of the question,” said Judson. “We are wasting time. Let us proceed
to details.”

“Proceeding to details” was quite a formal function in the code.
Arrangements for the slaughter of a couple of human beings were always
discussed over a bottle of wine, in a spirit of friendly benevolence.
Judson produced the refreshments, filled my glass, handed it to me
standing, left his own unfilled and sat down.

Now, in Southwestern Kentucky, where I was raised, gentlemen always
drank together. To offer wine or corn juice to an equal and not partake
yourself was an almost unpardonable affront. You might do that without
offense to an humble dependent, but not to one of the same social rank.

I had determined that the duel should not take place and was watching
for any chance to spar for time. This seemed to offer an “opening.”
Of course, Judson had not the most remote idea of being discourteous.
But I assumed to think otherwise. I looked as indignant as possible,
dashed the glass on the floor, slapped my hat on my head and left the
apartment before the astonished quartermaster had time to catch his
breath. A few hours later my second, Captain Fluson, a famous duelist,
waited on Judson with my challenge.

I hope no one will imagine I am bragging. I took not the slightest
chance in sending the challenge and knew it very well. No man was
compelled to accept a challenge without a full knowledge of the nature
of his offense. If a person wanted to fight you just for his own
amusement or because he disapproved of the cut of your coat, no one
was expected to humor him, and a man of honor could properly refuse to
consider a challenge based on trivial grounds or even kick the bearer
out of doors. As soon as my second presented himself to Judson, just as
I expected, he asked to be informed in what way he had given offense
to Mr. Harpending. My second explained the deadly nature of the
one-sided invitation to drink, according to the usages of Southwestern
Kentucky, whereat the quartermaster laughed and said he was ignorant of
any such custom; that he had never had the remotest intention of being
discourteous and asked that this explanation be given me before going
further.

Of course, I had to appear immensely gratified. I wrote Judson,
expressing my entire satisfaction, apologized for my own hasty
conclusion, and asked him to dinner. We had a jolly sort of time and
over black coffee we discussed the proposed Rubery-Tompkins duel. Both
agreed it was a shame to see two fine young fellows fill each other
with lead and decided to co-operate to prevent it. We managed to bring
the principals together and after a lot of diplomacy on all sides
Tompkins agreed to a written retraction of the insulting language,
Rubery promising that it should never be exhibited unless he were
charged with cowardice as a result of the billiard-hall incident.

Everything terminated in a dinner party and the incident was closed.

Rubery and I, thus strangely brought together, became inseparable. We
were nearly of an age, both crazy for adventure, both devoted to the
South. It was not, therefore, strange that I confided to him all my
plans of outfitting a privateer. When he learned the details he became
almost idiotic with delight. “Now, we’re getting somewhere,” he cried.
“Let me be your associate and count me in to the limit.”

That is how the nephew of John Bright became associated with Greathouse
and myself in an effort to destroy the commerce of the Pacific Coast
and how he came to loom largely in what was known to history as the
“Chapman piracy case.”




CHAPTER IX.

  PLAN TO CAPTURE GOLD SHIPS DEVELOPS, BUT TROUBLE FOLLOWS
    ENGAGEMENT OF VILLAINOUS-LOOKING PILOT.


The three of us--Greathouse, Rubery and myself--now worked in unison.
My first intention was to outfit in British Columbia, but an agent
stationed at Vancouver was unable to find anything fit for our purpose.
We negotiated for the purchase of the steamer Otter, owned in Oregon,
but on a trial trip she failed to develop a speed much greater than
that of a rowboat--not enough either to fight or run away.

While we were fretting over the delay a small deep-water vessel came
into port, after a record-breaking voyage from New York. The ship was
called plain “Chapman.” Historians have seen fit to name it the “J. M.
Chapman,” for what reason I am not aware. Probably it was a case of
what literary folk are pleased to call “poetic license.” At any rate,
we considered it a serviceable craft, in default of a steam vessel. We
purchased the Chapman from her owners at a reasonable price, as it was
winter and an outbound cargo was not obtainable at that season of the
year.

Our plans might as well be explained fully here. We proposed to sail
the Chapman to some islands off the coast of Mexico, transform her into
a fighting craft, proceed to Manzanillo, exhibit our letters of marque
and my captain’s commission in the Confederate navy and then lie in
wait for the first Pacific Mail liner that entered the harbor, capture
her--peacefully if possible, forcibly if we must. All of this was in
line with instructions. Then we proposed to equip the captured liner
as a privateer and figured to intercept two more eastbound Pacific
Mail steamers before the world knew what was happening, in those days
of slow-traveling news. After that we proposed to let events very much
take their own course. It was a wild, desperate undertaking at the
best, but we were all of an age that takes little stock of risks.

Having our ship, other details followed rapidly enough. We purchased
two cannons throwing a 12-pound shot. This was arranged by a Mexican
friend of mine, acting through a well-known business firm, which was
entirely ignorant of the nature of the transaction. In the same way,
we bought shells and solid shot and a large quantity of ammunition.
In those days of adventure it was no uncommon matter for corporations
or even private persons to purchase armament on a considerable scale,
without comment. Often remote investments had to be protected not only
with armed men but also with a show of artillery. Our Mexican friend
merely had to say that he needed the military supplies to guard a
mining property in his own country. As a matter of fact, he never knew
what the war material was intended for--just took it for granted that
he was doing something in the line of accommodation.

Also we bought a large assortment of small arms, rifles, revolvers and
cutlasses. Everything was heavily boxed and marked “machinery.” We
laid in, also, to avoid suspicion, a small line of general goods of a
kind salable in a Mexican port, and an extra supply of provisions.

We engaged an ordinary crew of able seamen and without much
difficulty selected twenty picked men--all from the South, of proved
and desperate courage. These were to constitute our working force.
They were not known to each other, did not even know the nature
of the service--further than that it meant fighting and plenty of
it--somewhere in Mexico.

All our plans were perfected. It only remained to secure a navigator
who could be implicitly trusted. Men of the South did not have much
practical experience in seamanship. Several of our confidential friends
scoured the town for a suitable person for this all-important post.

Finally a man was brought to me by the name of Wm. Law, guaranteed to
be a competent navigator familiar with the Mexican coast and a Southern
sympathizer. He was the possessor of a sinister, villainous mug, looked
capable of any crime and all in all was the most repulsive reptile in
appearance that I ever set eyes on. From the moment I saw him, I was
filled with distrust. After a short general conversation I dismissed
him and told his vouchers that I could put no faith in such an
ill-omened looking character. But time was pressing. No one else showed
up and after further guaranties, Greathouse, Rubery and myself saw Law
again and frankly gave him a general outline of our plans. He accepted
the responsibility with a well-feigned eagerness; his tough-looking
face seemed lighted with a sort of demoniac exultation. There was still
another who shared our confidence to some extent, Libby, the sailing
master of the Chapman.

Everything was now ready to launch the enterprise. Our clearance papers
were secured from the custom-house with a readiness that might have
suggested a suspicion to more alert minds. The “Chapman” was duly
certified to sail for Manzanillo with a cargo of machinery and mixed
merchandise.

It was on the night of March 14. Greathouse and Law were to be on board
at ten o’clock. Rubery and I stationed ourselves in a dark alley behind
the old American Exchange Hotel. One by one, our fighting men assembled
silently, by prearrangement. The night was dark, the sky overcast. We
divided into three squads to avoid attention, slipped through the dimly
lighted streets, past roaring saloons and sailor boarding houses and
reached an unfrequented part of the waterfront unnoticed, where the
privateer was moored.

Everything thus far had gone so smoothly that Rubery and I were
exultant. The wind, too, was propitious. We figured to sail without
delay, pass Fort Point in the dark and be beyond the horizon before the
morning broke. We scrambled aboard the Chapman. Greathouse was pacing
the deck in agitation. Law was not there.

I experienced a shock such as a man receives when a bucket of ice water
is emptied on him in his sleep. The suggestion of treachery could not
be avoided. We cast loose from the wharf and anchored in the stream.
But we were helpless. We could not sail without our navigator. We had
nothing to do but wait.

We scanned the bay for an approaching boat, but the dark waters
answered not. At two o’clock we turned in for a much needed rest. We
left a trusty man as a lookout with orders to waken us at five o’clock
if nothing happened before. We still had a lingering hope that Law
might appear in season to carry out our plans. And soon, as the hours
glided by, the Chapman rocked us to sleep.




CHAPTER X.

  WE WAKE TO FIND WARSHIP NEAR AND BOAT FILLED WITH POLICE
    APPROACHING.


Somebody else slumbered on board the Chapman that night besides the men
below. Morpheus evidently got a strangle-hold on our vigilant sentinel,
from what followed. I was wakened by a shake and a startled cry from
the lookout. I sprang hastily to the deck.

It was broad daylight. A couple of hundred yards away I looked into the
trained guns of the U. S. warship Cyane. Several boatloads of officers
and marines were just starting from her in our direction. A hasty look
also revealed a tugboat making for us from the waterfront, filled with
San Francisco cops, headed by I. W. Lees.

Of course, even had we been prepared, resistance would have meant
suicide, for the gunners of the Cyane stood waiting orders to blow
us out of the water. I rushed down to the cabin, jerked Rubery and
Greathouse from their bunks and after a brief word of explanation we
proceeded to destroy as many incriminating papers as possible. We made
a hasty bonfire on the cabin floor, burned a number of documents that
might not have looked well if read in open court, tore into little
bits and scattered the fragments of other documents that resisted a
quick fire and made a clean-up in general. Smoke was streaming up
the gangway when the naval officers and policemen swarmed on board.
Someone yelled, “They’ve fired the powder magazine.” This made a
diversion and gained a little more time. Nevertheless, out of the
destruction, Captain Lees gathered together the scraps and by piecing
them together and guessing at the missing parts, collected some
evidence that was produced against us in court later on.

Greathouse, Rubery, Libby and myself went on deck and surrendered.
We admitted nothing, contenting ourselves with saying that we alone
were responsible for the ship and everything on board. They did not
show the least surprise as they searched the ship and opened boxes
containing our “knocked down” cannon and stands of firearms. They
saw vast quantities of powder, shells and ammunition of all kinds
exposed with as much indifference as if they held a copy of the ship’s
manifest, which, in fact, they did have in their possession, through
the treachery of Law. If anything further were needed to complete the
knowledge that he had betrayed us, it was furnished by an unguarded
remark of Captain Lees.

Our twenty fighting men, very much down on their luck, were found in a
foreward compartment. On our solemn declaration that they were employed
only for service in Mexico none were prosecuted and finally all were
discharged with a “look out” in the future admonition from the officer
in charge.

Some effort was made to sweat the four of us. We were cordially invited
to step up like men and make a clean breast. All these courtesies were
politely declined. We only asked to be advised what we were charged
with, and the answer was sufficiently illuminating, “Why, piracy, of
course.” We were rather carelessly searched, so far as our persons
were concerned. I was allowed to retain a small penknife, but one
rather important thing was overlooked. In those days everyone carried
a derringer, which looked like a sort of toy pistol, but was really
one of the most deadly close-range emergency weapons ever invented by
the evil genius of man. Each person had a pet place for keeping his
derringer secreted, but handy. For myself, I carried one in a specially
prepared pocket inside of the right cuff of my coat. Just a practiced
twitch, and I could have it in my hand ready for use in an instant.
This, as I said, in some way escaped the notice of my searchers, so
though I was a prisoner, I remained fairly well armed.

All day long the wires around the world were telling of the great
Chapman piracy project, happily nipped in the bud by the efficiency
of Uncle Sam’s government. One of the facts that gave it a peculiar
interest was because John Bright’s nephew was a participant. The story
did not lose anything by age or travel. I had once a book of newspaper
clippings relating to the Chapman affair and a dispassionate reading
of the more lurid descriptions would have satisfied anyone that
Greathouse, Rubery and myself were the most bloodthirsty pirates who
ever cut a throat or scuttled a ship.

We were taken to Alcatraz and later to the old Broadway jail.
Greathouse was released after a few days of confinement on bail
furnished by his relative, Mr. Lloyd Tevis. Among the pleasant
incidents of our confinement were visits from Lieutenant Tompkins and
Quartermaster Judson. Our late enemies became our best friends, brought
us all kinds of necessaries and refreshments, including newspapers,
periodicals and books, and in every way sought to cheer us up and make
our confinement less burdensome. Rubery, for his part, returned to
Lieutenant Tompkins his letter of retraction, which the latter seemed
very glad to receive, for in those days no man of honor cared to
have documents of that kind floating around loose. Such incidents of
goodwill between men engaged on opposing sides in the Civil War prove
to my mind that there was no fundamental line of cleavage, no real
antagonism, in fact, between the North and South, and if there had been
some power to steady the masses, instead of lashing them to fury, there
never would have been a war.

As for Law, he had actually gone with us in good faith up to a certain
point, then had a case of cold feet. It occurred to his sordid mind
that a handsome sum of money could be obtained from the Government
without any risk at all, by betraying his associates. He made a
cold-blooded, mercenary bargain with the authorities through which he
realized a small fortune, disclosed all our plans, and our steps had
actually been dogged by detectives for days.

But the first day at Alcatraz I nearly landed Law. I was locked in a
lath and plaster room. I had not been there long before someone began
tapping on the wall. After several repetitions, thinking it might be
Rubery, I asked, “Who is there?” The acoustics were admirable. A voice
replied, “That you, Harpending? This is Law. I am under arrest. I want
to tell you all about the awful mishap that prevented me from being
with you on the Chapman last night.”

The voice of the wretch drove me to absolute madness. I knew he wanted
to draw me into admissions, probably had two or three witnesses with
him in the room. I simply thirsted for his blood. As before mentioned,
the searchers on the Chapman had overlooked a small penknife and a
derringer concealed on my person. My first impulse was to take a chance
shot at him through the plaster, but I thought of something better
instantly. With my penknife I easily bored an opening in the wall.

“Law,” I said, “there is something I want you to hear very distinctly
and I don’t want to speak loud. Put your ear to this hole I have made
through the wall.”

If he had ever put his ear to that hole he would certainly have heard
something very distinctly and much louder than I intimated. Also,
perhaps, this story would not have been written. But if such a fellow
can have a good angel she was not napping that day. Law did not put his
ear to the hole and a few minutes later I heard the door close behind
him as he left the room.




CHAPTER XI.

  TECHNICALITIES FALL BEFORE TRUE AND PERJURED TESTIMONY AND
    AUTHOR IS QUICKLY CONVICTED OF TREASON.

  _We Find Consolation in Lack of Proof Until a Foolish Remark Causes
    Weakling to Turn Informer._


As I said, Rubery, Libby and myself were brought from Alcatraz to the
Broadway jail, while Greathouse was enlarged on bail. We remained there
over six months, while the Government was preparing for our trial.

At that time there was published in San Francisco a paper called the
American Flag. It perished peacefully after the war ended, but while
it lasted, outclassed every publication of the North in downright
ferocity, not alone to the cause of the South, but to every person
of Southern parentage. It demanded that we be tried on a charge of
piracy--a capital offense. But the closest examination of the law
proved that no such accusation was tenable. The final indictment was
for high treason. That also used to be a capital crime, but such a
multitude of treason charges were brought during the war that Congress
stayed the hand of the executioner and made the offense punishable only
by imprisonment and fine.

Even that charge might have come to naught. Against us was the
accomplice Law, whose unsupported evidence was not sufficient. The
armament found on the Chapman might have been intended for a filibuster
expedition against a Central American State. The false custom-house
papers might be explained in the same way, also the secret preparations
for leaving the port, for the United States Government was bound to
intercept any illicit expeditions against friendly powers. Some general
literature of an inflammatory “secesh” character was found on us, but
our natural inclinations were a matter of public knowledge in San
Francisco. Finally the scraps of torn paper collected on the Chapman
by Captain Lees and pasted together, while incriminating, were not
complete and hardly admissible in a court of justice. In other words,
while there was an ocean of suspicion, the prosecution could offer
very little proof. Our best friends knew that the indictment was true
enough, but to maintain it according to the rules of evidence was
another thing.

The needed testimony, however, was supplied through some senseless talk
of Greathouse. I have always contended that a man’s worst enemy is his
mouth, and there never was a better illustration. Greathouse visited us
one day at the Broadway jail. He was handsomely caparisoned, full of
spirits and I think had just risen from a good dinner, or rather lunch.
Libby asked him anxiously about our prospects. “Well,” said Greathouse,
“they are not exactly flattering. I guess all of us will have to go to
prison for a long term, but,” he added somewhat grandly, “I will be
able to buy my way out.” He didn’t say a word about the rest of us.

This remark started Libby to thinking. He was scared stiff before. Now
he became a nervous wreck. He knew that Greathouse was powerful enough
to be at large on bail. He knew that Rubery and I had influential
connections. He was himself a poor fellow from Canada, adrift on the
Pacific Coast, without a cent or a friend. He saw himself made what we
moderns call the “goat” for the whole Chapman incident and concluded
that the wisest thing was to look out for his own hide. Somehow I have
never had it in my heart to blame Libby overmuch for whatever happened.
My impression is that he intended to “sit tight” until he thought
himself left in the lurch.

Be that as it may, the day after the visit of Greathouse, Libby sent
for the United States District Attorney, made a complete statement of
all he knew concerning the outfitting of the Chapman and our designs
against the commerce of the coast, adding, I am sorry to say, some
details that were false.

This confession, brought on as I believe by the foolish talk of
Greathouse, absolutely sealed our doom.

We were brought to trial on October 2 in the United States Circuit
Court, Judge Stephen J. Field and Judge Ogden Hoffman sitting in bank,
with an array of eminent counsel on each side. It did not take long
to pick a jury in those days. The very dogs of San Francisco knew of
the Chapman case, yet the twelve good men and true who swore they
were unbiased were impaneled in less than an hour. Some of them were
later noted. Here are the names: John Wheeler, Jacob Schrieber, A. S.
Iredale, Samuel Millbury, Joseph D. Pearson, Joseph A. Conboie, G. W.
Chesley, J. K. Osgood, James W. Towne and W. P. C. Stebbins.

The evidence against us was overwhelming. Law and Libby told their
stories in great detail. About half of it was rank perjury. They
related conversations that never took place. Also incidents that
existed only in their imaginations. Everything was set forth in its
blackest light. The witnesses were well drilled and were not shaken
by cross-examination. All of the other incidents were proved, the
purchase of the ship through a custom-house broker named Bunker, the
purchase of cannon and arms, the false manifest of the vessel and the
assemblage of a considerable fighting force. The Government also proved
that Greathouse and myself were citizens of the United States, not
of the revolted States, while Rubery was classed as a common foreign
adventurer. This, it seems, was necessary to establish the charge of
high treason.

Our lawyers made the best of a bad job. They argued manfully many
points of law concerning which I have no recollection, except that they
contended that the mere loading of a ship with arms did not constitute
a crime any more than buying a pistol constituted murder; that in order
to constitute the overt act the ship must sail for its destination. On
this point the court held that leaving the wharf and laying to in the
stream constituted “sailing.”

Finally our counsel made a grandstand bluff. They declared that
witnesses, then in Mexico, could clear up the whole transaction, but
in the absence of these they were compelled to submit the case without
testimony. None of us took the stand.

The lawyers unlimbered the usual forensic lore, illumined by bursts
of fiery eloquence. Both the judges charged dead against us. However,
Judge Hoffman threw me the following judicial bouquet:

“For the accused I feel a deep regret, especially for one of them who
appears to have been animated more by a zeal for the cause which he has
unhappily espoused than by the sordid and unworthy motive of enriching
himself by the plunder of his fellow-citizens. It is to be regretted
that the courage and willingness to sacrifice himself for the benefit
of his associates, a slight glimpse of which has been revealed by the
evidence, have been wasted on an enterprise which is indefensible in
morals as it is criminal in law.”

It took the jury just four minutes to bring in a verdict of guilty of
high treason.

A few days later we were brought into court and sentenced each to ten
years’ imprisonment and to pay a fine of $10,000. The county jail was
named as the place of our confinement until the Government of the
United States directed our imprisonment elsewhere.

As for Law and Libby, they were secretly placed on board a ship bound
for China by the United States authorities, and were never heard of
afterward, though I took some pains to learn their fate.

So ended the famous story of the so-called “Chapman piracy.” I have
given the details at some length because, while in itself rather
trivial, it has been made to cut quite a figure in history. The facts
have been so outrageously distorted that I thought it best for some one
having full personal knowledge of every detail to tell the truth.

Libby’s first name was Lorenzo. People often ask, “What’s in a name?”
Perhaps nothing; but I think otherwise. Lorenzo Libby helped to land
me in prison. Lorenzo Smith did me up in a business deal, and I have
unpleasant recollections of Lorenzo Sawyer, once on the Federal bench
of San Francisco. I never see a man christened “Lorenzo” without an
impression that he will bear a heap of watching.




CHAPTER XII.

  ARREST OF ACCOMPLICE ALARMS AUTHOR AND ON ADVICE OF FRIENDS HE
    TAKES FLIGHT.

  _Amnesty Act Unlocks Prison Doors of Conspirators, But Fails to
    Bring Security._


In war times, the American Eagle was not a bloodthirsty bird. We began
to have sympathizers, even among prominent Union men.

Greathouse was released after a brief confinement under a general
amnesty act and upon taking the oath of allegiance. Rubery, a
foreigner, could not take advantage of the amnesty act. However, at the
request of John Bright, President Lincoln granted him a free pardon.
But the astute statesman arranged that his precious nephew should not
be involved in future trouble because of his Southern proclivities. He
was placed on a Pacific Mail steamer and transferred at the Isthmus
to a British ship bound for England. We had an affectionate parting,
with the hope that we might again meet, a wish that was realized in a
dramatic manner.

I alone was held, because it had been shown that I had a commission in
the Confederate Navy. In almost exactly four months after my sentence,
I was brought before Judge Hoffman and ordered released, under the same
general amnesty act. The fine was likewise remitted. I am not versed
in legal technicalities, but it seemed to me that the learned jurist
stretched the strict letter of the law a bit in my behalf. Be that as
it may, I always held the name of Hoffman in high esteem.

I was free at last, but only to enter into a new kind of bondage. I
was broke. The fortune I had won by incredible good luck had vanished
absolutely. What was worse, my mine in Mexico was abandoned during the
French invasion and my title to it finally lost. It yielded wealth
to other owners later on. I never saw my old chum Don Miguel Paredis
again, but he kept his money and cut quite a figure in Mexican affairs.

When I stepped out of Broadway jail I was outwardly chesty, but
inwardly depressed, for I had just eight dollars and fifty cents to my
name. Having been a free spender at one of the leading hotels in my
capitalistic days, I went to the proprietor and frankly made a clean
breast of my impecuniosity. He was overjoyed to receive me as his
guest, gave me a fine room and settled all my anxiety as to lodging and
three square meals a day. That was nothing out of the common in the old
days. But I would like to see the photograph of a man with nerve enough
to make such a proposition to the manager of one of our first-class
hotels in the present generation.

[Illustration: THE AUTHOR’S FATHER

A. Harpending Sr., a supporter of the Union]

Still my financial affairs gave me no little concern. I thought of
writing to my father for temporary assistance, but there was an
impediment even there. While I was raising Cain, and wasting my
substance for the South in California, my progenitor was one of the
strongest Union men in Kentucky. Some rather crisp correspondence had
passed between us on that subject. Doubtless he would have been glad
enough to assist or welcome the prodigal. But I was too proud to seek
his aid.

This may justify a word of explanation. My father was a lineal
descendant of Baron Harpending, who came to New York, New Amsterdam,
with the original settlers from Holland. It was one of his ancestors
who gave a lease for ninety-nine years to the Dutch Reformed Church
of a piece of property in the business center of New York, now worth,
approximately, three hundred million dollars. It was another Trinity
Church case, with this exception, that there was no doubt about
the lawful heirs when the lease terminated. My father brought suit
to recover the property. That was one of the great lawsuits of the
last century. Henry Clay, Daniel Webster and Judge Underwood were
my father’s counsel. He won the case in the lower courts, but was
vanquished in the Supreme Court of the United States on a technicality
by a four to three decision. The family lost the vast property, but the
church still displays the Harpending arms, as required by the lease of
my ancestor, executed nearly 175 years ago.

My mother, on the other hand, was of the Clark family of Virginia,
which settled in Kentucky over a hundred years ago. She was of the
typical Southern strain. Thus, while my father, with his Northern
antecedents, was an ardent supporter of the Union cause, I had the
maternal blood in my veins. How we came to take opposite sides in the
great civil struggle was an instance of plain heredity, nothing more.

But that has nothing to do with this story. While I was worrying
over finances, not knowing which way to turn and mighty downcast and
blue-deviled, I was suddenly informed that my companion, Mr. Ridgley
Greathouse, had been rearrested and was in custody. Ignorant of the
charge and not having the wherewithal to fly, to say nothing of
inclination, I determined to put on a bold front, walked down to the
United States marshal’s office and asked him if he wanted me.

The mental processes of that functionary were of a leisurely nature.
He looked me over with great care, scratched his head with a pen in
a meditative way, slew a distant fly with a well-directed squirt of
tobacco juice and answered, weighing each word, “Well, not to-day, but
I guess I will to-morrow. Where do you live?”

I gave him the name of my hotel and the number of my room, which data
being duly noted, we bade each other good-day. To tell the truth, I
was badly rattled. Nothing seemed more certain than that I was doomed
to incarceration on a new charge, and, having enjoyed the public
hospitality for almost a year, I had no stomach for any more.

[Illustration: THE AUTHOR’S MOTHER

Mrs. A. Harpending Sr., an ardent Southern sympathizer]

Just as I reached my hotel, filled with these disturbing thoughts, a
friend asked me to go with him to a business office. I sat down in
the reception room, while my friend disappeared in a rear office. I
could hear the sound of voices and the clink of gold. Presently my
friend reappeared, carrying a small coin sack. “Harpending,” he said,
“you are certain to be arrested on some sort of an accusation. The
Yankees will never let you stay at large. There are fifteen of us who
have subscribed a hundred dollars each. Here is the money. We will
also provide you a good horse and necessary equipment. You must leave
to-night.”

I asked the privilege of meeting my friends and was accorded the
privilege. Several were not overburdened financially, and $1,500 was
more than I could reasonably need. I selected the three richest, gave
each of them my promissory note for $100, and returned the other
contributions. We talked more or less of plans. I was advised to ride
south to the neighborhood of Santa Cruz, across the mountains to the
plains, and journey thence through the San Joaquin Valley to what was
then known generally as the “Tulares,” where such inhabitants as there
were came mostly from the South and where, more important still, the
law writs did not run.

So, shortly after dark, I made my preparations and proceeded to put
as many miles between myself and San Francisco as the means of travel
would permit. I turned down the horseback proposition, slipped on
a southbound train in the evening and before midnight reached its
terminus, San Jose.




CHAPTER XIII.

  HITS FOR THE HILLS IN EFFORT TO LOSE PURSUERS, PASSES ONE GOOD
    THING AND STUMBLES INTO A BONANZA.

  _Company of Soldiers Goes to Arrest Him; Is Taken Into Camp and
    Very Soon After Everything Is Fine._


I stayed overnight at San Jose at the house of a friend, a stanch
Southern sympathizer, who had been advised by wire that he might expect
a guest by the late train. The next morning bright and early I left
with a companion and a stout team for Santa Cruz. On the outskirts of
that town--pardon me, city--my companion left me late in the afternoon,
directing me to a house of accommodation kept by a man I knew, of
strong “secesh” proclivities.

I passed into the waiting room, where a number of men were standing.
The proprietor received me with evident agitation and invited me to a
room upstairs. “Mr. Harpending,” he said, “the sheriff has received
a telegram from the United States Marshal to detain you if you pass
this way. He will hear of the arrival of a stranger, answering your
description, as a number saw you enter my house. But”--and here he
ripped out an awful oath, none of your feeble modern profanity--“I
will send for some of the boys and we will have one devil of a fight
before he takes you.”

I could see that the man was capable of anything desperate--I excused
myself for a moment to get my luggage, slipped down stairs to the
waiting room, took the small handbag that contained my personal
belongings, went out the rear door and took the road toward Gilroy on
foot. I hadn’t any plan in view--just walked on well into the night
until I was exhausted with fatigue and lack of food.

“Youth will not be denied,” is an old saying. I passed a house where
the lights were still burning and determined to seek a place of
shelter. I knocked at the door. To my astonishment and joy, it was
opened by a man called Clark, of Southern birth, whom I had met several
times in San Francisco.

Clark received me like a long-lost brother, roused the household, had
an old-fashioned Southern meal prepared that made me think of home,
and an hour later I was sound asleep in a comfortable bed, safe among
friends.

The next evening Mr. Clark accompanied me to Gilroy, where I was
concealed in the hotel of a mutual friend for two days, waiting for a
southbound stage that journeyed across the mountains to the San Joaquin
Valley and thence to Visalia in Tulare County.

There were two passengers on the stage when I boarded it, a gentleman
called Byington and his friend, Thomas Staples. Byington’s son was
afterward District Attorney of San Francisco for several years. The
gentleman recognized me at once and as we traveled along I found that
he wasn’t a half-bad secessionist himself. He told me that he and his
friend were bound to inspect a mine in which they were interested
at a place called Kernville, about 125 miles southeast of Visalia.
He advised me that it was a notable locality to “hole up” and avoid
observation indefinitely; that the “ville,” in fact, comprised only a
few shacks, appurtenant to the mine, which was just in the early stages
of development.

It was in the winter of 1864--the winter of the awful drought when
scarce a drop of rain fell in California. The weather was like
midsummer. The great valley then only had a few straggling settlements.
The vast prospect was unbroken save when here and there a miniature
whirlwind in the distance raised a spiral of sand skyward from
the parched ground, or where a band of dust-laden, half-famished
sheep, staggered on toward the mountains to escape from a universal
desolation. What a different prospect now. To one who saw those
unbroken solitudes, that are to-day among the busiest haunts of
men, with fine cities, railroads, power lines, immense systems of
irrigation, intensive agriculture, oil fields--everything in short
that goes to make prosperity and a high civilization,--nothing is more
impressive of what a few brief decades of enterprise can bring forth.

As there was a small military post at Visalia, when we neared that town
I made a detour on foot and joined Messrs. Byington and Staples to the
eastward. We reached Kern without any noteworthy incident. The place
was exactly as Mr. Byington described it--a collection of slab shacks
to shelter a few men engaged on development work on the mine. This was
known as the “Big Blue.” It was an immense ledge of bluish quartz, and
was enjoying a boom on the San Francisco stock market. Byington was a
type of the Californians of the ’60s, who were ready to go into any
mining stock venture, almost to the extent of their fortunes, without
knowing anything more about the actual business than so many cottontail
rabbits. At his request, I examined the “Big Blue,” and didn’t like the
looks of things at all. The superintendent raved about the richness of
the ore, showed us fabulous assays, but there, staring us in the face,
was a stamp mill that hadn’t turned a wheel for months. I satisfied
myself that while there were here and there small bunches of ore,
sufficient to furnish seductive looking assays, the general vein matter
was far too low to be worked to a profit. As for the outlook, that was
another thing. The mine might prove to be rich at a greater depth,
but the chances were at least 50 to 1 that it wouldn’t. I advised
Byington to unload his stock while he could, which he did to his great
advantage. A few months later, “Big Blue” stock certificates weren’t
worth picking up in the street. Nevertheless, “Big Blue” was the
inspiration for several later mining camp crazes. Among others, Senator
J. P. Jones of Nevada dropped a good-sized fortune in it.

I became known at Kernville, and as people were traveling to and fro,
it was certain that my retreat would soon be common property to my
enemies as well as my friends; so I decided to seek solitude and
efface myself. With three companions of a roving nature, we struck out
for the mountains and for some time enjoyed the delightful, care-free
bohemian existence that cannot be found in many places outside of
California.

I hadn’t forgotten my old mining habits. One day I picked up a number
of fragments of quartz, broken by the weather from a ledge that had a
likely look. I took these to our camp, crushed them in a primitive way,
“panned” the product and stood aghast with astonishment at the result.
A long, heavy “tail” of gold in the pan told that the rock must be
worth hundreds of dollars a ton.

There is something about gold--just the metal--that makes people forget
everything else in life. A little prospecting showed us that we were in
the heart of a great gold-bearing district, with surface croppings of
such value that all a man needed for working capital was a pick, a pan,
a couple of hammers and a mule to carry the rock to water, where it
could be hand-crushed and washed. Even the mule could be dispensed with
if one did not mind the labor of shouldering an ore sack for a short
distance every day. We were rich and gold-mad.

Realizing the importance of the discovery I sent one of my companions
to collect enough men to form a mining district under the existing
laws. These assembled, we perfected an organization and elected
officers. Somewhere in the Book of Genesis mention is made of a river
in Paradise running through the land of “Havilah, a country rich in
gold.” We were shy on the river, but the balance of the quotation
seemed appropriate enough, so I christened the proposed town “Havilah.”
The district was called “Clear Creek,” under which title it was famous
for many a year. Also I showed judgment and forethought in a real
estate way, claiming and staking off a natural townsite.

I didn’t dare to go down into the settled district to purchase anything
like machinery, for fear of arrest, but we constructed rude arastras,
primitive Spanish quartz mills, and began to turn out gold bullion in
astonishing amounts. Something concerning a new gold discovery began to
leak out and occasional prospectors joined our camp. We had no end of
provisions, plenty of fresh meat and sort of kept open house. All in
all, it was about the best-ordered mining camp I ever saw.

But the big boom for the camp came through my old journalistic enemy,
the American Flag. Word came to it somehow that I was located in the
mountains back of Kern City, ostensibly engaged in mining. Straightway
it gave me a terrific blast, claiming that mining was only a cloak for
a new piece of deviltry I was hatching. The effect of this was that
it located me for a lot of my Southern friends who really believed
that I was organizing a band to fight through to Texas, and as a
consequence they began to swarm into Havilah in large numbers. Nearly
all my fighting men of the Chapman were among the first arrivals.
Also several Northern men, fired by the word “gold,” took a chance
of entering into an alleged stronghold of conspirators. They would
have marched into hell, just the same, for gold. They had the same
reception as anyone else. Far up in the mountains, away from strife
and faction, these men mingled in perfect amity and good fellowship.
It was another illustration of what I said before--that if the people
had been left to settle matters in their own way there never would
have been a Civil War. Chattel slavery in the South was fast dying at
the root. Another decade or so would have seen its finish. And the
real question of slavery was not settled at all. There have grown up
other forms of slavery far more odious and soul-destroying than the
mild system maintained, with very few exceptions, in the South. It was
the agitators and demagogues on both sides, who never fought at all,
upon whom must rest the responsibilities of our war, just the same as
in nearly every other historic struggle. Strangely enough, these men
are commonly canonized, instead of being held up to the execration of
mankind.

Havilah was fast becoming a large proposition. Its trade was eagerly
sought for and pack trains of supplies were arriving daily. But the
more it grew, the louder and longer raved the American Flag about the
band of outlaws in the mountains, headed by the piratical Harpending.
So specific were the denunciations that at length they seriously
attracted the notice of the Government. Finally a detachment of troops
stationed at Visalia was dispatched to drive us out.

We had timely notice of this kindly intention. I had been recognized as
a sort of leader, partly because of my position as the largest owner
of the district, partly because of the newspaper notoriety, which had
given me the character of a daring adventurer--the character that
impresses the rough natures of a mining camp. All the miners were
called together. Lookouts were stationed down the canyon to give notice
of the approach of a hostile force. I had decided to adopt Albert
Sidney Johnston’s strategy and try the moral effect of a surprise.

But the wily soldier in command did not come by the usual route. Early
in the morning we heard the sound of cavalry tramping down the mountain
side. We were prepared for that. The officer and his troopers, about
eighty in all, walked into an ambuscade and suddenly found themselves
confronted by four times their number, raw-boned, bearded, athletic
miners, each armed to the teeth. I stepped forward, saluted the
officer, who seemed a trifle rattled, congratulated him on being just
in time for breakfast and carelessly asked him if he had lost his way.

The officer replied, in a surly fashion, that his business was to
disperse a band of cut-throats and rebels. I answered that he could
hardly mean us; that we were peacefully pursuing a lawful occupation;
that we were ready to submit to legal authority, but must first know
the nature of our offense. I urged him to examine the camp, interview
some well-known Union men who were with us and satisfy himself that we
were neither outlaws nor rebels. There was nothing for him to do but
make the best of a bad bargain. The troopers rode to camp with their
miner escort, had a jolly good breakfast, with more or less joshing on
either side, and that part of the incident closed in a happy way. But
the officer declined to be comforted. He was clearly mortified at our
successful strategy.

We all knew that this was only a respite--that more serious trouble
was ahead. But, in fact, it proved the camp’s salvation. A gentleman
called Sumner--I forget his other name--a Northerner of character and
standing, who knew all about our case, came to our defense in San
Francisco. I also sent a full statement of our case to my friend,
Colonel Crockett, later a Justice of the Supreme Court. These two
waited on General McDowell, in command of the Department of the
Pacific, and so far convinced him that he sent rather peremptory orders
to Visalia not to interfere with us further, except on direct command.

At the same time I was advised that I was free to go to and from San
Francisco; that there never had been, in fact, a charge against me;
that the rearrest of Mr. Greathouse was in no way connected with
myself; that the United States marshal had only been advised to keep an
eye on me; that he had only wired the Sheriff at Santa Cruz to do the
same.

Tn other words, I had fled from a man of straw--from a lighted pumpkin
head in a dark room--and had stumbled over a fortune.

With sufficient money, I made haste to San Francisco, paid my trifling
debts, not overlooking the hotel keeper; bought a quartz mill and
appurtenances, rushed it down the valley and had the stamps falling in
record-breaking time.

The year 1865 was a busy one for Havilah and the Clear Creek mining
district. It became a heavy gold producer--miners, capitalists,
speculators swarmed into it from all over the Pacific slope. I laid out
my townsite in due season and sold it out at fancy figures. The main
street brought an average of $20 per foot. A boom was on all along the
line. I was offered fancy prices for my mining claims. I let them go.
My principle was to avoid what is vulgarly known as “hoggishness.” When
I could make a million by a business turn I considered it a good day’s
work.

But as a matter of fact, I only cleaned up with $800,000. That is what
I banked in San Francisco long before the end of 1865.

The town of Havilah prospered mightily. At one time it must have
numbered nearly 3000 inhabitants. It was a brisk center with hotels,
livery stables, large merchandise stores, lawyers, doctors, preachers,
open gambling houses, hurdy-gurdies, saloons, banks, bagnios and the
other evidences of advanced civilization.

Not only that, but its enterprising inhabitants appeared before the
next legislature and asked for the creation of a new county. Though
by that time a permanent resident of San Francisco, I assisted in the
passage of a bill that cut off from Tulare the county of Kern, and
named Havilah the county seat. It so remained until the decline of
mining and the growth of agriculture in the lowlands moved the capital
to Bakersfield.

These statements can be verified by official records of Kern county
and of the town of Havilah, which I presume still exist. Also by the
testimony of many people still living.

Such were the tricks Dame Fortune played me in a period of a little
longer than a year.

I was literally chased from absolute poverty into the possession of
nearly a million dollars.

I discovered a great mining district and founded a thriving town.

And if the matter of paternity is ever brought up in court, it will
probably be proved to the satisfaction of a jury that I am the father
of Kern county.




CHAPTER XIV.

  DECADE BETWEEN 1860 AND ’70, NEXT TO THE GOLD AGE, ONE OF THE
    MOST STIRRING TIMES IN HISTORY OF STATE.

  _Realization Had Come That Mineral Riches Formed Smallest Part of
    Resources; Outlook Was Bright._


Late in the summer of 1865, I took up my residence in San Francisco.
The war was over, the country settling down after the intoxication of a
terrific struggle. But one fever was only followed by another, so far
as I was concerned. I was barely 25, but far older than my years. In
fact, I never had any youth at all. From the time when I ran away from
college to join Walker’s expedition against Nicaragua, I was called on
to meet problems that required a man’s decision, and so became one,
long ahead of time. But I was brimful of a restless ambition to make
my mark--to become one of the great central figures in working out the
destiny of the Pacific Coast.

Those were stirring times, indeed. Few seem to understand that the
decade between 1860 and 1870 was, next to the gold age of the ’50’s,
the most important in the history of California. It was the period of
transition from the fierce exploitation of the pioneers who looked only
on the region as a thing to be despoiled of its treasures and to be
abandoned. It saw the silent valleys changed to broad oceans of waving
grain. It saw the foothills crowned with thrifty vineyards, saw the
sure foundations laid of a great fruit industry, saw the beginning of
systematic irrigation. It saw the port of San Francisco crowded with
masts of vessels to carry its new-found wealth to distant lands, saw
a mighty foreign commerce develop, saw the treasures of the Comstock
Lode unlocked, saw a railroad stretch from the Atlantic to the Pacific.
And men arose to meet the new conditions. A splendid line of merchants
seized the opportunities of trade. Isaac Friedlander opened the markets
of England for our wheat. Macondray Brothers built up great business
interests in the Orient. The trade mark of William T. Coleman & Company
was a guaranty of their goods throughout the civilized world. These
names are only typical of many. A new race of mighty miners developed,
men like George Hearst, J. B. Haggin, Lloyd Tevis, Alvinza Hayward,
G. W. Grayson and others, whose activities extended to Utah, Nevada,
Arizona, Montana and to distant Mexico, pouring a fresh river of gold
and silver into California.

The drift of population of the growing city also changed and the
westward movement began, which will only be bounded by the ocean.

In short, nearly all we have in Northern California to-day in the way
of industries and enterprise can trace the starting point to that age.

It was an intense, booming, hopeful decade, a period of great events
and great men, when everyone at last realized that gold was the
smallest part of the State’s resources and the outlook as broad as the
horizon of midocean. I do not wish to interrupt the narrative to dip
into general history, but it may interest the reader to have a glimpse,
as we jog along, of real things and the live people of what I may be
pardoned for calling the old but recent times.

All old Californians can recollect the now faded glory of Montgomery
street. Stretching barely from the foot of Telegraph Hill, at Jackson
street, nine blocks, to a full stop at Market street, it was really the
whole town. During the busy hours of the day you could meet there every
man worth knowing in San Francisco, and in the afternoon, every woman
with a pretty face or a handsome gown to show. This gave a wonderful
facility for acquaintance and general good-fellowship. Everybody knew
everybody. That was what made the old San Francisco the most charming
and fascinating city in the world from a social standpoint. It was not
alone the most brilliant society I ever encountered in an experience
that has covered most of the world, but there was a freedom and
heartiness in general intercourse that could only be explained by the
conditions under which people lived.

Into those nine blocks, and, to a less extent, into one block on
either side of some of the intersecting streets like California, Pine
and Bush, a vast business was huddled no less remarkable for its vast
extent than for its cosmopolitan, or rather heterogeneous character.
Banks, commercial houses, stock exchanges, brokers’ offices, courts,
public buildings, the leading hotels, retail stores, public libraries,
theaters, music halls, the two great social clubs, nearly all the
lawyers in town, the leading doctors and probably the finest saloons
in the world, were mixed up inextricably like a huge human menagerie
broke loose. Not to be on Montgomery street, or within half a block of
it, was to be classed as a business, professional or social pariah.

Of course real estate values soared skyward. It was hard to estimate
what Montgomery street frontage was really worth, but there were actual
transactions as high as $6,000 a front foot, nearly as high as the
present selling price of choice realty on Market street. Rents likewise
were enormous. Considering how little the landlord gave in the way of
conveniences to his tenants, these rents were much higher than they are
today.

To relieve this tremendous congestion was one of the problems of San
Francisco in the 60’s. No one had the perspective to forecast cable and
trolley cars climbing all kinds of grades and peopling the hills with
homes. All we could see was an extension south and for that purpose the
city was badly laid out.

The battle cry in the early 60’s was “Montgomery street straight.”
The all but universal wish was to run the great street, broadened to
a wide avenue, in a direct line to Connecticut street, far to the
south. Tremendous efforts were made to carry through this project in
a peaceful way. Several times it was near accomplishment, but just as
often fell through, owing to some recalcitrant property owner. The main
obstacle was the large block of land on Market street where the Palace
Hotel now stands. This was owned by the Catholic Church and had been
reserved for the construction thereon of a great religious edifice.

As soon as I got my bearings in San Francisco, I saw at once what a
vital question was involved and what a grand opportunity was there to
win not alone fortune, but fame. I carefully surveyed the situation
from every standpoint and finally hit upon a scheme which would carry
out the original design of “Montgomery street straight,” and avoid
the opposition hitherto evolved. As what follows forms one of the
interesting bits of San Francisco’s history, hitherto untold, and
the city’s present status was greatly influenced by my plans, which,
however, were only carried out in part, I will give an outline of one
of the largest real estate transactions, of a far reaching character,
ever conceived and partly completed in the history of San Francisco.




CHAPTER XV.

  FIRST SPECULATOR TO FIGURE THAT MARKET STREET HAD FUTURE BUYS
    SEVERAL CHOICE LOTS FOR A PITTANCE.

  _Earthquake Plays Important Part in Big Deal; Timid Citizen Sells
    Out in Hurry and Loses $350,000._


In the early 60’s no one thought of Market street except as a
disfigurement to the city and a broad impediment to its progress. It
began almost nowhere, at an unfrequented section of the waterfront,
where the dullness was relieved only by the arrival and departure four
or five times a day of a ferryboat owned by Charles Minturn, which
transported a few straggling passengers between San Francisco and
the small village of Oakland, across the bay. If I recollect aright,
the fare was 50 cents each way. It terminated--so far as traffic and
settlement were concerned--exactly nowhere, in the desolate sand hills
beyond where the Flood Building now stands. The “gore” streets, like
Post, Geary and O’Farrell, that now pour a human tide into the city’s
big artery, were settled only for a few blocks westward; beyond that
there was solitude. The roadway of Market street was an abomination
even in the old days before “good roads” became a slogan. The
sidewalks, if any, were wooden, and mighty poor at that.

I was about the first real estate investor, to which business I
turned my attention, who realized in a sort of vague way that Market
street had a future. I had a shrewd idea that the insistent plan for
“Montgomery straight,” on which so many based their hopes, was doomed
to disappointment, but as I said in the last chapter, I saw a way out
of the dilemma. With this in view, I began to pick up Market street
frontage from First street west till I owned 800 feet. I also bought
the Sutter-street gore, where the skyscraper has since gone up, at a
public auction, paying $86,000 for the same in hard cash, which was
considered a top price.

Meanwhile I was quietly buying a solid block of land straight through
from Howard street to Market. It was broad enough to allow a wide
street to be laid out in a line directly opposite to the ending of
Montgomery, and thus change so many backyards into frontages on a fine
thoroughfare--an extension of the city’s crowded mart. I wasn’t a
prophet or the son of a prophet, but the enterprise looked good. Not
only that, but it seemed certain to me that the extension of Montgomery
street, once begun, either “straight” or at an angle, would be pushed
ahead by the force of public opinion to its proper terminal, the
waterfront of the bay.

Most of this immense property, outside of the Sutter-street gore, was
gathered in at prices so pitifully small that they would test the
credulity of the reader. Excepting one other piece of property, the
total investment was less than $500,000, and the wretched buildings
on it yielded a net income of 1½ per cent. per month on this amount.
However, this was looked on as a very poor return in those days when
2½ per cent. per month, compounded with the regularity of fate, could
be obtained on well-secured loans. The money market was considered
easy when borrowers could be accommodated on those terms. It all seems
like some Monte Cristo story, but let me tell the young, ambitious
reader that there are just as splendid opportunities staring him in
the face to-day just waiting to be taken into camp. The region around
the Bay of San Francisco is destined, beyond a doubt, to become one
of the greatest world centers of population, commerce, business and
production. The possibilities have barely been touched. Take it as
the judgment of a close observer, with wide experience, that now is
the time to get on board--using, of course, sound common sense and
intelligent foresight. If I were 25 instead of 76, I would like to give
the public an object lesson of how to make money.

But I was a long time securing the Market street frontage necessary to
carry out my plans. How I finally succeeded is quite an incident, well
worth recalling, although it is ahead of my story.

On the south side of Market street, exactly opposite the terminus of
Montgomery street, stood a vacant fifty-vara lot, owned by a well-known
old pioneer by the name of Selim Woodworth. I had bought sixty feet
adjoining the church property where the Palace Hotel now corners. The
Selim Woodworth lot was next to that. Now the owner had a very hard
head and a rather top-heavy idea of the value of anything he possessed.
Off and on I was negotiating with Woodworth for more than a year and a
half, sometimes personally, sometimes through a broker, but always ran
abruptly against the same proposition. “If you want that property it
will cost you precisely half a million. There is nothing further to be
said on the subject. Let’s turn the conversation to something else.”
Nobody could have been more courteous or more firm.

I had been bumping up against this brick wall so often and was so
helpless to carry out my plans without the land in question, that I was
on the very point of paying what was then a price out of all reason
or proportion to existing values, when something happened to change
Mr. Woodworth’s estimates in a way quite novel and picturesque, from a
business standpoint.

The earthquake of 1868 wasn’t much alongside of its successor of 1906,
nevertheless, it was quite a jolt. Some rattletrap buildings collapsed,
many others were cracked from roof to foundation, an immense number of
chimneys were overthrown and a few people killed. The most disquieting
feature was that the earthquake didn’t know when to stop. There was the
first big damaging shock, but after that every ten minutes the earth
gave a jolt quite hard enough to send multitudes scurrying into the
streets. There was not an interval long enough to allow the average man
to gather his wits. After a night of agony and suspense, most people
were weak as kittens and speechless.

I went down town in the morning after the quake from my home on Rincon
Hill. I really was not much disturbed after the first lurch, for I had
read somewhere that the minor tremors succeeding the initial shock
never need be apprehended. One of the first men I met in the business
section was Selim Woodworth. He was carrying a handbag and his face
showed evidence of mental strain. I asked him where he was going.

“Where am I going?” said Woodworth. “What a question to ask! Why, I am
getting out of here before the earth swallows me up. When do you leave?”

I told him I didn’t intend to leave at all, whereat a look of deep
craft came over Woodworth’s face. “Look here, Harpending,” he said,
“how about that Market street lot? Do you still want to buy?”

I laughed as if in scorn. “Who on earth,” I said, “would want to buy
a lot that may be a hole in the ground by night, reaching through to
China. Besides, you have always been so unreasonable that no human
being could deal with you.”

“Well, make me an offer, anyway,” he replied, “you will find me
reasonable enough.”

I pondered for a moment before I answered, “Well, I was thinking of
offering you $150,000,” I said, “but that’s too much. Still, just to
help you out in a neighborly way I might strain a point and give you--”

I never had time to finish the sentence. “Oh, for God’s sake,” yelled
Woodworth, “don’t screw me down at a time like this. Make it $150,000
and we’ll close the bargain here.”

We shook hands on the spot. Together we went to the Bank of California,
where a formal contract for a deed to the property was drawn, and this,
at Mr. Woodworth’s request, was guaranteed by a high official at the
bank. I deposited $150,000 in escrow. In due season the deed was sent
on to Mr. Woodworth in Europe, was returned properly executed and the
famous 50 vara lot passed into my hands.

This is the veritable story of how I acquired the frontage on Market
street which enabled me to open New Montgomery street through my
property to Howard. I was certain it would soon be extended to the
bay and solve the problem of the 60’s--“Montgomery South.” At the
Market street corners of the street I opened, the Palace Hotel and the
Merchants’ Bank, two of the finest buildings in San Francisco, now
stand.

I made New Montgomery street, as it stands to-day, a free gift to the
city of San Francisco, and it must remain a permanent record of my
existence. I may add that I had to scatter numerous shekels among the
“boys” before the gift was finally accepted.

Also, the earthquake literally shook $350,000 out of Selim Woodworth,
which he would have received otherwise in a few days.




CHAPTER XVI.

  MONTGOMERY SOUTH DEAL COMES TO NOTICE OF RALSTON, WHO BUYS
    QUARTER INTEREST IN REAL ESTATE PROJECT.


Long before the events narrated in the last chapter a most important
person became a character in this narrative. In one way or another, I
had become quite a figure in the business world of San Francisco; I
took a flyer at several things in a speculative line, always made money
at my ventures, and was generally looked on as what we now call “a
comer.”

But it was entirely because of my large and peculiar real estate
investments that I attracted the notice of the great central figure of
California of that day--one who always wished to be associated with any
of the large movements of his time.

Almost from the date when I first had money enough to make it
inconvenient to carry it on my person I kept my account at the Pacific
Bank, of which Governor Burnett was president. But I had watched
the ascendant star of William C. Ralston as it put out of sight all
the lesser luminaries. I had a young man’s admiration for his dash,
energy and success and I was pleased when I received a letter from the
gentleman, saying that he would like to see me, at my convenience, at
the Bank of California.

We met by appointment. I had known Mr. Ralston before in a purely
casual way. This was the first time we had touched in business. He had
a swift, offhand fashion of saying pleasant things--not flatteries, but
things that put a man in good humor with himself; and thus he spoke
to me of his desire to be abreast with the active men of the city, to
be able to aid and co-operate with them. Then he had a word to say
about my real estate ventures and in a very natural course led up to a
general conversation on the subject.

Mr. Ralston’s manner entirely won my confidence. Besides, we had
a direct way of doing business then, quite different from the
dark-lantern methods of to-day. I simply laid down my cards on the
table, face up. I told Mr. Ralston exactly what I had in mind; that my
purpose was to solve the great problem of “Montgomery South” in a new
way; that I considered it a matter of vast importance for the city’s
future and one certain to bring fortune to the successful promoter.

Mr. Ralston listened with deep attention, with an occasional word or
nod of approval. When I concluded he leaned back in his chair in a
meditative way and thought a minute. “It looks like a noble game,” he
said at length. “Now, how would you like me for a partner?”

I was just a bit astonished at the proposition, but I was gratified
that the financial autocrat of the Pacific Coast wanted to climb
into my band wagon. The arrangements were made with less “jockeying”
than now takes place over a thousand-dollar transaction. I made a
complete statement of my investments, which Mr. Ralston accepted, and
made me an offer based on cost, plus a very handsome profit, for a
quarter interest. I accepted also in an offhand way and deeds passed
to correspond covering all my real estate involved in “Montgomery
South.” It was understood that we would stand together to push the new
street through to the bay, and that in this project I should have the
practically unlimited support of the Bank of California. Our holdings
were merged into a corporation, known as the Montgomery Street Land
Company.

Thus I became associated with this strange character, who has been
dead almost forty years, yet whose name is still a household word to
thousands and bids fair to be remembered long after those who pose as
the truly great are asleep in forgotten tombs.

I spoke of Ralston as a “strange” character. But the adjective doesn’t
fit the case at all. There was just one Ralston in California. Perhaps
his counterpart never lived before. It would be far beyond my powers to
draw a sketch of a man so many-sided, but here and there some traits
cropped out so prominent that they could scarcely miss the observation
of a child.

[Illustration: WM. C. RALSTON

President of Bank of California, the first dupe in diamond fraud]

Ralston had a marvelous head for business. The most difficult problems
of finance were as simple to him as the alphabet and his mind cut
through all perplexities and obstructions straight to the truth. Had
he possessed a few less red corpuscles in his blood--been a plain,
downright financier, I am certain that he would have grown beyond the
narrow environment of the Pacific Coast and become one of the world’s
money kings. But he had an odd supplement to the cold-blooded
faculty of making money, a sort of richly Oriental imagination that
looked far beyond the mere acquisition of a pile of cash.

For one thing, he had a passionate, almost pathetic love for
California. He wanted to see his State and city great, prosperous,
progressive, conspicuous throughout the world for enterprise and
big things. I think it was this imagination, this ambition, that
kept hurrying him into one big undertaking after another, many of
which were way ahead of time. While he was stacking up money in one
direction, with the skill of a great native-born financier, it was
leaking out in various other ways for rolling mills, vast hotels, watch
factories, woolen mills, furniture factories, and what not. It was only
an ambition to say that San Francisco had the grandest and largest
hostelry in the world that prompted him to build the Palace Hotel.
And so on down the line. He tried to do everything, and, like others,
failed in the end.

With all of his tremendous business activities, I could never think
of Ralston except as a big over-grown boy. He had an elasticity and
buoyancy of spirits very seldom seen beyond the teens and a youth’s
eagerness in the pursuit of pleasure. Nothing seemed to disturb his
imperturbable good humor. He was at once the best winner or loser
in the world--could pick up or drop a million with equal gaiety and
nonchalance. He always smiled in conversation, but in moments of repose
his features settled into an expression that was half thoughtful, half
sad.

Where he shone most perhaps was as a “mixer.” He had wonderful manners,
frank, cordial, magnetic, and handed out the same quality to everyone
alike. He avoided, either by design or inclination, all the pomposity
and circumstance of greatness, even went out of his way to be extra
gracious to those who seemed a trifle embarrassed in his presence.
In this way he endeared himself to a small army of young men and to
some of the still more youthful highbinders who used to visit the Bank
of California and stand up the smiling financier for baseball club
uniforms and other all-important incidentials upon which the fame and
glory of California hung. As to the industrial classes, they simply
worshiped Ralston. He was their constant provider, philosopher and
friend. It seemed to me that he knew half of the working population
by their first name, and he was known among them familiarly and
affectionately as “Bill” Ralston. It is a sad commentary on human
nature that in the hour of his misfortune the men he had enriched took
to the tall timber. Only his humble friends proved true.

This only gives the faintest glimpse of Ralston. For years I was his
intimate associate. He was a man of many friends and many business
connections, but I think he gave his entire confidence to only two
men, Maurice Dore and myself. In all our relations I always found him
punctiliously honorable and truthful, and though the acquaintance was a
costly one to me, I hold his memory in affectionate remembrance--as I
did when I last saw him forty years ago.

And even admitting all that his traducers charge, after death had
silenced his voice forever, I would still say that he deserved a
statue in Golden Gate Park as the most effective friend the State of
California ever had. But before I close this story I hope to make it
plain that a cruel wrong was done his memory and let the truth come out
at last.




CHAPTER XVII.

SHARON, TOO, BECOMES ASSOCIATE OF FAMOUS PIONEER; THIS CHAPTER
TELLS HOW GREAT PANIC WAS AVERTED.

_Ralston Lays Foundation for Huge Fortune of D. O. Mills by Making Him
a Bank President_


Ralston had two business associates--I might almost call them
familiars--William Sharon and D. O. Mills. D. O. Mills was a man of
some fortune, worth perhaps half a million dollars. He was about to
leave for the East to settle down somewhere under his own vine and
fig tree, when Ralston took him up. The latter was just organizing
the Bank of California, had no ambition for titular dignities, and
offered Mills the place of president. He promised that the job would
be a sinecure--that he would do all the work. Mills accepted. That
was the foundation of his huge fortune. But he was a mighty cautious
speculator in those days. He tried his hand at a number of ventures,
sometime invested large sums, but always required a guaranty against
loss. Strangely enough, this used to be given him often, because of
the conservatism associated with his name. That, however, did not
last long. He became a bold, ambitious, original operator on his own
account. He had fine personal habits, but was just the opposite of
Ralston--unemotional, cool-headed and austere.

[Illustration: D. O. MILLS

First President Bank of California, a financier of national repute]

Sharon was quite a different character. He was from the same part of
the Northwest as J. D. Fry, an uncle of Mrs. Ralston, and so received
a favorable introduction to the famous financier. Ralston sent Sharon
to Virginia City during the early flush times as an agent for his
mining interests, and when the Bank of California was organized and a
branch located on the Comstock Lode, Sharon became manager, a position
of great prominence and power. He was a daring, spectacular plunger,
though a very shrewd one, made big money from the outset and with his
general foreknowledge of conditions really took no chance at all on
great stock market deals. With unexampled rapidity, he accumulated
a fortune of millions. Having no pet hobbies to interfere with
accumulating money, before the ’60s were over both Mills and Sharon
probably possessed larger fortunes than their chief.

As I have said Sharon’s personality was very different from that of
Mills in many ways. He had some habits that an anchorite might not
approve. Among other things he was devoted to the great national
pastime--draw-poker. Many legends of his prowess, of his bewildering
bluffs and high-class technique were long fragrant memories of the
Comstock Lode. It is related that a friend of Ralston with a moral turn
warned him that his agent at Virginia was a notorious, abandoned and
dissolute poker player. The banker listened with absorbed interest.
“Does he win or lose?” he asked.

“My information,” said the informer, “is that he almost always wins.”

“Good,” said Ralston. “He’s the very man I want.” The three were
associated in many enterprises of the first magnitude. They had
combined resources, speaking very conservatively, of not less than
thirty-five millions, which is a big bunch of money even today. They
formed an irresistible power in California, until the railroad dynasty
succeeded them. Still I have reason to believe that Ralston never gave
these associates his full confidence, and that the relation became
irksome, if not oppressive.

I judge the former from an unrecorded incident that ought to be
remembered in financial history--an incident that just prevented a
crisis far more terrible than that of 1907.

[Illustration: WM. SHARON

A leading Comstock figure, former U. S. Senator]

It was in the year 1869. Ralston had loaned the railroad people some
months before $3,000,000, with which they pushed their line to Ogden,
adding a hundred miles to the Central Pacific in its cross-country race
with the Union Pacific for mileage. This large sum had gone out of the
State absolutely. Also two millions had taken wing for South America to
finance an investment there. Things were already a trifle tight when in
July, 1869, Jay Gould’s famous “gold corner” raised the yellow metal to
a huge premium and the gold coin of California was drained eastward, as
through a sieve. The banks always carried a large amount of gold bars,
but this was not available as coin, for the mint happened to be shut
down pending a change of administration.

The situation need not have been serious, for tucked away in the United
States sub-treasury were $14,000,000 in gold coin. It seemed the
most legitimate transaction in the world to deposit gold bars in the
Treasury and carry away an equal value in coin. But President Grant,
who was rather new on the job, for some unaccountable reason absolutely
refused to sanction the transfer, although the bankers almost burned up
the wires with their appeals. An uneasy feeling was over the town, the
overcharged atmosphere of panic, apt to break loose at any moment into
a resistless storm.

While the tension was at its height I called at the Bank of California
one afternoon and was ushered into the private office of Mr. Ralston.
To tell the truth, I was feeling the pinch myself, and wanted to know
something of the outlook.

The banker said I was just the man he wanted to see. “If things go
on as they are,” he said, “every bank will be closed by tomorrow
afternoon. Not one of us can stand a half day’s run, and all will go
down in a heap. Then look out for hell in general to break loose. This
will happen if I don’t get a million dollars in coin in the vaults
tonight. But I intend to get it, and want you and Maurice Dore to help.
Be at the bank at 1 o’clock tonight, and put on an old suit of clothes,
for you will have plenty of hard work to do.”

Dore and myself met by appointment shortly after midnight. We were
utterly mystified. Together we tramped through the deserted, dimly
lighted streets. It seemed just like old times--the time we boarded
the Chapman to become privateers. We found Ralston at the bank
with one of its trusty officials, still alive and prominent in San
Francisco. The financier was in high spirits, but counseled caution. We
walked noiselessly to the United States Sub-Treasury, then located on
Montgomery between Sacramento and California streets, where the Selby
offices afterward stood. A dim light was burning within. Mr. Ralston
asked us to halt a few paces from the entrance; then to our great
surprise he opened the door of the Sub-Treasury, without challenge of
any kind, and closed it after him as he stepped inside. Presently he
emerged with several sacks of coin. “Take that to the bank,” he said.
“The gentleman there will give you something to bring back.”

The party at the bank received the cash, tallied it and handed us gold
bars for the same value. These we took to the Sub-Treasury, where we
found Mr. Ralston smilingly awaiting us with a new cargo of sacks on
the sidewalk. We turned over the bars and made another journey to the
bank.

Thus, at dead of night, passing to and fro, we transferred in actual
weight, between the Sub-Treasury and the bank nearly five tons of gold.
We did not get quite as much as Ralston wanted, before the light began
to break. It was a heart-breaking job from a physical standpoint. I was
young and athletic and stood my end of it in good shape. But Maurice
Dore was of sedentary habit, soft as mush, and he was on the verge of
collapse. He was nearly chest foundered and had a swayback appearance
for a month. During all this time, not a person passed to interrupt us.
This was doubtless due to a prearrangement with the policeman on the
beat.

When the Bank of California opened the next morning a rather ominous
looking crowd was in waiting. Lines began to form behind the paying
tellers’ windows. It wasn’t a “run,” but a “near-run.” Ralston appeared
on the scene and looked annoyed, as he said, “Why are you making so
many of our customers wait on a busy day? Put more tellers on the
windows and have your coin on hand.” More tellers went to the windows.
Porters brought tray after tray from the vaults. It was amazing how
the crowd changed their minds about wanting their money and melted
away. And all over the troubled city the report spread that the Bank of
California had coin to burn, and the news caused a general relief.

Nevertheless, a serious run started on one of the leading banks.
Ralston hurried to the spot, mounted a dry goods box and addressed
the crowd. He told them they were doing the bank and the city a great
injustice. He declared that the bank was absolutely sound--which was
the truth. He further told the crowd that they need not wait for a
line-up. Just bring their books to the Bank of California and they
would be accommodated with the cash there. Again, the crowd slunk away
abashed.

Thus a tremendous panic, the consequences of which might have been
world-wide, was averted by a bold front, a nervy bluff backed by a
million in cash. Three days later, President Grant reversed himself
and allowed gold to be exchanged at the Sub-Treasury for cash, which
settled all anxiety. This was brought about through the agency of Jesse
Seligman, the New York banker, who gave the President a banquet and
then showed him his mistake.

But neither Mills nor Sharon, who were leading officers of the bank,
ever knew how Ralston gathered in nearly a million dollars after
banking hours that day. All the satisfaction they ever got was that a
kind friend had come to the bank’s assistance.




CHAPTER XVIII.

  “BIG FOUR” INTERVENES AND SETS UP OBSTACLES; RALSTON ACTS AS
    MEDIATOR AND IS BADLY GOLD-BRICKED.

  _Railroad Madness Results in the Narrator Securing Franchise for
    Line From Sausalito to Humboldt._


Way back in 1868, the Legislature passed a bill giving a franchise to
a corporation organized under the name of the San Francisco & Humboldt
Bay Railroad Company, to construct a railroad from an indefinite
point on the bay of San Francisco to Eureka, in Humboldt county.
The franchise was coupled with a provision that the electors of the
counties through which it passed should be authorized to vote a subsidy
in bonds of $5,000 per mile, payable as every section of 25 miles was
completed. That was about enough to pay for the rails. The franchise
was later extended to the waterfront of Sausalito, but that was
surrendered to the Sausalito Land and Ferry Company.

The franchise was held by Fred McCrellish of the Alta; J. F. McCauley,
a well known business “rustler”; General Connor, a temporary sojourner
from the Northwest, and I think H. T. Templeton had a small interest.
None of them had any capital to speak of, and they had no other design
than to peddle the franchise to someone who had.

Of course, the promoters had done nothing in the way of construction,
and the rights were in a fair way to lapse, when Fred McCrellish drew
my attention to this paper property and asked me to make an offer. The
Central Pacific was then nearing completion. Like most people in the
State, I was railroad mad, and being on the lookout for everything
good, I referred his proposition to an expert. The report of the
engineer was very favorable and when I found they wanted only $20,000
for all their rights and franchises for a railroad from Sausalito to
Humboldt Bay, I readily closed the bargain and bought them out, all
except one-tenth, which J. F. McCauley owned.

Then I looked into the proposition seriously. I went over the ground
in person, realized the vast opportunities presented, particularly in
the great forests of the Eel River country, which were still Government
land. The way things were going then, it would have been no trick at
all to introduce a bill in Congress asking for a land grant through a
country to be traversed by a railroad, and get half a million acres or
more just for the asking. It seemed to me a bigger game than all the
gold mines, speculations and investments I had ever seen or dreamed of.
I tried to interest Ralston, but he said I was visionary, and made some
remarks about “back lands” and “coyote ranges.”

That did not deter me in the slightest. I had abundant capital of my
own, and very important financial connections, and had no doubt that
I could complete the undertaking on my own account. With a good corps
of engineers I began to rush the work of surveys and locations with
my customary impetuosity. In a short time I had the dirt flying at
Petaluma and several other points north. I contracted for fifty miles
of ties as a start and bought fifty miles of rail, some ten miles here
and the rest in England. I was perfectly infatuated with the railroad
business and determined to devote my life and energies to the work.

Needing all the money I could get to handle this enormous enterprise,
I suggested to Ralston that we hold an auction sale of our joint
possessions. We had laid out New Montgomery street in good style.
We had completed our plans for the Grand Hotel, and the inquiry for
our holding was brisk. Besides, San Francisco was in the grip of a
tremendous real estate craze, the biggest in its history. The railroad
would be with us in a few months. Then everybody would be rich.

We had incorporated under the name of the Montgomery Street Land
Company. The moment an auction sale of its properties was announced
the whole town was alert. The offices of the company were crowded with
investors eager to purchase at private sale, but were told that we were
going to have an old-fashioned auction and nothing else.

It was less than a week before this historic event took place when the
minimum prices were arranged. Ralston, Maurice Dore and myself met in
a back office of the Bank of California one night and discussed this
all-important question. Finally we agreed that each should write on a
slip of paper his opinion of an average price per front foot. I based
my figures on a profit of two and a half millions, which seemed to me a
fair return. But when we came to compare the slips, Ralston’s figures
were just double mine, while Dore’s were intermediate--nearer mine.

Ralston’s nature was sanguine. He never saw anything but success.
He had supreme confidence in his judgment, not without foundation,
and possessed a knack of bringing everyone to his own views. If he
was right in this instance, of course five million dollars were more
desirable than two and a half. I yielded to his arguments, but not
without grave misgivings.

That auction sale was memorable for many a year. By consent, it was
held on the floor of the Merchants’ Exchange, and there never was such
a throng of moneyed men gathered together in San Francisco. Everyone
seemed keyed up to buy a lot or have a free fight. Maurice Dore and
his spieler, Cobb, were past masters in all the auctioneer’s arts to
promote enthusiasm. Among his “cappers,” to bid the prices up, were
Mills, Hayward, Sharon, Tom Selby and William Alvord. Pandemonium broke
loose when the first offering was announced. Men fought and raved, like
brokers filling “shorts” on a stock exchange. The same scenes were
re-enacted time after time, but it became only too evident to insiders
that our “cappers” were picking up everything ostensibly sold. The
fact was that the public would have gone above my estimate, might have
touched Dore’s, but stopped short of Ralston’s. After keeping up the
hippodrome long enough to save our faces, the great sale was adjourned
without a day.

But that wasn’t the worst of it. For months we had been living in a
fool’s paradise over the boom that would follow the driving of the last
spike. That day came, but what a disappointment! It may have seemed
all right to the proletariat, but for the business people it spelled
ruin. It brought in an avalanche of goods from Chicago and St. Louis,
at prices which our local men could not meet. Many firms failed, some
consolidated, some retired from business. Rents dropped like lead, real
estate values shriveled up to nothing. It was ten years before those
values recovered to the level of 1869.

Meanwhile my railroad in Sonoma was being rushed ahead. I do not think
it would have encountered opposition had I stuck to my original plans
of a coast line through Marin, Sonoma, Mendocino and Humboldt. But
my vision began to broaden. I knew of Beckwith Pass and the almost
increditable fatuity that overlooked it in constructing the Central
Pacific Railroad. I employed General W. S. Rosecrans and a corps of
engineers and began a railroad survey westward from the pass, to
connect with the Humboldt system. I guess this gave the Big Four the
largest scare they received in many years.

Instantly I found my enterprise blockaded with all kinds of petty
obstructions. I had thirty miles of road graded and the ties strung.
Peter Donahue had partly agreed to sell me the rails. Suddenly he
withheld them from the market, and there were no more on the Pacific
Coast. I had twenty miles of rail on the water from England. The vessel
was detained at Valparaiso and at last sunk peacefully in the harbor.
My agent, A. A. Cohen, always claimed the ship was scuttled.

I ordered another large shipment from England. Then the railroad
people tried another tack. They appealed to Ralston to subdue me.
Ralston had been the friend of the Big Four in the trying construction
days. They had promised him all sorts of things in return, among
others a concession to build all their cars, for which he made great
preparations. They plainly told him that if he did not constrain me,
his estimable partner, to abandon my railroad projects, the concession
would be canceled and he could expect nothing but war.

Ralston laid the matter before me as a friend. He admitted that he had
no right to influence my action, but said he was facing an enormous
loss; that I could sell out at a large profit, and frankly asked me to
strain a point. The matter once placed in that light, I yielded, with
great reluctance. After some negotiations, I sold my railroad rights to
Peter Donahue. These rights, only partially developed, constituted the
bulk of his great fortune.

That incident made a vast difference, not alone in my fortunes, but in
the history of California.

Left to myself, I would have had a railroad to Humboldt bay thirty-five
years ago, and would now be the owner of the Northwestern Pacific
Railroad.

Also it is more than probable that my youthful energies would have
carried another railroad eastward through Beckwith Pass. That would
have made history, changed our Governors, United States Senators,
bosses and the whole machinery of state.

As for poor Ralston, he was gold-bricked. He never received the car
concession at all. I cannot tell why, for I was out of the State when
that scheme went up in smoke. The great building he had constructed
for the purpose was converted into the West Coast Furniture Company’s
plant, which was operated during his lifetime at a heavy loss.

I can only think of Ralston as a long cherished and lamented friend.
But so far as business went, our acquaintance began and ended under an
unlucky star.




CHAPTER XIX.

  TWO MEN BLOCK PLAN TO RUN NEW MONTGOMERY STREET TO THE BAY; ONE
    ASKS COIN, OTHER PREFERS FIGHT.

  _Promoters Appeal to Legislature and Do Not Neglect Precaution of
    First “Seeing” Vote Brokers._


When Ralston and I opened New Montgomery street we never doubted
that its manifest importance would compel an immediate and voluntary
extension to the natural terminus of the waterfront and prove the
logical outlet for congested trade. That this would have been the case
had the majority of property owners been able to follow our example,
I have no reasonable doubt. But just as in the case of “Montgomery
Street Straight,” special interests and selfish considerations stood in
the way. Less than half a dozen property owners, to their irreparable
disadvantage, blocked “Montgomery Straight”--a project that would have
changed the whole course of the city’s progress and development. Just
two property owners prevented the immediate extension of New Montgomery
street to the bay, and again the failure was the city’s heavy loss.

These two men were Milton S. Latham and John Parrott. Latham owned a
stately home and large grounds on Folsom street, directly in the line
of the new thoroughfare. It was a matter of no small personal pride,
and doubtless he was attached to the locality. He asked such a fabulous
price for the right-of-way, which of course would have destroyed the
home value of the property, that even Ralston and myself, who were
accustomed to brush any minor obstacles out of our way without counting
costs, stood aghast.

John Parrott, on the other hand, wouldn’t trade at all. His business
hours were then strictly limited from 9 to half-past 10, and every time
we managed to secure an interview, all the satisfaction we could get
out of him was a promise to fight us every inch of the way.

Outside of these two, we had a clear field. We secured contracts on a
great number of properties along the line of the proposed thoroughfare.
All the large owners concerned favored it with enthusiasm. Still we
were absolutely blocked.

Under these conditions, nothing remained but an appeal to the
Legislature to appoint a commission, empowered to open New Montgomery
street for its full length and assess benefits and damages as provided
by the general laws then in force.

And while about it, we did not stop there. We worked out a grand,
comprehensive scheme of improvement, embracing the immense territory to
the south.

Two years before, a bill had been lobbied through the Legislature
providing for what became famous later on as the “Second Street Cut.”
It was a rascally project, a sordid bit of real estate roguery, carried
through without a moment’s thought of other people’s rights. But it
was an accomplished feat, and one of the results was to ruin the
finest haunt of good breeding San Francisco ever had. Families were
scattering from Rincon Hill to various sections of the city. The old
high-priced residence property was going for a song. As the “Hill” had
ceased to be either beautiful or useful, Ralston and I calmly proposed
to cut it down.

We planned to have the city buy the property, which could be purchased
for $5,000,000 according to arrangement with the owners, and grade
it to the Market-street level. Many million cubic yards of excavated
material were used to fill in a 150-acre tract of tide land, offered
to the city by the State at a nominal price, lying between the Pacific
Mail docks and Islais Creek; also to reclaim China Basin, at least
in part. The cost of grading and reclamation work was estimated at
$7,000,000; in fact, contractors were willing to undertake it at that
price. In other words, the city was asked to issue its bonds for
$12,000,000 and receive in payment over 200 blocks of choice property,
to say nothing of great advantage to the appearance of the town and the
facilities for doing business.

Two separate bills were introduced in the Legislature. One provided
for the opening of New Montgomery street to the bay, and created a
commission to carry out its purpose as above defined. This would
probably have slipped through without any serious opposition; but
coupled with it, in a way, was the great constructive bill for
acquiring Rincon Hill, for filling the tideland acreage and China
Basin and running all the streets from First to Third, including an
extension of Sansome street, on a nearly level grade, southward to the
waterfront. For the extension of Sansome street Michael Reese, Lloyd
Tevis and myself had bought a solid block from Market to Folsom street.

[Illustration: THE AUTHOR

Taken during his active career in San Francisco]

I was very much a novice in politics, but Mr. Ralston insisted that
I should have full charge of the program and take up my residence
in Sacramento pending the session of the Legislature. So among
other things I gathered quite an exact idea of how wires used to be
manipulated underground.

In the first place, the necessity of a Legislature was not apparent
at that time. What had been an able and independent body in the early
history of California had degenerated to a mere recording machine
for a couple of vote brokers, “Nap” Broughton and “Zeke” Wilson by
name. “Nap,” brief for Napoleon, was a happy, enthusiastic chap,
always slapping someone on the back with a heartiness not always quite
sincere; a good fellow in his way, and a most abandoned corrupter of
men, a spendthrift disciple of nearly every sin, with an ever-watchful
eye on the money of others, yet himself the veriest sucker that ever
lived.

“Zeke” Wilson, on the other hand, was a gray, desiccated, sinister, old
spider, who seldom smiled, and when he did everyone in his presence
felt depressed. He was the “thinking member” of the duumvirate, and
while “Nap” Broughton made nearly all the noise “Zeke” Wilson laid the
plans.

The Senate used to be respectable in appearance, an able body and
reasonably clean. The one that I was concerned with contained such men
as Hager and Saunders of San Francisco, George C. Perkins of Butte, who
made then his first appearance in politics; Rumaldo Pacheco, afterward
Governor; Pendergast of Napa, Lewis of Tehama, and several others whose
names are fairly connected with the history of the State.

The Assembly, on the other hand, was a conglomeration of miscellaneous
riff-raff, gathered together God knows how, inexperienced, ignorant,
venal and scandalously cheap. Of course there were some honorable
exceptions. I am only speaking of the general rule. It was in the
Assembly, not the Senate, that the “business” of the session was done.
That is, if Messrs. Broughton and Wilson wanted to kill a measure, they
never worried what the Senate did, but let the obnoxious bill come
before the “popular-priced” Assembly, where its shrift was short.

No one in his senses ever came to Sacramento with a bill involving
a considerable question of finance without establishing friendly
relations with Messrs. Broughton and Wilson at the start. Treaties
of alliance were negotiated through Napoleon Broughton. At our first
interview $35,000 passed hands. “Nap” merely said in a casual way
that I was a gentleman and I accepted the compliment for what it was
worth. What became of that money I have no means of knowing, and never
inquired. That would have been the height of bad manners. But he
never asked me for any more, and everything I wanted slid through the
Assembly on greased ways.

We were among the first who made a consistent effort to impress the
merits of our measures on law-makers by systematic good-fellowship. I
practically chartered a well known restaurant, threw it open to my
friends, and the bills were over $400 a day, so generously did they
respond to my invitation. Down in San Francisco, Ralston was on the
lookout for statesmen, and none of them struck the town without good
cause to remember the experience pleasantly.

In a way, it was a striking session--a sort of breaking of new ground.
The railroad appeared for the first time as a seeker for favors. It
had two leading bills, each providing for a subsidy for railroads
southward, one through the San Joaquin Valley and one along the coast
line. Neither terminated anywhere in particular; the former somewhere
in Kern county, the latter in San Luis Obispo county, near the border
line of Santa Barbara. The measures simply authorized the electors
of the counties concerned to vote for a subsidy payable to the first
railroad that came along. The combined subsidies provided for amounted
to only $3,000,000, but they were regarded as the opening wedges for
more. Of course everyone knew what that first railroad would be.
Strangely enough, in the newspaper and legislative discussions, no
one seemed to think that Los Angeles cut any figure as a terminal or
feeder. The cry was for a railroad south to the Colorado river. For
that the people were willing to pay any kind of subsidy, but not a
cent for a couple of local concerns. A bitter newspaper war followed,
and charges of corruption were freely made. But the bills passed both
houses by large majorities, and were only halted in their triumphant
progress by the veto of Governor Haight. Even then, it was a close
call. The Assembly enthusiastically passed one of them over his veto,
and in the Senate the same action failed by only two votes.

There were so many bills of a shady, not to say rotten, nature
introduced during the session that almost all measures were looked
on as “jobs.” Our two bills--“Montgomery South” and the effacement
of Rincon Hill--took their places with the rest. They were harshly
criticized by most of the San Francisco papers as crafty schemes, the
true inwardness of which would develop later on. They were likened
to the “Second Street Cut” outrage, and a lot of ill-advised public
opinion was worked up against both. Nevertheless, they passed the
Legislature. How one of them became a law is an interesting story, told
in many official records of the State.

The bill for the extension of New Montgomery street had gone to
Governor Haight. It leaked out from the executive chambers that a veto
message was being prepared. The Governor had ten days in which to veto
the bill, otherwise it became a law by default. It was on the afternoon
of the last day, shortly after the Senate had re-assembled, when one
of my attorneys, Creed Haymond, said in a musing way, “If the Senate
could only be induced to adjourn we would not have to worry about a
veto message. Then it could not be delivered to anyone, and by twelve
o’clock to-night would become a law.” That set me thinking in a moment.
“Is that correct?” I asked. Haymond replied that he was certain,
although he was not sure that the point had ever been tested by the
courts.

The emergency demanded swift work. To offer a motion to adjourn, just
after settling down to business, would certainly have aroused suspicion
and a general rumpus. Here I worked in a bit of strategy or what might
have more properly been called chicane, which I trust may be pardoned
me in my final account.

Senator John S. Hager was the leader of what might be called the
“reformers” and had quite a following among his fellow members. He was
the unwearied foe of anything like a job. Among other measures, he had
opposed the Montgomery Street Extension bill. But there were several
bills on a special file that afternoon that were his pet abominations
and he justly feared that they might slip through. While in this frame
of mind, a certain gentleman called him aside and advised him that
several members were anxious for an adjournment, that if he would make
the motion it would probably carry and the obnoxious bills would lose
their places on the special file and their chance of final passage.

The Senator swallowed the bait--hook, sinker and all. While he
was lining up the “reformers,” somebody else was attending to the
“performers,” and when the gentleman made his motion to adjourn he must
have been gratified at the unexpected support. It went through _nem
con_, as the lawyers say. The officers of the Senate were hurried out
of the room on one pretext or another and in a few minutes the chamber
was vacant.

Dr. Edward R. Taylor, later Mayor of San Francisco, was the very
efficient private secretary of Governor Haight. I was in an agony
of fear lest he should pop into the Chamber with the fatal message
before the adjournment could be arranged. For this reason, I had
several effective conversationalists stationed between the Governor’s
office and the Senate, to engage the secretary for a few minutes if
he chanced to appear. This they actually did, although Dr. Taylor has
forgotten the incident. What he does remember was that he found much
to his surprise an empty Senate Chamber, and after ruminating over the
situation for a time, carried back the veto message to the Governor’s
office and laid it on his desk.

On the following day the Governor attempted to deliver his message,
but the Senate held he was too late. His Excellency refused to certify
the bill to the Secretary of State as passed and I brought a mandamus
suit to compel him to take that action. The title of the case was
_Harpending_ vs. _Haight_, and attracted a wide attention at the time.
It was carried to the Supreme Court on an agreed statement and decided
within fifteen days in my favor. The decision can be found in Vol. 39,
Cal. Reports, page 189. Other Governors have been cautious not to hold
back their vetoes till the last day. Hager roared like a wounded bull
buffalo when he found out how he had been used, but his lamentation
bore no fruit.

Thus the Montgomery South bill became a law of the State, although the
Governor liked it not. Commissioners were appointed by Judge Lake, a
lot of work was done in surveys, estimates of benefits and damages,
but in the end it came to naught. Two years later, while I was in
Europe, a bill with a misleading title, designed to repeal the act,
was introduced and Ralston, busy with many things, never knew about it
until it had sneaked through both houses and become a law. Because of
this, New Montgomery street still halts at Howard street and bids fair
to camp there forever more.

As to the Rincon Hill measure, that also passed both houses
triumphantly, but was held back through the opposition of Senator
Hager, so that it went to the Executive just one day beyond the period
when a return to the Legislature must be made. It found a peaceful
resting place in the Governor’s capacious pocket.

Thus all our grand schemes for the development of the city southward
fell by the dreary wayside of lost opportunity. I do not pretend for a
moment that Ralston and myself were inspired in our efforts by the pure
spirit of benevolence. We would have made our profit, but a mere trifle
in comparison to the public good. It was the most comprehensive plan
for the city’s improvement ever presented in a concrete form, and the
pity is it was not better understood.

Just take a retrospect. Who is there who would not admit that five fine
level streets from Market, between First and Third, southward to the
bay, would not be a vast improvement and convenience to business, over
the blockade that prevails to-day?

And was such a real estate proposition ever before offered to a people
and turned down? For the sum of $12,000,000 the city would have
acquired full title to approximately two hundred and twenty blocks, the
present value of which would be hard to estimate exactly. But a rough
valuation indicates that the property would be worth enough to pay the
entire city debt, buy the Spring Valley Water Company’s plant, bring in
the Hetch-Hetchy water supply and leave a balance large enough perhaps
to settle all questions with the United Railroads and municipalize the
entire street transportation system, not in the dim future, but now.

Immense revenues would have flowed into the municipal treasury from
these utilities. Taxation would have become a joke. All these things
are among the haggard, melancholy “might have beens.”

There were too many well-intentioned, but bigoted, reformers in the
city then, just as there are now.

And the incident serves to indicate the superiority of hindsight over
foresight, which has been illustrated unhappily and too often in the
history of the State.




CHAPTER XX.

  BURNING OF HARPENDING BLOCK PROVIDES FINE SPECTACLE, BUT
    OVERSIGHT OF OWNER COSTS HIM DEARLY.

  _George Hearst Makes Stake on Comstock and Celebrates by Taking Joe
    Clark on a Trip to Europe._


I was busy with other things besides real estate investments, financing
railroads, and politics, during the five years between 1865 and 1870.
In 1869 I built the first fine business block on the south side of
Market street, the Harpending Block, between First and Second streets.
It was also in 1869-1870 that Ralston and myself built the Grand Hotel,
partly on our own land, partly on land belonging to the Platt estate,
which we held under 20 years’ lease.

The Harpending Block cost nearly $400,000. It was burned two years
later, contributing the biggest fire in San Francisco since the ’50’s.
Through an oversight of my agent, the insurance hardly represented a
tenth of the loss. The Grand Hotel remained for several years the last
word in the hotel business of the Pacific Coast. It was its phenomenal
success from the outset that induced Ralston later to embark in the
Palace Hotel project, which contributed in a large measure to his ruin.
I owned a three-fourths interest in the Grand Hotel; Ralston owned the
balance.

No one who has ever had much to do with mining can keep out of that
fascinating business very long. When I returned to San Francisco
from Havilah, it was my solemn intention to abandon mining forever
thereafter and confine my efforts to what was known as “legitimate
business,” whatever that may be; I have never found out. But I hadn’t
more than barely got my bearings before I began to make casual
incursions in a sly way into the old field of endeavor, and thus had a
personal and financial acquaintance with, I think, all of the heroic
figures who created the vast deep-mining industry of the far West.

Only one of these big men has lasted down to our own time. J. B.
Haggin[A] still lives at his home in Lexington, Ky., at a great age--90
or more--and until recently in the enjoyment of good health. A story
used to be current in San Francisco that in the early pioneer days
Haggin was a devotee of play at the El Dorado and Union. One night,
so the narrative runs, after successive losses he borrowed $100, to
win or take the gambler’s last alternative. But he had no occasion
for the latter. He stood calm and imperturbable as the hundred
became a thousand, and then tens of thousands, while a circle of
mute, white-faced gamblers stood fascinated at his luck, until the
proprietor, in a voice that showed no tremor, quietly announced the
bank closed for the night. The story goes on to say that Mr. Haggin
never touched a card from that day forth. All of this I have only on
hearsay. Mr. Haggin lives to tell whether it is true or false.

    [A] Since the above was written, Mr. Haggin died.

[Illustration: J. B. HAGGIN

Successful miner and a true financial genius]

But if he abandoned gambling in one direction, he took it up in
another. In the mining industry he was a plunger, par excellence. I do
not mean that he invested recklessly or without mature investigation,
but when he once made up his mind, a few millions, more or less, never
moved him from his purpose. The broad, liberal way he played the game
had more to do with the development of the West than perhaps anything
else.

Haggin had nothing in common with good fellowship. He was always
silent, sober and cold. But under it all he must have had a heart. He
was the only one I ever knew who remembered the men who helped to give
him wealth. Every man, without exception, who rendered Haggin faithful,
efficient service, he made rich. And he was very loyal to his friends.
In these days--and other days--when men of power exhaust the energies
of their subordinates and then toss them without concern on the scrap
pile, like so many sucked-out oranges, and treat their business
associates just a shade better, an example such as Haggin gave ought
not to be overlooked.

George Hearst was probably the greatest natural miner who ever had a
chance to bring his talents into play on a large scale. He was not a
geologist, had no special education to start with, was not overburdened
with book learning, but he had a congenital instinct for mining, just
as some other people have for mathematics, music or chess. He was not
a man of showy parts, liked the company of a lot of cronies, to whom
he was kind and serviceable--when he wasn’t broke himself--was much
inclined to take the world easy, but if anyone mentioned mines in his
presence, it had the same effect as saying, “Rats!” to a terrier.
Hearst became alert and on dress parade in a moment.

Hearst made his first big stake on the Comstock Lode, a year after it
was uncovered in 1858. He was associated with his cousin, Joe Clark,
and William M. Lent. I do not know the exact size of the clean-up, but
it must have reached into seven figures. Such an event, in the old days
was always made memorable by some kind of a “jamboree.”

Now, Joe Clark was a southwestern man, hailing from a section not
far from where I originated myself. All of us were inclined to be
provincial. For instance, Joe Clark believed that St. Louis was not
only the most magnificent but the largest city in the world. He had
many heated discussions on the subject and several times backed his
opinions with coin. He declared that the Rue de Rivoli was a pale
shadow alongside of the glories of Laclede avenue. He swore that St.
Louis was bigger than London, more cultured than Athens during the age
of Pericles and grander and more picturesque than Babylon, when the
hanging gardens were in full bloom.

It is said that Hearst suggested a “blow out” in Europe after their
clean-up, in order to disabuse his kinsman’s mind of certain illusions
respecting St. Louis. At any rate, the two husky young miners set their
faces eastward to look over the effete monarchies of the Old World.

[Illustration: GEORGE HEARST

An unsurpassed mining genius, former U. S. Senator]

While they were pleasure bound, “Bill” Lent stayed behind to look
after the investments. He sunk a shaft which headed dead on for the
big bonanza and had he continued the work a little further, Flood,
O’Brien, Mackay and Fair would have cut a very small figure in history.
But he engaged unfortunately in a seductive looking speculation and
went to pieces in a grand pyrotechnic and spectacular failure. Hearst
and Clark were hopelessly involved. They received the news while they
were making the tour of Europe with much eclat. Fortunately they had
money enough to reach home. But the main object of the journey was
accomplished. When Joe Clark mentioned St. Louis thereafter, it was the
voice of a chastened soul that spoke.

Of course, nothing could keep Hearst down in a mining region. Any
capitalist was only too eager to back a man with such surpassing
talents; but he had to pay an awful toll. For years Hearst’s projects
were financed at 2½ per cent. per month compounded monthly, and any
business that can stand that strain and come out ahead must have a
solid foundation to build on. He was the real founder not only of his
own but of the vast Haggin and Tevis fortunes.

I had mining deals of more or less importance with Haggin, Hearst,
Hayward, Hobart, Grayson, in fact, with nearly all the large operators
of those times. My largest speculations, however, were with Ralston as
a silent partner, which, on average, showed more profit than loss. It
was for the purpose of joint investment that late in the fall of 1870
I visited the Emma mine near Salt Lake City, which a year later was
the central point of a great international scandal and will play an
important part in this narrative.




CHAPTER XXI.

  SAM BRANNAN STRIKES IT RICH AND REFUSES TO SHARE WITH MORMON
    CHURCH EXCEPT ON ORDER FROM LORD.

  _Mine Bargain Fails to Stand Inquiry of Author, But Others Invest
    and Figure as Victims of Fraud._


I had early been familiar with Utah and its mines, through an
acquaintance with “Sam” Brannan. Brannan had a history of thrills and
adventures which if gathered into book form would make the heroes of
Dumas look cheap and commonplace. Originally a Mormon, high in the
councils of Brigham Young, he led a body of his co-religionists around
Cape Horn to California, before the earliest Argonauts. He staked out
claims on the American River, about two miles from where Folsom prison
stands, the location being known as “Mormon Island” to this day. The
diggings were so rich that one of California’s evanescent cities sprang
up around it, almost overnight, just as suddenly to disappear. “Sam”
worked his companions on a per diem basis and very soon accumulated
a large fortune--certainly in excess of a million dollars, many well
informed people estimating it at two or three times as much. But while
he settled promptly his labor bills, he was not so businesslike in
squaring accounts with the Mormon Church, which claimed nearly all
the profits. Finally, a trusted agent was dispatched from Salt Lake
City with a peremptory order on Brannan to turn over the ecclesiastical
share of the “dust” at once.

Brannan’s reply was historic and to the point, even if a bit profane.
The gold, he said, had been placed in his safe keeping on the Lord’s
account. He would surrender it upon the Lord’s proper written order;
otherwise not.

“Sam” invested most of his wealth in San Francisco real estate. An
important street bears his name. Like most of the early Mormon leaders,
he was of a coarse-fibered nature, with a rather forbidding, saturnine
face, but singularly keen-witted, resolute, and fearing neither man nor
devil.

The latter quality stood him in good stead. Brigham could not permit
such a flagrant breach of church discipline to remain unpunished.
Flock after flock of “destroying angels” took flight from Salt Lake
City, duly commissioned to bring back Samuel’s scalp or perish in the
attempt. But their holy work was always a dismal failure. Brannan must
have had some foreknowledge of their movement against the security
of his person. Liking not to meet “angels” unawares of any kind, he
arranged to encounter the “destroyers” half way out in the trackless
desert, or mountain fastnesses, with a competent group of exterminators
he seemed to keep on hand for such occasions; and it was the “angels”
who were always taken unawares. Some of them got back to Salt Lake
minus tail feathers and otherwise damaged, but the majority of them
never returned at all. At last, the disciplining of Brannan became so
manifestly an extra-hazardous risk that it was finally abandoned. How
he defied the whole power of Mormonism and actually conducted a private
and successful war against the church was one of the old romances of
the Pacific Coast. In later years Brannan fell a victim to drink,
all his enormous wealth became dissipated and he died penniless and
forgotten in Mexico.

“Sam” never forgot Salt Lake City or Utah. His life would not have
been worth 10 cents if he had once stepped within the territory of
Brigham Young. But he always cast longing eyes at the scene of his
early struggle. He knew Utah and its resources from end to end, and in
our frequent interviews often mentioned the illusive, “pockety” nature
of its mines. Therefore, when Ralston and I took a 30-day option on
the Emma mine, about 40 miles from Salt Lake City, I was prepared to
exercise extreme caution in examining the property.

The Emma mine had startled the Coast with a wonderful burst of
production, considering the limited nature of its plant. Its wealth
was claimed to be fabulous, and it was a matter of some surprise when
its owner’s offer to sell it at the low price of $350,000 was made.
Nevertheless, the proposition seemed well worth looking into. But
remembering Sam Brannan’s counsel, I went unannounced to the mine,
presented my credentials to the superintendent, who gave me permission
to examine the property, although rather surprised that I came alone.

It did not take me long to reach a conclusion that the Emma mine
was nothing more than a large “kidney.” Considerable high-grade ore
had been stoped out of the upper levels. Below, the ore was plainly
pinching out. The whole thing was nothing but a shell, with just
enough in place to fool a tenderfoot. There was no trace of a fissure
vein. Any mining expert would have turned it down without a moment’s
hesitation.

I had just seen all I cared to see when J. W. Woodman of Salt Lake
City, the principal owner of the property, hurried to the mine in
some agitation and expressed his regret that I had not advised him of
my coming. However, he trusted everything was satisfactory. I told
him courteously that I could not pass favorably on the mine, and to
consider the option closed. He wished to argue the matter, but I told
him that the conclusion was final and decisive. Then he took another
tack. He was anxious, he said, to clean up and get away. If he threw
off an even hundred thousand dollars, would Mr. Ralston and myself take
over the property? Again I answered in the negative, and told him, in
so many words, that we did not want the mine at any price.

As a matter of fact, when it was finally bottomed, the mine did not
yield anything like a hundred thousand dollars net. I even doubt if it
made both ends meet.

Such was the Emma mine, famous, or rather infamous, in history. Just
a little later this barren hole in the ground figured in one of the
biggest swindles of modern times, in which great names were involved, a
minister of the United States to England disgraced and ruined, British
investors robbed out of ten million dollars, and the business world
filled with such suspicion that for many years the doors of foreign
credit were barred against American mining enterprise of every sort.
The very character of Americans for common honesty was so seriously
besmirched that it caused an international unfriendliness that time
only partially cured.

It was a fact of common knowledge that the mine had been bonded to
Mr. Ralston and myself for $350,000. It was also well known that I
had examined and must have found it unsatisfactory, for the bond was
allowed to lapse. This alone gave the Emma such a black eye on the
Pacific Coast, then the great market for legitimate properties, that
it became almost a waste of time to make any further attempt to market
it in the neighborhood where the circumstances were known. Ralston
was rather noted for taking a long chance on mining ventures, and
while his luck lasted he usually pulled them through. Therefore, when
he and his associates turned down a developed and going concern, the
wise, conservative natures shook their heads. That is doubtless why
the Emma was taken to a market some five thousand miles from home for
exploitation.

In fact, it was practically taken off the market for quite a while.
After it was first offered for sale to Ralston and myself, my
impression is that I was the only one who examined it qualified to pass
an honest judgment on such a property, until it suddenly blossomed
on the London stock market as the great American ophir, the newly
discovered treasure store, of which the human imagination had dreamed
for ages--and was unloaded on the British public for $10,000,000; or,
to use the parlance of our Anglo-Saxon cousins, for £2,000,000.

I have gone into the early history of the Emma mine so minutely because
it strikes this narrative a little later at an angle so acute that the
two seem to run parallel, and it is necessary to have all the facts in
hand to understand how the great swindle that strained the commercial
friendship of two great peoples almost to the breaking point had a
close relation to the diamond hoax story.




CHAPTER XXII.

  BRITON WITH ORIENTAL IMAGINATION SEEKS TO LURE INVESTORS WITH
    TALES OF MOUNTAIN OF SILVER.

  _New Promotion Company Tells Truth, But Editor Samson Frightens Off
    Public at Critical Moment._


When I reached Salt Lake City after examining the Emma mine, I found
awaiting me a telegram from Mr. Ralston to the effect that the
president of the Bank of England, a Mr. Green, then traveling in the
Far West, would be in Cheyenne on a certain day. He asked me to meet
the gentleman, and in his name, as president of the Bank of California,
extend to the visiting banker any courtesies that his time and
inclination might permit. So I journeyed to Cheyenne in quest of Mr.
Green.

I stopped at the principal hotel and one of the first persons my eyes
rested on was about the most impressive looking man I ever saw. He must
have been six feet six in his stocking feet; he was richly caparisoned,
handsome, debonair, evidently a Briton and looked like the president
of the Bank of England and the Prince of Wales rolled into one. I took
a chance, approached the stranger and asked him if he were Mr. Green,
president of the Bank of England. The gentleman laughed and said I had
made a close guess, but had missed the mark a trifle. He introduced
himself as Mr. Morgan, an Englishman of leisure, making a sight-seeing
tour of the Far West. Later I discovered that Mr. Green had passed on
without stopping and was then well along on his journey east.

One of my objects, besides inspecting the Emma mine, was to examine a
property I had acquired in New Mexico near the headwaters of the Gila
river. I had made an investment on the strength of huge outcroppings of
mineralized ledges that gave indications of a great mining property.
But besides that there was a large valley, covered waist deep with
grass, interspersed with black walnuts into which luxuriant wild hops
twined, and traversed by a fine stream of water. In addition to the
mining claims, I had secured the water rights and taken the preliminary
steps to acquire a vast acreage of fertile land. Development work had
been going on for some time and I was anxious to see for myself just
how the property was showing up. I had several chats with Mr. Morgan
after our first odd meeting, and learning of my projected trip to New
Mexico he asked and readily received my consent to go along.

Arrived at our destination, Mr. Morgan at once became infatuated with
the country--ledges, land, water and all. Some of the prospect work
showed ore of high values. The Englishman took many samples and had
them tested by my assayer. My impression is that, like every beginner
in the mining business, he always chose the best. Finally, he made me a
business proposition. He said he had important financial connections in
England, that a great diversified property like this could be floated
for an immense sum--named $3,000,000 as a fair estimate, and offered
to form a company on an equitable basis to finance and develop its
resources.

With a cooler head, I advised Mr. Morgan that the mines were still only
in the “prospect” state; that they might turn out something great, but
more likely nothing at all. Concerning the land and water, there was no
question. Properly handled and developed their value must be great.

After some negotiations, we hit upon a bargain. Morgan was to go to
England post haste. I was to follow by more leisurely stages, a month
later, and by the time of my arrival everything was to be arranged.

I stopped a few days in New York to see the sights. While there I met
another Englishman by the name of Dalton, a member of Parliament. I
told the gentleman something of my contemplated trip to England. When
I mentioned the name of Morgan, he seemed a bit amused. He said Morgan
was all right; that he had excellent family connections, but that he
hardly figured as a financier. He said that his imagination was of an
oriental type, prone to exaggeration and very apt to make a mess of any
large transaction. “If Mr. Morgan fails,” he added, “you had better
come to me.”

When I arrived in England, I found that Mr. Dalton’s prediction had
already come true. Morgan had issued a prospectus that put the tales
of Baron Munchausen in the shade. He actually described the mines as
mountains of silver, and by his very extravagance of statement doomed
the enterprise from the start. Meanwhile, I had various meetings with
Mr. Dalton, who was a man of standing in the business world and through
him met a great firm of brokers, Coates and Hanky. Mr. Coates was the
son of a manufacturer who won fortune and immortality by his exploits
in spool cotton. These gentlemen agreed to place my proposition before
the investing public. Morgan floundered around for a short time but was
soon discouraged. I offered him an interest in the new exploitation,
with the understanding that he keep mute.

Coates and Hanky now undertook the enterprise in a business fashion.
The New Mexico Land and Silver Mining Company was formed, with a
high-class directorate. One of the directors, I recollect, was a
retired admiral of the British navy. The prospectus was flattering
enough, but would stand investigation. Among other things, it dwelt
more on the unquestioned value of the land and water than the
probabilities and possibilities of the mines. The capitalization was
six hundred thousand pounds.

The London Times was then, as now, the great newspaper authority of
England. Its financial editor, whose suggestive name was Samson, was
currently said to have more power than the Queen. Five lines favorable
from Samson’s pen in the financial columns of the Times assured the
success of an enterprise. Five lines unfavorable were equivalent to a
death warrant. It was customary with promoters to submit their plans
to Mr. Samson before submitting them to the public. The directors of
the New Mexico Land and Silver Mining Company followed this custom and
received a somewhat cryptic answer which, however, they construed to
be favorable.

The issue was brought out with the skill of trained hands. Everything
pointed to a successful outcome. But the very next day, Samson came out
with a double-barreled blast. Before the Times reached the country,
a small avalanche of subscriptions poured in. But in the city, after
a large first day’s business, the promotion fell flat. Nevertheless,
the directors stood manfully by their guns. They received space in the
Times to answer. They put up a bulldog sort of fight. The old admiral
in particular was as belligerent as when he paced a man-of-war. There
was somewhat of a reversal of public opinion in our favor. More than
half the capital stock was subscribed for and we might have pulled the
issue through, but it seemed to me that the company was overburdened
to start with, that it must labor under too many handicaps of distrust
to operate successfully, and against the judgment of the directors
I withdrew the properties and the incident was closed. All the
subscribers received their money back, without cost or abatement. No
investor lost a cent.

An incident shortly after my arrival served to illustrate in a pleasant
way my relations with W. C. Ralston at that time. I was asked to call
at the Oriental Bank, the agency for the Bank of California, and
going there the following day, was ushered into the presence of the
president, an impressive looking man of affairs. “I have here,” he
said, “a cable from W. C. Ralston, president of the Bank of California,
advising us to give Mr. A. Harpending credit for any sum he wants.
This is an unlimited order and as you probably intend to make heavy
drafts on us, I thought it advisable to inquire beforehand how much
you were likely to want.” I laughed and told him I had all the money I
needed, but if I happened to want accommodation I would certainly call
for more. The story is immaterial in itself, except as an illustration
of Ralston’s offhand way of doing business, and his confidence in me as
his friend.

Another pleasant incident was the renewing of my acquaintance with
Alfred Rubery, who again becomes a leading figure in this story. He was
the same old Rubery of the “Chapman days.” John Bright, his illustrious
uncle, was at the height of his prestige and power, and Rubery himself
was in the swim with the biggest kind of social and political fish.

And still another incident was that I came in personal contact with the
famous Baron Grant, the overlord of financial London.




CHAPTER XXIII.

  BARON GRANT DEMONSTRATES HIS TALENT FOR EXPLOITATION BY PUTTING
    OVER A DEAL THAT NETS $1,500,000.

  _Happy Directors Decide That Occasion Calls for Generous Cash
    Souvenirs, But Stockholders Object._


Those who are familiar with the staid, conservative, even-paced London
of to-day can hardly realize what that same London was in 1871,
the period of my first visit there. It was the year of the great
Franco-Prussian war. The pleasure capital of the world was transferred
from the River Seine to the River Thames. Male and female adventurers
of every nation thronged the British capital; speculators eager to tap
the great reservoirs of English wealth, gentlemen who lived by their
wits, chevaliers d’industrie in general, made London a common trysting
place. And the life was to correspond. It was notable for undisguised
and shameless intemperance, a primitive, savage, heathenish pursuit
of women and a fevered spirit of gambling speculation that cut loose
from all moorings of common sense. I could compare it only to the
recklessness and abandon of a Western mining camp in the orgy of flush
times.

The speculative world was ruled and controlled by a strange character,
for many years one of the famous figures in London, Baron Grant, the
same man I mentioned in the last chapter. He was half Hebrew, half
Irish, and it has been my experience that wherever you find that
combination you can look out for something different from the common
run. His real name was Gottheimer, but he had it changed by act of
Parliament to Alfred Grant. He came by his title in a curious way. When
the nascent kingdom of Italy, years before, had attempted to raise a
considerable sum and had been turned down in the money marts of Europe,
Grant, then in the height of his prestige, offered his services and
floated triumphantly the discarded securities, for which service the
grateful Italian government honored him with the title of baron.

When I first met him Baron Grant was past his zenith. Some of his
transactions had been disapproved by the great financiers, but he was
still a potent factor in the domain of speculation and a promoter
without a peer.

Personally, he had the magnetic temperament more highly developed than
any man I ever knew. His manners were engaging, he was simply a wonder
in conversation, and as he spoke his handsome face was lighted with
candid smiles that no one could resist. Whoever came within the sphere
of Baron Grant’s influence felt the intoxication of his power to charm.

Meeting several times under favorable auspices, we talked of the
mines of California and the transmississippi region in general,
concerning which I could speak with first-hand knowledge. He was
deeply interested, said that such properties would have a ready sale
on the booming London market and promised that if I could only secure
an option on a high-grade mining proposition, it would prove a very
profitable piece of business to both of us.

I cabled Mr. Ralston, naming three well known developed mines and
asked him to secure me an option on one of them. In answer I received
a cable from William M. Lent, president of the Mineral Hill Silver
Mining Company, in which I owned a quarter interest myself, offering
an option on that property for a million dollars. Within a month all
the necessary papers arrived by mail. These included, besides a legally
drawn option, a full description of the property, its productive
history, maps, engineer’s reports, estimates of tonnage in sight and
all the details that a careful investor might require. In addition
there was a private agreement, duly executed, giving me a commission of
10 per cent.

It certainly was an alluring proposition. The Mineral Hill mine was
located in eastern Nevada. Traveling on the Narrow Gauge Railroad, from
the Palisades, a station on the Southern Pacific, to Eureka, you can
still see the ruins of its plant. It was a sulphide ore that required
preliminary roasting and then became tractable and free. Besides the
furnaces, the equipment consisted of only a 20-stamp mill. Yet the ore
was of so high grade that the gross production had reached the enormous
total of $150,000 in a single month. Much of the ground was totally
unexplored, though promising.

Baron Grant laid out his promotion with his consummate skill. He
possessed a complete knowledge of the investing public. At that
time--and probably still--investors and speculators, as a rule,
confined themselves to a single line. One dabbled in coal, another in
iron mines, another in silver mines, another in gold mines and so on
down the line. Informed of the specialty of each, the astute baron
knew exactly where to go for customers, and never wasted time. The
plans provided for an issue of £600,000 of common stock and £300,000
of debenture bonds, the latter to be used for a plant to quadruple
production.

The enterprise was ably advertised and this time Samson was tractable
and kind. Interest was keen, but I think even Baron Grant was rather
surprised at what followed. When the books were opened there was a
crush to get on board, and when we had a chance to assemble figures
everything had been gobbled up and the stock twice oversubscribed. Our
net profit was £300,000, or, in American money, $1,500,000.

I had several experiences in the easy-money line, but this put them
all in the shade. I was confident that my mission in life was to place
American mining securities on the London market. Baron Grant and myself
entered into a written agreement. I was to secure options on high-class
mining properties. I had in mind the Raymond & Ely, North Bloomfield,
Eureka Consolidated and Zellerbach mines. Grant, on his part, agreed to
handle no other mining properties but mine. With this understanding,
I did not even wait for the Mineral Hill melon cutting, but set out
post-haste for San Francisco to lay in a new stock of options for the
foundation of wealth beyond the dreams of avarice.

The news of my success in placing the Mineral Hill mine in London
had made quite a stir in my home town and I was deluged with offers
of mining properties, good and bad. Quite a jubilee occurred when the
first half million dollars on account of the purchase price for Mineral
Hill was made payable at the Bank of California. The directors of the
company were so enthusiastic that they voted themselves $5000 each as
a “souvenir” and added a “souvenir” of $25,000 for the president. The
other $500,000 arrived in due season, but the sordid stockholders,
who seemed singularly devoid of imagination, objected so strongly to
“souvenirs” that this feature of the celebration was overlooked.

I had no difficulty at all in securing options on several of the
most assured mining properties of California and the Pacific Slope.
From these alone I figured to make millions, judging by the history
of Mineral Hill. Figuring on a prolonged stay abroad, I broke up my
residence in San Francisco, gave Maurice Dore a power of attorney to
manage my local interests, and left with my family for London, to
change paper into gold.




CHAPTER XXIV.

  BARON GRANT DEMANDS MORE TIME, THEREBY KNOCKING OUT OPTION FOR
    MINE THAT SOON DEVELOPED BONANZA.

  _Exploiter Breaks His Promise and Litigation Follows; Public Fooled
    Into Buying Worthless Securities._


I returned to London as soon as my business was arranged in San
Francisco. The boom times were still on. Speculation was running mad. I
was a trifle chagrined at losing the best property I had bonded through
the stubbornness of Baron Grant. This was the famous Raymond and Ely
mine. By the payment of $10,000 I had secured an option on this famous
property for sixty days for $900,000. I had cabled Grant about Raymond
and Ely, in order to hasten arrangements, as the time was short. He
answered that nothing short of 90 days’ option should be considered.
I tried to secure an extension, but was turned down. While we were
see-sawing over this and time was slipping by, the company offered
to return my $10,000 and let the option drop. Under the conditions,
I accepted the tender. Just a week later the Raymond and Ely bonanza
was uncovered, yielding millions in dividends. After that no one could
purchase it at any price. Whether the owners really knew anything about
this tremendous “strike” when they so generously tendered me the
return of my $10,000 deposit the reader can guess as well as I.

But that was a small matter, I had so many shots in my locker. Among
these was the famous North Bloomfield hydraulic mine. I had an option
on it for $600,000. In my judgment, which afterwards came true, it was
worth at least five times as much. One of the principal owners, Samuel
F. Butterworth, followed me to England. Talking of Baron Grant and his
power of fascination, I introduced him to Butterworth, who was an able
man, but cold and unemotional as fate, and after a ten minutes’ talk
the Baron had him spellbound. “There never was a human being like him,”
said Butterworth as we retired.

Baron Grant was measurably glad to see me, but not so cordial as
the circumstances led me to expect. I spoke to him about the North
Bloomfield mine and my desire to have the proposition laid before the
public without unnecessary delay, but he seemed singularly backward. At
last the cat escaped from the bag. He had violated his written contract
by agreeing to bring out another mining exploitation, ahead of mine.
But my indignation at his absolute lack of faith was nothing compared
with my astonishment--almost horror--when he told me that the property
he proposed to unload on the British public for a million pounds
sterling was none other than the Emma mine.

I had no desire to continue business relations with a man who had
shown himself so utterly without faith; but I was at some pains to
explain the folly of his project from a mere practical standpoint,
setting common honesty to one side. I told Baron Grant that I was
familiar with the Emma mine, that Mr. Ralston and myself had recently
held an option on the property for $350,000; that I had personally
inspected the property and found it a nearly worked out “kidney”; that
the principal owner had later offered it to me for $250,000; that
I considered it dear at any price. In conclusion, I urged that to
promote such a fraudulent concern for a huge sum would not only cause a
scandal of far-reaching proportions, but would also ruin the market for
American securities for many years to come.

Baron Grant listened coldly. He said he had every confidence in the
Emma mine and those behind it. That the proposition had been brought to
England by Trenor W. Park, a New York financier, once of California;
that it was vouched for by such men of prominence as Senator William M.
Stewart of Nevada and by the American Minister, General Robert Schenck.
He had no fear of a mine guaranteed by such weighty names. As for my
own properties, he said he would take them up when his convenience
suited. Otherwise, he possessed the power to prevent any other interest
floating them. The interview ended in a violent quarrel.

Even when I demanded my share of the profits in the Mineral Hill deal,
Baron Grant held me off with specious promises of speedy settlement,
then flatly refused to settle at all. By this time we were sworn
enemies. I brought an action for the recovery of a hundred and fifty
thousand pounds, $750,000 of our money. The Baron harassed me with the
usual legal impediments, but in the end, I may say here, that I gained
a judgment and what was more important still, collected the amount sued
for in full.

I sought new outlets for my mining properties, among the highest
financial circles of England, not by means of stock exchange
exploitation but by sales to intelligent and provident investors. The
North Bloomfield mine was well and favorably known in England. One of
its owners was Tom Bell, an English resident of San Francisco, who cut
a large figure in the old days. I had actually arranged the complete
details of the sale of this property for four hundred thousand pounds.
A meeting was held to confirm the transaction and pay in half the
purchase price, when an unfortunate remark of Mr. Butterworth caused
a halt. He said, doubtless in good faith, that no English manager was
capable of handling a California hydraulic mine. But this so offended
some of the principal English investors that they quietly withdrew.

In the meanwhile, the Emma mine promotion was brought out with a grand
blare of trumpets. Immense sums were spent in wholesale advertising.
The most dazzling and seductive literature was scattered broadcast
through the length and breadth of the United Kingdom. Its fabulous
wealth was described in the vivid language that fires the speculative
spirit latent in every man and in most women. Special stress was laid
on the eminent station of the American backers. I have seen much lurid
get-rich-quick literature of our own, at a time when the industry of
plucking the public was unchecked and in full bloom, but nothing that
took rank with the effrontery employed to bolster up this brazen fraud.

Of course, the promotion was a huge success. When the subscription
books were opened a small river of gold poured in from applicants for
shares. The issue was enormously over-subscribed. Baron Grant and
his associates selected, as far as possible, the smaller class of
investors. These are less able to roar in an effective manner when the
inevitable day of reckoning comes for every crooked deal.

The Emma mine was regularly listed on the London stock exchange,
alongside of reputable and conservative companies. It became the
feature of a tremendous gamble. In the hands of expert market
manipulators, the stock ebbed and flowed like the tide. Stories of
fabulous dividends were passed from mouth to mouth and the stock soared
from one high level to another till ten pound shares touched thirty-two
pounds. This absolutely valueless and exhausted property had a paper
value of $16,000,000. When it shrank under profit taking and selling
pressure, reports of new strikes, vast ore bodies uncovered, sent the
prices booming once more. Had it not been for the utter heartlessness
of the thing, one could almost admire the skill with which a huge
deception was organized and kept alive.

Of course, I shouted “murder” from the housetops. I publicly denounced
the Emma mine as an exhausted, worthless hole in the ground. It was
like a voice raised in the wilderness. No one paid the least attention
to my warnings in the midst of the bawling crowd. I was classified
either as a general calamity howler or as the leader of a “bear”
faction, anxious to organize a “bear” raid and interrupt the wave of
prosperity. At length, to gain a larger audience and put my statements
in responsible form, I made an effort in a new field of endeavor by
founding the London Stock Exchange Review.




CHAPTER XXV.

  INSPIRED BY DESIRE TO EXPOSE EMMA MINE SWINDLE AUTHOR BEGINS
    PUBLICATION OF FINANCIAL JOURNAL.

  _Ralston Reports Discovery of Immense Diamond Field and Declares
    His Find is Worth $50,000,000._


Many times I had learned to have a deep respect for printer’s ink. I
had seen it make history, change fortune, influence the thought of
great bodies of people, prove a mighty instrument for good or ill.
Without the least desire to be disrespectful to the present, I have a
strong impression that the journalism of fifty years ago had a wider
dominion over the minds of its readers than the modern school. I
cannot say that this was always for the best. Men had a blind devotion
to their pet newspapers that amounted to something very much akin to
bigotry. Such newspapers were the final authority on everything from
religion to politics, and everyone who questioned their opinions,
politics or statements had a fair prospect for a fight. Thus when an
editor fell into some grievous error he was certain to pull nearly all
of his subscribers into the same abyss.

So I realized that to have any influence in my new place of business,
to attack the power of Baron Grant, now bitterly antagonistic in every
way, and to offset the Emma mine fraud, I must have a personal organ.
For this purpose, I established a financial weekly paper known as the
London Stock Exchange Review. It was issued, for apparent reasons,
ostensibly by a brokerage firm, but it was an open secret that the
publication was mine. I engaged an able editor-in-chief, and directed
him to employ the best financial writers in England, giving each his
proper department, such as railroad securities, industrial, mining
shares, foreign and domestic loans and the like. I retained a page for
which I furnished material hot enough to burn holes in an asbestos
blanket. The page was devoted to the Emma mine and Baron Grant.

The Stock Exchange Review was a breezy, well-written sheet, full of
valuable information to investors, put together in an attractive,
readable form. I had set aside £6,000 to pay the losses of the venture.
Much to my surprise and pleasure, it proved a money-maker from the
start. The style was such a departure from the ordinary dry-as-dust
publications of its kind that it made a hit on the street with the
first issue. The price was a shilling, but often big premiums were
offered when it came out with an extra seasoning of tabasco.

I had reason to know that it tickled the hide of Baron Grant
unpleasantly. It managed to hit on a number of raw spots in his past
career, and in particular interfered with the Emma mine proceedings.
While I spoke as a private person, my charges might be disregarded, but
when a publication, reasonably responsible in damages and absolutely
responsible in a criminal charge, made a downright allegation of fraud,
that was quite another thing. The libel laws of England were then,
as now, airtight. It was not a jocular affair to call anyone a thief
in print, and those who did not seek redress had to suffer under the
suspicion, just or unjust, that the accusation was substantially true.
The Emma mine was brought out in two sections, for promoting each of
which Baron Grant received a commission of £100,000. When the first
section was issued it almost took a squad of policemen to keep back the
crowd of investors. The second appeared just after the Stock Exchange
Review began to hammer. While the stock was taken, the promotion
staggered and was never quite itself again. One thing it prevented
absolutely--the declaring of a great dividend--on air--which would
have sent the stock skyward like a rocket. The managers had determined
on this piece of rascality, but doubtless fearing that I had certain
knowledge of the fact that not a dollar’s worth of precious metal
had been produced, this particular piece of villainy was reluctantly
abandoned.

In the meanwhile, I began to have suspicions of the integrity of
Samson, the financial editor of the London Times. I could not think he
was ignorant of what was going on in the Emma mine deal. His attitude
toward several shady promotions looked, to say the least, queer. In the
days of our intimacy Baron Grant had more than once broadly intimated
that he possessed some kind of mysterious hold on Samson. Whenever I
suggested Samson’s name as a possible factor in our enterprises he
always said smilingly, “He’ll be all right.” For some time previous I
had a passionate yearning to get a look at the financial writer’s bank
account.

I communicated this desire to Alfred Rubery one day, just as the
expression of a wish. Rubery, who knew all the ropes and all the ins
and outs of London, pondered a few moments and said he thought it might
be arranged. I was overjoyed at this intimation, but could not exactly
see how, though my friend had an odd way of doing things seemingly
impossible, in an everyday fashion. He was of an impulsive character, a
most loyal, trusty and affectionate friend, yet nothing on earth could
ever jar him out of his marvelous British self-possession. I remember
one occasion in San Francisco in the old Chapman days, when Rubery and
I were present at a certain meeting, when a wholesale slaughter was
on the point of taking place. Just at the crisis I happened to glance
at Rubery. He was sitting in his chair with a bored, blasé expression
on his face, as if tragedies were so commonplace in his life that
they lacked interest and were positively wearisome. This incident has
nothing to do with the story further than to illustrate the singular
character of the man--a mixture of dash and enthusiasm under strong
control.

At that time money could accomplish almost anything in England. A few
evenings after our conversation, Mr. Rubery waited on me at my rooms,
accompanied by a dapper looking person, whom he introduced as an
official of the Bank of England, who had access to the accounts kept
there by Mr. Samson and who was willing for a reasonable compensation
to give me all the information concerning the same I might desire. To
which pleasing presentation the official of the Bank of England gravely
bowed.

Some conversation followed as to the terms and conditions. The official
wanted all that was coming, but evidently did not wish to scare off a
good customer by an extravagant price. At last he got down to a cold
cash proposition. Would I consider, under all the circumstances, £500
excessive for so delicate a service?

A bargain was struck readily enough. Much better terms would have been
cheerfully granted. The contracting party underestimated his hand.

Through this person I secured an accurate statement of Mr. Samson’s
transactions. I even was shown checks and cross checks, which I
photographed for future use. These proved beyond all question that
Mr. Samson was a beneficiary of the Emma mine promotion, that he had
profited largely by other deals, and, in short, was faithless to the
trust of his employer, and trading on that trust.

Here loomed up the outlines of a great dramatic situation, the
unmasking of a conspiracy, the righting of many wrongs, by which the
villain of the play would be confounded and the innocent come to their
own. Only the details needed rounding out to clear the atmosphere and
let the curtain fall.

I was deeply engaged in these great affairs when I received a cable
from Mr. Ralston. It was, in fact, a letter. At the cable rates then in
force, it cost over $1,100. When I read it I felt assured that my old
friend had gone mad.

It told me of a vast diamond field just discovered in a remote section
of the United States. His description of it made Sinbad, the Sailor,
look like a novice. He said that diamonds of incalculable value could
be gathered in limitless quantities at nominal expense; that they
could be picked up on the ant hills; that at a low estimate it was a
$50,000,000 proposition; that he and George D. Roberts, a well-known
mining man, were in practical control. Finally he almost demanded that
I should drop everything, take the next steamer and act as general
manager.

The extravagance of his language alone seemed to me to indicate that
he was laboring under some strange delusion. However, diamonds or no
diamonds, I was in no position to stir. I cabled him briefly that my
business in London was of too vital importance to admit of considering
other engagements.

But that did not satisfy Ralston at all. Cable followed cable, urging,
imploring, beseeching me to come on, which were invariably answered in
the same way. Still I was worried and perplexed. Rumors began to float
into London about the discovery of a vast diamond field in the American
continent, controlled by the great California banker, W. C. Ralston.
Many financiers called on me for information, knowing our relations.
Among others, Baron Rothschild sought an interview. He asked me what I
knew about the diamond fields, and I frankly showed him Mr. Ralston’s
cables. He read them with interest and asked me what I thought myself.
I told him that while I had great confidence in Mr. Ralston, I
thought he must have been imposed upon in some way, and that in due
season the bubble would burst.

[Illustration: BARON ROTHSCHILD

Head of the great financial institution in England in 1872]

Baron Rothschild mused a moment. “Do not be so sure of that,” he said.
“America is a very large country. It has furnished the world with many
surprises already. Perhaps it may have others in store. At any rate, if
you find cause to change your opinion, kindly let me know.”

This remark, made by perhaps the keenest financier in the world, was
enough to set any one thinking hard.

My position was one of extreme difficulty. The most important
engagements of my life demanded my presence in London. Of course I knew
that in my absence everything must mark time. But little by little
the impression began to grow on me that Mr. Ralston had actually
captured a fifty million dollar financial circus and that I was badly
needed as ringmaster. His cables did not deal in hopes, but absolute
certainties--assured facts. The diamonds were not a dream--a small
fortune of them taken from an insignificant trench were already in his
possession. Finally came a cable begging me to go to California, if
only for the briefest stay, say sixty or ninety days.

I had engaged offices in London for seven years. I could see ahead a
vast future of activity and success, and I did not want my selected
career broken into by outside distractions, however brief. But I
commenced to take the appeals of Mr. Ralston more seriously. Casual
expressions of opinion such as the one noted by Baron Rothschild began
to stir up my imagination a bit. Could it really be true that there was
a place where diamonds could be picked up on ant hills? It was very
easy to find out the truth, and if the truth happened to correspond
with Mr. Ralston’s statements, then everything else in the world in the
way of business or enterprise seemed commonplace and cheap.

I laid the matter before Alfred Rubery, who usually had a level head.
He was surprised at my reluctance. “You have your men safely trapped
here,” he said. “There is no possibility of escape, and whether they
enjoy for a brief time a sense of fancied freedom, matters not in the
least. Make up your mind to go to California and find out what all
this cable correspondence means. Personally, I am bored to death, just
pining for a little bit of excitement. I will go along with you and we
will stir up things again in the Far West.”

Pressure came on every side. I must have had a forewarning of disaster
to have hesitated so long, but finally I gave way to forces that seemed
like fate. I cabled Ralston that I would be at his service for a brief
period, but that the proceedings must be short and sweet. Also I made
a hurried arrangement of my affairs in London, thinking to take up
the thread again in three months at most. Rubery was rejoiced at my
decision, and prepared to go along. We turned our backs on London,
stayed not on the order of our going when we reached New York, and
as fast as steamships and railroads would carry us, arrived in San
Francisco some time during the month of May, 1872, prepared to uncover
the greatest diamond field in the world or return whence we came with
equal expedition.




CHAPTER XXVI.

  DISCOVERERS DECLINE TO REVEAL LOCATION OF DIAMOND FIELD, BUT
    REPORT OF AGENT SATISFIES PROMOTERS.

  _Final Proof of Good Faith Is Offered in Form of Bag Filled With
    Collection of Eye-Dazzling Gems._


When I arrived in San Francisco I lost no time in getting in touch
with the principals of the diamond deal. Three prominent men only
were concerned in it at that time, W. C. Ralston, George D. Roberts
and William M. Lent. From them I learned that the alleged discovery
of the diamond fields had been known to them for many months. Two
prospectors, Philip Arnold and John Slack, were the original locators.
I had known Arnold previously in California. He had been employed by
Roberts to look into mining properties in the western country. The
later story that he had once been employed by myself in a like capacity
was absolutely false. Slack I had known as a plain man about town, of
general fair repute.

As an earnest of the great value of the fields, the gentleman had,
as near as I can recollect, a large quantity of rough, uncut,
brilliant-looking stones which they said local experts had pronounced
diamonds of an estimated value of $125,000. Among them were several
magnificent reddish-colored stones, said to be rubies. Moreover, they
claimed that the discoveries had been verified to an extent sufficient
to satisfy themselves.

The story, previous to my arrival, I only know by hearsay and I cannot
vouch for every detail of things beyond my personal experience that
happened forty years ago. But as nearly as I can recall the narrative,
as it was related, the main facts were these:

One day, in the year 1871, when I was in Europe, two weather-beaten
men, looking like typical miners, presented themselves at the Bank
of California and arranged to deposit property of great value for
safe keeping. The property proved to be nothing more than some
handsome-looking stones which they said in explanation were diamonds,
of which they had discovered a great store, in the desert section of
the West. They were given a receipt for their valuables and quietly
took their leave. But, of course, in those days of mad excitement
and crazy speculation, such an incident was bound to leak. George D.
Roberts located, in his old prospector Arnold, one of the fortunates,
and introduced him to Ralston and Lent. Arnold was always the
spokesman, the negotiator, in these early transactions. Slack merely
was present and acquiesced. At first the men were exceedingly coy and
cautious, had all the manner of a couple of simple-minded fellows
who had stumbled on something great and, bewildered with their good
fortune, were simply afraid to trust anyone with the momentous secret.
They declined to give the slightest indication of the locality of the
fields, or left the impression that they were distant a thousand miles,
or thereabouts, from the actual spot. Relying on vague hints, several
parties actually set out for Arizona to locate the new Golconda. At the
outset the men refused to part with their rights, except to the extent
of a small interest, and only then for a large sum of money which they
asserted was necessary to secure claims to a very large territory.

Later, however, they became more amenable to reason. They were willing
to part with a half interest to gentlemen in whom they had such
implicit confidence. When it was pointed out to them that negotiations
were impossible, unless the location of the mines was indicated and
some kind of an inspection allowed, they offered a rather strange
arrangement, which, however, seemed fair enough on its face. By its
terms they agreed to conduct two men, to be selected by Ralston and
Roberts, to the diamond fields, and allow them to satisfy themselves
of the general nature of the find, but with this proviso: that these
representatives, after reaching the wild, uninhabitable country,
must submit to being blindfolded, both going and coming back. These
conditions were agreed to and such an expedition was actually made. I
am not certain, but my impression is that David D. Colton was one of
the two investigators, being selected by Mr. Ralston as a peculiarly
level-headed man of large practical experience. However that may be,
the mines were certainly visited and displayed, more diamonds were
unearthed, and the party returned with the most rose-colored reports of
the genuineness of the properties and their fabulous richness. It was
this report that set Ralston and his associates wild.

I had some knowledge of the prospectors. Arnold generally had borne a
good reputation among the mining fraternity. Slack seemed to be a stray
bird who had blown in by chance, probably picked up by Arnold because
of a marriage relationship. It seemed that they had told a straight
enough story. It was impossible to tangle them in any detail. Still I
had a general, indefinable doubt, which I expressed in plain words to
Ralston.

Before I arrived the men made a proposition that seemed eminently
fair. This was an offer to go to the diamond fields and bring to San
Francisco a couple of million dollars’ worth of stones and place them
in our possession as a guaranty of good faith. Such a tender was, of
course, accepted. Slack and Arnold left San Francisco, promising to be
back in record-breaking time.

Shortly after I arrived Ralston received a telegram from Arnold dated
at Reno, stating that he and Slack were on the way and urging that
somebody meet them at Lathrop, presumably to share in the heavy burden
of responsibility. After a hurried conference I was asked to meet our
emissaries as per request, and they were so advised by wire. At the
same time a later conference was arranged at my residence. After my
marriage in 1866 I had bought the fine family home of Mr. Ralston on
Rincon Hill. There my friends were to await my coming till the overland
train arrived.

I had a long wait at Lathrop, but at last the expected overland pulled
in. I located the men without difficulty. Both were travel-stained and
weather-beaten and had the general appearance of having gone through
much hardship and privation. Slack was sound asleep like a tired-out
man. Arnold sat grimly erect like a vigilant old soldier with a rifle
by his side, also a bulky-looking buckskin package.

Slack soon awoke and we discussed the business in hand in low tones.
The men told a rather lurid story, but yet not improbable in its way.
They said they had luckily struck a spot which was enormously rich in
stones, which they estimated to be worth two million dollars, that
these had been done up for convenience in two packages, one for each;
that on their way home they found the water in a river they had to
cross extremely high, and for purposes of safety had constructed a
raft, had nearly been upset, had lost one of the bags of diamonds, but
as the other contained at least a million dollars’ worth of stones, it
ought to be fairly satisfactory.

Slack and Arnold left the train at Oakland, turning over the sack of
diamonds on my bare receipt. It was an awkward, burdensome bundle to
handle on the ferryboat. Arrived at San Francisco, my carriage was
waiting and drove me swiftly to my home. An eager group was assembled.
We did not waste time on ceremonies. A sheet was spread on my billiard
table, I cut the elaborate fastenings of the sack and, taking hold of
the lower corners, dumped the contents.

It seemed like a dazzling, many-colored cataract of light.




CHAPTER XXVII.

  PROMOTERS DECIDE TO SUBMIT SAMPLES OF THEIR COLLECTION OF
    DIAMONDS TO GREAT AUTHORITY ON GEMS.

  _Tiffany Consults His Lapidary and Soon Makes Report That Creates
    Big Stir in Speculative Circles._


I think it was the next day or the day following that a display
of diamonds was made in the office of William Willis that filled
San Francisco with astonishment. The precious stones were actually
displayed in open trays to a multitude of sightseers, until I bought
a show-case and gave them some kind of protection. General Dodge, a
partner of Lent in mining, bought an interest from the prospectors at
once, and Maurice Dore also acquired a small holding, although I do not
remember exactly what.

Hitherto there had been no attempt made at organization. It was
generally understood that Ralston, Lent, Roberts and myself owned
three-quarters of the properties by virtue of money already advanced
and to be advanced. For that there seemed to be ample security in the
gems we held. The last invoice alone appeared to be security many times
over for our cash outlays, to say nothing of the probable value of
the diamond fields. So we prepared to get our affairs into business
shape, without further delay, and for that purpose held a meeting at
which all concerned were present. The plan of action was to follow
these lines: First we were to send a large sample of the diamonds to
Tiffany, of New York, then, as now, the greatest American authority
on precious stones, and have them thoroughly examined and appraised.
If their value were proved beyond peradventure, then Messrs. Ralston,
Lent, Roberts, Dodge and myself were to choose a mining expert to whom
Arnold and Slack agreed to exhibit the diamond fields and permit a full
examination of the same.

Nothing could possibly be fairer to all, and Arnold and Slack easily
consented to these conditions, without a moment’s hesitation. On the
favorable outcome of the valuation and the engineer’s report concerning
the diamond deposits, we agreed to take care of the financial end.
Not connected with any agreement with Arnold or Slack, was a plan to
facilitate the passage of a law whereby a great territory of mining
land could be taken up so as to insure to ourselves the entire field,
no matter what the extent. The outline of a corporation was sketched,
with a capital stock of $10,000,000 and the allotment of shares to each
arranged and defined.

These preliminaries being settled, we set out for New York without
delay. In the party were William Lent, General Dodge, Rubery, Arnold,
Slack and myself. It had been arranged beforehand in a general way that
Mr. Lent should be president and myself general manager.

We first retained Samuel Barlow, a leader of the New York bar, as
general counsel. Mr. Barlow’s reputation as a sound business adviser
was no less assured than his standing as a great trial lawyer. On his
advice we added General B. F. Butler to our legal staff. I had some
southern prejudice against Butler on account of the spoon story in New
Orleans, but when I came to know the gentleman I found him to be very
companionable and quite a social genius in his way. A side reason for
employing General Butler was because he was a member of Congress and
perhaps able to aid us materially in legislation needed to acquire the
diamond fields, as later proved to be the case.

Through Mr. Butler, an arrangement was made to meet Mr. Tiffany at the
lawyer’s house. My counsel had some eye to stage effects. A number of
distinguished men were present to see the gems displayed. Among them
I remember General George B. McClellan, Horace Greeley, Mr. Duncan,
of the banking house of Duncan, Sherman & Co., Mr. Tiffany, General
B. F. Butler, and the host. I opened the bag of diamonds I had brought
from California; also there were mixed in a few rubies, emeralds and
sapphires. Mr. Tiffany viewed them gravely, sorted them into little
heaps, held them up to the light, looking every whit the part of a
great connoisseur. “Gentlemen,” he said, “these are beyond question
precious stones of enormous value. But before I give you the exact
appraisement, I must submit them to my lapidary, and will report to you
further in two days.”

Within two days Mr. Tiffany presented his report. In an official
statement, still available, his valuation on the lot was $150,000. My
own recollection is that he named a much higher sum. However, let it
go at that. At that figure, we had diamonds enough already in stock
to make up a total of $1,500,000 in hard cash, whenever we wanted
to turn them into money. That certainly seemed a very satisfactory
financial basis--regular velvet to begin with. The news of the Tiffany
appraisement, though not intended for public consumption, soon became
common property in New York and made a big stir in speculative circles.
The hardier class of plungers were only too eager to get aboard even at
this early stage of the game.

All that remained now was the choice of a mining expert. One name
naturally suggested itself--Henry Janin.

Henry Janin bore at that time in the financial world about the same
reputation that John Hays Hammond enjoys to-day. As a great mine expert
and consulting engineer, he was without a peer in the United States,
perhaps in the world. Nearly all the big operators like Haggin, Hayward
and their class were willing to stake their fortunes on his judgment.
It was said of Janin that he had the record of having examined
something over six hundred mines, without once making a mistake,
certainly without ever having caused his clients to lose a dollar by
his bad judgment. If he had any failing at all, it was on the side of
ultra-conservatism. Some complained that he never took a chance--that
he even turned down good mines, to strengthen the confidence of the
greatest investing classes, both in the old world and the new. The
O. K. of Henry Janin fixed the reputation of a mining property in every
market.

Therefore there could not have been selected a better equipped expert,
so far as the financial world knew, to settle finally the existence
of the diamond fields. Mr. Janin was interviewed. He was a man of
big affairs, whose time was well occupied. But he agreed to make the
examination provided the time to be consumed did not exceed a month. He
was also a very high-priced professional. His best terms were $2,500
cash, all expenses paid, and a right to take up 1,000 shares of the
stock at a nominal price. I may add here that Mr. Janin later on sold
his stock, while the excitement was in full bloom, for $40,000. Mr.
Lent rebelled and protested against this arrangement as excessive, but
was overruled. He and I afterwards purchased Mr. Janin’s stock.

At this stage of the proceedings Arnold became restive. He said he was
placing his property at the mercy of others without proper security,
that what he had received was a trifle compared to the value he was
about to disclose and that he must have a further guarantee in cold
cash. He named a hundred thousand dollars as the amount that must be
paid down, but agreed to let it remain in escrow, pending Mr. Janin’s
report. Some quick writing went on between Mr. Lent and Mr. Ralston, as
the result of which the latter transmitted the amount by telegraphic
order; Mr. Lent holding the diamonds appraised by Tiffany at $150,000
as a further and final security. This was not exactly according to
program, but the transaction was fairly business-like and did not
present itself as a hold-up.

All our arrangements and differences in New York were settled in a very
brief space of time and we set out in high spirits on the way to the
mysterious diamond land. The party consisted of Henry Janin, General
George S. Dodge, Alfred Rubery, myself and Arnold and Slack.




CHAPTER XXVIII.

  DISCOVERERS OF FIELD OF DIAMONDS FINALLY LEAD THE PARTY OF
    INVESTORS TO THE SCENE OF WONDERFUL FIND.

  _Pick Turns Up Many Fine Gems, and Expert Grows Enthusiastic as He
    Figures Out the Profits._


Our friends in San Francisco had, of course, been advised by wire of
our transactions and movements, including the date of our departure.
We had not journeyed far before we received on the train a telegram
that George D. Roberts and a considerable party were on the way to
join us to visit the diamond fields and would meet us, if I recollect
aright, at Omaha. Here again, Arnold absolutely rebelled. He had kept
all his engagements, he said. The diamonds had been appraised by an
expert of our own selection. He was now on his way with the mining
engineer chosen by us and with the appointed representatives of the San
Francisco interests to exhibit the diamond fields and permit any kind
of examination we wished to make; but he was not willing to expose his
hand to the whole world until other business arrangements were complete.

It seemed to me that Arnold’s argument was unanswerable. Before we
left San Francisco, every detail had been arranged. This was a plain
departure from the plan. I took sides with Arnold. In fact, there was
nothing else to do, for he insisted that everything was off unless we
conceded to his wishes. Besides, I had every faith in Janin’s ability
to pass on the genuineness of the diamond fields. Accordingly a
telegram was sent that turned Roberts and his party back.

We left the Union Pacific Railroad at a small station near Rawlings
Springs. Here we hired the necessary outfit and struck out in the
wilderness, Arnold and Slack leading the way. Our course was erratic.
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
country was wild and inhospitable. We suffered during four days’ travel
many inconveniences. 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.

The spot was at a high elevation, about 7,000 feet above sea level, I
think. Physically, it embraced a small mesa or rather gently sloping
basin, littered here and there with rocks comprising about thirty or
forty acres, through which a small stream of water ran. It was located
in one of the most unfrequented parts of the United States, although,
as it afterwards proved, Arnold and Slack in their zig-zag course, had
actually brought us nearly parallel with the railroad and not more than
twenty or twenty-five miles from it. In fact, once, while we were at
the mines, 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.

But at all events we were mighty glad to reach our destination and
now everything was sidetracked to begin the diamond hunt. We barely
unsaddled our animals and secured them; then commenced to hunt
diamonds. Arnold and Slack were serene and confident. They pointed out
several spots where they had previously dug and found the precious
stones, already mined and delivered in San Francisco. 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. Why a few pearls weren’t thrown in for good luck I have
never yet been able to tell. Probably it was an oversight.

You may depend upon it that we were in a happy mood that night. 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.
Arnold and Slack had excellent reason to be satisfied. 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.

The next day prospecting was resumed and covered a wide range.
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.

Accounts have been published to the effect that when we arrived at the
diamond fields there were visible evidences of the ground having been
tampered with and disturbed. This is absolutely absurd on its face.
In the first place any such evidence would have excited the suspicion
of the keen-eyed Janin in a moment. Secondly, such a clumsy method of
“salting” was unthinkable. Undoubtedly holes were made in the soil with
sharp iron rods, gems were dropped in the holes, which were closed by
a hard stamp of the foot and the first winter’s rain obliterated every
trace that remained of human agency. Wherever we worked, the ground was
“in place.”

Two days’ work satisfied Janin of the absolute genuineness of the
diamond fields. He was wildly enthusiastic. It was useless, he said, to
spend more time on that particular piece of property--that was proved.
The important thing was to determine how much similar land was in the
neighborhood, and be able to seize on everything in sight, for Mr.
Janin pointed out that this new field would certainly control the gem
market of the world and that the all-essential part of the program was
for one great corporation to have absolute control.

So we started on a widely extended prospecting trip. Arnold and Slack
did not care to go along, and, to tell the truth, we weren’t very
anxious for their company. We saw much landscape, also much land that
exactly resembled the formation at the diamond mine. We staked off in a
rough way an enormous stretch of the country, set up notices of claims
that we hoped would hold things down and covered what we believed to be
the entire diamondiferous area.

We returned to the original treasure fields and found Arnold and Slack
patiently waiting. Some discussion arose over the vast values we were
leaving behind us unguarded and the urgent necessity to place some one
in charge. Slack was willing enough to stay, and Dodge and Janin begged
me to induce Rubery to remain with him. This Rubery rebelled against
lustily. He had come on a pleasure trip--nothing more. But he was a
most accommodating man at heart, and finally gave in. So we rode away
from the diamond fields, leaving Rubery and Slack on guard. I never saw
Slack afterwards--what became of him is a dark mystery that I will take
up later on.




CHAPTER XXIX.

  PUBLIC SOON HEARS OF WONDERFUL FIND AND GOSSIPS CARRY NEWS
    UNTIL WHOLE WORLD IS KEENLY INTERESTED.

  _Company to Develop Diamond Fields Includes Great Lords of Finance
    and One Noted Union General._


We returned direct to New York; that is to say, all of the original
party except Rubery and Slack. Of course, Mr. Ralston was advised
by wire of the substantial results of our examination. Likewise, of
course, we advised our New York friends who had been previously in our
confidence, that our best expectations were exceeded. Where so many are
cognizant of a secret, it very soon becomes public property, and in a
brief space of time all New York and, for the matter of that, all the
civilized world, knew that vast diamond fields had been discovered on
the North American continent, had been inspected by a mining engineer
of great reputation and pronounced genuine. Something like the profound
excitement that stirred the mighty Argonaut movement began to take form
everywhere.

As an evidence of this fact, almost immediately after I had reached New
York, Baron Rothschild of London, who had previously made inquiries
of us, arranged for what amounted to a cable interview. He informed
me that he had just received a cable from Mr. Ralston. (This, I
presume, related to the agency he accepted at a later date.) He stated
further that he had heard of the Tiffany appraisement, also that I
had personally made a visit to the mines with a leading expert. He
wished me to confirm the result of our observations. I answered Baron
Rothschild that half the truth had not been told; that the diamond
fields were rich beyond calculation; that every doubt and shadow of a
doubt had been absolutely removed, so far as I was concerned. The Baron
thanked me, saying he was pleased to hear the good news.

In fact, after the Tiffany valuation, the personal examination of the
mines and the statements of Mr. Janin before he promulgated his famous
report, every suspicion gave way to an unbounded enthusiasm. Mr. Lent
afterward made a written statement, still in existence, that Mr. Janin
assured him he could wash out a million dollars’ worth of diamonds a
month with the assistance of twenty rough laborers. Mr. Janin never
went that far with me; in fact, he afterward questioned the entire
accuracy of Mr. Lent’s figures, and Mr. Lent himself admitted that
he might have made an error. But before leaving the diamond fields
Mr. Janin assured me that the discovery location alone, which we had
partially examined, was certainly worth many million dollars, with
countless possibilities besides.

Who wouldn’t become enthusiastic with such a showing? It fired the
imagination of all financialdom. It upset the caution of the wisest
heads in the old world, as well as in the new. There was a wild
scramble to get on board, almost at any price.

Some statements have been made to the effect that I used my influence
to have the headquarters of the company at New York instead of San
Francisco. There is this much truth to the statement, that it was
debated very seriously. This was a plain matter of business, a question
of dollars and cents--not patriotism. In launching a concern of such
tremendous importance, probably destined to affect profoundly a vast
industry, it is always deemed vital to have the support of the largest
financial center possible. New York was then, as now, the great haunt
of capital in the United States. Many of its leading men were only
too anxious to identify themselves with the new exploitation. I did
not think that the question of headquarters was one deserving mature
consideration, especially inasmuch as San Francisco, controlling the
stock issues, would necessarily be the great beneficiary in the long
run.

But this point was easily settled. Mr. Ralston and myself owned a
majority of the property. This we had held from the outset. I simply
telegraphed to Mr. Ralston, laying the matter before him, without
prejudice. Mr. Ralston’s answer was decisive. He said that San
Francisco stood ready to furnish any amount of capital required. There
was no further argument on that head. To San Francisco the headquarters
went, but this much was conceded to New York--that branch offices were
to be maintained in that city, and that Samuel P. Barlow and General
George B. McClellan were to be resident directors; which arrangement
was later carried out. The New York connection was clearly indicated by
the company’s name.

The scene now shifted to San Francisco, where Mr. Ralston had the
situation well in hand. A company was regularly organized under the
laws of California, entitled the San Francisco and New York Mining and
Commercial Company, with a capital stock of $10,000,000, divided into
100,000 shares. Its powers were of the largest possible description;
not alone to engage in the business of mining and owning mines and
their accessories, but also to engage in every class of commercial
business, including the preparation of precious stones for the general
market. The apparent intention of the organizers was to move the great
lapidary establishments of Amsterdam to the Pacific Coast, and the
truth is that this design caused no small concern in the Low Countries,
where the cutting of gems is an industry hundreds of years old.

San Francisco was certainly ripe for the new company. Hardly a business
man of any considerable wealth would not have considered it a rare
privilege to be admitted to participation in the enterprise on the
ground floor. It was only a case of choosing the highest class of
names in the community, to launch the great undertaking under the most
brilliant auspices. Twenty-five gentlemen, representing the cream of
the financial interests of the city of San Francisco, men of national
reputation for high-class business standing and personal integrity,
were permitted to subscribe for stock to the amount of $80,000 each,
and this initial capital of $2,000,000 was immediately paid to the Bank
of California.

[Illustration: THOS. S. SELBY

Founder of Selby Smelting Works, director Diamond Co.]

At a stockholders’ meeting the following board of directors were
elected to manage the affairs of the corporation: Wm. M. Lent, A.
Gansl, Thomas Selby, Milton S. Latham, Louis Sloss, Maurice Dore,
W. F. Babcock, William C. Ralston, William Willis. George B. McClellan
and Samuel P. Barlow were at the same time elected directors, with
headquarters at the City of New York. Mr. Lent was then chosen
president, W. C. Ralston, treasurer, and William Willis, secretary.
David D. Colton resigned from his position with the railroad to become
general manager.

Only old timers can recognize what these names meant. All the owners of
them are long since dead. Some of them went into a financial eclipse
before they died. But in 1872 they stood as the last word in the
financial and commercial world of the Pacific Coast. I might mention
here for the benefit of the later generation that A. Gansl was the
representative of the House of Rothschild on the Pacific Coast.

Such was the lineup. The biggest men of San Francisco were solidly
behind the enterprise. Two distinguished citizens of New York
represented the company as resident directors there, and in the Old
World the famous house of Rothschild became the company’s agents. The
interest of Slack and Arnold was wiped out finally by a cash payment
of $300,000, which was turned over to Arnold personally, he having a
properly executed power of attorney to act for Slack. Thus, the decks
were cleared.




CHAPTER XXX.

  “OLD MINER” DRAWS ON HIS IMAGINATION AND TELLS WILD TALE OF
    SINGLE GEM AS BIG AS A PIGEON’S EGG.

  _Winter Causes Lull, But Cold Fails to Chill the Ardor of Men
    Counting on Millions in Spring._


On July 30, 1872, the articles of incorporation of the San Francisco
and New York Mining and Commercial Company were formally filed and the
report of Expert Janin was made public. As yet, however, the exact
location of the diamond fields was undisclosed, because the company’s
rights to the great territories claimed were not completed, although a
recent act of Congress changing the mining laws gave ample opportunity.
The wildest tales concerning the new discoveries were at once turned
loose. An article in the New York Sun, signed “Old Miner,” located
the exact position of the fields somewhere in Southeastern Arizona, a
guess that happened to be out of the way by some seven or eight hundred
miles. The “Old Miner” further stated that the company had in its
possession a single gem larger than a pigeon’s egg, of matchless purity
of color, worth at a low estimate $500,000. You may be sure that this
started a good-sized stampede for Arizona.

The directors had several meetings and decided to proceed with extreme
circumspection. For one thing, they sent a large consignment of
diamonds to the House of Rothschild in London for examination and
sale. At the same time a party of fifteen, including miners, surveyors
and others interested, were dispatched to the diamond fields for
the purpose of exploring, surveying and securing our rights. In the
meantime not a share of stock was placed on the market, although the
excitement was intense.

I append an extract from a morning paper of the day following the
incorporation and making public Janin’s radiant report:

(Alta, Aug. 1, 1872.)--“American Diamond Fields. One Thousand Diamonds
Now in This City. Also Four Pounds of Rubies and Large Sapphires.

“We have a wonderful story to tell. We listened to it at first with
incredulity, but after hearing all our informant had to say we found
reasons for believing it. We have seen a report written by Henry Janin,
a mining engineer of an established reputation who had visited the
mines, examined them and reported favorably on them. He has accepted
the position of superintendent and has expressed the opinion that with
twenty-five men he will take out gems worth at least $1,000,000 a
month. In this paper he attached so much importance to the discovery
that he discusses the question whether the price of rubies and diamonds
is likely to depreciate in consequence of increased production and
answers the question in the negative. We have thus commenced with Mr.
Janin because he is well known here and it is mainly on his statements
that confidence rests. His statements evidently command confidence,
for some of the leading capitalists of the State have purchased stock.

“The place of the new mines has not been communicated to us by any of
the interested parties, but street rumor says it is New Mexico. About
three years ago, they say, an Indian near the diamond deposits gave
several diamonds and rubies to a white man who brought them to Messrs.
Roberts and Harpending in San Francisco. These gentlemen satisfied
themselves of the value of the gems and sent men to hunt for more. They
met the Indian after a long search, he took them to the place and was
subsequently drowned. We tell the story as it was told to us.

“Then Mr. Janin went to the spot, washed a ton and a half of gravel,
took out 1000 diamonds, four pounds of rubies and a dozen sapphires,
and selected the best ground for mining. Three thousand acres were
claimed under the mining law passed last session. The country for a
considerable distance around was examined, but no equally promising
deposit was found.

“Most of the diamonds found by Mr. Janin are small, weighing a karat.
One obtained previously weighed over 100 karats, but was dark and of
little value relatively. There are 109 karats in an avoirdupois ounce,
so that a diamond weighing a karat is a small affair, yet if clear and
well shaped may be worth from $25 to $50.... Some of the sapphires are
as large as pigeon eggs.

“The diamond mines are the property of the San Francisco and New
York Mining and Commercial Company, which has been incorporated,
and the directors are M. S. Latham, A. Gansl, W. F. Babcock, Louis
Sloss, William M. Lent, T. H. Selby, Maurice Dore, General George B.
McClellan and Samuel L. Barlow, the last two of New York. The company
is incorporated in this city. It has 100,000 shares of stock and they
have been selling at $40, making the present market value of the whole
property $4,000,000.

“This price indicates great expectations, as Mr. Gansl is the agent
of the Rothschilds and Mr. Latham of prominent British capitalists. A
party of miners will go to the mines with tools and provisions for the
winter’s work and the extraction of gems will begin. The stones are to
be brought to San Francisco and cut here.”

But that was nothing compared with what followed, when the last party
returned from the fields on October 6. Previous to that Deacon Fitch
had cautioned the public more than once to go slow on the diamond
craze. But thereafter even he joined the procession joyously. Witness
this:


(From the Bulletin, Oct. 7, 1872.)

  “The Diamond Fields--About the 20th of August a party of fifteen
  men left this city to explore the diamond fields about which
  there has been such a furore of excitement. Amongst them were the
  following well-known gentlemen: G. D. Roberts, General John W.
  Bost, M. G. King, M. G. Gillette, Alfred Rubery, John F. Boyd, Dr.
  C. Cleveland, E. M. Fry, Chauncey Fairfield and Chas. G. Myers.

  “The members of the expedition returned last evening. They
  experienced no trouble with the Indians, but had a very tedious
  march to the fields and thence home. The heads of the party declare
  that their explorations more than confirmed the original report of
  Janin of the extent and richness of the deposits and they exhibited
  specimens which they say they secured with their own exertions with
  but little labor. This party went merely to explore and prospect
  the country where the diamonds and rubies were said to abound and
  not for the purpose of working. They say that active operations
  could not be carried on when they were there, as the altitude is
  great and the ground covered with snow. The specimens they brought
  back are similar to those previously exhibited in this city and
  they number 286 diamonds of various sizes.

  “Mr. Roberts says that if they had been deceived they are the worst
  deceived and cheated men who ever lived. They surveyed 3000 acres
  of land and propose to keep secret the exact locality until the
  company receives a Government patent. The implements used by them
  seem to have been ordinary jackknives--an improvement on the boot
  heels of the original locators. If so much wealth can be turned up
  by such primitive means, what might be accomplished with shovels
  and pickaxes? The report of the party renewed the excitement and
  little else is talked about on California street but diamonds and
  rubies. A meeting of the trustees of the company was called for 2
  p. m. and further developments will be awaited with interest. A
  fact that is so easily demonstrated as the existence of diamonds in
  that country should not be longer one of doubt and suspicion.”

Of course, everything was closed down for the winter. But every holder
of the company’s stock figured on being a millionaire at least by the
early spring, from the proceeds of his diamond field adventures.

I should have added that when we returned from the diamond fields Mr.
Janin took a package of the gems we had found to Tiffany for valuation.
We had estimated them to be worth $20,000, but the jeweler scaled this
down to $8000. This didn’t disturb Janin. He considered it a “bear”
movement.




CHAPTER XXXI.

  RUDE AWAKENING FOLLOWS DREAMS OF BOUNDLESS WEALTH; WHILE
    PROMOTERS WAIT FOR SPRING WORD SUDDENLY COMES THAT THEY WERE
    VICTIMS OF CLEVER SWINDLE.

  _Diamond Already Cut Reveals Fraud; Gems Had Been Carried to Scene
    of “Find” and Planted Like Seeds._


Just what might have happened in a single month of wild speculation
had the stock of the San Francisco and New York Mining and Commercial
Company been placed in any considerable quantity on the market, is
hard to tell. But one thing is very certain--it would have caused a
catastrophe almost without parallel in the civilized world. The public
was keyed up to the point of a speculative craze such as even the
Comstock never saw, not alone in San Francisco but in nearly every
financial center of the earth. Millions upon millions would have been
invested. The shares would have soared to fabulous figures. Banks would
have advanced money on these prime securities, as was the custom in
those times. And then the awful crash! There would have been more ruins
in financialdom than San Francisco exhibited after the fire. Every day
the mails were loaded with letters from eager correspondents making
inquiries for stock. The best and unanswerable proof that everyone
connected with the company acted in absolute good faith is to be
found in the fact that not a share changed hands.

[Illustration: LOUIS SLOSS

President Alaska Commercial Co., director Diamond Co.]

Meanwhile, however, handsome offices were engaged, and David D. Colton
was installed in all the dignity of general manager. This was long
before the date of typewriters, and it required several clerks to
answer letters. A large map showing the general outlines and physical
characteristics of the 3000 acres claimed by the company was displayed
in the office. It showed the relative position of Discovery Claim, Ruby
Gulch, Diamond Flat, Sapphire Hollow, and other locations with names
equally suggestive of wealth without limit. Many longing eyes were cast
on that map by would-be speculators. The company had considered a plan
for holding and working what was known as Discovery Claim on its own
account, and granting concessions in the remaining territory for so
much down in cash and a royalty on the gems recovered.

Some fifteen or more bona fide offers were made to purchase a
concession for $200,000 cash and a royalty to the parent company of 20
per cent. Not only that, but the purchasers of such concession would
have been able to place stock on the market and sell the shares like
hot cakes. Quite a few million could have been gathered in from that
source alone. Why not? Even granting that the element of gambling was
strong, nevertheless, such a property had a far better backing of
apparent value than nine-tenths of the wildcat mining schemes launched
every week on the stock exchange.

Not only that, but three other diamond and ruby companies were
organized, each with fairly representative men behind them. One of
these companies exposed to public view a gem that looked like the
headlight of a locomotive, seen through a fog after dark. It was known
as the Staunton ruby, and was generally conceded by experts to be a
genuine stone of high quality. No one seemed able to give more than a
guess at its value, but the opinion was unanimous that only some rich
and powerful nation could purchase it, to adorn a scepter or a crown.
All of these companies were merely marking time, waiting till the
great, proved, unquestioned company should say “play ball” and start a
speculative market for everyone.

But no such misfortune happened. On November 11 a telegram was received
from Clarence King by the president of the San Francisco and New York
Mining and Commercial Company dated from a small station in Wyoming
stating that the diamond fields were fraudulent and plainly “salted.”
This, of course, caused a wild excitement among the officers of the
company. They held a hurried meeting. They were simply stunned. King
was reached by wire at once, and agreed to take a party in and prove
his statements. A party was at once organized for this purpose. The
members were Henry Janin, D. D. Colton, John W. Bost and E. M. Fry.

Clarence King was a geologist and engineer in the service of the
United States Government, a man of some professional distinction and
of talent in the literary line. It is worthy of note here that some
years after the diamond story broke, King wrote a perfervid narrative
entitled “Mountaineering in the High Sierras.” In it he described an
ascent of Mount Whitney, the highest peak in California, and dragged
himself through a series of hair-breadth escapes that put every Alpine
adventure in the shade. A geologist by the name of W. A. Goodyear knew
something of the region, visited Mount Whitney, made the ascent on a
mule with settled habits of reflection and never dismounted till he
reached the top, proving that King had never been there at all. All of
this Goodyear described in a widely circulated magazine. The laugh that
followed broke King’s heart. He died a few months later.

It was this same gentleman who late in the fall of 1872 made up his
mind to have a look at the diamond fields. Notwithstanding all of our
attempted secrecy, almost anyone could place his finger on our claims.
Not only that, but at least two men, Berry and McClellan, had actually
been at the fields, saw the old washings and the tools left by the
Roberts party, and it was one of these who guided Mr. King to the spot.

Mr. King’s story makes the discovery of the fraud rather a matter of
deductive reasoning, whereby little straws of evidence are put together
one by one and formed into the nest that holds the egg of proof. It is
easier to construct this nest afterwards than before. I heard myself a
somewhat different version of the story. In company with Mr. King went
a middle-aged German, a sort of cross between a camp follower and a
friend. Like a “super” in a great dramatic performance, he did not cut
a very large figure. But many years afterward I met him in New York and
he told me a very interesting story. On reaching the diamond fields,
he said, notwithstanding the intense cold weather, both he and Mr. King
began washing for diamonds, and naturally enough found what they were
looking for. In fact, the geologist came very near being fooled as
badly as anyone else--wanted to leave instantly, and thought of going
to San Francisco to have a talk with the directors of the company. But
the German gentleman felt differently. He was not overburdened with
wealth, had never been in any place before where diamonds could be
picked up without even saying, “by your leave,” and he was naturally
averse to leaving a place so full of delightful possibilities. So he
arranged a brief respite before departure. In the meantime he was
washing “dirt” to beat the band and every now and then pocketing a
sparkler that he valued at a small fortune. Suddenly he came on a stone
that caught his eye and filled him with wonderment. It bore the plain
marks of the lapidary’s art. He took it immediately to his principal.
“Look here, Mr. King,” he said. “This is the bulliest diamond field as
never vas. It not only produces diamonds, but cuts them moreover also.”

King grabbed the half-cut diamond. Everything was clear as day. Beyond
the peradventure of a doubt the fields were salted. He hunted out
evidence that he had overlooked before, and very soon was in possession
of proof quite aside from the partly cut gem, that a wholesale fraud
had been committed.

I am not giving this story as a fact--simply offering it for what it
is worth, and certainly without any desire to detract from the great
service rendered by Clarence King.

Mr. King reached the diamond fields on November 2, 1872. On November
10 he was back to the railroad and sent the famous dispatch--that the
company was duped.

Also he waited for Messrs. Janin, Colton, Host and Fry, the party sent
from California. They went together to the diamond fields and the now
plain nature of the plot was thoroughly exposed. It is not necessary to
go into any of Mr. King’s geological conclusions or the entire evidence
upon which the conclusion was reached. Two or three facts are enough to
indicate the satisfactory nature of the proof.

Mention has been made of ant-hills sparkling with minute but veritable
diamond and ruby dust. Perhaps because they were so pretty no one ever
disturbed them. But if somebody had taken a notion to give one of them
a kick their supposititious nature would have been apparent. They
weren’t ant-hills at all. They were fakes; the work of a sinful man,
not of the moral insect. They were also works of art; no one would have
suspected guile from looking at them.

A close examination revealed three holes evidently made with a stick
or some sharp instrument, at the bottom of each of which a gem rested.
There is little doubt that all the “salting” was done in this way,
except that as a rule the holes were carefully closed. But in such
extensive operations a little reckless work was likely to slip in.

Finally, on the top of a large flat rock, several rubies and diamonds
were found pressed into crevices to hold them in place. This was so
grotesquely raw that it seems incredible, and led to a story that some
of the diamonds were in the forks of trees. Unfortunately for the
story, there weren’t any trees in the neighborhood.

The party returned to San Francisco late in November. On the 25th
of that month the general facts were given to the press, that the
diamond fields were a fraud, and that everyone had been taken in. The
excitement was intense. The Associated Press kept the wires humming
with the news for days, transmitting fuller reports than were published
here, although the local papers printed whole pages. Wherever a
printing press ran, the world knew the story of the diamond fraud.

The trustees of the San Francisco and New York Mining and Commercial
Company held various meetings and a select investigating committee was
appointed. W. H. L. Barnes was the company’s regular attorney. Messrs.
Hall McAllister and S. M. Wilson were added to the staff to ferret out
and punish those guilty of the fraud. Everyone connected with the early
history of the transaction gave testimony, every line of evidence was
hunted down.

[Illustration: MILTON S. LATHAM

Former Governor and U. S. Senator, director of Diamond Co.]

Among other things, an accomplice came forward by the name of Cooper,
who admitted with noble candor that he was the author of the whole
scheme, though unrighteously deprived by his welching partners of his
just share of the spoils. Salting mines was the commonest thing in the
past, and isn’t yet to be classed with the lost arts. Talking with
Arnold and Clark, whom he knew personally, of how the “salting” of gold
and silver mines had been overworked, he suggested the “salting” of a
diamond field as a pleasing variation, and told how small diamonds,
such as those used for drills, could be readily obtained. According
to his story, Arnold and Slack bit greedily and a triumvirate was
formed to carry on the fraud. This was nearly two years before the
Janin examination. Cooper was undoubtedly a confederate, did a lot of
advising and suggesting, but was kept in the dark concerning the most
important details. Also, he was promised a liberal share in the booty
and his confession was prompted chiefly by a desire for revenge. He
gave Arnold and Slack the full credit for everything.

The statement of Cooper was made not only to the special investigating
committee, but also to the grand jury of San Francisco. The latter body
indicted no one.

On November 27 the trustees of the San Francisco and New York Mining
and Commercial Company met for the last time. At this session it made
a final report to the public, giving its brief history, the confidence
placed in Tiffany appraisement and the report of Janin; the final
statement that the properties it claimed to be diamondiferous were
“salted” and that everyone had been cleverly duped. All its business
was summarily suspended and its attorneys ordered to wind up its
business at once.

Appended to the report were statements from Clarence King, describing
his discoveries, from Henry Janin, confirming Clarence King, and
admitting his former errors; also from Messrs. Colton, Fry and Bost,
all denouncing the fraud.

If anything were lacking, news came from London that the diamonds we
had sent there were coarse, almost valueless “niggerheads” from the
South African fields, and had been purchased in bulk there from a
dealer nearly a year before, who identified them perfectly.

The late diamond millionaires, who had been rather chesty, presented a
sad spectacle on the street. They were pursued everywhere with jibes
and jokes. Some of them went into retirement till the storm blew
over. There never was a better illustration of the joy to be found in
triumphing over the sorrow and discomfiture of others.




CHAPTER XXXII.

  VICTIM OF BIG SWINDLE EXPLAINS HOW ROUGH MINERS MANAGED TO
    DECEIVE MEN LIKE TIFFANY AND JANIN.

  _Inquiry Reveals That “Salting” of Diamond Field Cost Plotters
    $35,000 and Yielded $600,000 Net Profit._


How so many of the shrewdest men in the world could have been
absolutely duped by the great diamond fraud may well be asked. The
truth is it succeeded not because of the baleful craft employed in
working out its details, but because of a rawness that seemed to
disarm rather than arouse suspicion and the audacity and nerve with
which everything was carried out. That diamonds, rubies, emeralds and
sapphires were found associated together--gems found elsewhere in the
world under widely different geological conditions--was a fact that
ought to have made a goat do some responsible thinking. But it seems
to have been entirely overlooked by Tiffany, by Janin, by the house of
Rothschild, to say nothing of Ralston, Sam Barlow, General McClellan,
General Butler, William M. Lent, General Dodge, the twenty-five
hard-headed business men of San Francisco who cheerfully invested
$2,000,000 in the stock and the fifteen mining men who accompanied Mr.
Roberts to the fields, after the San Francisco and New York Mining and
Commercial Company was organized. Had serious attention ever been
directed to that single point it certainly would have prompted an
investigation that must have ended in exposure.

Again, the Tiffany appraisement of $150,000 on not more than a tenth
of the gems actually on hand is hard to comprehend, unless regarded
in connection with another fact--that valuing cut stones and valuing
stones in the rough are widely different matters. While the Tiffany
establishment had undoubted experts as to the finished diamond, it is
doubtful whether a single real expert valuer of rough diamonds was
to be found in the United States. All the lapidary work of the world
was then done principally in Amsterdam, with smaller establishments
in Paris and London. As I understood later, the Tiffany experts
satisfied themselves that the stones were actually diamonds, weighed
them, estimated the cost of cutting and net weight, applied the usual
rules for valuation, which increases enormously with the size of the
stone, made a large deduction and let it go at that. Thus the total of
$150,000 was arrived at. Knowing the immense reserves we had in San
Francisco, the question of fraud probably never entered their minds.
For, although much ingenuity and some money had been invested in the
enterprise of palming off worthless mining properties, it seemed the
height of absurdity to suppose that anyone had invested a million and a
half dollars in “salt.”

And, to do justice to Henry Janin, I think it was this valuation
that disarmed his suspicions and made him less eager to search for
traces of chicane. He said several times on the journey to the diamond
fields that he considered their genuine character established; that
his mission was mainly to estimate their extent and probable value.
As to that, the washings we made might well have satisfied any man.
Perhaps had he remained at the discovery claim, instead of exploring
the country in the neighborhood, he might have detected traces of
fraud. But he considered the most essential thing was an examination
to determine the diamondiferous area, so that his employers might
ultimately get it all.

Yet the most convincing factor of all was the attitude of the men
themselves. Arnold was no ordinary mortal. Throughout all the
negotiations, coming in contact with some of the most alert intellects
of the time, he was always serene, ready, confident--did not make a
single break. Besides he had an air of simple, rugged honesty that
impressed everyone he met. General Dodge, who thought meanly of human
nature, said in a printed interview that he would stake his life on
Arnold’s integrity. Not only that, but Arnold and Slack were willing,
even eager, to submit the diamonds to any test and to lead a party
of experts to the fields, under proper guaranty that their rights
would be protected. They seemed almost exultant when they understood
that Tiffany would value the diamonds. That, of course, would settle
everything, they said. They were equally delighted at the choice
of Janin as an expert. Both of them had the dramatic gift highly
developed. On the stage they might have made the most famous actors of
any time.

And how did a couple of ordinary prospectors secure the very large sum
undoubtedly used to finance the glittering fraud? That was a question
that puzzled many and led to all kinds of surmises about confederates,
syndicates, and so forth. But it was shown later that in 1870 Arnold
and Slack made a couple of lucky turns at selling mines and actually
had at one time in excess of $50,000 to their credit in a Western bank.
This deposit was withdrawn in bulk and was never traced afterwards,
except in the purchase of diamonds in the markets of Amsterdam and
London.

Through the agency of I. W. Lees, this end of the transaction was fully
traced and the facts published. Arnold made two trips to Europe to
purchase gems. Both times he shrewdly avoided American ports, sailing
and returning by way of Halifax. His first visit was made in the fall
of 1870. That time he confined his activities to Amsterdam and showed
great shrewdness in concealing his tracks and avoiding suspicion. He
visited the various gem-cutting establishments, bought many coarse
stones, but not enough from any one firm to make the transaction look
unusual. No one seemed to know his name, but his photograph was at once
identified by many diamond dealers of Amsterdam as the eccentric person
who seemed to have an unusual penchant for inferior stones. He was
regarded as a newly-rich American with a vulgar taste for ostentation,
who wished to overburden his family and dazzle his fellow-countrymen
with a wealth of cheap, almost worthless gems.

[Illustration: WM. BABCOCK

A foremost San Franciscan, director of Diamond Co.]

On his second trip in the early winter of 1872, Arnold went direct to
London, and there, while the conspiracy was at the most ticklish point,
he threw all caution to the winds. One of the largest dealers in the
great metropolis gave the story to the press how one afternoon a
rather rough-looking American appeared at his place of business and
asked to be shown what they had in the way of undergrade or rather
refuse diamonds. He was shown a large stock of South African stones of
the quality known as “niggerheads,” handsome enough, but of very small
commercial value. The American pawed over them apparently without the
least regard for size or quality until he had collected a great pile.
Then he asked indifferently, “How much for the lot?”

The trader hadn’t the least conception that his customer meant
business. However, he made a rapid appraisement of the stones and gave
the price at £3000, or $15,000. To his amazement, the American produced
a huge bank roll, counted off the money, had the diamonds packed in
small sacks, which he deposited in the capacious pockets of an overcoat
and elsewhere, said good-day and departed. In the photograph of Arnold,
the English trader recognized his customer at once.

As near as anyone could estimate, about $35,000 was invested in
“salting” the claims. To this should be added something for traveling
expenses, etc. The men received approximately $660,000. That left a
little over $600,000 net profit.




CHAPTER XXXIII.

  PRINCIPAL IN DIAMOND SWINDLE GOES BACK TO HIS OLD HOME IN
    KENTUCKY TO ENJOY HARD-EARNED RICHES.

  _Victims Bring Suit for $350,000, But Arnold Is Popular With
    Neighbors and Forces Compromise._


After Arnold received his final payment of $300,000 he retired to his
old home at Elizabethtown in Hardin county, Kentucky, bought a fine
piece of land and also a safe, which he kept in his house under strong
guard. In this he deposited nearly all his spoils, although he also had
a tidy balance in the local bank, which added greatly to his repute
among his neighbors. He had a host of relatives in Hardin county, which
borders on the primitive section of Kentucky. It was there that the
most capable of Morgan’s guerrillas were recruited and there most of
them returned. Anyone hunting trouble in that locality was almost sure
to find it. Arnold settled down quietly among his friends and relatives
to enjoy the fruits of a toilsome life.

His place of residence was well known. In fact, the Kentucky papers
gave some prominence to the return of this famous discoverer of diamond
fields to the home of his ancestors. When the bubble burst, Mr. Lent
hurried to Kentucky, hired eminent counsel--Judge Harlan, later a
Justice of the Supreme Court of the United States, and Benjamin
Bristow, a lawyer of equal standing--brought suit against Arnold for
$350,000 on his personal account and levied an attachment on his
property. All of these proceedings are set forth in the Louisville
Journal of December 18, 1872. Two days later the same paper published
a long statement from Arnold, in which he denounced in unmeasured
terms the outrage that had been committed on his rights. He scored
“Bill” Lent in language of scant courtesy, but of picturesque Western
expressiveness, and declared he neither owed him $350,000 nor the like
number of cents, or any other sum, for the matter of that.

Arnold went on to say that his safe contained $550,000, the result
of arduous labor as a prospector and miner in the Far West, not to
mention his bank account and real estate. The sequestration of the
same by a shark or an aggregation of sharks from California he looked
upon as an outrage unparalleled in history. He went into the diamond
field story in detail, denied that he had ever “salted” it or that it
had ever been “salted” at all. He appended Janin’s report, the Tiffany
appraisement and a long extract from the San Francisco Chronicle to
prove that he had turned over an absolutely valid diamond property to
the San Francisco and New York Mining and Commercial Company, and that
if anyone “salted” it, the diabolical act must have been done after the
experts’ examination and by some of the “California scamps.”

Did Arnold suffer any in the estimation of his compatriots by reason of
the grave accusations preferred against him? Rather the reverse. They
gloried in what they were pleased to call his “spunk.” The old Morgan
raiders and thousands of their way of thinking looked with pride,
almost with reverence, on one of their kind with nerve and wit enough
to make a foray into Yankeedom and bring away more than half a million
in spoils. To tell the truth, Arnold was the very hero of the hour, for
the old war feeling was still rampant.

I followed Lent to Kentucky, whither also went Captain I. W. Lees.
Familiar with the field, after some investigation of the state of
public opinion in Hardin county, I am satisfied that had Arnold stood
his ground unflinchingly not a dollar could have been wrung from him
by legal proceedings, no matter what the proof. And, moreover, at that
time the matter of exact proof was not as easy as later on.

Negotiations leading to a compromise took place in which I played
a part. These resulted in a compromise by which Arnold surrendered
$150,000 on consideration of immunity from further litigation. The
money was turned over to Mr. Lent personally. What disposition was made
of it I am not informed, but understood that it was retained by the
recipient to make good his personal loss.

So Arnold, left, according to his own statements, with an uncontested
fortune of nearly half a million dollars, everywhere enjoyed the esteem
and high respect which broadcloth and a large cash balance invariably
inspire. But he did not live long to enjoy prosperity. Arnold, among
other ambitions, wanted to shine in finance, and for this purpose
opened a bank in Elizabethtown, and for a time did a rushing trade, to
the great irritation of his business rivals. The quarrel became very
bitter, and as differences of opinion were only arbitrated in one way
in Hardin county at the period mentioned, the first time Arnold met one
of his competitors the two opened fire at each other on the street,
after the manner of the best traditions. Arnold never lacked courage,
and had all the best of the arbitration, having winged his man once,
when his antagonist’s partner appeared in a doorway and landed the
greater portion of a charge of buckshot in the diamond discoverer’s
shoulder. His wounds were considered fatal, but his iron constitution
carried him far toward recovery, and he was considering with pleasant
anticipation a second meeting with the bankers, with sixshooters
instead of a clearing-house to balance the account, when he was seized
with pneumonia. Under this last affliction the tough old campaigner,
after a hard struggle, weakened and died. This happened, I think, near
the close of 1873, so that Arnold’s prosperity was short-lived.

What became of Slack? That was a question often asked, but never
answered in a satisfactory way. As I said, the last time I ever saw him
was when I left the diamond fields with the Janin party. He and Rubery
remained behind. When these two separated Rubery came to San Francisco,
while Slack took an eastbound train. Many attempts were made to locate
him at a later day. He was heard from at various points--St. Louis, New
Orleans, Memphis and Mobile. Always it turned out to be another Slack.
Finally the impression became general that he must have gone abroad and
hid his identity in another land.

But the strange part of it was that Arnold had all the money, or
nearly all of it, as appears by his signed statements and later by the
inventory of his estate, which corresponded. Granting every possible
contingency, the share of Slack was either practically nothing or very
small, not to exceed $30,000 at the utmost. As they always figured as
partners, and as Slack, though not the spokesman, appeared a man of
force, I have always considered that a deep mystery hung over his fate.
It seems not unlikely that he died somewhere in the Western country,
probably among strangers, and never participated in the profits of the
diamond fraud at all.




CHAPTER XXXIV.

  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.




CHAPTER XXXV.

  BARON GRANT BOBS UP AGAIN; TRIES TO GET EVEN ON MAN WHO EXPOSED
    ONE OF HIS BIG STOCK SWINDLES.

  _Alfred Rubery Brings Suit Against London Times for Libel and Is
    Awarded £10,000 as Damages._


In the charges made by the London Times, it was not difficult to
recognize the handiwork of my old enemies, Baron Grant and the
financial editor, Samson. The accusation seemed to be an echo of the
old Emma Mine fight, when I warned the public against the exploitation
of a worthless property. That bubble had burst, carrying ruin to
investors, disgrace to the promoters and more than a decade of distrust
for every American security in European markets. But the sting of
defeat remained and the opportunity to retaliate was one not to be
overlooked.

Alfred Rubery, being a British subject in good standing, brought
the libel suit against the London Times. As my intimate and close
companion for nine months, covering the various incidents involved, he
admitted that whatever involved me involved himself as well. Although
the earth was ransacked for evidence to connect us with the fraud,
the defense absolutely failed to sustain the newspaper’s charges. Not
only that, but the proof I had gathered, as described in a previous
chapter showing the secret bond between Baron Grant and the financial
writer, was thoroughly exposed, ending in the ruin of both. Samson was
dismissed in disgrace by the London Times. Enough was shown of Baron
Grant’s methods to involve him in lawsuits innumerable that stripped
him of his fortune in the end. He did business under assumed names long
after, but never with his old success.

Heavy damages were awarded Rubery--the sum, if I remember right, was
£10,000. Years afterwards he moved to Australia, and as I never heard
from him after, I presume that, like the other actors in the diamond
field drama, he is dead. In fact, of all who were in any material way
connected with the historic incident--and there were many--I alone
survive.

For myself, I felt crushed beneath the burden of vague suspicion,
became disgusted with life in general and with business in particular,
and formed a determination to retire permanently from active affairs at
once. With this end in view, I offered my extensive California holdings
on a dead market and accepted bargain prices. My controlling interest
in the Montgomery Street Land Company I sold to Messrs. Ralston and
Sharon, so that they owned share and share alike. I sold a great
acreage of tule land to George D. Roberts, part of which comprises
what is known as Roberts Island, not far from the city of Stockton. A
large estate around Honey Lake I disposed of to various purchasers.
Scattering investments in San Francisco were cleaned up in a summary
way. I would hardly care to know what all these properties are worth
to-day.

[Illustration: MRS. A. HARPENDING

At age of 30, before leaving San Francisco]

In four months after the diamond fraud was exposed I had converted
into cash everything tangible I possessed on the Pacific Coast.
Although the sacrifice I made was enormous, I realized more than
a million and a quarter dollars, which was as good or better than
$5,000,000 to-day--a fortune ample to supply the most extensive and
up-to-date wants of modern times.

The great mistake of my career, entirely apart from monetary reasons,
was this hastily taken resolution to seek the shades of private
life. Had I faced the music, like all the rest--like Ralston, Lent,
Roberts, Dodge and one or two other original “dupes,” I would have
outlived every trace of suspicion just as they did themselves. And I
am glad to give evidence at this late date, long after all of them
are dead, that they were as innocent as children throughout the whole
transaction--were the unhappy victims of a costly confidence in men.

But as I took a pessimistic view of things in general and saw fit
to withdraw from public view, perhaps I have not so much reason to
complain because, in my absence from the world, Dame Rumor was busy
with my name.

Three alleged histories of San Francisco, which profess to give an
accurate narrative of events, devote much space to the diamond field
fraud. Considering the mass of documentary evidence easily accessible,
the misstatements of many facts and the omission of others is
noteworthy and may call into question the entire accuracy of all these
works. To go no further, they all agree that the losses of stockholders
were enormous, claim that they brought suit in the State of New Jersey
against Arnold and Slack, but never recovered a cent. Lent’s suit in
Kentucky, the only place where such an action could be maintained, is
not mentioned, nor the $300,000 which Ralston contributed to make good.
Under these conditions I should not feel hurt because they surmise that
the plot was conceived in the “active brain of Asbury Harpending.”

I returned to Kentucky, made considerable investments in agricultural
land and settled down to play the part of the country gentleman. My
estate was one of the finest in Southwestern Kentucky and became a
center of hospitality in its region. And there I made another grave
mistake--not to remain content with the finest existence in the world,
that of an independent owner and tiller of the soil.

It was while I was living in my new home in Kentucky, at peace with
all mankind and oblivious of the outside world, that I had a sharp and
vivid reminder of the unforgotten past when the papers told, one day
in August, 1875, of the failure of the Bank of California and two days
later the tragic story of my old friend Ralston’s death.

[Illustration: MY SISTER, MRS. O. P. ELDRED

Who is well known in the literary world]




CHAPTER XXXVI.

  ASSOCIATES BAR GREAT FINANCIER FROM CONFERENCE AND SOON AFTER
    HIS BODY IS FOUND IN THE BAY.

  _Fortune Plays Cruel Trick; At Height of Ralston’s Power His Big
    Bank Is Forced to Close Its Doors._


Ralston succeeded D. O. Mills as president of the Bank of California,
in 1872. While conceding the titular supremacy to another, and
contenting himself with the station of cashier, Ralston had always been
the actual head. In all matters of policy and large accommodation his
word was law. After the withdrawal of Mills, the directors practically
gave him a free hand.

All through the ascendancy of Ralston, the institution had the splendid
reputation that the Bank of California enjoys to-day. It not only
possessed the fullest confidence of the community, but ranked as one
of the strongest banks of the United States, with agencies throughout
the civilized world and unlimited credit everywhere. The splendor of
Ralston’s hospitality, the immense enterprises in which he was engaged,
and his vast holdings in real estate and corporate concerns, gave him
the standing of a man whose wealth was almost beyond computation. There
was not an intimation of embarrassment when, on August 25, 1875, the
Bank of California closed its doors.

I was not a witness of what followed. I was living quietly in my home
in Kentucky. But from what I have heard, it was one of the most intense
moments in the history of the West. For blocks around the Bank of
California stood a packed mass of pale-faced men, anticipating ruin.
What might have become an unparalleled panic and almost universal
wreck, was happily averted by the closing of the stock exchange and the
practical suspension of business for a period long enough to allow the
community to catch its breath.

Ralston stood the ordeal with all the resources of fortitude, met many
patrons of the bank, admitted the grave conditions of its finances, but
contended that its assets were very large. Everything he possessed in
the world, he said, would be used to make good.

On the afternoon of August 27 the directors called a meeting. Ralston
was on hand as usual, but was barred from attendance by D. O. Mills.
The incident, it is said, touched him to the quick. Every director had
profited by his friendship in the days of his power and prosperity.
This seemed a harsh return in the hour of his deep distress. He left
the meeting with a dazed and haggard face.

He proceeded to his home and thence to North Beach, where he was
accustomed to take a swim in the bay when the weather was opportune.
There are a number of living witnesses of what followed. Shortly after
he entered the water other swimmers noticed that something was amiss.
His body did not sink, but he was floating face downward. A boatman was
quickly at his side. This boatman declared that the banker was still
living. Be that as it may, when he reached the shore with his burden
the once master spirit of the Pacific Coast was dead.

How great was the hold that Ralston had on the hearts and minds of
men could only be illustrated by the passion of grief under which the
whole city bent. His death was looked on as a common calamity. No
spectacle has ever been witnessed in modern times such as his funeral
presented. By common consent, business of every kind was suspended in
San Francisco. You might say that the population of the city of more
than 150,000 inhabitants turned out en masse. The proudest and the
humblest touched shoulders at his grave. Such tribute was never paid to
any potentate or prince.

There were even some who found it convenient to make an exhibition of
immoderate sorrow who might have been more fittingly employed elsewhere.

I once heard a story of a French gentleman who had suffered a domestic
bereavement. A friend met him shortly after and tendered the customary
condolences.

“Ah! My poor wife! Yes, it was indeed a great loss!” sighed the
Frenchman.

“I was at your house during the funeral,” continued the sympathetic
friend, “and was deeply touched by your manifestations of grief.”

“Ah! You saw me at the house,” exclaimed the bereaved Gaul. “Many
thought that fine. But you should have seen me at the grave. There I
raised hell.”

Very much in the same way, there was one man at Ralston’s obsequies
conspicuous for his ostentatious sorrow, who was more responsible for
his downfall than anyone else and profited largely by his death. But
after the funeral he was able to speak of the tragic event with much
fortitude and a certain degree of complacency. Ralston’s death, he
said, was extremely opportune--in fact, the best thing that could have
happened, for it made easy going for everyone.

But nothing can be more true than the cynical words that Shakespeare
puts into the mouth of Marc Antony. The evil a man does lives after
him. The good is buried with his bones. The city went about its
business, forgot its sorrow, which is necessary and proper, unless the
world is to be draped with perpetual mourning weeds, forgot much of the
great services Ralston rendered California; although to this day, among
the old-timers and their descendants his name still stirs a thrill. But
all his human weaknesses have been remembered and handed down, duly
magnified, to posterity.

Not only that, but his memory has been assailed by accusations of the
gravest nature, relating to the failure of the Bank of California.
These charges reached me in Kentucky, and as they did not proceed from
an authoritative source and, moreover, seemed totally inconsistent with
the character of my old friend, I made a special visit to the Pacific
Coast to investigate the circumstances immediately preceding and
associated with his death, for the better satisfaction of myself and of
the world at large.




CHAPTER XXXVII.

  TESTIMONY OF EYE-WITNESSES AND EXPERTS REFUTES STORY THAT WM.
    C. RALSTON TOOK HIS OWN LIFE.

  _Ruined Financier Had Deeded His Property to William Sharon, Who
    Forces Widow to Accept $250,000 as Payment in Full._


Among the common traditions of William C. Ralston’s death is the story
that he committed suicide to escape exposure. Notwithstanding the fact
that a coroner’s jury found on ample expert evidence that he died from
a cerebral attack, and the further incident that a life insurance
company promptly paid a policy of $50,000 to his widow--a policy void
by express terms in the event of suicide--this impression seems to
persist to-day.

When I came to California for first-hand information concerning my
old friend’s tragic end, my earliest business was to investigate the
question of self-destruction; for if it were a fact that he made away
with himself at a time when much explanation was needed, it would
have had assuredly an ugly look. The evidence was all fresh and so
overwhelmingly conclusive of death from natural causes that I cannot
see on what basis a theory of suicide was reached, unless it were
suggested by ulterior motives. The testimony of eye-witnesses was
that the swimmer suddenly collapsed and floated with the tide. The
lungs were inflated with air, not with water, as in cases of drowning;
otherwise the body would have sunk. The features had not the ghastly
pallor that follows water suffocation; on the contrary, they were
suffused and livid as when death ensues from a bursting blood vessel
in the brain. To this physicians gave further testimony. The sad
facts were plain enough. For many days Mr. Ralston had suffered a
mental strain against which the human machinery is not often proof. It
reached the crisis when he was excluded from the meeting of the bank’s
trustees. Then something snapped. Perhaps the plunge in the cold waters
of the bay hurried on the catastrophe. But the baseless story of Mr.
Ralston’s suicide ought to be finally set at rest.

The inside history of the failure of the Bank of California in 1875
has never been told. About the only definite statement ever made was
that its capital stock of $5,000,000 had been exhausted, although the
institution had resources sufficient to protect depositors. It was
rehabilitated by an assessment of $100 a share which was paid by the
stockholders, giving a new capital of $3,000,000. Five weeks after the
failure it reopened its doors, with almost undiminished prestige, and
with all the many ups and downs of finance has maintained its position
as the leading commercial bank west of the Missouri River.

There is no doubt that Mr. Ralston owed large sums of money to the
bank, growing out of many investments, some of which were disastrous.
In those days, whatever may be said of the practice, it was the
commonest thing for bank officers to make loans to themselves. Not
only that, but the practice was in full swing down to the time of
the failure of the Safe Deposit Company’s Bank. With vast visible
personal resources as security for loans, Mr. Ralston’s unlimited
credit never seems to have been questioned by the directors of the
Bank of California. Among his assets were a half interest in the
Palace Hotel; a half interest in the Montgomery Street Land Company,
which he and I organized, including the Grand Hotel, and most of the
frontage on New Montgomery street; one-half of the capital stock of
the Spring Valley Water Works; one-half interest in the Union Milling
and Mining Company, which controlled the reduction of ores on the
Comstock Lode with enormous profits, and one-third of the stock of the
Virginia and Truckee Railroad, which holds the record of earning more
per mile than any railroad in the world before or since. I should say
that a conservative estimate of these properties alone was not less
than $15,000,000. Besides, he had numberless industrial investments,
residences and immense acreages of real estate in various parts of
California.

After I left San Francisco in the early part of 1873, Mr. Ralston
engaged in many costly projects. One of these was the purchase of the
Catholic Church property on Market street, and the construction of the
Palace Hotel thereon by himself and William Sharon. This alone tied
up $3,000,000 of ready money on his account. It is known that he lost
heavily on a large purchase of stock in the Ophir Mining Company, upon
false information that the great Flood and O’Brien bonanza extended
into its territory. Several months before the failure he saw that he
was deeply involved. Mr. Ralston realized too late that he had gone too
far, that he was beyond his depth. He made efforts to secure money on
his great holdings. But for evident reason he was compelled to go slow.
The spectacle of Ralston as a borrower would have started suspicion
at once. Loans were attempted through outside agents, but the door of
accommodation was closed. Rumor has attributed this to the manipulation
of the Bonanza firm, but a much better reason can be given than that.
Nearly all the ready capital on the Pacific Coast was tied up in the
wild Comstock speculation, still at its height. There was no money
available for legitimate investments or loans of any kind. On top of
this came the withdrawal of many large accounts. On the day of the
failure more than $1,000,000 were unexpectedly checked out. Under this
last blow the bank went down. So far as the Bonanza firm was involved,
its members were personal friends of Ralston, though not of William
Sharon.

Four days before the failure Mr. Ralston made a deed to William Sharon,
conveying “all and singular my real and personal property situated in
the City and County of San Francisco and the County of San Mateo and
elsewhere and wheresoever and howsoever situated, to be managed, sold
and otherwise disposed of for our joint and several interests.”

What was the disposition of this vast property? No one will ever know.
Was part of it used to repay any indebtedness of Mr. Ralston to the
bank? Again the record is silent.

Some years later Mr. Ralston’s widow, who is still living, brought
a suit against William Sharon for an accounting under the deed of
her deceased husband. After some delay, Mr. Sharon filed a general
answer to the effect that the property coming from Mr. Ralston into
his hands was worth about a million dollars less than nothing. But he
offered $250,000 in full settlement, and to avoid the endless delay of
litigation and expenses that she did not have the means to meet, this
adjustment was accepted by Mrs. Ralston.

Never in the whole history of finance has such a mystery attached as
surrounds the failure of the Bank of California and the disappearance
of Ralston’s fortune. My own firm belief is that had his life been
spared another month, he would have emerged from all his difficulties
with a clean sheet. James R. Keene, a trustee of the Bank of California
and the only one who seemed inclined to speak, made a printed statement
that upon an examination of Mr. Ralston’s assets he was justified in
stating that they were sufficient to pay all his debts of every kind
and leave a balance of $3,000,000 to his family; and it is worthy of
remark that Keene had a very clear business head.

No one seemed anxious to know the facts. Quite the contrary was the
case. When I proceeded to gather information of a most important
character, J. D. Fry, uncle of Mrs. Ralston, commanded me in the name
of the family to cease. To this I had to bow. But Mrs. Ralston is here
to say whether her kinsman was her faithful friend or not.

Even Mr. Ralston’s private papers and personal accounts were seized,
and disappeared. In some ways he was a secretive man. Once he asked
me to send a check to A. A. Cohen for $5,000 each month until ordered
discontinued. I followed instructions till the total amounted to over
$100,000, yet I never had an inkling what the payments were for. Thus,
it was currently believed that he had many interests in other people’s
names. Mrs. Ralston well remembers that her husband took her to inspect
a fine business block in process of completion, which he told her was
his. After his death the title to this same property stood in the name
of another, and in that family name it stands to-day.

There were many wild rumors of wrongdoing that followed the failure of
the Bank of California. The only one deserving notice is this: that
Mr. Ralston over-issued and marketed stock of the Bank of California.
Without any evidence to support it that would be received in any court,
this unfounded charge has received an astonishing credence, for I can
find nothing to support it except absolutely irresponsible hearsay.
Besides, it is contradicted by unquestioned facts.

Mr. Ralston had no reason to over-issue any stock. He had oceans of
prime securities. What he needed was cash, not certificates of shares.
His 50,000 shares of Spring Valley alone had a selling market value
at that time of $5,000,000, nearly twice as much as the bank started
business with later on. The money simply wasn’t in the town to realize
on even that splendid security. That’s how Ralston and the bank went
down.

In a way, my acquaintance with Mr. Ralston was somewhat tragic. With
the best intent on either side, something always went wrong. It
changed the whole character and purpose of my life. But I only recall
him as a most loyal, consistent friend, a financier with a very nice
sense of honor and an exemplar of candid courtesy. It seems to me the
time has come when tardy justice should be done to the memory of one of
California’s most illustrious pioneers, who loved his State as no man
of station has loved it since, and to whom the present generation owes
much.




CHAPTER XXXVIII.

  AUTHOR TRIES LUCK IN WALL STREET AND MAKES BIG FORTUNE, ONLY TO
    LOSE IT IN MINING INVESTMENTS.

  _Silver Falls and Land Slides, But Disaster Fails to Discourage Man
    Who Has Outlived Old Associates._


All the various people of the story have been accounted for and
decently retired. Before the curtain falls I have just a word to say
about myself to those who have followed the narrative of sixteen
tempestuous years from 1857 to 1873.

The role of a Kentucky country gentleman was not to my liking. As I
have said, I sold out everything and retired from California after the
bursting of the diamond bubble. I resolved that nothing should tempt me
again into an active career. But the lure of the busy world was more
potent than I realized. After a few years of the simple life I made
my headquarters in New York, studied and grasped the investment and
speculative markets, and became one of the recognized figures of Wall
Street.

[Illustration: THE AUTHOR

At the period of his Wall Street operations]

Good fortune, as a rule, attended my ventures. Sometimes the tide
turned the other way, but I think, taking one year with another, each
saw my assets materially increased. At one time I was worth very near
if not quite four million dollars, which is distinctly more than
any man ought to have. But when one is fairly gone in the money-making
intoxication he never knows when to stop, any more than the victim of
alcohol.

When I was at the zenith of my good luck I was induced to invest in
two mining properties in the United States of Columbia, South America.
One was an immense silver mining district, the other a great hydraulic
proposition with almost fabulous gold-bearing gravel resources. Both
were passed upon favorably by the ablest experts that money could hire.
The reports were justified by the facts, yet both projects ended in
ruinous disaster to me.

I was drawn into a much larger investment than I contemplated. As I
developed the silver property, the economy of a much larger plant
and the ownership of adjacent mineral territory became self-evident.
There appeared no element of risk. Silver, after various fluctuations,
seemed to have reached a firm level. Financial experts were in accord
that the price of the white metal could not possibly go lower, was
much more likely to advance than to recede. Even with silver at 80
cents an ounce, the profits on my mining operations would be enormous.
I figured to clear such profits that in a few years I would receive
back my capital investment and own a property with an earning capacity
of millions. In fact, during the period of practical operation these
estimates were fully borne out.

Then something happened. Without a note of warning to the commercial
world, Great Britain closed the mints of India to the coinage of
silver. As long as this vast Oriental market was open, the value of
silver was secure. When it closed, like the snapping of a trap, a
panic followed which did not end until the price was squarely cut in
two. I could not produce an ounce of bullion without an actual loss.
An immense investment became instantly valueless. Nearly three million
dollars vanished into thin air with the scratching of a pen.

The hydraulic mining project fared no better. The gold gravel deposit
appeared humanly inexhaustible. All the physical conditions seemed
favorable. Water had to be brought in a ditch for twenty-three miles.
Most of the ditch, carrying 10,000 miner’s inches of water, was
completed. Then something happened again. For nearly a mile at its
upper end the line of the ditch ran along a rather steep hillside of
shale foundation. When the surface was broken, the whole mountain
seemed to get in motion. Millions of tons slid down, bringing to
naught every effort of our engineers. Money, as a rule, will in the
end conquer every physical obstacle. But about this time a third thing
happened, most serious of all: my funds ran so low that to continue the
enterprise further meant an invitation to a final and complete disaster.

My fortune was not lost. It is still intact, buried in the mountains of
the United States of Colombia. I have no doubt that some adventurous
speculator of the future, under happier conditions, will dig it out.

Since then I have been a miner and dealer in mining properties, with
the common average of the miner’s ups and downs. Much of my time has
been devoted to the mother lode of California, where I own a property
that has an immense future.

       *       *       *       *       *

I am an old man now--in years, but not in hope. I have outlived not
alone nearly all my contemporaries, covered by this narrative, but
the turbulence and ardor of my early years as well. But while many
illusions inseparable from the imagination of a robust and enterprising
youth have disappeared, I still have very definite ambitions to pull
off one more surprise on the world before the close. There may yet be
a sequel, another chapter to the story to which may be attached more
fittingly than now the sad word that marks the conclusions of all
things human--


(THE END.)


[The above was written nearly two years ago. Since then Mr.
Harpending’s ambition has been realized. He sold one of his mines on
the Mother Lode and after many fluctuations of fortune is again the
possessor of ample means. One of his last and best friends was John
A. Finch, of Spokane, to whom this volume is dedicated. Just as the
forms were going to press, word came of the sudden death of this good
gentleman in Idaho. He took great interest in the publication of this
book, which he can never read.--Editor.]

[Illustration: THE LATE JOHN A. FINCH

Who possessed all the qualities of a good man and many of the qualities
of a great man.]


[Illustration]




Transcriber’s Notes


Punctuation, hyphenation, and spelling were made consistent when a
predominant preference was found in this book, otherwise they were not
changed; simple typographical errors were corrected.

Ambiguous hyphens at the ends of lines were retained.

Page 126: “incidentials” was printed that way.





End of Project Gutenberg's The Great Diamond Hoax, by Asbury Harpending