#PrescottAZHistory: The Great Diamond Swindle of 1872

John Slack and Phillip Arnold were 10 years apart in age, but both were born in Elizabethtown, KY and both went to fight in the Mexican War at the same time. They developed a friendship that had one thing in common: they both yearned to become rich quick. So they both travelled to California to become “49ers” during the gold rush there.

Although neither man was considered a mental giant, together they would pull off one of the most successful cons in Arizona history.

Several years previous, Slack “wondered his way to Fort Defiance, in the northeastern part of this Territory, and found several pounds of beautiful stones,” but they were only semi-precious stones, not worth a great deal. He “skedaddled from these diggings,” but kept the location in mind. It would be here that the Diamond Swindle would be staged.

A plan was hatched and Slack sent the stones he found to a bank in San Francisco. At the same time, a bunch of black diamonds was sent there by a man named Cooper. Slack informed the bank that he also found diamonds lying about in the field.

This brought great excitement to adventure capitalists in San Francisco, but locally, the newspapers were skeptical. “We reassert, do not come here at our invitation to fill your sacks and purses with diamonds and such, for we are not prepared to say, positively, that such gems do exist here,” the Miner reported, “although we think they rather do.”

“The pile was next transferred to New York City, where Mr. Lent, Gens. Dodge, Barlow and others were ‘caught’ (in the fraud.) Next, Slack sold his interest in the secret field for $100,000, one-half of which he gave Arnold, who straightaway started for London, bought diamonds, and returned home. (From there he) started for the ‘diamond’ field, and having selected it, ‘salted’ it good with Indian and Brazillian diamonds, Arizona rubies, garnets, etc.”

A man named “Janin was sent out, saw (the diamonds,) returned, and set the world of San Francisco wild with the report.” Conveniently, with Janin were Slack and Arnold who supposedly were the only two people experienced in washing the gravel to expose the diamonds.

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Slack was an old placer miner from Lynx Creek. “He has old and dear friends here in Prescott, with whom he has corresponded,” the paper reported suspiciously, “but to whom he has never once said (the word) diamond.”

The paper continued: “We have seen some of the ‘diamonds’ found in the Pinal Mountains, and did not believe they were diamonds.”

Despite the fact that “no diamonds had been brought to Prescott from the new diamond fields,” a party of men left to search for it in September, 1872. They came back with several precious and semi-precious stones and “a few which they hoped were diamonds.”

It was at this time that Arnold sold his interests for upwards of $550,000. Finally, it was decided to have the stones tested by experts and the truth that the diamonds were planted was exposed. Those who speculated were left “holding the bag.”

After selling the $50,000 worth of stones he used to salt the field, Slack quietly left Arizona, $100,000 richer. He spent 8 years working at the Burro mine in Utah. Then, in 1880, he moved to White Oaks, NM where “he engaged in the cabinet and undertaking business. Mr. Slack was one of the oldest and most respected residents of White Oak, NM,” the paper reported upon his death.

Arnold went back to Elizabethtown and became a folk hero there. When the speculation ended, the big loser of the swindle turned out to be William M Lent of San Francisco, who went to Kentucky and sued Arnold, attaching his property. Arnold denounced the move as unjustifiable, “stating that he never received any money from Lent on the diamond business, and never sold him one dollar’s worth of property.”

Lent and his attorneys were not welcomed in Elizabethtown and when Arnold offered him a $150,000 settlement, Lent decided to cut his losses instead of facing a hostile jury.

Phillip Arnold, the illiterate son of a drunkard, ended making off with a tidy $400,000 profit in a day when the average Arizona farm-worker made $780 a year.

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Upon Arnold’s death it was noted by the newspaper that “if he had stolen a horse in Kentucky, he would have gone to the penitentiary. But his success ‘in business’ appears to have been respected in his native state.”

As for the rest of Yavapai county, the paper opined philosophically. “The fact that interests us the most is that Arizona was drawn upon for the rubies and other inferior stones with which the…field of Arnold & Slack were ‘salted.’” Several big and little rubies found in Arizona WERE real. They were located “some distance to the northward of Prescott, where there is also a chance to find diamonds.”

“So the truth of the adage that ‘It is an ill wind that blows nobody good,’ is once again verified,” the paper continued. “The bogus cry about diamonds has led our people to prospect, and they think they have found rich and extensive deposits of rubies, amethysts, garnets and other valuable stones.

“Who knows but that diamonds will yet be found in portions of our Territory?”

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