|Home -> James H. Barry Press -> The Great Diamond Hoax - 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.