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TpoivnETH YEAR. NEW YORK, THURSDAY, DECEMBER 5 1872. TRICK TWO CENTS, HE DIAMOND FRAUD. .The Greatest Swindle Ever Exposed in America. HOW THE FIELDS WERE 8!TED. Tho Sharpoot Mon In California Lose Nearly $2,000,000. INDIGNATION IN SAN FRANCISCO. Prominent New Yorkers out of Pockot to tho Extont of 8750,000. OFFICIAL REPORTS OF SCIEMIP1C MEN'. Disappearance of the Men who First Found tho Jewels. Ft em (lit .in FranciHD Uulltltn, Sot. M. The diamond excitement commenced In this rlty In August last. Two men, Black and Arnold, had some months previously represented to par ties In tills city, I.cnl, Harpendlng and othora, tnat they lind discovered an extensive dlnniiind Cold, and asked that an agent be selected to visit the ground, the discoverers being willing to aoll an Interest. The fluent returned, and brought quite a number of valuable stones. A company was formed, and a limited number of unarm disposed of to men of wealth. TJio pub lic at largo worn not permitted to purchase, nor were tho newspapers allowed to publish the farts concerning the locality of the mines. Con trndlctory stories were told as to their location, the ireneral Impression being that the flcldswerc la Aritona. CAPITALISTS INVET. Henry Janln. a mining expert, with a small party, went to the diggings early In the spring, nnd washod out a ton and a half of gravel. The work was done by Slack and Arnold, assisted by other members of the company, who worked where directed by the two discoverers. A law nutntwr of precious stunes were found, somo of which were brought here and subsequently I taken to Now York city, where they wore tested, I and Mr. Janln made n very favorable ro, ort to the stockholders. After this report was made. "Win. C Haliton and other capitalists Invested In the stock. Mr. Italston was chosen Treasurer, and othur prominent members were Milton B. J .allium. Albert Uansl, George I), ltoberts. Wll lim K Habcock, 'Ihomas 11. Bclhy, Louis Mos, "William M. Lent, Maurice Dote, nnd A II .rpen dine of this city : and Bam Harlow and George II. MoOlslUnof .New York. ja.mn's ur.roiiT. Mr Jimu'i. report as to tho snlue of the stone .was made mainly on the results reached by the diamond expert of Tiffany & Co. of .New York, alio exprrt.Mr. Macnuran, visited fan Francisco and Uutol sumo of the stones In possession of tho company here, lleinirlhe diamond Inspec tor employed by the New York Custom Home, ninl tho author of trtlclea on precious stones In the Ainrrtran .'riritIoiill, etc., he Is consider ed th het authority in tho United Btaten. He took Kimiti of the stones with lilm to .New York, ninl mi alter that Mr. Junln's report was pub IUIhJ "HALTED." TIik iintirisloii was permitted to go to the iiublli 'lint the mines were In Arlmna. George . ltoberts, however, denied that that was the place. He admitted to the reporters that the llnlil u small, and that all the stones were lakon from one locality. A party, accom panied by ltoberts, went to the place In Peptem imr, and were followed by Kerry and McClelland, two old OaJIfornians, who have leen mining In Utah 'I'liey ascertained that the Held was less than thirty miles from llrldger, on tho I'hlun I'ncifln Hallmail. In November Hern and McOlnllatnl went to the place and remained ivevoral days, llerry found everything ar raugod for the commencement of work jh the spring, the claims being staked oft and marked by the locators. The weather was very cold, and there was some snow nn the ground, but the party managed to obtain In three days enough diamonds to pay all their uxpenie. and leave a margin. An examination of the stones showed a close resemblance to frlcaii diamonds of not very good quality. Mr. llorry came to Han Francisco with hit "find," and the matter coming to the ears of the owner created considerable excltcmeDt, es pecially the report that the fields were "salted." This suspicion bad already been raited by reports In tho London Timtt concern ing large purchases of rough diamonds by two men. supposed to be Americana, several months Vrevlous I.. Keller & Co. fold several lots to these men, .alio 1,100 carats to another American, most ly of rough diamonds of an Inferior description. Their statement to the Tfnws was that the pur chaser, were evidently unacquainted with pre cious stone j they purchasing without reference I to alio, weight, or qualltv, the lot including Ulsmnnds, rubles, emeralds, Ac, of the value of ovnrflS.OUt. The fact that the precious stones were all found In one spot pointed out by Hack and Arnold, and wore of various kinds, Indicating dlvers origin, together with the suspicious cir cumstance detailed by the Ixiudou Tlmi', led to n investigation, and the services of Clarence King, the geologist, were secured, Mr. King, In company wllh (lon.Collon uid a small party, (iroceitdad to tho fields, and an examination of tho country u mude, the result of which, so near as can be ascertained, was a conviction on the part nf Mr. King that the diamonds were scat tered In tho locality where found for purposes of lieoeptlon. Ills opinion is based on the fact that thn geology of the district la not that of a llsmond-hoarlng region, and from the further J act that the various stones found could not all tiavn originated In the same locality. The col lection Includes specimens pecullxr to the Cape of flood Hope, others evidently nf Indian origin, and rubies, diamonds, sapphires, emeralds, :. of such diverse character as to render It beyond beliof that they were the product of any olio lo cality. Tills, taken in connection with thn fact th.it the region Itself la not one Indicating tho ntlstonno of precious stones, seems to put tho question of fraud boyund a doubt. A STOCKHOLDER 8 STATEMK.IT. From .1 gent leman who Is In the secret of those who hava suffered, and wno Is himself onu of the lopi, wi have the following comprehensive uceounlM the great diamond swindle : The first discovery, as alleged, w as made by one I'hilln Arnold, He made a contract with IlarpeiiilliiK for the sale of the dltrovory. Har pendlng transferred an Interest In that contract to Win. M. Lent. The first payment to Arnold wasfliD.uo, This money was udvanced by taut. The property now underwent various suhdivis-lons-tha bulk of It centurlug in Lent, who paid nbout f-VAOXI. Other Interests were sold to various parties, so that tho result was that Ar nold and his confederates, whoever they were, nettod about jaM.OK). lly subsequent sale of a x)rtlon of Lent's interest ho got back a part of bis money, and now stands Ioer of about tlM.OUO. Thedlamond fields discovered by Arnold, after having been prospected by Henry Janln. under Arnold's supervision, yielded about fl.VIMO to X30.UD worth of gems, Upou this prospect Janln'a report tu Messrs. Harlow and (Jen. Mo Ulellan was based. It Is now reported that Arnold took Janln over a few acres nf the land, and that Arnold chose the spots for digging while Janln looked on. Upon Jsnln's report and tho receipt of the Jewels tho Put Francisco and New York Mining and Commercial Com pany was organized, with a capital of )lu,0t),U. A portion of this stock waa taken In Ban Fran clsoo) at the rato of W per share, with the agree ment of all subscribers that the stock should re main In tho hands of W. C. Hnlttnn, and should not bo sold or put upon the market until the value of the property should bo thoroughly as certained. Another prospecting part y, headed by George I. ltoberts, who apiwarn to nnve been one of the tiurohatsrs from the discoverer, visited the Held, This party did a good deal of surveying and lo oallnr, but spent, It Is rumored, only an hour In bunting jewels, and left the field bringing away several hundred carets of diamonds. The brevi ty of this search, and the comparatively small result, aroused suspicion of the extent If not the genuineness of the alleged discoveries, and another party was despatched, whose examina tion and report have not yet been made public. Lnough la known to warrant the assertion that future explorations will develop no diamonds or other gems. Arnold, tho discoverer. Is a native of Ken J" '..Vi n"w. .""I'poted to be In that Btato, though It is more than likely ho will prove to bo 1 ke the pea under the thlmblo-rlgger'a cap ."now you see It, and now you don't" I rh swindle waa probably suggested by tho dlaoorerr of the mineral known as Itacoliimito u (Jroon I Ivor District, which mineral Is usual ly found In dlamondlferoua countries, though H U frequently found, at In the present in alanco, without the Important adjunct of dia monds. How the Ureal Fraud waa Kaposrri. Vtum tht Han Aicicio Csrwildr, Km, to. .1 ' lii-iTy,wlionrrlvt'(Hiuruiil!litberoro lakt, ha. been one of the principal agents In fer reting out the great fraud, Mr. Horry It a dia mond einort and mining operator of consider able celebrity on this coast. Lately ho has re sided In Bait Lake, from which point he has been carrying on extensive operations In tho Utah mine. Soon after tho diamond f evor broke out, Mr. Horry and Ueorge Hearst, who has been vorklng with him, determined to find tho loca tion of the Lent-Harpcndlng claim. To this end they worked like beavers, sending men nut In all directions for Information wbloh would put them on the scent, Thov sent a man to Wash ington to get copies of maps which had been filed there by tho locators In order to secure n patent to tholr claims. In this last they were lot successful, but thoy got somo Information which helped them Immensely. They also aont men to Lont and others In this city, who, by a Judicious system of pumping, succeedKl in getting now and thon a hint as to the locitlon. rOMOWlMO TIIK IIOBEIIT8 PAIITT. Finally, when the lloberts party vlflled the location a few week ago, Kerry and another man boldly followed them, and thon tho rat was out of tho bag. llerry now having adjulrod the Information, lay on his oars for a while. About the 1st nf November, llerry, a man named Me Clell.ind, and another dttod themselves out to visit tho claim. They left Halt Luke fully eiilp pod and armed to the teeth. Taking the cars they went to llrldger, on the Union 1'nclilo Hall road, and from there struck right Into the wil derness. They dlil not have far to travel. The treat diamond adds were only : miles from tho rallrondl A few hours' ride on hores brought them to the boso of a range of mountains which ara In full sight from the curnlndowsat llrldger. To crosv tho mountain took but two hours, and when they got to the base on tho opposite side they found themselves right In the diamond fields. Thero wete the claims, nil staked off and marked, and everything tlxed for thn com mencing of digging operations in the spring. THE (HIKAT rilACD DlSCOVr.llItP. llerry and his pvtv remained two or three days on the ground. Iliirlng this tlmo. and after asomowhat protracted search, they picked up quite a number of small diamonds. Kerry himself picked up twenty-six of the stones. Something In the appearance of the stones as they came from tho gtavel, and the nature nf the grael Itself, soon convinced Harry that ho was on the track of a gigantic fraud. '1 ho stones seemed to him like old acquaintances. Ho Is a diamond expert, and Is quite familiar with the appear ance of rough stones from all parts nf the world. lie at onco recognized tho stones as African or Cape of Good Hope diamonds of rather Inferior quality. To his practised oe It was apparent at Ural sight, almost-that tho claim had been salted with not only Cape but with lllo Janeiro atones, for there are somo of tho latter In the collection they obtained. The Horry party returned to Salt Lake by way of Uroen ltlver station w Ithout further ado, and at onco started for Ban Francisco. THE APPEARANCE Or TUB OIIOl'SP. The weather was intensely cold on the ground. Mr. Kerry had his nose frostbitten, ninl all three mon suffered severely. Tho ground on the hill sides adjacent was slightly covered with snow, but not enough to Impede their search for the stones which had beon hid In the gravel. The plaro Is In a little valley, as Janln describes It In his report. Mr. llerry says ho saw a fine seam of coal cropping out of tho hillside, and what Is more valuable, a deposit of puro alum three or four inches deep, all of which he thinks will make tho claim worth something aside from the diamond "salt." aiteh Titr. itrsT or tiik "salt." Last night Mr, Kerry received a despatch from Mr. McClelland, one of tho men who went In with lain, that ho and a small party wero to leave for the scene to-day to plclt up whatever may bo left of tho African diamonds used to salt tho claim, Kytho time they get through thero will be probably only now and then n stray Hottentot left. Kerry says that to tho best of his knowledge there have been diamonds taken out to tho value of J-l.VOiXI. Ho sajs the ttones have all been comparatively small, off color, and not of great vnluo ; hence the enormous number ol "carats" alleged to have boon taken do not represent a very large amount of money. am KrrortT to aiirest Titr. swiMii.niis. It Is understood vigorous efforts will be made forthwith to arrest and bring to Justice the per petrators or this gigantic swindle, although It Is extremely doubtful whether they will be suc cessful. The parties sought have had amplo tlmo to get away. It Is said they arc In Kentucky. OrriClAT. IIKI'OIIT.I. The First Evidences of the Kraud-Tke fall ing Overdone Too Jinny Different Kluda r Precious Clones Found-Jaula Acknowl edges ho waa rold. Orrica or tuk Bin Fascico amd Naw Ynsa ) MlMMI ASH COHHtaCIAL t'OMI'AM, Nui . 21, ItTi. j At n meeting of tho Hoard of Trunt'os of this company held this day, (len. D. D. Colton, the Manager, appeared, accompanied by Massrt. Clarence King and Henry Janln, when the fol lowing reports were made, which were ordered by the board to b published In the dally papers of this city: cuahence r.isos khpobt. Sa.n Fhancisco, Nov. 11, 1!C!. 7(4 Hoard of filrmlori o tht Ain taiuHtco anil Xtu IVfi lliiuitg ami Vomintrclat CVulsJny. I have hastened to Han Francisco to lay before you tho startling fact that the new diamond fields upon which are based such Urge Invest ment and such brilliant hopo are utterly value less, and yoursehes and your engineer, Henry Janln, tho victims of an unparalleled fraud. Having convlnceu you verbally that my Investi gations have been made upon no utner than your own ground, I beg herewith to give a brief statement of my mode of study and Its unan swerable results. Feeling that su marvellous a deposit as the dlmond fields mutt not exist within the official limits of the geological ex ploration of the fortieth parallel unknown and unstudied by us, I availed myself of the Inti mate knowledge possessed by tho gentlemen of my corps, not only of Colorado nnd Wvomlug, but tho trail of every party travelling there, and wax enabled to find the spot Ithout difficulty, reaching thero on Nov. "J, After examining the camp ground, water, notices, and general features of tho diamond mesa, I next traced the boundaries of your claims, and then began In earnest to study the distribution and mode of occurrence of tho pre clousstones. Our first day wm devoted to the sandstone table rock, at the head of Iluby Otilch, where about all the stones collected by your parties have been gathered ; and had our critical work ended with the close of this one day, wo should have left the ground confident believers In tho genuineness and value of tho fields, Mysuspl- Ions were, however, amused, early In the sec ond day's work, and 1 at nnro determined to make an exhaustive sorloa of "pruspvets," of which the follow lug are the results : tiik ittarLT or l'ltOsPECriNO. 1. A nearly uniform numerical ratio exists be tween tho rubies and diamonds. The gems In nine cases out of ten lln di rectly upon the hard surface of rock or In In durated crust of aoll. In the exceptional coses where 1 found thorn In crevices, thero was al ways amplo evidence that tho sand or soil had been disturbed and broken up within a year. il. With the diamonds and rublies nccurquartz pebbles of varied sizes and concretions of Iron and containing crtstallne particles of quartz, which are found freely mingled with the roll from surface and bod rock j henco, If the gems wore a natural deposit, being of a specific grav ity Intermediate between tho quartz and Iron concretions, they must also have settled through the earth to tho tied rock, I therefore selected ground on and Immediately about Tablo Hock, where the top was more or less strewn with the so-called rubles, carefully shovelled off the sur face Inch of ground and gravel, and examined It by means of sieves and pan -washing all tho material down to the bed rock. About thirty of these tests were made, encircling Tablo Hock, and lu no Instance was a ruby or diamond found. WflAT WAS l-OUMD IK HUDY Ol'I.CH. 4. Iluby Gulch, leading directly from Table Hock to Arnold Creek, and, by necessity, receiv ing the wash of the gems, leaving a surface of sandstone, waa found to be extremely rich In rubles at Ha head : but this richness, Instead of continuing down the bed, as If genuine It inevit ably must, proved to exist only In ground di rectly at the foot of Tablo Hock, where the soli wasl clearly dlsturlied, mixed, and smoothed over, I tank a series of four pits to bed rock down the gulch at Intervals, excavating probably a couple of tons of material; and although, aa In every other Instance, quartz and Iron concre tions were distributed throughout all the gulch sol), MOT A Kl'BV OR DIAMOND WAS rOUNU, 5. In the top of Table Hock, and In the midst of thickly sown rubles are certain crevices not opened by your parties they are filled with soil and pebbles, and more or less lovergrown with grass, sago brush, and small cactus plants. We carefully removed the top Inch, dug out the whole crack, finding no trace or diamonds or even rubles. In tho crevices, which bore unmis takable evidence nf having been tampered with, we never failed to find rubles, and often small diamonds. 0. Upon raised, dome-like portions nf Table Hock rabies and diamonds lay upon the sum mits and Inclined sides In positions where thn storms of one or two winters must Inevitably have dislodged thorn, and where, moreover, they were unaccompanod by quartz or concretions, TIIK WONOEBrUL AWT HILLS. 7. An exhaustive examination of the rock ma terial itself with a field microscope revealed no grain, however minute, of either gem, it. In the ravines and upon the mesa are nu. morons ant hills, built of small pebbles minced by the ants, and which wo found to bear rubles on tholr surface, A atlll closer examination showed artificial holes, broken horizontally with some stick or small Implement through the natural crust of the mound holes easily dis tinguished from the natural arsnues made by the Insects themselves. When traced to their end eaoh artificial hole hold nno or two rubles. Moreover, about thoso "talUul" hills woro tho old storm-worn footprints of a man. Many out side ant hills wore studied, but thero wero neither artificial holes piercing them, rubles within or without, nor human tracks. NATVHK'0 HTOHEItOUHK Of JKWEU), P. I dlsooverod nn tho table three small emer alds. Humming up the minerals, this rock has produced fourdlstlnot typos of diamonds. Ori ental rubles, garnnts, aplnals, sapphires, emer alds, and amethysts an association of min erals I bellcvo or Impossible occurrence In nature. 10. Whon altogether satisfied that the gems had been "salted " on and about tho table, our party set out upon a werlea of outside prospects, which wero carried on ovor all tho mesa nnd Its flanking cartons, until tho absolute valuelessness of the property was finally ascertained. The result of these ton links of proof oro t That tho gems oxlst In positions whore nature alone could nnvnr hato placed them. That they do not oxlst where, hnd the occur rence boon genuine, tho inevitable laws of na ture must have carried tl.em. Flirilly, that somo designing hand has "salt ed " them with deliberate fraudulent Intent. the vroiiK or .so common svviMii.r.ii. Furthermore, this Is tho work of no common swindler, but of one who has known enough to slect afpot where ovory geologlcol parallelism added a fresh probability of honesty. Iho selection or geological locality Is so aston ishingly considered, tho " salting " Itself so cun ning and artful, tho condition of all condltlona ro fatally well done, I can feel no surprise that oven so trustworthy and cautious an engineer n Mr Janln should have brought home the be lief no did. especlall, when, as ills report stales, ho was not allowed to prospoot exhaustively i nor do I wonder that j ou and a party of ton men brought bark a confirmation of Mr. Janln a opinion, since they, too, were hurried from tho ground without actually testing It. I should add that on the evening nf Wednes day, Nov. 5, when leaving the ground for tho last lime, I met Mr, J. F Herrv of halt I.ako, who had arrived with a prospecting part). 1 honestly expressed my conviction t' him, do tal 3d minutely my mode of Investigation, and em: 'd by urging him to remain nnd s.itlsl) him. sell by personal examination, slmo ho seemed to accept my tcsult without question. A sense of mv duty as u public oRlccrhis Im pelled mo to romo directly and frankly to ymi. gentlemen. In au-wrr to our request that I accompany Clou Colton back to tho ground, wl.lloho and Ills party Imcstlgato for them tolvos, I place myself, my ramp, men, and outfit at his disposal for two weeks, befitting that In so tlolng I shall act as mv chief. MiiJor-Gen. A. A. lliinit'lirevs. would order, wero It possible. at this suuueil emcrcencyf to coiiiiiiuniiaie won him. I urn. with respect, pentleinen, your obedi ent strraut, Cumiknce Kino. United Btatos Geologist, len. Co'lon's llepnrl ThMf p,yiilof thru' rattht f n rn-canl AVie Yori Jlmiugumt Vvminevtiil (' iny. Or.vri.xME : On the first of tho present month I was tendered by jour body tho position of general manager of )our company, under cir cumstances so liberal and flattering thut I ac cepted the appointment, and proceeded at om c to acquaint myself with tho affairs and pioperty of the company. On the llth Inst.. Information having been re celvod from Clarence King. I'liltcd !lnteCe gl-t. In barge or the suncj of tho fourth ar ailcl. from whb h II becaine probable that u great (niml had been perpetrated upon jutir stoi k holders. I Immediately roi ceded. under the ear nest solicitation of your l'.xei'iitlvo Committee, to the purported diamond He ds. Ms party waa made uuof Clarence King, who moit generou!) consent! d to accompany the expedition, and Henry Junlii. who had previously visited the ground and reported on Its value, John W, Host, ox-SuryovoMlcnrral of this Stale, nnd K. M. Fry - the last two gentlemen hating been nn tho ground with what It known st the "Ib'herts lurt."" IN THE DIAMOND rll'.t.PS. We proceeded bt rail to lllack Hutte Station, on tho Union l'oclfle lUllroad lu Wyoming Ter ritory There taking riding animals we reached the ground on the l-lli. It being ill tho Terrltorv nf Colorado, In a duo south direction from IShi.-k lluttc Station, and not to exceed fifty miles therefrom. The locality Is perfectly eay or ac. cess In good weather, being situated on high table land, on tho north side of a pine-clad mountain plain, to bo seen in three hours' ride from our starting point. 'As all the gentlemen with me were familiar with the ground, wo lost no tlmo, and at once proceeded to prospect the property. At the head of what was designated on Mr. Janln" map and report as Iluby Gulch I found a bare, solid table nf sandstone about :U0 feet long by l.'s) feet wide, cut up more or less by crevices, most of them emptying Into Huby Gulch, which runs parallel with tho west face of tho rock. On this table, as I am In formed by Messrs. Host and Fry. tho ltoberts party found the diamonds thoy brought to your company. TTSTINO THE DIItT. At tho head of Iluby Gulch, and close by the edge of tho rock, Mr. Janln pointed to places where most nf tho dirt was taken from which were washed the largo number of diamonds and rubles taken by (len. Dodge, Janln. II arpeii ding, and Arnold to Now York, and afterward brought to Han Francisco. We proceeded atonce to test the dirt In Huby Gulch, and after makliu ntti-slx different tests of tho most thorough and careful nature, from surface to bedrock, tho day closed on us without our having found a diamond or ruby outside the limits of the bare rock first described; whereas, on the table rock, vllhl3 to the naked eye, wero many small rubles and a few small, worthless diamonds, which had been overlooked bt prctlnus parties, On the second day Gen. Host and Mr Fry de voted their time to various tests of the property, particularly In opening ou this roc k two crevices which showed unmlstakahln evidences of not having been tampered with, NO DIAMONDS Mill IU IIIKH. The result was they found no diamonds nor robins, thero or elsewhere, nurlng tho whole day, outside the previously described points where tho first stones wero found. In the mean time Mr. Janln and myself proceeded first to the point on Diamond Creek where Arnold and others did their diamond washing. We found the grutel they had thrown away, and In testing it discovered some small rubles, and found somo of the same stones ou several ant hills near the trail they had travelled while, there. Wo then proceeded on the eastern line of Mr. Janln'a and black's survey nf tho original location, going north; found all tho stakes; and Mr. Janln, as we reached these, Identified all the old prospect holes on the line, from which he took the dirt, with Mr. Arnold, anil he found diamonds and rubles as set forth In his first report. We mado flto separate, distinct, anil careful tests of the dirt in und about each hole, MAKING OVEIl TIUIITT TESTS, and never. In one Instance, found a diamond or ruby. Wo also dug new holes near his old ones and found nothing. In fact, after making uiiuieious tests ninety-three in all, lu different places on the 11) acres of the original location, we never, In n single Instance, found a diamond or ruby. And to show- you the correctness of our tests, 1 placed several times a very small ruby In tho dirt each gentleman worked, and In every Instance they found tho atone, believing It a genuine find until I informed them other wise It further demonstrated how easy It was for one person even, who had the entire confi dence of his associates, to commit numerous frauds on the various members of hlspurty with out their suspecting It. THE 8ALTINO. Among other places I examined waa a point of rocks near by and overlooking the pl.ico where Mr. Janln und others did the nashlng'of the dirt that produced tho precious atones brought to California In August last. On this point I found some rubles scattered over tho bare rock, where, In my opinion. It would have boon as Impossible for Nature to have deposited them as for a per son In San Francisco to toss a marble In tho air and have It fall on Hunker Hill Monument. All these Investigations forced upon my mind the irresistible conclusion that the general as sortment of precious stones found on the ground were not placed there by bounteous Nature, but w era strewn by tho designing hand of one whoso supply waa only sudlclent to place a limited number In the most conspicuous places, whoro the eye of a coming expert would most readily discover them, a rnoriTAiii.E noun's, walk. The previous party, after returning frnm the ground, related that In one hour's walk thoy ac picked up2S5 diamonds. It Is understood these were all found In the locality before de scribed. If so. It Is to be regretted that thoy did not. In the eight days they were on the ground, spend one hour more In prospecting other portions of the 3,000 acres they surveyed. In which event I feel certain that the second hour's labor would not havn produced a single precious stone, leading necessarily to such fur ther Investigation aa would have demonstrated that the diamonds that party found wero all confined to the narrow limits of this small, bar ren, yet prolific, upot, which fact would havo prevented, In this city at least, many unfortu nate complications. Till PROPERTY VALtTXLEBS, Believe me, gentlemen. I waa not unmindful of the great responsibility of carrying out tho oxpedltion, and of making this teport, which fironouncei to-day a property absolutely value aa, having, when 1 left home, a cash valtio or many millions or dollars. The honor of this board and tho Interests of the community ilo-( inandod an Immediate examination offthoprop.. erty without a moment's delay, and before any Intimation could be given of our move monts, It was not a Journey to be coveted ; for no mere pecuniary consideration, I am intlafted, would have Induced any member of our party to undergo all the hardships and perils' of luofi a trip In the mountains at this season of tho year, camping and sleeping In the open air, surrounded much of the time by mow, with the thermome ter 113 to to degrees Oolow zero. In behalf of myself aud the gentlemen who accompanied mo, whosa nsmos are already glvon, the only remuneration we ask at your hands for undergoing the hardships of this Jour ney Is that you will spare neither tlmo, money, nor skill In finding out the jrullty parties to this unparalleled fraud, and b'lnglng them tospcody justice. Tho good nvmool the State and the credit of our mining Interests demand It. PUTT1ISO AM END TO THE MYSTERY. I havn taken tho liberty In this report of nn nountlng the location or tho so-called diamond fields of Arizona, from tho fact that I consider It high time tho alluring fascination of socrcsy and in story bo stripped from this diamond ex cltemnnt, and the world brought to understand that If thero bo any such Immoiiso deposits of privies stones as this present exrltement has led them to bellove tho deposit Is yot to bo found, as It Is my honest belief to this tlmo no now or rich disc ivory has been mndo In the sec tion of country this mysterious whisper has pointed to, i In tho fovr dnyslhavo been connected with the management of Jour company it Is Impossi ble for mo to give oil tho loast Information as to who are tho guilty parties In putting this fraud upon tho world, but the unlmpeachablo Integrity of every member of your board Is a sumclent guaranteo that this Investigation will bo so thoroughly conducted b you as to do Jus tico to all paitlos concerned. Trusting my course In this mnttor may meet tho approval of your body, I remain, t ury respectfully, David D. Colton.. Sak ritAM'isco, Nov. SS, A.N ENDOIl.tr.MKNT, StN Fntnciwo, Nor. SS, 172. Having read tho report of (len, Colton aa the result of his Investigation on tho property or the New York Mining aud Commercial Company, wo cheerfully Indorse, the suciens belli u tho result of our personal Investigations nn the ground with hltn. hollering tho aport to bo a correct statemoiit ol out oxpedltion, Jons W, Host, H. M. Fuv. Mr. Jnnln'ts ltrporl. Tho following Is the report of Biiperlntenilont Henry .liuiln, whose first report of thn condition of the diamond fields wns regarded nn positive evidence ol tho genuineness of the discovery; Han Kntscisco, Nov. 2.", lsT- To Jrut'tn nf He AVw Fort und Sun rtairfi o Mfttng antt Vomnniit VoniJany. Cknti.kmen: Ou tho night of tho 10th Inst. Mr. Clarence) King. United States Geologist in cliargo or tho fortieth p.irallel surrey, mado us tho startling announcement that ho had found nnd closely Investigated our supposed diamond fields, nnd that his conclu sions proved conclusively that a stu pendous fraud had born perpetrated upon us. Mr. King himself agreed to rorogo his intention ol giving immeuiato puiuiciiy m nis detection or the frnud. until wo could send In a party to reinvestigate tho wholo field. With equal kindness he consented to Immediately re- iiort the fatiguing trip trom which ho had but nt retrunod and to give us the benefit of his In urination and Int ostlgatlnns. Our parly re turned last night, we have examined all tho points tested by Mr King, and havo made other additional tost-, nil ol which go to prote that he wa right In his conclusion that the ground it absolutely worthies and not diamond Inur ing, mid that It has been made the field of ATI lNOKNIIH S AMI IMWUOl'8 rllAt'U. Ill company with (len. Colton I relocated tho te-lsmmli' by me on the occasion of tuj first t sit, at points a mini of n mile distant from the "iliseotert ' point. Where 1 had pretlmislv found hnd rei".rf'd di.t n mils und rubles, tti numerable tests showed the ground to be abso lutely barren, showing that tho gems found were pi. iced III the various samples of ground taken between the time they were collected and the time they were wnsliod. 'IhcHOte-ts were made lu company with one of the original and nuptin.ed discoverers. Wo bad no sieves, wllh which one man may tnnke hU test alone nnd una - l-ted. nnd were obliged to ma'.. the tests by the slow nnd labo rious process of dlL'glii. tho gravel, lucking tho same on horseback t'i water and there w.hlng It In gold pans Under these conditions nsslsl nnro oecnuio necessary. Along thoso outside lines wo found, as befure. aeteral ant-hills with rubles on their sides. One was round, slmllnrly prepared, widen 1 had never before seen. Care ful and thorough testa from the eitreme bottom of these hills and from the ground around them showed the gravel to bo ub.olutely barren, and proves that tho rubles on tliein WERE rilAl'Df'l.KSTI.r PLACED THERE, with the expectation that these points being on tho line or surtoy woold be examined, with tho correct calculation that the occurrence or gems under such coiwUilons w mid be considered proof conclusive that tho occurrence was a nat ural one. It was upon one of the-o ant-hill that I found, on my first visit, a diamond so placed as to a pear to bo clearly tho work r nature. Tho same remarks apply to the ant-hills found below tho sandstone bluff, and In the xulcli running with thebliitT. Hero the hills were richer In rubles, nnd yielded mo diamonds In my previous wash ings. Plmilar tests proved that these ant-hills also had been prepared for Inspection. The same evidence of careful preparation can be detected wherever rubles or diamonds are found. In com pany with (.Sen. Colton 1 (inspected the tailing of my old washlngi, aud found rubles. Opposite this point Is an oitcrop or COSntlMEIlATr, distant 2U) j arils from the "discovery " point, and forming a part or the same bluff. My at tention was several times called to this point on my first visit, as hating furnished good pros pects ou previous occasions, I did not then examine this place. as I did not wish to act upon any hints or suggestions aalo tho points I should examine. On this trip, however, recalling these suggestions, I otainlned this bluff and found rubles on the top of the same, and on the large rock, under such conditions that they must havn boon plsc-.l there. It further proved that a line of rubles tverit prnkled from tills point for one hundred nrd; toward tho dl.cov cry. Kepeated tests prove.) inui ine-t. ,.,,,, reiices were superficial and artificial. As for the gulch which dr.ilns tho bluff, and n lib h under honest conditions of tho occurrence of dia monds, where it w in lil naturally bo found ex tremity rich, tho pits sunk by Mr. King, and re-letted by mo PROVED THE SOIL TO I1E II Villi EN. Ilubles and diamonds wero found down to the edge of the gu'cli, mid then stopped. At t lie very head of fie . called " Iluby pulch" Mr. King gathered from one slcveful of grutel forty two rubles. Wo gathered diamonds and rubles frnm tho lace ploco of sandstone ab .ve, as has been done by every party tisitmg the ground. Here, too, tho conditions of fraud nro numerous and Irresistible. Since I professionally examined and endorsed this fcuppocd discovery tho responsi bility of Investment made subsequent to my re port, and tho consequent losses of counc rest upi.li me. I ii partial explanation of tho apparent ansa with which I WAS tlEFOOLED I must bo allowed to go back to the time when I first hoard of this affair, nnd when my services wero engaged. In tho latter part of last May I was lu Now York, and tvus called upon by two gentlemen or this city, both at present largo shareholders In tho enterprise, and with their own means largely engaged lu tho same. They laid the story before me and sllenocd the Incredibility which It naturally excttod by the statement that they themselves had luvestl- f rated the matter closely, that they were assured y the two original prospectors, and behoved that two trips bad already been made by them to these fields at long Intervals, and that each trip had resulted In tho production of large values In precious stones, although their work was dono hastily and with rudo Implements. Those gontlenion named the banks, one In this city and ono In New York, In which the two lots of gems were deposited, assured ma that thoy had full faith In the statements of the pros, rectors, and finally Informed mo that aa a result of their Investigations, and of their consequent faith In tho Integrity and value of the discovery, they themselves had PURCHASED A LAflOK JOINT INTEREST at high figures. This last statement I Investi gated and verified. One or these two gentlemen subsequently accompanied me to tho fields and shared my favorable opinion. While discount ing very largely In my own mind the statement of tha prospectors, aa quoted by me, they atlll left me firmly Impressed with the belief that such large sums had been obtained from thli ground aa to preclude any suspicion of salting. Diamonds and rubles, both In the rough ana polished state, were shown to roe, and in good faith, aa coming from these fields. The dia monds were, many of them, of considerable value, and wero ranked aa a high average, quality by New York lapidaries. The diamonds plckid up by tho last expedition are MOSTLY SMALL AMD WORTHLESS, and are tho refute of what were obtained by the earlier expeditions. On my way out I waa told In great detail the story and adventures of tho two so-productive trips. I looked upon my Investigation aa under taken not to determine tho fact of the discov ery; but to ascertain approximately the extent und value of the same. Having thus good ground! for believing In tho honesty aud productiveness of the discovery I was 111 prepared to become A VICTIM TO TrlE riUCD which I havo slnco discovered waa to carefully .prepared fnrwhatever engineer should be select d,to make tho examination. Had I b.en al lowed more tlmo, an I desired, In which to make my Investigation, It Is prnbaha that I would have detected tho fraud. At the same time It la posslblo Hint tho same sailing game might hays beon kept up and my good opinion of the prop erty hato boon not only continued but Increased. With tho lights beloro thern, finding diamonds ao readily, und considering, they did no out side proipoctlng.lt la not surprising that the tonVoml era of iho ltobirta party confirmed my orrnnuoua report, A further explanation of the mistaken, opinions of myself and others Is found In tho patient, In genious, and audacious nature of the fraud. Verrtrulj-, your obedient servant, (Hlguod) IlEMitr Janin. Additional rartlonlnra of Iho Monstrous fvrlndlo-IlevT Janln tsaa Hoped Into the Consslraor llnrnendlnr nnd Dodge Onon. ly Arcnsed of Complicity In Iho Frnud. Inmlht Snn Frnnrlfo ChroMctt, Sot. H. Tho (llainoiiii qtiwtlon contlnticxl to be dismissed In business circles yesterday. Tho standing of Itoborts. Harpendlng, ltubery, Dodgo, Lont, Arnold, Black, and other persons who havo hoen Identified with the great exelto inent formod tho chtof topics of discussion, Itoberta appeared as usual upon tho boulevard, arrayed In his ordinary suit of gray, A confident smllo played across his features as friend after friend cams up, and addressed him with some Jooular remark about the sudden cniupao l his great diamond schemes, llarpcnillng's black eyes shono with a sinister bistro ; otherwlso he soemed entirely at his case. Mr. ltoberts expressed his entire concurrence in the reports or King nnd Janln as to the salting R recess, but Inclines to the theory that Arnold as a vatuablo find In the vicinity. The fact that King reMirts thn country thereabouts as geo logically diamond bearing strengthens his ho lier. Many wero tho comments passed upon the King and Janln reports. It was thought strango that Janln could bo hoodwinked nnd led nbout by Arnold, when Kins Instantly dis covered peculiarities which set him on bis guard and led to tho discovery of tho gigantic swindle, and tho mutual admiration evinced In those reports- King for Janln and Janln for King-caused somo comment. Notwithstand ing .Icnln's candid avowal of 1I1E WAT IN WHICH HE WAS TOOLED, ho has lost tho confidence of many who went their bottom pile on him. All experts will make errors of Judgment, but Jniiln does not seem to hato exorcised any Judgment whatever. Instead or examining tho reports or others with a view ti their verification, he allowed tho same per sons to do nil tho examination, while he looked on and said "All right." Janln mado no attempt at examination himself, but followod tho beaten track laid out by Arnold. Soma iiinuscmetit was created on the streot early In tho morning by tho appearance of a wagon In which wns seated an Individual vend ing the " Original Diamond Tooth I'aate." He cried It out with roclfrrous voice, and answered all Inquiries as to whother It wns "Harpend Ing'a best " with ready wit. There were but fovr purchasers, however, no one seeming to care for diamonds In any way, shapo, or form much lots as tooth powder or tooth washes. WHO ARE THE S ALTERA? Tim oiiesttnn most fronueiitlr asked nn tho street was; "Well, who Is the chief Salter?" Many different answers were glvon. Among others, nn operator remarked that he thought "the Krothertons were at tho bottom of tho whole nffnlr, and It was a wonder the newspapers didn't Intervlow thoso worthies," An expert said that It was singular the thing hadn't been discovered before, from the fact that tho sailors overreached them. elves In tho salting pro cess. Tho Arnold party, It will bo re membered, brought back diamonds, rubles, nmethjsts, emeralds, garnets, splnals, to pazes, and wo don't know how many other Jewels. Their "find" was like the In exhaustible bottle turn out nny thing that was wanted at a moment's notice. Now. said tho expert, anjbody wiio knows anything about geology must have known that these stones cnuldii t bo found together. Diamonds are pure carbon, and what would have formed pure carbon would have consumed tho other stones. It Is said that a letter was yesterday re ceived by Mr, Guldsinlth from a firm In Amster dam, throwing cold water on tho diamond ques tion because of the finding or so many different stones. The trouble with our California sharps, from Janln down to Gillette, seems to havo been that they presumed that diamonds existed, and It wu4 only u question how many carets could be round In a square root or gravel. It seems very strange that If lloberts and others Interested with lilm wele cognizant of THE SALTIMl PROCESS they should hate taken such extraordinary meas'ires to secure title to tholr field. It Is well known that the mineral laws were amended at thrir suggestion so as to Includo diamond fields under the words, "other valuable or mineral de posits." If they had desired simply to get up a swindle and get rid of their stock, they would not have troubled themselves so much about title. It makes very little difference now who holds the title. It Is not very probable that tho diamond fields wjU !,o worked In the spring, unless some Inquisitive fellow wants to sea how many diamonds are left out nf the ori ginal salt. Investigations are progressing to discover the saltern and their confederates. It was stated yesterday that Arnold was on his war bark to California. It is not very likely that Arnold, Black, or any other man, against whom suspicion Is directed, will willingly put himself within the reach of Inves tigation. If they could bo made to disgorge their Ill-gotten gains, II would bo some satisfac tion to the capitalists who to-day regret the loss of their diamond venture ; but it wouldn't mend matters so far as California's reputation for sharp practice Is concerned. The story has gone forth, and Is being discussed to-day In every F.uropoan centre, In English, German, French, Spanish, and In every known and unknown language, California's fame niay not have heeli very extended heretofore. Travellers tell us that thoy don't know-much about California In L'urne. There need bo no fear but what this diamond story will spread far enough to make California famous, or Infamous, according to tho view which will bo taken of the plot. THE RAMirtCATIONR Or THE JOD. Now that the whole thing has been officially declared a fr.iuil, It Is quite Interesting to know how the Inli was put up and all about It. Janin, perhaps,! not criminally to blame, although his reputation as a geologist and mining engineer will have received a blow by this rrom which It will bo hard for lilm to recover. Ills first con Iiecllot, win, ! MfTnlr seems to Date hern 111 Now York InU spring, where he was approached bj Harpendlng. Gen. Dodge, nnd Arnold, tho "discoverer" of the wonderful Golcondn. They told him that Arnold and Blackball mado two trips to the diamond fields, securing In the first Instance a bag of prerlous stones valued at Jt.uii.m), which had been sealed and deposited In the Hank of California: nnd In the second, a bug of gems valued nt f-'SM0, the latter being deposited In the banking house of Win, II. Dun can & Co. In Now Yoik. WHAT TirrANY TOI.D JANI.V. Ilesldes all this, Janln was taken to tho private, residence nf Tlffon)-. the great New York Jewel ler, who told lilm In presence of Bam Harlow, Gen. Meridian, and other panics that the esti mated taluo of tho gems In Duncan's bank wns JIMl.Hfl. This statement, emanating as It did from so reliable a source, could not fall to dis arm whatever suspicion there was In Janln'a mlnil. unit thn ciiiisemierien u'iu ti wh, t,u,-t effectually roped In. Harpendlng and Dodgo told Janln thut Arnold received IOO,lil for his first trip, and by sundry plausible statements thoy Induced Jnnln to visit the diamond fields. These gentlemen promised Janln that ho should hato two weeks to examine tho ground and Investigate tin geological formation, and when ho reached the spot thoy kept lilm employed lu surveying and making mining laws for a wholo week. Boon otter, when he began to prospect, Dodge nnd Harpendlng 'hurried him away, against the promise, and hud him make hi. first report In New York, In which he says; " HOW JANIN WS8 lll'RHIED AWAY. I hia only time to gather samples from thnte portions of trie 10. fr t'loek of ground which are uurkeil en ttie scciiiiipiuijlng plat. At earli one of the points nunibereil illiuimtiils or rubles wero found, as prr en closed sinples, Thrso points wtro ott-rnoc-llilrdof a mile distant from trie orlglusl discovery, sud sliuw a Tf ry large srrs lo lie diamond and ruby hearing. The samples were takrii from Hie aurfare. It la probablo that at a grester depth larger diamonds would he found. The amount nf pro.prctlng done was IralKnlncant.and does not enslilo mo tu form a pjdgnirnt ai to the et tent or limits either et the very rich or only modcratrly rich (rounds. Ihsve alrrady shown that It requ res only one half aero of the very rich xrnund to repay the porchtao money, aud site that If the wholo lift acre tract wilt produce gravel of an avrrago value of 1 pr ceut. uf tho value of tbo one aud a halt tons washed (tS.mtiper ton) it would furnish an Immense value In illsmouils sud rubles, I consider this a won dcrfully rich discovery, sad ono thai will prove ex tremtly profitable. That while I did not havo time csoogti to make Invtstlgslloot which would have so. swcied very Important quritlons, I da not doubt lhat further proiptcting will rttult in Ending diamonds over a greater srea loan Is as y tt proved lo be diamond bear ing snd finally, that 1 consider any Int tilnirnt.ot 110 per thsre, or si the rste of t nju,ugo for ins whole pro perty, a ttft and attractive one. BIN BUTLEIt TAKEg A TtAND, While Janln was being Induced to Join the en terprise and to make a professional survey of the ground, the projectors of the scheme were at work In a new direction, Oen. Bam Harlow set a ball In motion to secure a United Btates I latent to the tract, and also legislation directly ooklng to the development of tho diamond mines. He draw up Mho celebrated "l'lacer Mining bill "and gave It Into tho hands of that Immaculate legislator, Oen. Ilonjamln K. Kutler of Muaaobusetts.to engineer through Congress. Dsn' wonderful sagacity and a thousand sharoa of the Lent-Harpendlng diamond stock, tu hltn In band paid, enabled him to see the great ad vantage this bill would bo to the country, and he finally secured Its passage w ithout difficulty, Oen. llufler't stock Is not worth much Jutt now, but then that Is not his fault. WHAT JANI.V GOT 1011 HIS SKlt VICES. Hefore Janln went In tlio first time lio was paid t2,600for his services by tho company. This was a mere professional fee, nnd Is not believed to havo been Intended to socuro n favorable report. Ilesldes the -.rs, ho tv.m glvon the privilege of purchasing l.tmo shares of tho stock nt f lu a share In currency, which ho did purchase In Now York after hit return from tho llrlds, This stock ho at onco sent to Bun i'renclsco und sold at Its till value IOa share. In gold -thus cloar lngoTer3ti.u0i) by tho transaction. Whatever suspicion of the Integrity or laok of confidence In tho professional ability or Janln may grow out i of this matter, It is evident he has boon mado the dupo of others. Ills reputation though has suffered a blow frnm which he can scarcely hope to recover, and for which $30,0W It hardly au adequate recompense. wno xnx mtoNOf.T suspected. Next to Arnold, of whose guilt there can hardly be a reasonable doubt, Harpendlng and Oen. Dodge are the moat strongly suspected of complicity In the fraud. Harpendlng and Dodge wore both In New York, as we have related, whon they secured the services nf Janln. Nay more, Harpendlng was In London when tho ttonos were said to have been purchased there of l'lttar, Levlson ft Co. , and Keller, tho dia mond men. These facts, In oonneotlon with other things which have come to light, have ranted a grave suspicion to fsll upon both these persons, (len. Dodgo was perhaps Ignorant of tho fraud In the beginning, but It Is now believed that he knew of the sell long before the crposl by Clarence King, and lm (roved tho opportunity to get all his money isck that he put Into It. lie was heard to say bore before he went East that when Oen. Colton camo back he would bring bad nows,and soon after left for tho East, as Is believed, to tee Ar nold and get his monoy back before tho thing should explode, A photograph of Harpendlng was sent a week ago to London to l'lttar, Levl son & Co. for Identification as the man who pur chased tho brilliants. If they Identify Harpen dlng as one of the purchasers things may be mado warm for him. THE ItARD-IIEARTED OEOLOfllnT. Clarence King, United States Geologist, whose researches on tills coast have won tor him an enviable reputation among scientific men, not long since msdn an official Investigation of the belt of country In which the alleged diamond fields were located, and when the news or the discovery had been thoroughly disseminated and tho qiiostlon was assuming a serious aspect, he determined that he would make an official visit to tho fields on his own account and with out the knowledge of any of tho Interested parties. He entered the diamond fields with ono of his surveying parties, known as the Fort Hridcer Division, and made ocare f ill estimate of the country. After satisfying himself that the whole thing was a fraud, ho hastened to Ban Francisco to lay his astounding discovery before tho directors. He knew no one ot them personally, and did not know where any or them lived. Ho did know Janln, and lilm ho hunted tip the very night he arrived hero. Janln waa in bed at the tlmo, but King waked him up and conveyed tho dltsgreeable Information. Janln would not believe hltn at first, but the goeloglst sat down and before morning convinced him. Next day thoy went together and saw Mr. Ilalston. This gentleman poo-poobed tho Idea that there was frnud, but he finally consented to permit King to make a report. Then the latter made the renort which was Printed yesterday. and which It will bo seen bears date Nor. 11. the la-Btir.x burst. The report was so comprehensive, so convinc ing, that the directors' faces turned white when they heard It read. They at onco resolved to ferret the thing out, and for that purpose Gen. Cotton's expedition was fitted out, and Mr. King kindly consented to accompany It with Mr. Janln. The whole matter was kept strictly private, not even the principal shareholders knowing anything of It. Tno only persons that knew of the explosion were King, Janln, Italston, I6iit, and Colton, with the two who ao rouipaiitcd him on his trip. Gen. Host, and K M Fry. Tho feelings of Messrs. Italston and Int during the absence of Cotton's party may bo bet ter Imagined than described. They had King's report In tholr hands, and they know If that was verified thoy were out together nearly f VM.CsS) I Yet they kept their own counsel, and It Is even said that Lent was qulto cheerful. THE LOCATION OK THE I'lELD. Tho diamond field Is located near Vermilion Creek, forty-five miles from Hlack Hutte Btatlon, directly on one of tho prominent geodetic sta tions ofthe Geological burvey. It Is at the north base of a plne-cl.id ridge that runs east and west, north of Krown's Hole, and Is in Colorado Territory, eight miles south of the Wj-oinlng line. At this point Is a mesa about 7,o00 feet high, gently sloping to the north, and cut by cations five or six hundred feet deep, which carry off the drainage of the pine ridge Into Ver milion creek. This intm has a comparatively smooth surface, which Is broken only bylwu masses nf sandstone, which rise above Its level. Bomo of the vallets near this spot are charming In appearance aud abound In the. flutist of game, such as deer, el!:, triilles, Ac, though the climate, save In sheltered spots, Is not one of the finest In trie world. The summers are cool and the winters very cold, and hurricanes sweep over the country about two-thirds of the year. The diamond field Is not located In an Indian country, though the straggling I'tes occasionally pass over and near It. These Indians are nominally at peace, and would not trouble whlto men unless a good opportunity offered. TIIK GOLDE1T YIStONS. The hopes of the diamond men seem to hate been without limit. The property of the com pany was so large and Its value so enormous that thoy had resolved, for Its better security and to keep out all proipectcrs, to divide It up Into eighteen different tracts of HS0 acres each. These tracts wero to be given to eighteen differ ent companies on the most favorable terms. Each company was to organtze with a capital of 10,UXU'"J, divided Into luu.m.0 shares of flUU each. Halt of this slock was to ho retained by tho parent companj-. and the other half Issued and paid for out of the proceeds of the ground. In other words, each of the eighteen companies wero to pay VUXVJUO to the parent company, but all payments were to be mads from the pro ceeds of the diggings. Bo all the capital required by the young companies was f-.VUO or $10,(Xi0, enough to fit out ten men and set them to work, which last was one of the conditions Imposed upon them by the parent company, HOW THE aCDOKONS TOOK THE HOOK. These terms wero considered so favorable that It was not n question of how thoy should dlpose of those HW-acre tracts, but who they should let In, Thev wanted good men, and the parent company were very chary of their selections, Tho applications were Innumerable, but It was finally agreed that each of the following named gentlemen should bo permitted to organize a company and take possession ol a lfiO-acro trnct ; (len. John T. Miller, Lloyd Tevls, Chus. Freeman, 11. II. Wakelee, the druggist: Col. .1. 1). Fav, J. W. nashwllcr. John F. CassoUl, II. F. Bherwood, J.J. Wllnicrdliig, S. II. Koawell, A. O. Klusey, and Mr. Llghtner, brother of tho ltaymond -i:iy superintendent. The Original Diamond Min ing Companj, lu consideration that they had a claim adjoining the Harpendlng tract, were also to bo allowed ono of the locations. The second choice the parent company reserving the first choice, of course -of all the tracts was to be given to a company organized by Gen. Host, John 11. Koyd, K. M. Fry, Gillette, and others, the party who went In with George lloberts on the "assuring" expedition. In grntltudo fur their services ou that occasion the parent coin company wore to give them one half of all they took out, aud they were to pay nothing what ever for the claim. MR LATHAM'S HONOR. Oen. Colton was among the last of our wealthy men to get Into tho company. Aswas narrated In his conversation ou Monday with a Clironltle reporter, he got In on tho !ld of November by purchasing from Mr. Latham five hundred shares of the stock for f-H.IWi. Yesterday, when tho official announcement wns made that tho wholo thing was a swindle, Mr. l-atliam came to Goti. Colton and handed him back his ta),lAM, with the remark that ho could not conscientiously keep the money, for when It was paid him lu good fulth Clarence King was oven then busily working out the fraud. Buch an Instance of honorable deal ing as this is worthy of especial mention In these dajs of financial scheming and business shrewd ncs. Heme Accouut of the .lien Charged ttlth Originating tho Hnindlr. JVom Me ivt lYancUco Chronicle, yor.it. California, strt'ot was very much oxoitort yesterday, Tho Block board was not excited upon tho question of legitimate mines, but tho members talked diamond stock. Financiers and bankers, brokers and merchants, clerks and book-keepero- -all discussed the question of "bilk or no bilk" from tholr respective stand points. And as William M. Lont or George D. ltoberts or Harpendlng appeared upon the street, they were followed by a number of eager eyes, who looked as though, they wanted tu see now many diamonds each carried In his vest pocket. It la needless to say that neither of these gentle men appeared entirely at ease yesterday aa they passed along, the observed of all observers. Lent's hair seemed a shado grayer; lloberts' eyes were quick In their movements and glanced nervously around; Harpendlng clutched his cane with a feeling of insecurity, his dark orbs glistening with uncertain excitement and a crowd of lessor diamond operators moved along the street Interviewed at every step by curious persons. Hero Col. M. G. Gillette was the cyno sure of observing ojes. The Colonel jetterday was 1IY NO MEANS EXL'DKIUNT, and yet no ono doubts that ho told tho truth ox aetly as It appeared to him nt the tlmo. Until his dying day he will never know how they could have "salted" tho roots of a cedar tree wherein ho found several diamonds. To an other or more srlentltln mind It might havo appeared strange that diamonds were found In so undlamond llko a locality. Toward noon quite a crowd of expectant observers stationed themselves In tho vicinity of tho Hank of Call, forniii, whoro It was thought tho mooting of tho Directors of the onco big company would meet. Boon they congregated, each coming with low ering brow, compressed Hps, aud a general air of supreme Indignation qulto foreign to their usual amiable countenances. There came Gen. D, D, Colton, the chief expert, who wont to the fields two weeks slnco with King, tho geologist, and others, Colton looked as If ho knew a thing or two and meant to impart sumo of his Ideas to othora, while W. C. Italston moved about ner vously, It wasn't ALL IIEUW AND NO TAII.I to them, The only gentleman who looked qulto au tuitmd vru Huurv Jauin. HI oros had boon vpened nn his second trip, and he had avIdenUtf oonoludod to go back on hlmtelf a quietly as possible. When the small board of brokers metyestoo day morning one of tho operators created a sen-. satlon by calling up the "New York and London Commercial Company," and offering the stock at a low figure. Jack MoKenty offered II per share. In the big board Charlie Btoutenborougit offered some of the stock, seller 90, but no on hid therefor. The stock couldn't very well hayei been given away. It would be Impossible t , give any adequate Idea of all that was said on the subject of diamonds In general, anal thoso ot tho ltoberts Company In par ticular, yesterday. A Chronica report took particular pains to oount, and notes 19.105 persons who had " all along de clared that the reported diamond discoveries' were bilks arid swindles." And how oraoutar they became In discussing the subject I What learning they exhibited I How could dlamonda be found In such geological formations? only thirty miles from the railroad bosh I And then they sot about to designate the Bwlndler-ln-Chlef-the Orand Baiter of tho Plains. Arnold and Black wero generally doslgnatod as tht) salters, becauso thoy reported the grand dis coveries. With them Janln hsd examlnod tht fields. They washed out tho diamonds while Henry Janln stood by picking his tcoth and say ing "Oood," Bo the common sentiment nf tha people conrluded that Arnold and Black had done the dirty work, llut WHOSE DRAINS 8U0OE3TED THE ORAND BCnEMEt Whose prolific, mind concocted the details ol the plot? Who went to London and purchaaoJ tho rough diamonds? Who furnished the cap ital for tho purchase of the "csrntsf" Who en listed the interest of tho Ban Francisco capital ists who engaged In the schemer All thoss questions wero more frequently asked than an swered. Tho general current of suspicion I an against Harpondlng and ltubery. lloth of these operators were connected with tho pirate Chap man several years since, and It was thought that ltubery had furnished the braluwork ol the plot, while tho more active mind ol Harpendlng suggested the details and car ried them to a successful termination. The names of lloberts and Lent were occasion, ally mentioned In this connection, but thoss who really believed that thoy wore connectod with the swindle wero not quite so numerous. Huberts was chiefly blamed becauso of tin mastery which Harpendlng scorned to possost over his mind. Ono gentleman who knows both well, remarked, "ltoberts Is too honest. Tht boj-s pull tho wool over his eyes easily. Thoy used to do It up In Gross Valley; for while , ltoberts haa a big head and plenty of brains, hs V Is too sanguine and roufldlng tube smart, liar. W pending threw diamond dust In Huberts'! eyes, and ltoberts was blinded." ARNOLD, the man with the dyed whiskers and blue eyes, made his appearance In Ban Francisco a few days itflcr the ltoberts party returned with what seemed to them the Indubitable proot of tht existence of diamonds. His object In coming wns to receive his share nf the plunder whlob which bud been deposited to the credit of Har pendlng In the Hank ot California. Having Iilaccd the money on special deposit, he left tha lute with his certificates of deposit and has not since been seen. It was rumored that long before he received the reward nt his doubtful enterprise he hnd presented his wifo with a largo number ot diamonds, and there aro some people hviv wbu luuil i ,.uii ti.u, im , oob.oquotico. Thoy nay Arnold really found diamonds snmurhctr; with these diamonds ha salted tho Now York Companj's claim, and re ported It to ltoberts and Harpendlng, who tout him out to limit for precious stones. ARNOLD STILL OWNS HIS OVfff EIND snd can tako therefrom nil thn diamonds ho wants. Among others who wero reticent was Harpendlng. When Informed that develop ments showed the wholo thing was n swindle, ho declared he wouldn't bollove It until con vinced by tho evidence of his own eyes ; that he proposed going there In the spring and seeing tor himself, lie then put tho following ques tlon : " Supposo lhat Clarenoo King says that owing to the geological formation ot the ground diamonds cannot lu the nature nt things bo found; and supposo Henry Janln now makes a report sating that ho was mistaken In his first report, nnd that thero are no dia monds there, what would you sayr" Harpend lng vouchsafed no answer to this question. Al fred Kubcry acted ns pilot to George ltoberts when ho " went In" to the iddos! fields a few months slnco. He had been left originally on the field to watch and wait. Hut It was lonely work, and thinking the diamonds wouldn't run away, bo took a juscar to Baa Francisco, He says : " I never had A CENT'S INEEREST In the company. Having nothing else to do I w ent with Harpendlng and Arnold to the ground. Thinking It was all right, 1 took up a claim for myself -but beyond this I own nothing thero. It there was any salting It can't be proved by me. And yet all tills Dullness will find Its way to lin den and be published In the 71mr, and my nam connected with It, and all for, nothing." Mr. ltubery appears to bo a very Innocent young fentleman, and were tt not that Innocenoe, ike beauty, Is only skin-deep, he would re ceive more general sympathy. It was very difficult to find snybody yesterday wtro ever owned any diamond stock or had ever boon promised any. It was either, " Never had any." or " I sold out 5 month ago." John Ilosenfeld, the popular Harbor Commissioner, Invested 1.000, " lor lurk, you know," and was tho only one who took the matter philosophically, and didn't get tils mad up. It was known that Oen. Gashwller had put In about .V),000. but good au thority was round In Ids absence for the state ment that ho had cleaned up some of his "dia mond plunder" before tho collapse. Ho ven tured bis money entirely upon the strength of JAKlN't) CONFIDENTIAL ADVICES. Up to within a short time ago Janln was re ported to have been a purchaser of the stock. Other reports are to tho effect that ho longslncs sold his I .nut) shares at bedrock prices, rubllo sentiment seemed to conclude that, after all, those who had been tho favored few, let In by special privilege, could stand It very well. They nre all rich and well-to-do, and say jrm,Ul (i.l.Uti) shares at ftn scattered among twenty or thirty ot thvso cannot do much harm. Ilotv Urn, Collou was Hoped In. Vom Mr &in Francitco Chroniclt, .Vor. ii. (leu. I). I), (.'olltui Inst nlnht Kitvo a Oirnnfclf reporter the history of his connection with the Diamond Companj'. He said thaths was first Invited to Join by Milton B. Latham, who had l,u) shares or thn stock, aud offered him one-half of It, Bald (len. Colton: "Latham and I talked tho matter over, and finally I said, Let mo seo who aro In It?' I counted on my fingers lloberts, Harpendlng, Arnold. Lent no. I guess I don't want any stork. Latham 1"' Iteporter That looks as If you had but little contldcnco In the projectors of the eulurprise. (len, Colton Well, 1 didn't havo much. I know HaroendlriLF to lio n wild, reckloss fellow, and. to fell you the truth. I didn't waul to have any thing to do with them. Iteporter- How did you flnallygot In, General? Gen. Colton Well, you know, I'm pretty heavily Interested In railroads, and enjoyed pretty good facilities to get to the ground, and as I waa a disinterested party, Ilalston, Latham and somo or them wanted mo to go to the Holds. Bo I got ready aud went up the road, but Just as I waa about to strike Into the diamond country lgot u telegram from lloberts felling mo to coma back, lloberts sold ho and his party had Just returned from the fields, bringing nn abundance of diamonds quite enough to satisfy every body. Ills report was on the whole so favorable that 1 gave ujitho Idea of going In nnd camo back to tho clfy. I wisli now I'd gone In, for laughing 1 haven't near as much faith lu ltoberta's report now as I had. I Iteporter Did you buy In, then? Gen. Colton i es. After lloberts got back Latham saj's to mo, "Now, Colton, don't you want sonic of that stocky' I said, "Yes," and ou the3d of this month Igave my check lor t0,. till for fsiO shares of the stock. Heporler Then tho company reorganized, didn't It? Oen. Colton Yes, Thero was an executive committee formed of Louis Sloss, Latham, and Maurice Doro, with Mr. Italston as a kind of an advisory member. I waa appointed general superintendent of the company. After that I fot an Inkling that the whole thing was a fraud rum Clarence King, and then 1 made up my I mind to ferret It out. ,i Iteporter And you went right up there? Gen. Colton-Yes, but kept tho matter very 1 quiet. There were only four ot us, Mr. King, , Mr. Host, U. N. Fry and mjself. The only per- I sons In Ban Francisco that knew our errand wore Italston and Latham. , . 1 lleporter Well, now. General, whom do you I suspect of having put thn Job up? ... . Gen, Colton (wllh u deep sigh and a shrug ot , tho shouldersl-That Is Just what wo are going j to try and find out. 1 don't believe that Arnold and Black did the job without IisIp. 1 Iteporter Will thero ho an effort mads to pun- ' ish tno guilty parties? Gen. Colton Yes, Indeed ; there will be no effort spared to that ond. STSl'lCIO.NH or lunpENDnso. One fid s pointed to as being verv sutplcloul i In regard to the connection of Harpendlng with tho affair, namely, that ho was In London at the . time tho diamond brokers ot that city reported 1 tho rvmurkablo sale of rough gems to have 3 taken place. Another Is, that from tho Incep- ' tiou of tho movement Harpendlng acted at the v flnanclnl agont of, Arnold aud conducted all his negotiations until a very recent date. Oen, George B. Dodgo Is also entitled to the floor In regard to his connection with the affair. ' Hu was among tho first who visited the ground, having gnno there with Arnold, Black, Harpend. lug, anil ltubery long before Janln ever saw (he place. Ho therefore occupies a rather proiiilnvnl position as one of tho sponsors for the arrange ment. And slnco Arnold's last departure from this city Hon, Dodge has been his i oufldenllsl agent, r)u great was Arnold's confidencu lu tin CtmHiiti4 on Second I'uoe.