In July 1872, according to court papers quoted by Woodard, Philip Arnold bought a two-story brick house in Elizabethtown, Kentucky, and moved his family into it. After acquiring some 500 acres nearby—all of the property was in his wife Mary’s name—he bred horses, sheep and pigs. A grand jury in San Francisco indicted Arnold and Slack for fraud, but the contents of the indictment were never revealed, and Woodard speculates that they were quashed by the investors to avoid further bad publicity. Arnold answered the news of the indictments by telling the Louisville paper that “I have employed counsel myself—a good Henry rifle.” But he eventually did settle out of court with William Lent for $150,000, his only acknowledgment, though tacit, that he had planted any diamonds. In 1873, Arnold became a banker himself by putting an unknown amount of money into an Elizabethtown bank that had temporarily closed its doors. An 1878 quarrel with another banker in town led to a shootout that injured three bystanders. Arnold took a shotgun blast in the shoulder, but was recovering when, six months later, he contracted pneumonia and, at age 49, died. Although he left his family comfortably off, several hundred thousand dollars have never been accounted for.
Even before the Diamond Hoax came to light, California had had more than its fair measure of frauds—from the routine salting of land with gold nuggets during the gold rush to faked reports of oil finds costing investors millions in the 1860s. “I see the Diamond Hoax as one in a long line of scams made possible by the fact that the United States truly was a land of opportunity,” says Patricia O’Toole, author of Money and Morals in America: A History. “Many a legitimate fortune seemed to be made overnight,” she adds, “so it was particularly easy for a con artist to convince a gullible American that he too could wake up a millionaire.” Moreover, as Jackson Lears, a professor of history at RutgersUniversity and the author of Something for Nothing: Luck in America, observes, “The 1870s was the golden age of gambling, due to an expanding post-Civil War frontier economy.” He is hardly surprised that such supposedly sophisticated investors were taken in. “In an unregulated laissez-faire economy,” he says, “licit and illicit risk were difficult to distinguish; only after it had turned out well did a speculation become an ‘investment.’ Playing the market could be just as shady an enterprise as running a three-card monte game on a steamboat or organizing a diamond swindle.”
No wonder, then, that press and public alike greeted King’s exposé so gratefully. The Chronicle editorialized that “We have escaped, thanks to GOD and CLARENCE KING, a great financial calamity.” Echoed the San FranciscoBulletin, “Fortunately for the good name of San Francisco and the State, there was one cool-headed man of scientific education who esteemed it his duty to investigate the matter in the only right way.” Many saw the unravelling of the hoax as a welcome case of government acting on behalf of the people. Clarence King, says Lears, “looked forward to the 20th century, when management rather than morality became the chief idiom and technique of control. He was the sort of man (or pretended to be) that we like to think our government regulators can be today—expertly informed, incorruptible, calmly surveying the scuffle of self-interest from an Olympian perspective, one which protects him from the irrational exuberance of the clods who think they’ve struck it rich.”
King’s role in exploding the diamond hoax made him an international celebrity—the case was followed closely in newspapers in London and New York—and he dined out on his deed for the rest of his days. Earlier in 1872, he had published a series of sketches from his time with the California survey, called Mountaineering in the Sierra Nevada. The book was a popular success on both sides of the Atlantic, and even today it is considered a classic of American nature writing. He counted among his friends Henry Adams, John Hay and Henry James. In one chapter of The Education of Henry Adams, Adams wrote of King, “None of his contemporaries had done so much, single-handed, or were likely to leave so deep a trail.” Hay called him “the best and brightest man of his generation.”
Upon completion of the fieldwork for his survey in 1872, King returned East where, for the next six years, he oversaw the publication of a multivolume report of the survey’s findings, culminating in his own work, Systematic Geology, published in 1878, which one critic called “the most important single contribution made to the scientific knowledge of the continent.” But even as he was finishing the book and starting a two-year stint as the first director of the United States Geological Survey, King’s attention was turning from one Gilded Age secular religion, science, to the other, the pursuit of money. He tried ranching, mining and, like Philip Arnold, banking, but he didn’t have the knack for any of them. He lost more money than he made, and he lost the money of many of his friends as well, though both Henry Adams and John Hay remained loyal. And when, deep in debt, King died of tuberculosis in a small brick house in Phoenix in 1901, just shy of his 60th birthday, his old friend Theodore Roosevelt sent a wire of condolence from the White House.