Financial Doldrums: The ADC, 1912-1919
In late 1911, a frustrated John Fuller stopped working full-time with the ADC, remaining involved with the company only as an investor and informal consultant. In 1913, he became a consulting engineer in the Arkansas Bureau of Mines, Manufactures and Agriculture.
The ADC kept processing material at the pilot plant in 1912, irregularly “but always with results in the way of diamonds recovered.” The following year, operations effectively halted; Reyburn and his board of directors began pondering the future. These items in the company’s balance sheet of April 1914 helped clarify their position:
Cash in Pike County Bank, $10; interest account, $11,521.62; value of rough and polished diamonds left on hand, $3,855.68 and $80l.55, respectively; bills payable, $46,302.82; interest payable, $3,365.97; bank overdraft, $181.83; owed to Reyburn, Stifft, Cohn, Fuller, John Peay, Lee Wagner, and Moorehead Wright, $8,000.
On June 8, 1914, officers of the company convened stockholders in Little Rock to approve a bond issue covering “the present indebtedness and probably $5,000 to $10,000 additional advances.” The notice of the meeting expressed disappointment over the lack of support from the public at large: after five years of effort, the company still had failed “to pay out the property and make a thorough test of its value”; four serious attempts with “strong financial groups” had failed because of unsatisfactory offers. With no alternative, stockholders approved a first mortgage on company property to back a maximum bond issue of $100,000, to be initiated at the board of directors’ discretion.
About that time, associates in New York City asked Sam Reyburn to come and handle finances for Lord and Taylor, a large and struggling corporation owning a string of department stores. Reyburn had been a director of the American Banking Association and gained stature from that role; but, as he acknowledged years later, the key to his advancement lay in the difficult London negotiations in 1910, where he had the opportunity to demonstrate his abilities to powerful investment bankers. “If it hadn’t been for Murfreesboro and London,” he said, “I never would have gotten to New York.
Thinking the job in New York would last perhaps six months, Reyburn left the ADC’s property in the hands of the man whose honesty and mechanical skills he had learned to respect—Lee J. Wagner, the brother-in-law of John Huddleston. Wagner had sold his farm to Reyburn’s group after the discovery and gone to work for them. While overseeing the diamond field after Reyburn’s departure, he decided to continue working the surface layer by rigging a large hose to the water supply of the processing plant and flushing the tough black gumbo through sluice boxes. Wagner “was industrious and loyal,” a grateful Sam Reyburn said a few years later, “and without our knowledge spent his own money to replace and repair some of our old machinery to get water to the ore area . . .. His efforts met with good success and he paid his own salary and other expenses and had left enough to apply on the high taxes that had been assessed against the property. His recoveries enabled us to demonstrate to people with money that it is very possible that enough efficient work might prove our property to be valuable.” To Sam Reyburn, “Mr. Wagner” was “a very exceptional man.”
As the war in Europe increased demand for industrial diamonds and at the same time began draining financial resources from the United States, the ADC’s board finally issued the approved bonds. In May 1916, the directors authorized $100,000 in $100 and $500 denominations for “developing and mining the property,” paying debts and taxes, and otherwise supporting operations. The ADC’s properties in Pike County were mortgaged to back the certificates. In the end, Reyburn, Stifft, and Cohn bought almost all the bonds, $66,000 worth out of the $75,100 sold. Fuller and two other old associates either bought some or received them in lieu of salaries due. Only one new name, a minor investor, appeared on the list of bond owners.
 Editorial notes in Fuller’s EMJ articles trace his shifting positions in Arkansas until 1914. “Qualifications of John T. Fuller,” in “Reports and Information,” 9-10, lists the full range of activities. For a reflection of his continuing financial stake in the ADC: Pike, 13, 357, Mortgage Deed, September 30, 1919. He held both stock and bonds.
 Fuller, “Diamond Mining in Arkansas ,” 75.
 “Arkansas Diamond Co., Little Rock, Balance Sheet as of April 30, 1914,” IV.F.1, Crater archive. At that point, the company owed Lee Wagner only $125. The entries made it clear that at least one-third of payments to lawyers, managers and consultants, including Fuller, had been in stock. Overall, the company’s assets and liabilities balanced, with land constituting all but a small fraction of assets.
 Letter to Stockholders, Reyburn to W. F. Armstrong, St. Louis, May 1, 1914, I.H, Crater archive; Notice of Stockholders Meeting, for June 8, 1914, IV.F.2, ibid.
 Pike, Mortgage Deeds, 10, p. 396, June 1, 1916, recorded the decision at the meeting in 1914.
 Obituary, “Samuel W. Reyburn, 90, Dies at Home in Florida,” Arkansas Gazette, June 8, 1962, p. B1; Arkansas Democrat, June 7, 1962, pp. 1-2.
 “Mr. Reyburn Traces Life History,” Arkansas Gazette, April 25(?), 1945, clipping in Biography, Butler Center vertical files, Little Rock. After 1914, Reyburn turned Lord and Taylor into a profitable operation. He became its president in 1916, and that year also assumed leadership of the Associated Dry Goods Corporation. He gave the speech above to the Little Rock Rotary Club, after retiring about three years earlier. He mentioned the London group’s concern that the Arkansas field might compete with “the empire’s South African mines.”
 Feature article, “Prepare for Test in Diamond Field,” Gazette, November 14, 1919, p. 5; correspondence, Reyburn and Wagner, infra.
Wagner’s qualities, including trustworthiness, were reflected in Reyburn’s reliance on the man and in Wagner’s personal investment in the company. But his good reputation around Murfreesboro, where he was still remembered clearly by old-timers the author talked with, is equally telling. An outstanding account came from Alton Terrell, who as a young boy in the mid-1920s often accompanied “Uncle Lee” on daily trips to the mine (notes in author’s possession).
Regarding the general trustworthiness of workers, an article in the New York Times got to the heart of the matter: “Personal honesty is the first requirement of diamond diggers in Arkansas. Mine foremen employ native labor, most of it white, ‘neighbor people’ whom all the community knows well and has good reason to trust.” (“Diamond Mines are Busy in Arkansas,” June 14, 1931, Sec. 8, p. 7). Cf. Washington’s and Woodford’s early speculation about potential theft, a major problem in South Africa : Henry S. Washington, Report to Sam W. Reyburn, October 30, 1907, in “Reports and Information,” 8; E. G. Woodford, Consulting Mining Engineer, New York, to President, Ozark Diamond Mining Corporation, October 28, 1908, 4.
Evidently, Wagner knew of the similar hydraulic mining used in the Western gold fields for decades. Fuller’s pilot plant, built in 1909, had a water pump capable of filling its large water tower, which provided enough gravity flow to produce a powerful spray, especially when a large hose fed the water to an adjustable nozzle. While this method broke down the clayey gumbo and concentrated heavy minerals in the sluice boxes, however, it also resulted in significant loss of diamonds, as the author’s field work and other digging in the Crater has verified. In the 1980s and early ‘90s, I and the recreational diamond diggers often shoveled through a thick stream of black silt-clay while putting down holes to reach old buried drainage channels; at the top of this layer, usually in greenish silt, were runs of gravel containing diamonds, mostly very small and typical of surface stones (high percentage broken, fractured, carbonized). A considerable number ranged from about one-fifth carat to a half carat, and occasionally a digger washed out a larger one. The author found this pattern constantly while doing extensive field work between the summer of 1985 and late fall of 1992. Monitoring of the diggers after 1992 found the same pattern until the buried black layer and accompanying gravel stream were virtually depleted. At last observation, in 1998, only a few short runs of the layer remained in the original deep cut of the east drain, seven-to-ten feet from the surface.
No doubt Wagner and others lost diamonds in four ways: some through the sluice boxes; some at the sorting tables (visual inspection of sized material); others, including fairly large diamonds, in sluiced “debris” left out in the field; and a great many through the smallest-mesh screens (the ADC never tried to retain the smallest diamonds, as is especially evident in the average size of those recovered after 1906—about one-half carat).
 Pike,Mortgage Record 10, 396-406, Mortgage Deed, June 1, 1916. The five-year certificates, backed by the property mortgage, were payable in gold coin at 6% interest. The bonds and the mortgage were placed with the Union Trust Co. of Little Rock, Reyburn’s old firm, for marketing and administration (E. J. Bodman, Secretary, Union Trust).
 Record 13, 357, Extension of Maturity, September 30, 1919. This instrument extended the date of maturity five more years, and listed bondholders. Reyburn, still president of the ADC, signed in New York City, then later in Little Rock. Jointly, Reyburn, Stifft, and Cohn bought $44,100 worth; Reyburn and Cohn (individually), $5,400 each; Stifft (individually), $5,900; Reyburn and Stifft “as Trustees,” $5,200; John C. Peay, $2,900; John T. Fuller, $1,400; Moorehead Wright, $700; Adolph G. Wigren, $4,100.