From Caution to Overconfidence
Reyburn’s group set out in late 1906 to determine if the field had been “salted” or not, and then if diamonds could be extracted “in paying quantity.” In late September Reyburn and Stifft conferred with the nation’s most distinguished geologist and diamond expert, George F. Kunz of Tiffany & Company, New York City, who recommended an experienced colleague, Henry S. Washington, as a consulting geologist. Washington visited the property in October and joined the Huddlestons and others in a preliminary evaluation. “Pits were sunk in various places over the igneous area, the green and yellow earth was screened and panned, and a careful search was made for more diamonds on the surface, but none were discovered.” Although the lack of success raised some doubt about the discovery, Washington recommended further effort; and after he departed, Huddleston and the little crew began finding more diamonds on the surface. Both Washington and Kunz returned in January 1907 for more extensive field work.
Encouraged after a long visit, the two experts left instructions for examining the peridotite matrix beneath the eroded surface—a test that would settle the “salting” issue. A civil engineer from Little Rock, Theodore Hartman, was brought in to manage the fledgling operation; John Peay supervised the field work. Clear proof of a genuine discovery finally came in March 1907 when a crew digging several feet deep exposed part of a white diamond still firmly embedded in original matrix. Meanwhile, the continuing discovery of diamonds on the surface raised hopes of commercial success.
While still cautious, Reyburn’s group organized in late December 1907 as the Arkansas Diamond Mining Company (ADMC), with offices at the Union Trust Company, Little Rock. Incorporators included Stifft, Cohn, John C. Peay, C. P. Perrie, (Reyburn’s secretary at Union Trust), Reyburn as an individual, and Reyburn “as Trustee.” Acting as the board of directors, that group officially installed Reyburn as President; Stifft, Vice President; and Cohn, Secretary-Treasurer. Capitalization was $100,000, divided into shares priced at $100. The five individual incorporators subscribed to one share each; “Sam W. Reyburn as Trustee” held 245. Instead of being transferred to the company, properties remained with Reyburn, Trustee.
In early 1908, Reyburn hired an old mining engineer from South African, J. G. Woodford, to direct field operations, and on June 15 transferred the Huddleston farm to ADMC. Under Woodford’s guidance, the company built a small “washing and reduction” plant in June, near the spot where Huddleston found the first diamond. Then the remainder of the group’s property was signed over.
As the ADMC prepared to continue the venture, its balance sheet was hardly encouraging: Paid up Capital & Assessment, $47,000; Expenditures, $43,000; Balance in Bank, $4,000; Money still due on property, $72,000. And almost all of that $72,000 fell due in six months, on January 1, 1909.
The arrival of another mining engineer in the late spring of 1908 injected new energy and optimism into the venture, and spurred it into an uncharacteristic burst of overconfidence. Coming from the South African diamond fields, twenty-eight year old John Torrey Fuller visited the ADMC’s property to evaluate it for interested investors in the New York area, and found the prospect “good enough to give up a lucrative position” abroad. Late that year, Reyburn asked him for an evaluation and proposal for development, which Fuller provided November 11, 1908. Then Fuller joined the group as mining engineer and general manager. Displaying self assurance, he reportedly “refused to accept a money consideration for his services, but insisted on being paid his salary in stock.”
Fuller’s ambitious plans for full-scale testing helped inspire the formation of a more appropriate corporate entity in November 1908—the Arkansas Diamond Company (ADC), capitalized initially at $1,000,000. The filing of the Articles of Incorporation and the acquisition of all ADMC property occurred December 3, 1909. Perhaps to avoid any appearance of impropriety, Reyburn’s group let some associates in Little Rock serve as organizers and officials of the ADC at the beginning. Then Reyburn became president; Charles Stifft, vice president; and Albert Cohen, secretary. To demonstrate commitment and help set themselves apart from less reputable ventures of the time, officials of the ADC received no salary.
Although sidelined, the ADMC was not dissolved. As its trustee, Sam Reyburn received $800,000 worth of ADC stock in exchange for the property, thus assuring that he, Stifft, and Cohn remained firmly in control of the new operation.
The ADC offered investors the remaining $200,000 worth of stock “to raise money to pay balance due on land, and to equip and operate the mine in accordance with the plans of Mr. Fuller.” The major objective was “to install a complete plant with all machinery and equipment for operation on a large scale and to provide working capital to cover the first six month’s operations.” Invoking impressive average yields gotten recently from the surface of the field, the company’s prospectus radiated confidence that the property could be mined “at immense profit.”
In the prospectus, an introductory statement signed by Reyburn, Stifft, and Cohn on January 1, 1909, went beyond Fuller’s basic estimate and declared the venture should net from about $130,000 to $600,000 in six months. “Mr. Fuller has been ultra-conservative in output and profit,” it said. “With our crude methods, imperfect machinery, and inexperienced labor, he gives us credit of recovering .21 carats per load [21 per 100 loads]. . . . Our manager, Mr. John C. Peay, recovered 14 carats from 20 loads, .70 carats per load, and has made other runs as good.” The logical conclusion:
Our surface finds exceed anything that was discovered at the African mines at a corresponding period of their exploitation. We, therefore, feel that we can safely count on a production of at least .25 or .30 carats per load, the usual South African return, and a return that would pay handsomely.
Eager to improve upon the ADC’s “haphazard experimental tests,” John Fuller began by erecting a new pilot plant in August 1909 and upgrading the company’s equipment. The plant had the basic washing and sorting tools used in Africa, but was intended only to determine “the mechanical details and degree of concentration to be expected in a larger, permanent plant” then under consideration. Clearly, John Fuller was impatient—and for good reason. The ADC indeed seemed on the verge of success.
 Huddleston found the first diamond at the base of the southeast slope and two others farther up; so exploration started at the base, with Huddleston acting under the option contract. For the location of the first find, see USGS map, Plate 10, “x1”; also photos, VIII, 23.80 and unnumbered folder (Millar collection), Crater archive. Fuller, “Diamond Mine in Pike County, Arkansas,” EMJ (1909), 152, also has a photo captioned “Point at Which First Diamond was Found.” Fortunately, the base of the slope was the site closest to the Little Missouri River—a reliable source of water for panning or screening the soil.
The suspicion of salting came naturally to those remembering the late 1800s. Henry Washington, consulting geologist, recalled the initial caution in a report to Reyburn in late 1907, “The hypothesis that the locality had been ‘salted’ was carefully investigated by you and by myself, and we both came to the conclusion . . . that such a theory is not tenable” (Washington, consulting geologist and chemist, Report to Sam W. Reyburn, Trustee, October 30, 1907, in “Reports and Information Gathered by John T. Fuller,” 6). Also Stifft’s cautious statement, Arkansas Gazette, September 21, 1906, p. 1 (in Nashville News, September 22, 1906, p. 1), and Kunz and Washington, “Occurrence of Diamonds in Arkansas,” 1249.
Over a half century later, Reyburn still recalled the initial restraint. Before Stifft and Cohn first inspected Huddleston’s farm, he told an interviewer, they “had been warned about a diamond ‘salting’ hoax pulled by a San Francisco banker years before, and so they carefully examined the property for hours.” (Martin L. Gross, “The Incredible American Diamond Mine Mystery,” True [September 1959], 55).
Although the group satisfied themselves within months, the general skepticism was much harder to overcome, as the New York Times suggested in an early editorial about the Arkansas field: “The story of its discovery was printed a year ago, but tales of diamond discoveries are taken warily, even by the credulous” (“Diamonds of Arkansas,” August 4, 1907, p. 6). The editorial assured readers that highly regarded experts (Kunz and Washington) had spent two months at the field and “found the Arkansas diamonds real, and the field genuine.” With other examples of the problem cited infra, see Howard A. Millar’s final lament. When a reporter asked about disappointments, if any, in Millar’s 50-plus years as “the Arkansas diamond man,” he mentioned only one: “He has never quite understood, Millar commented, why so many people, including Arkansas people, refuse to believe that genuine diamonds in considerable quantity–and of excellent quality–are in the volcanic ‘pipe’ in Pike County. Just because this is the only place on the entire North American continent where diamonds are found . . . is no reason for skepticism, he said” (Ernie Deane, “Memories of Arkansas’s Famous Crater of Diamonds,” Arkansas Gazette, July 6, 1969, p. 4E).
 National Cyclopedia of American Biography, XIII (NY: James T. White & Co., 1906), 433, provided a thorough summary of Kunz’s career. Washington was less prominent.
 Kunz and Washington, “Occurrence of Diamonds in Arkansas,” 1249; also “Diamonds Genuine,” Nashville News, August 10, 1907, p. 3.
 Kunz and Washington, “Occurrence,” 1249; “Diamonds Genuine”; Fuller to Loree, 13-14. Referring to Washington’s initial report to Reyburn after the visit in October, Fuller said, “Report not very favorable and more prospecting work recommended” (14). No written report is available. For Huddleston’s diamond finds into January 1907, see supra. No doubt, rains aided the surface hunters after Washington left—exposing diamonds where vegetation had been disturbed in the field.
 Kunz and Washington, “Occurrence of Diamonds in Arkansas,” 1250, provided a basic outline of activities; “Diamonds Genuine, Nashville News, generally paralleld that account, but added considerable detail (including comment about Peay); also Kunz and Washington, “Diamonds in Arkansas,” 173. Although the pair worked closely with Reyburn’s group, they seem to have gotten inexact information about the depth at which the embedded diamond was found: their statements range from three to five feet. The “15 ft.” in ibid. must have been a typographical error, although the field crew did dig a few deep pits.
Photographs of John Peay are available: VIII, 23.68, Crater archive is a later close-up of Peay and Lee Wagner; 23.14 is a good group shot.
 Infra, “Surface Bonanza.”
 While still undecided about commercial potential, the group completed the paperwork December 30th and filed the Articles of Agreement and Incorporation on December 31, 1907 (Arkansas Diamond Mining Company, Articles, Arkansas Secretary of State, File No. 455, Record 1-15-189). Publicly or privately, the ADMC was rarely mentioned by name before the group later transferred property to it (one of the first references: Fuller to Loree, June 25, 1908, 15). According to Fuller, the company also included J. C. Pinnix and August Zinsser (Jr.). Zinsser, a lawyer in the firm of Hansen, Zinsser & Power, New York City, had been “taken into partnership” in early 1907 (ibid., 14).
A later report in the Nashville News expressed the tentativeness of the venture as it continued in 1908. “While to date only somewhat crude and incomplete mining operations have been conducted on the company’s properties, with a view rather of demonstrating its productiveness than of exploiting it, more than 500 diamonds have been recovered, mostly of color, quality and brilliancy rivaling those of South Africa” (“$1,000,000 Concern,” December 5, 1908, p. 4).
 Pike County, P, 326, Warranty Deed, John and Sarah Huddleston to ADMC, June 15, 1908 ($6,000 cash and the balance of $22,000 by January 1, 1909). Fuller, in June 1908, gathered basic information on Woodford (Fuller to Loree, 14-18 passim). VIII, Crater archive has a few photographs of Woodford (23.79, an old postcard, is the clearest)
 The USGS map, Plate 10, marked the first diamond find (x1) and the plant location. For the first time, water was pumped to the field from the Little Missouri River, filling an elevated redwood water tank near the plant. With limited equipment, the small plant was used “for experimental tests of the Peridotite to obtain data on which to base calculations for a complete plant capable of handling a sufficient tonnage to definitely and conclusively prove the richness of the Peridotite in the most economical manner” (John Fuller’s wording, in Fuller, “Report on Property of The Arkansas Diamond Co.,” to the Arkansas Diamond Company, January 1, 1909, in “Reports and Information Gathered by John T. Fuller,” 26).
Fuller, on site in June 1908, found the plant “sufficient with a few possible additions and adjustments for all testing purposes.” He described the equipment: tube mill; sizing screen (the typical cylindrical unit comprising a series of screens, with the meshes not reported in this case); settling tank and jig; small steam engine mounted on portable horizontal boiler; small gasoline engine pump erected on the bank of the Little Missouri River to pump water for washing operations; two steel trucks, twenty cubic feet each, and rails. Capacity of the plant “will be from 50 to 100 loads per day of nine hours” (15-16). The absence of a grease table in Fuller’s list of equipment indicates the processed concentrates were spread on a table and examined visually for diamonds. Throughout the early decades, this method was used on the southeast slope much more often than grease tables (photographs, ibid.).
Before the pump and water line were installed, workers hauled large quantities of material about a quarter mile to the river for processing, or water was carried to the field when makeshift screens and various tubs were used for small runs. During rainy months, shallow pits in certain parts of the field collected enough water for limited processing; and, initially, some prospectors also tried to cope by drilling into shallow reservoirs in the peridotite and installing hand pumps. File VIII, “Photographs,” passim, Crater archive, helps clarify the methods (on microfilm, rolls 5-6, AHC and Crater).
 S, 604, Quit Claim Deed, Reyburn, Trustee, and Lotta N. Reyburn, wife, to ADMC, July 1, 1908).
 Fuller secured this financial data while evaluating the property for potential investors (Report to Loree, in “Reports and Information,” 15). As indicated previously, John and Sarah Huddleston alone were due $22,000 on January 1, 1909.
 “Arkansas Diamond Co.,” leaflet for initial stock offering, undated [January 1909], in W. C. Rodgers Collection, Box 2, IV, File 18, AHC; copy in IV.C.8, Crater archive; also on microfilm, AHC, separate roll after basic six-roll series.
The promotional leaflet was issued in conjunction with the ADC’s prospectus: Sam W. Reyburn, Trustee, Diamonds in Arkansas–A brief account of the discovery and investigation; official reports of Geologist and Mining Engineer on the occurrence of diamonds in Pike County (Little Rock: Arkansas Diamond Company, January 1909), in Box 2, IV, File 27, William C. Rodgers Collection, AHC; also on microfilm, “Crater of Diamonds,” first separate roll, and available on microfilm from the University of Arkansas, Lafayette (“AgProject” reel, microfilm 13.19, LC TN 993.B75 1908). The ADC’s stock “Subscription Blank” is in Rodgers, ibid., File 19. The prospectus has an introductory “Statement of Original Investors,” dated January 1, 1909 and signed by Sam W. Reyburn, Chas. S. Stifft, and Albert D. Cohn as individuals (7-9).
William Champ Rodgers, one of the most prominent lawyers of southwest Arkansas, lived in Nashville, about thirteen miles southwest of Murfreesboro. While involved with the diamond field, he primarily served as the lawyer for M. M. Mauney and family, Murfreesboro.
Fuller initially reported to L. F. Loree, President, Delaware & Hudson Railroad Co., New York, June 25, 1908, in “Reports and Information,” 11-20. In 1928 Fuller told a gathering of investors in Little Rock, “Shortly after arriving in this country I was sent down here by a group of men in New York, headed by Mr. Koonce [sic; George F. Kunz] of Tiffany, to make a report . . ..” (“Public Statement by John T. Fuller on April 7, 1929 [April 7, 1928],” in “Reports and Information,” 33). Cf. Reyburn, Diamonds in Arkansas, 7, which says only that after Fuller returned to the United States from South Africa in the late spring of 1908, “Dr. Kunz called our attention to him.”
The “Qualifications of John T. Fuller,” in “Reports and Information,” 9-10, is a detailed resume up to 1931; his listing included six years with the DeBeers Company at several of its South African mines, including jobs as mine manager at three. Also see the obituary, “John Torrey Fuller,” New York Times, May 19, 1939, p. 21, which failed to mention his experience in Arkansas.
 Fuller, “Report on Property of the Arkansas Diamond Company,” to the ADC, November 11, 1908, in Reyburn, Diamonds in Arkansas, 9ff. (ADC’s prospectus).
 Quotation is from “Arkansas Diamond Co.,” leaflet (January 1909). Also, Fuller, “Report on Property of the Arkansas Diamond Co.,” to the ADC, January 1, 1909, in “Reports and Information,” 21-32. Reyburn’s group became familiar with Fuller’s views after he began working on the report to Loree earlier (for Fuller’s estimates of commercial potential, see infra, “Test for Truth Tellers,” final paragraphs).
In January 1909 the ADC referred to Fuller as both “Engineer” and “the present Manager” (“Arkansas Diamond Co.,” leaflet). Editorial footnotes with Fuller’s articles in the Engineering and Mining Journal, 1909-1914, help identify his job titles (cf. “Qualifications of John T. Fuller,” in “Reports and Information, 9-10).
 “Articles of Agreement and Incorporation,” December 3, 1908, Arkansas Secretary of State, File No. 478, Record 1-15-540; “Amendment Providing for Increase of the Capital Stock of the Company from $1,000,000 to $1,250,000,” May 24, 1910, No. 478, Record 4-14-199; Pike County, Deed Book S, 492, Warranty Deed, ADMC to ADC, December 3, 1908 (signed by Reyburn that date; notarized November 3, 1909; recorded March 12, 1910). Financial considerations were involved in the piecemeal filing of the deed: the ADC assumed responsibility for paying off the $72,000 still owed on properties, plus promised interest.
 At the ADC’s organizational meeting on November 12, 1908, Moorhead Wright, treasurer at Union Trust, was designated president, with W. B. Smith and John F. Boyle, Jr., also of Little Rock, acting as the other officers and directors. The company office remained in the Union Trust Company (Articles; also, “$1,000,000 Concern Formed of Pike County Diamond Holdings—Reyburn–Stifft Firm,” Nashville News, December 5, 1908, p. 4). After the Articles were filed, Wright shifted from president to treasurer. Smith and Boyle remained on the board of directors; August Zinsser, Jr., of New York and J. A. Van Etten of Little Rock joined the board (“Arkansas Diamond Company,” leaflet; the ADC’s stock subscription blank also identified Reyburn as president, along with the three other officials).
 Ibid. The ADC’s literature repetitiously assured investors their money would be used only for essential expenses. The Subscription Blank put it concisely: “The Company guarantees . . . that the amount realized from the sale of its Treasury stock, of which this is a part, less the expense of advertising and selling said stock, shall be used only in paying the balance of the purchase price of the lands, for necessary mining machinery and in working its mines.” Alluding to growing ranks of speculators in Pike County, the accompanying prospectus said, “We have proceeded in the most careful, deliberate and businesslike manner, without the influence of any excitement or mining fever” (Reyburn, Diamonds in Arkansas, 9).
 Warranty Deed, ibid.; “$1,000,000 Concern,” Nashville News, December 5, 1908, p. 4. The three incorporators of the ADC had subscribed to only ten shares each, at $100 per share (the typed Articles indicated one share each; correction was made in ink before the filing).
The Arkansas Diamond Mining Company remained obscure until its termination in 1930 (“Application for Dissolution,” signed by John C. Peay as “Director,” May 19, 1930, Secretary of State, File 455, Record 1-15-189). Peay certified that the ADMC ceased to do business on or about March 1, 1930, and that a resolution of dissolution could not be approved because the addresses of officers and stockholders were unknown (infra, “The ADC and the Arkansas Diamond Corporation,” provides context).
 “Diamonds in Arkansas” (prospectus), 9.
 “Arkansas Diamond Company” (leaflet). Fuller’s Report to the ADC, January 1, 1909, estimated that a new “direct double treatment plant” with a capacity of 600-1,000 loads per 10-hour day operated for 150 working days (a total of 90,000-150,000 loads) would cost $143,000 shipped and erected on site with power plant, water supply, etc. The basic “crushing, washing and concentrating plant” would take only about $40,000 of that amount; field operations and other expenses for six months would cost $65,000, for a grand total of $208,000. He estimated that thirty-five acres of decomposed peridotite extending an average twenty-five feet deep could produce “with a minimum use of explosives approximately 1,900,000 loads” (28-31). The standard tram load was about 1,600 pounds, or 16 cubic feet. As for potential diamond yield, Fuller said the few washing operations done at the mine were impressive, but still too unreliable to accept as a guideline. Yet, he was optimistic the venture could make “a large profit” at considerably less than the average yield gotten so far (27; infra, “Test for Truth Tellers,” last four paragraphs).
Although the ADC’s promotional leaflet implied Fuller’s plan had top priority, final payments on ADC properties were due. Apparently, most of the first $100,000 of public stock sales, completed before the leaflet was written, satisfied that obligation (the leaflet stated the ADC was “offering $100,000.00, the balance of the original $200,000.00 treasury stock for subscription”). As a result, the stock available for subscription in January 1909 was inadequate for the full-scale test. Evidently, this basically explains the increased capitalization of the ADC in May 1910 (“Amendment Providing for Increase of the Capital Stock of the Company from $1,000,000 to $1,250,000,” May 24, 1910). The Amendment was filed as Reyburn and associates prepared to negotiate with a group of investors (infra, London trip).
Compare Fuller’s ambitious plan for the ADC with his modest recommendation to the Eastern investors who sent him to Arkansas about seven months earlier: Strip the surface from at least ten one-acre sites and process at least 25,000 loads of peridotite using ADMC’s current plant, a project requiring approximately eighteen months and $40,000, plus $13,000 for “unforeseen extras” (Report to Loree, in “Reports and Information,” 18-19).
 “Diamonds in Arkansas” (prospectus), 8. For Fuller’s use of statistics, see infra, “Test for Truth Tellers,” final paragraphs.
 “Diamonds in Arkansas,” 8 (see infra, “Surface Bonanza”). The writer, or editor, of the statement accidentally left an erroneous sentence in that quotation, in the part omitted: “We know that more than half of the material washed was the over burden of vegetable soil not bearing diamonds.” As stated, it clearly implied the yields had been gotten from the matrix beneath the surface layer, with the surface soil contributing nothing. Immediately after the passage quoted, however, the writer extolled the rich “surface finds.”
 “Diamonds in Arkansas,” 8.
 Fuller, “Arkansas Diamond Field in 1909,” Engineering and Mining Journal [EMJ] (April 9, 1910), 767. The plant was powered by a twenty-horsepower portable boiler and engine. Processing equipment included an eight-foot rotary washing pan (an “African Washer,” whose metal blades stirred material into a sludge, thus floating silt, clay, and light rock over the edge of the big pan while diamonds and associated heavy minerals sank to the bottom); a revolving cylindrical screen with a graduated series of meshes, designed to sort out five sizes of concentrates (not specified); and a Hartz jig, used to further concentrate diamonds and associated heavy minerals. No grease table was mentioned; so, again, the jigged material was examined visually after being spread to dry on inspection tables, usually metal sheets on supports. No doubt the sorters missed a significant number of dark or dull diamonds, which tended to blend with small gravel in the concentrates, especially if the material was not completely dry before being examined.
 Fuller, consulting mining engineer, Report to Loree, June 25, 1908, in “Reports and Information”; Fuller, “Report on Property of The Arkansas Diamond Co.,” to the ADC, January 1, 1909, ibid.. The reports reflected Fuller’s growing vision of the project.
Fuller’s frank displays of impatience began with his first reports on the pipe (to Loree, June 25, 1908, 15; “Diamond Mine in Pike County, Arkansas,” EMJ, January 16, 1909, 154). His enthusiasm, as well as his constant frustration, was especially evident in his annual reports in the Engineering and Mining Journal, 1909-1914. Infra, “Test for Truth Tellers,” expands this topic.