After the main effort ended in November 1930, Lee Wagner and a small sluicing crew remained in the field, working the black ground just below the high ridge separating the southeast slope from the six-acre counterpart on the other side. John Peay was still general manager. Photographs and time books indicate the little operation began in March 1931 and finally concluded on Christmas Eve, December 24, 1932.[1] That was the last mining activity on the southeast slope in the early period—except for whatever work Lee Wagner might have done on his own initiative.
While helpful, the overall results fell far short of a handsome reward. The inevitable borrowing began. In October, 1931, the DMEC gave the Arkansas Diamond Corporation a four-month promissory note for $3,775.56, secured by twenty-two diamonds ranging from 4.47 carats to 0.66 carat. Without paying that obligation, the DMEC then gave the Corporation a one-month note in February 1932 for $3,463 secured by the remainder of the company’s diamond collection.[2] The strained Corporation, itself, then started borrowing from the Union Trust, Little Rock, giving it a one-month note for $3,456.95 in August 1932. For collateral, the Corporation put up both of the DMEC’s notes, with diamonds.[3]
Although closely tied to the borrowers, Union Trust pressed both for payment after the Corporation missed the due date, and received only token payments on interest due. Finally, the lender sued in Pulaski County Chancery Court, Little Rock; the court ordered both borrowers to pay principal and interest due within five days, after which the diamonds would be sold to satisfy the plaintiff. Whatever money was left would go first to the Corporation and then to the DMEC. In a public sale at the courthouse November 25, 1932, Aristo Brizzolara Jr., acting as a trustee, bid $9,166.65 and took the gems. The court’s judgment had been $3,531.28 from the Corporation and $7,763.19 from the DMEC.[4] It is not clear if Brizzolara represented the DMEC, which he served as secretary.
Reflecting accumulated losses, the Corporation devaluated its stock from the original par value of $10. In December 1932, as the Great Depression deepened and field operations concluded, Lee J. Wagner and others found their certificates were now worth 10˘ each. Wagner, fortune in the balance, kept his old job as overseer of the diamond field.[5]
[1] Fuller’s comprehensive map shows the sluicing in 1931, up near the high ridge and out in the center of the field (VI.A.3, Maps, Crater). The work in 1932 followed the completion of the map.
The collection of photographs at the Crater has one dated August 1932, with Giles Wagner, Era Brown, “Lester” Wagner, and Will Jackson, a local mechanic, identified (“Old Photo Contest” file, Crater). Lottie Wagner, also in the shot, was no doubt posing. The inclusion of all the Wagners suggests this was a special photograph marking the finale of the sluicing days.
Because Lee Wagner was on salary (up to about $125 monthly), he did not appear on the time books for the crew, which ranged from five to six men in May-September 1931 and four to six in May-December 1932. The last entry in the books was the two-week period ending December 24 (Time Books, II.P, Crater, including significant detail in notes at the bottom of entries; names of crews are clear except for the first few entries).
“Arkansas Diamond Mines Resume Operations,” Pike County Courier, May 20, 1932, p. 1, was essentially correct: “After a close-down of several months the Arkansas Diamond Mining Company resumed operations Monday on their holdings one mile south of Murfreesboro, with practically the same crew as formerly used in the operation of this plant.”
The DMEC, itself, left no direct record of diamond recovery in 1931-1932. The State severance tax reports simply entered 769.23 carats for 1931 (valued at $3,846.15), and had no entry for diamonds in 1932 (Mary L. Gibson, compiler, Mineral Production Statistics of Arkansas for the Period 1880-1935, Information Circular 9 (Little Rock: Arkansas Geological Survey, 1937), 29, 81. Ibid., entries from the U.S Bureau of Mines included a cryptic “300 carats gemstones and bort” for 1932 (81n. 7). Although the gemstones category normally embraced various precious minerals, the USBM’s estimate probably meant diamonds. M. W. von Bernewitz, “Precious and Semiprecious Stones,” Minerals Yearbook, 1932-33 (Washington, D. C.: U. S. Department of Commerce, Bureau of Mines, 1933), 799-801, provided no helpful information.
[2] “Complaint,” Union Trust Company vs. Arkansas Diamond Corporation and Arkansas Diamond Mining and Engineering Company, 1932, Pulaski County Chancery Court, Case. No. 46729. All the diamonds were in a group evaluated by Schenck and Van Haelen of New York, list No. 9. The complaint described the twenty-two choice diamonds; the full list was described in the “Report of Sale,” and “Order Approving and Confirming Commissioner’s Sale,” ibid.
“Arkansas Diamonds Will Be Sold,” Pike County Courier, November 11, 1932, p. 1, summarized basic details of the case.
[3] “Complaint,” Case No. 46729.
[4] “Decree”; Report of Sale; Order Approving Sale.
[5] For example, see “Stock Certificates,” II.A, Crater. Although the item on file was stamped “A liquidating dividend of 10˘ per share from capital has been paid on this certificate,” that action was taken later when the Corporation sold the property (infra, North American Diamond Corporation ).
The dream, however, lived on. In 1936 one national magazine reported the DMEC and the Corporation were “ready to put up $400,000 to resume operations. Better times and a rise in the diamond market are actuating them” (Literary Digest [November 11, 1914], p. 9; a clipping is in IV.E.5, Crater, but the publisher is not identified).