North American Diamond Corporation and Trust A
A year after Blick took the option, he and his wife, Mary, conveyed their rights in the property to a new venture identified as “Trust A.” That same day the Arkansas Diamond Corporation issued a deed to the trustees, Robert J. Arthur of Logansport, Indiana, and Edwin T. Schneberger of Chicago. The trustees then awarded a ninety-nine year mineral lease to a newly organized North American Diamond Corporation of Arkansas.[1] Years later, other deeds revealed that two parties dominated the Corporation and the trust: Ray Blick and the Charles Wilkinson interests, of Logansport. Wilkinson was President and major partner of the Corporation and he and his family together were the majority partner in Trust A.[2]
Blick thought the Nazi threat to America’s industrial-diamond supply abroad gave his company enough leverage to secure federal support for the venture. Congress’s declaration of war on Japan and Germany after the attack on Pearl Harbor, with the ensuing mobilization of war industry, seemed to improve his chances. Yet, federal officials such as Hugh Miser, still with the U.S. Geological Survey, were reluctant to approve public funds or vital resources for a test by the Corporation—especially the multi-million dollar project proposed by Blick. Like Miser, Richard J. Lund of the Miscellaneous Minerals Division of the War Production Board was fully aware the old test averages cited by Vitt and others were highly inflated by the surface concentration of diamonds.[3]
Further opposition to Blick’s proposal came from the Millars and associates, who insisted any such project had to include them, as well. In the end federal agencies decided to run their own, less-expensive test.[4]
[1] Pike, Misc. 4, 342, conveyance, Ray E. and Mary Blick to Robert J. Arthur and Edwin T. Schneberger, as Trustees under the provision of a Trust agreement dated July 1, 1941 (agreement not included in the conveyance), July 1, 1941; Deeds, 60, 94, Trust Deed, Arkansas Diamond Corporation to Arthur and Schneberger, July 1, 1941; Oil & Gas (Mineral), 7, 61, Lease with right to extend, Arthur and Schneberger to North American Diamond Corporation, July 1, 1941.
Time magazine called $175,000 a “modest” price (“Domestic Diamonds,” Time, 38 [July 21, 1941], 71). Echoing Blick, the writer commented on the possibility the Nazis might get control of Europe’s industrial diamond supply; he said the Chicago group hoped wartime demand would translate into mining success.
Stockholders of the Arkansas Diamond Corporation had submitted their certificates for liquidation, and in late July, 1941, Union National Bank of Little Rock returned certificates and checks for a liquidating dividend of 10¢ a share. Lee J. Wagner, after about thirty-five years with the Arkansas Diamond Company and the Corporation, received $240 total for certificate Nos. A 309, 1000 shares; A 3086, 200; and A 4640, 1,200 (Letter of transmittal, Union National Bank to L. J. Wagner, Murfreesboro, July 23, 1941, I.P, Crater archive; stock certificates, endorsed for liquidation at 10¢, 2.A, ibid.).
[2] Misc. 5, 114-116, Notice of Resignation as Trustee, Robert J. Arthur, March 11, 1948. The instrument included details about the individuals and companies involved in Trust A. Also Oil and Gas 7, 206, Assignment, by Ray E. Blick, a 38/100ths holder in the Trust (undivided interest), undated, filed November 25, 1946; Misc. 7, 326, Trustees revocation of lease to North American Diamond Corp. (NADC), December 11, 1945.
[3] Vitt, then managing engineer of the NADC, responded for the corporation with a nine-page “Memorandum on Diamond Content in the Murfreesboro Diamondiferous Peridotite Pipe,” March 3, 1943 (Parks and Tourism vertical files; on microfilm, first separate roll). Basically a rehash of his initial report to Blick, Vitt’s memo added a section on the surface concentrate, in which he engaged in convoluted argument. His peculiar conclusion: “In other words the greatest concentration of diamonds in the top soil as compared to sub-surface content is in a ratio of 5.2 to 1; the smallest is in a ratio of 1.32 to 1; and perhaps the most reliable figure . . . is in a ratio of 2.82 to 1. In round figures this concentration can be expressed as “3 to 1” (5-6). Vitt said his analysis discredited Lund’s “previous arbitrary allegations . . ..” (6). For Lund, see the following footnote.
[4] A confidential draft report, “Prairie Creek Diamond Area, Pike County, Arkansas,” War Minerals Report (US Dept. of Interior, BM, April 1944), Arkansas State Geological Commission (ASGC), said: “The present owners, the North American Diamond Corporation, acquired the property . . . and in 1942 made a detailed topographic survey of the property dividing the potential mining area into 100 foot squares in preparation for sampling the deposit on the grid pattern. The company requested priorities for equipment . . ., but, on the strength of information gathered from various sources, the War Production Board concluded that granting of priorities for the erection of a mill were not justified, yet further tests to determine the possibility of economic recovery would be desirable” (3).
Items in the Millars’ correspondence of March 1942-August 1943, I.P, Crater archive, provide a convenient summary of deliberations: Samuel W. Fordyce, of the law firm of Fordyce, White, Mayne, Williams & Hartman, St. Louis, to Austin Millar, Murfreesboro, March 28, 1942 (about communication from the Defense Plant Corporation, and Fordyce’s advice that all owners of the diamond field should be involved and the entire pipe should be tested); Thomas W. White, St. Louis, to Austin Millar (about Congressional testimony of Richard K. Lund, chief of the Miscellaneous Minerals Division of the War Production Board, in which Lund explained why the Arkansas field owned by the NADC was not being explored); Austin Millar to Thomas W. White, May 4, 1943 (quoting telegrams Millar recently received from Lund, asking Millar to provide records to Hugh Miser “for investigating possible diamond resources of Arkansas”; Millar said Miser had visited him to review records; he also mentioned the NADC’s proposal for a federal loan of $6,000,000 to construct and operate a diamond washing plant, which Millar thought “savored of a ‘promoter’s dream’”; in addition, Millar attached a copy of a recent letter Miser had written him about NADC’s application to the War Production Board); Howard Millar, “Personal” letter to C. W. Buckley, Sr., Barrington, Illinois, August 4, 1943 (discussing Howard’s current job in Little Rock with the Mining Division of the War Production Board and his being in charge of “recommending all equipment for mines in the States of Arkansas, Louisiana, Mississippi and Oklahoma”; Millar said he recently was in Washington and “went into the matter of priorities for equipment for the diamond mines, and we are assured of sufficient equipment for a consolidated plant to take care of the entire production of the Prairie Creek Crater, but equipment cannot be secured for just one individual ownership. If the properties are consolidated in some equitable manner, a government loan can be secured for the needed working capital”).
Howard Millar’s letter to Buckley reflected optimism that the impending test by the U.S. Bureau of Mines would prove successful. Above all, the letter demonstrated the long-standing effort of Millar and associates to consolidate ownership of the pipe—preferably under their control.
Samuel Fordyce’s law firm in St. Louis was in the middle of the affair, and kept the Millars informed about federal inquiries.