The Consolidated Mining Corporation and Financial Ruin, 1927-1939
The Millars’ overriding concern in 1927 was the possibility their small base of supporters in Chicago might give up and demand a settlement. At the same time the crucial Ozark Mine–legally the Millars’ property–needed to be clearly separated from the long-neglected Kimberlite Mine and the Kimberlite Diamond Mining & Washing Company’s aging, dwindling shareholders. In November 1927, the Millars, Warren Buckley, Bennett C. Clark, and Wilder responded by setting up a new company controlled by themselves and five of the Chicagoans: the Consolidated Diamond Corporation of Missouri. Taking a majority interest, the Millars and Austin’s wife, Margaret, signed over the deed to the Ozark Mine. Austin became president.[1] The Kimberlite Company became isolated and obscure.[2]
After this step, Howard Millar again focused on apparent developments around the Arkansas diamond field. He was not convinced the syndicate controlled Reyburn, and now began thinking that Reyburn was conspiring to advance his own interests. In November 1927 Howard wrote his father an unusually long and vehement letter. “Reyburn has put the Indian Sign on the whole enterprise,” he said, “and there is no doubt in my mind now, but that he is playing the old Jew game of killing and knocking the mines, so that he can personally acquire the whole area for a song.”[3]
But such speculation no longer mattered. The main trio of Chicago investors gave up in early 1928, declaring they would make no more payments.[4] The trustee of the collateral diamonds bought them for a price Howard Millar later described as “an enormous loss to us.”[5] By 1929 the Millars were paying taxes on the Ozark from personal funds, sometimes after missing the official deadline.[6]
As the Depression set in, diamonds and other resources were almost exhausted.[7] The Millars failed to pay taxes on the Ozark in 1933-1936, and the thirty-acre tract was entered in the State auction the next year. After others in Chicago failed to respond to the crisis, Warren Buckley stepped in and loaned $1,000 to redeem the property from tax forfeiture.[8] The best the Consolidated Diamond Corporation’s officers and trustees could do was provide a note in September 1937 promising the Corporation would pay Howard, their vice president, $9,204.34 within thirty days for accumulated debts.[9] Of course the note had no backing.
Finally pushed to his limit, Howard Millar sued the Corporation in November 1938 and won a default judgment for $10,523.34, along with costs and 6% interest until payment in full.[10] The award covered the promissory note and the back taxes paid to recover the property. The $1,000 loan from Warren Buckley was then secured by a contract for one-quarter interest in whatever came from the judgment.[11]
Apparently, Howard recovered very little, or nothing: in January 1939 he had to seek a loan from the Pike County Bank. To get $250 for ninety days, he signed a note at 10% interest and deposited twenty-nine diamonds for collateral. Then he never made a payment. The bank finally sued in Chancery Court over two and a half years later, and when Millar failed to respond, the diamonds were sold at public auction. Pike County Bank bought them for $335, enough to cover the loan and interest.[12]
Whatever the methods, the Millars’ survival during the Depression depended upon a dutiful son’s personal effort, eventually aided by new federal relief agencies. At the beginning, Howard economized by moving himself, father, and mother from Murfreesboro to the small house that had served as the office of the Ozark Mine. After the death of his mother, Margaret, in March 1930, he worked a while as a consulting engineer at a cinnabar mine (quicksilver, or mercury) near Murfreesboro, and in September 1931 began serving informally as a consultant for State Geologist George C. Branner. Branner relied on him after a visit to the Ozark Mine that month, particularly for information about the recently discovered cinnabar deposits in the area.[13] For a few years, the Millars still pursued various plans for financing a revival of the diamond field; but harsh realities soon shoved that dream aside.[14]
When New Deal work programs took hold in 1937-1938, Howard finally got the fulltime job he wanted—with the staff of the Arkansas State Mineral Survey, a federal WPA project sponsored by the Arkansas Geological Survey.[15] In the end Austin and Howard Millar made it through the Great Depression without losing the Ozark and Kimberlite Mines.
[1] Pike, 46, 528, Warranty Deed, Austin Q. Millar, Margaret Millar, and Howard Millar, to Consolidated Diamond Corporation, October 27, 1927; “Correspondence,” I.N, October 1927. The five in Chicago were George E. Scott, trustee for the group [holding liens secured by diamonds and stock]; F. T. Vaux; Ward T. Willits; Robert H. Ripley, and Robert P. Lamont. As shareholders in the new corporation, the group ranked next to the Millars. The Millars, Buckley, Clark, and Scott served as incorporators.
The maneuver was consistent with an idea the Millars had entertained as early as 1920 (“Memorandum, September 14, 1920, Diamond Mines,” V.B.4, Crater archive). Discussion of such an organization followed in 1921-1922. The more general idea of consolidating ownership of the entire diamond pipe extended back to Austin Millar’s first year in Arkansas.
[2] The Kimberlite property was handled separately, usually by Austin Miller as trustee (for instance, Pike, Mining Claims, C, 261, Affidavit by Austin Q. Millar, December 31, 1934). Although almost all of the company’s mining claims had been disallowed over the years, the original Kimberlite Mine was secure, and Millar had added an adjacent claim recently, boosting the acreage to 120 (ibid.).
[3] Howard Millar to Austin Millar, November 29, 1927, I.W. The letter discussed Howard’s previous speculation about Ford and Reyburn and displayed his strong need in 1927 to disparage the latter. He believed the Arkansan “had again approached Ford” trying to sell him the ADC’s property, “and was turned down.” Ford “only desired the Ozark, but after seeing the lay of the land, he did not choose to have Jews for neighbors. . . .” Concluding, Millar outlined a plan for purchasing the ADC’s property and getting out from under “Reyburn’s whip hand.” Also see Howard Millar to Austin Millar, November 17, 1927, ibid.: HM discussed financial maneuvering to purchase Reyburn’s property and said, “If we do this I think we will have to work fast, as Reyburn may attempt to sell Ford himself.”
Notice the absence of the syndicate in Howard Millar to T. W. White, St. Louis, May 28, 1930, I.W. Millar commented on the new Arkansas Diamond Mining & Engineering Company, working on the southeast slope. Little Rock businessmen of “considerable wealth” were involved, he said, and “looks to me like the same old gang . . .. They appear to be still living up to Sam Reyburn’s old policy, ‘Arkansas Diamond Mine for Arkansas folks.’”
After World War II, however, a frustrated Howard Millar increasingly blamed Reyburn and the “international diamond syndicate” for his troubles. One of his most sweeping statements was reported in the Arkansas Democrat in 1956 (McCord, “More Frustrations Than Gems,” pp. 7-9). McCord, a sympathetic interviewer, wrote: “Why, then, has there never been any large-scale mining in the field? Why did the mining equipment burn mysteriously in the dead of night? Why was capital often promised but never delivered? Why couldn’t the owners ever get together on a project? Mr. Millar has spent almost all of his 63 years answering these questions. And his answer to all of them and a hundred others is: Because of the power of the international diamond syndicate, which controls diamond mining and traffic throughout the world. His belief is that the syndicate has used everything in its power to stop the development of the American field. In fact, he contends that one man became a millionaire simply by owning a part of the property and never doing anything with it” (9). Sam Reyburn was still alive and active at this time.
In his memoir, written after Reyburn’s death, Millar dispensed with all subtlety. “I cannot help believing that Mr. Reyburn’s voyage to London, and his discussions with the syndicates financial representatives [in 1910], resulted in an agreement to prevent Arkansas’ diamond ground from being developed commercially.” Millar admitted he could not prove a conspiracy; “but there is no denying the facts that are know, and they do point to an apparent ‘deal’ in London” (Finders-Keepers, 40). Referring to John T. Fuller as “the DeBeers engineer,” Millar alleged that a veil of secrecy surrounded Reyburn’s venture on the southeast slope. “My personal opinion has always been that the tests showed a potential for profitable operations, but Mr. Reyburn and his British friends did not want this fact known” (41).
For the most strident allegations of a syndicate conspiracy, see Gross, “Diamond Mine Mystery” (1959), 54ff.
[4] C. W. Buckley to Austin Millar, March 3, 1928, I.W.
[5] Austin Millar to Bennett C. Clark, St. Louis, August 5, 1929, I.N; Austin Millar to Howard Millar, October 7, 1945, I.P. The notes of October 6, 1923, were for one year, but were extended. The exact date of final settlement is unclear; Millar’s letter to Clark mentioned the loss cryptically.
[6] “Tax Statement of the Ozark Diamond Mine,” II.B (summarized valuations and payments of 1929-1936). Tax records in the Pike County Court House show no significant differences; the Millars’ statement, evidently prepared for a later lawsuit against the Consolidated Corporation, made it clear payments came from personal funds.
[7] The Millars received a few requests from individuals wanting rough diamonds. Howard told one inquirer in 1935 they had none that were for sale (Howard Millar to Arthur A. English, Mobile, Alabama, October 29, 1935, I.O). Later, Howard used a small batch as collateral for a bank loan (infra).
[8] “Tax Statement of the Ozark Diamond Mine: Unpaid tax on Ozark Diamond Mine,” II.B, Crater archive; Notice of special meeting of stockholders, Consolidated Diamond Corp., in St. Louis, September 15, 1937, I.O; Winston, Strawn & Shaw, Chicago, to Austin Millar, October 13, 1937, ibid. (property placed on court docket); Austin Millar to Bennett C. Clark, St. Louis, October 14, 1937, ibid. (discussing the indifference of “the [George E.] Scott crowd” and Warren Buckley’s offer to furnish money to recover the property from the State).
[9] Pike, Civil Court Record, E, 113-114, Default Judgment, Howard A. Millar vs. Consolidated Diamond Corporation, Defendant, No. 916, November 21, 1938. The judgment included the note of September 30, 1937, as part of the money due Millar. The note, itself, is not in the records.
[10] Ibid.
[11] Austin Millar to Howard Millar, October 7, 1945, I.P; Howard Millar to Robert W. Buckley, December 24, 1945, ibid. The two letters provide a long summary of the affair. A notation on the default judgment (supra) also documented the assignment of one-quarter interest, although Buckley is not mentioned specifically.
[12] Record G, 489, Decree, Pike County Bank vs. Howard A. Millar, September 16, 1941, Chancery No. 2312-A, provides details; also ibid., 500, Sheriff’s Report of Sale, November 10, 1941. The collateral was described only as twenty “industrials” and nine “gems,” evidently all diamonds in the rough.
[13] Pike County Courier, March 30, 1930, p. 1 (Margaret Millar); correspondence between Howard A. Millar, Mining Engineer, Ozark Diamond Mine, Murfreesboro, and George C. Branner, State Geologist, Little Rock, September 10, 1931 to February 17, 1940 (“Chronology” folder, Crater of Diamonds vertical files, top drawer, Department of Parks and Tourism, Little Rock). Howard Millar, Finders Keepers, 66, is a credible account; also, Obituary, Arkansas Gazette, undated clipping (1973), IV.H, Crater archive; biographical sketch, January 1964, I.S (less reliable, especially dates). Howard Agnew Millar remained single until 1942, when he married Modean Bohannon of Marshall, Arkansas. He died at 91, after retiring to Fayetteville.
Cinnebar, not diamonds, stirred excitement in the early 1930s (the Pike County Courier [Murfreesboro] and the Nashville News carried relevant articles regularly after September 1931). After the Depression, the cinnabar mines fulfilled expectations.
[14] Howard Millar to Branner, November 16, 1934, correspondence, ibid., summarized the current failure to get a loan from the federal Reconstruction Finance Corporation to “put the diamond industry of Arkansas into production.” The idea was to borrow $15,000 from the RFC, with the Ozark Mine as collateral, and then lease the rest of the “crater area and the outlying properties.” Millar said the “Arkansas Mine crowd” seemed ready for some sort of lease.
[15] Howard began trying to get a job with the State in the early ‘30s (e.g., Millar to George C. Branner, February 14, 1934, ibid.; also Branner to Millar, December 30, 1937, ibid. [the Mineral Survey would be starting soon]). George C. Branner, “State Mineral Survey in Arkansas,” Economic Geology, 35, No. 6 (September-October, 1940), 761-771, summarized the State-sponsored program of the Works Progress Administration.