A Final Deal and Final Justice

    Over a year later, there was an offer to purchase all the property held by the Receiver—for $450.  Written on stationery of the Pike County Bank, the proposal of July 26, 1929 came from a stranger, W. F. Hintze of Tarrant County (Ft. Worth), Texas.[1]  There is no evidence this offer, or any other, was ever accepted; yet, the following month, Hintze filed a Certificate of Incorporation at the Pike County Courthouse, declaring formation of the American Diamond Corporation, a Murfreesboro venture.  Hintze was President; Claude A. Rankin, a leading citizen of Pike County, signed as Secretary.  J. N. Hipp, cashier at the Pike County Bank, also appeared as an incorporator and one of three directors.  Initial capitalization was $300, the legal minimum; but 100,000 shares of stock were authorized at $1 par value.  According to the document, each incorporator subscribed to 100 shares.[2]

     The timing seemed appropriate, considering the reorganized Arkansas Diamond Company had just started working the southeast slope again, reviving interest locally.  This time, the Pike County Courier took a close look at the northeast slope and “found quite a bit of activity going on.”  W. F. “Hientz” of Ft. Worth “recently purchased this property in fee simple,” the paper reported, “and for the past 20 or 30 days has been busy in making preparations to uncover the ‘gems’ . . ..”  After obtaining a permit, Hientz’s group would lay pipe from the plant to Prairie Creek and start “’sluice washing.’”  The article described the process in detail, and said two small diamonds had already been found “employing hand washing methods.”[3]

    Noting the roles of Hipp and “Senator Claude A. Rankin,” the Courier was guardedly optimistic.  “At present seven men are employed and one foreman, but if his plans materialize, Mr. Hientz stated that he expected to run a day and night shift in about 30 days that would require the services of about 30 men.”  Hientz was “very optimistic over the prospects . . ..”[4]


    After almost three months, however, readers of the Courier learned of another frustrating turn of events.  The headlines:  “Diamond Mining Men Are Arrested—Charged With Using the Mails to Defraud. Hearing Will Be Had in Federal Court.”  Walter F. “Heintze” and W. I. Brashears, a “promotion man, said to have served a Federal term from Fort Worth on a similar charge,” were taken into custody in Dallas, Texas.  Heintze’s female secretary was being sought.[5]

    Moreover, Walter Mauney of Murfreesboro—currently a candidate for Pike County Judge—had a hearing before a U.S. commissioner the previous week.  Mauney told the Courier he had appeared voluntarily, and insisted “all he did was make a deed to W. F. Hientz” and place it in escrow in the Pike County Bank.  He believed the people of the county would understand “that his only interest was to dispose of the property, that it might be properly developed, and prove to be of some benefit to the county and state.”  He was, he said, still a candidate for county judge.[6]

    The news was doubly disappointing, for the U.S. postal inspector declared the group’s literature was not only misleading, but also “based on false hopes.”  Engineers from the South African diamond fields considered the company’s prospects on the northeast slope to be “negligible.”[7]


    Later, federal court proceedings in Texarkana cast doubt on the validity of Walter Mauney’s defense.  In May 1931, he entered a plea of guilty and drew a $750 fine, which the judge suspended.  Also pleading guilty, Hintze was fined $300 and sentenced to a year and a day in prison; Brashears’ guilty plea yielded a year and three months.  The secretary, Sue E. Nash, remained at large.[8]

    The obscure deed to W. F. Hintze was never recorded in Pike County.  According to statements at the time, Mauney simply sold an option to purchase, which expired April 1, 1930.[9]  But J. N. Hipp’s later affidavit provided further perspective:  although a deed was delivered to the Pike County Bank for escrow, the plan to organize the American Diamond Corporation “did not materialize.”  Those who were “suppose [sic] to furnish the money” failed to do so.  The deed was never delivered to Hintze, who was said to be the president of the American Diamond Corporation “if and when organized.”[10]


    The Mauney family entered the 1930s effectively bankrupt and still depending upon friendly creditors to get by.  The Pike County Bank received very little payment on its big loan of 1923, backed by a lien on the Mauney Mine.  The obligation—$20,907.93, at 10% annual interest—became unmanageable as Walter’s various deals failed, and yet the bank never foreclosed.[11]  Similarly, the family’s much smaller loan from the Bank of Delight, in nearby Delight, Arkansas, became a problem for all concerned.[12]  But then came the Great Depression, a leveling force creating a society filled with irony and paradox, as well as tragedy.

    For many Americans, the Depression relieved both the pressure and the stigma of past mistakes.  In areas hit by severe drought, such as southwest Arkansas, forfeited land soon threatened to inundate both the banking system and state tax agencies.  While many foreclosures occurred, many debts were also dealt with sensitively, especially in tightly-knit rural communities.  Lenders often suspended mortgages, with debtors getting a fresh start as New Deal programs expanded and a second great war revived the economy.[13]

    Eventually, the Mauneys recovered from those hectic years of 1913-1933, still holding the Mine and the main family estate those ten acres had rescued back in the early ‘20s.  In February 1943, all of M. M. Mauney’s surviving heirs finally signed a deed transferring the mortgaged property to the Pike County Bank.[14]


[1] Letter filed with T. J. Jones, Receiver, v. British American Diamond Company, ibid.  According to the writer, the offer would liquidate all claims.  Chancery Court records, however, show no action beyond the delay-of-sale in 1928.  Nor do deeds or leases.


[2] Misc. Record 3, 370, Certificate of Incorporation, American Diamond Corp., August 14, 1929; supra.  This time, Hintze and undisclosed associates in Texas followed one of the basic rules of promotion:  To succeed, or at least have the best chance at success, draw prominent leaders of the community into the effort.  For Hipp and Rankin’s backgrounds, see their later affidavits in Misc. Record 4, 339, July 15, 1937 (Rankin) and Misc. 5, 59, November 9, 1945.  In 1929, Rankin managed the Pike County Abstract Company, owned by J. C. Pinnix.


[3] “Diamond Mines Are Being Worked Now—W. F. Hientz Recently Purchased Mauney Mines[,] Expects to Use Night and Day Shift Soon,” Courier, September 20, 1929, p. 1.  Hintze’s name was often misspelled.  The typed Certificate of Incorporation was consistent throughout:  Hintze.


[4] Ibid.


[5] Courier, December 13, 1929, p. 1.  Apparently, the paper had gotten erroneous or confusing information from some source:  the article said, in the lead paragraph, that the charges were “in connection with stock selling operations of the Arkansas Diamond Corporation, carried on from Texarkana several months ago.  The company has no connection with the American Diamond Corporation, here, but has a tract of land near Murfreesboro . . . adjoining that of the older company.”  Then the article clearly described the principals, excepting Brashears, as those known to be involved with the American Diamond Corporation.  Hipp and Rankin escaped attention.


[6] Ibid.  According to Mauney, the postal inspector missed the hearing; so he returned home to await further instructions.  He requested another hearing, he said, and was anxious to explain he “had no connection with the diamond company, that he knew nothing about their alleged mail campaign, does not have stock in the company, has no office in the company, and . . . knows nothing about the organization in Texas nor Arkansas.”


[7] Ibid.  The promoters raised hopes that investors might make “up to 15,000 per cent on their money.”


[8] “Diamond Mine Case Is Heard,” Pike County Courier, May 22, 1931, p. 1.  Federal officials viewed the American Diamond Corporation as a successor of Brashears’ British-American venture.


[9] Ibid.


[10] Pike, Misc. Record 5, 59, Affidavit by J. N. Hipp, long-time cashier of Pike County Bank, November 9, 1945 (cf. Certificate of Incorporation,” supra).


[11] The required marginal notations on the mortgage contract, certified by Pinnix and the cashier, J. N. Hipp, reflected the problem:  $43.01 credit for property rental in 1924; an extension of the original ninety-days deadline, to September 10, 1925; a $500 payment on January 13, 1927; $200 credit for rents in 1929, and a $150 credit on July 10, 1933, as the Great Depression set in (Pike, Mortgage Deeds 17, 48, “Mortgage with Power of Sale,” Bettie L. Mauney, Walter J. and Emma Mauney, and Henry and May Mauney to Pike County Bank, June 30, 1923.


[12] Walter, Bettie, and Henry Mauney had signed a note; and finally, in March 1931, the Bank of Delight got a court order instructing Walter to settle the account.  A year later, the court ordered Bettie and son Henry to pay the loan, then totaling $1,020, principal and interest.  The previous judgment against Walter was incorporated into that order (Pike Circuit, Civil D, 419, Bank of Delight vs. Bettie L. Mauney and Henry Mauney, March 21, 1932, Case No. 699).


[13] The records of Pike County offer ample material for a study of the 1930s.  The deeds and tax records, along with court proceedings, provide an overview.


[14] Deed Record 68, 209, Warranty Deed, Bettie L. Mauney, et al., to Pike County Bank, February 15, 1943.  According to the brief document, the Mauneys sold the property for $10.


© 2006 All rights reserved. Brief citations may be used in writings or other presentations if this source is properly identified. No part of this study may be photocopied or otherwise reproduced without written permission of the author. Address inquiries to: dbanks@windstream.net