Reprieved by the Ozark Purchase

    The Kimberlite Company was financially drained in early 1915 because the Millars were scraping up funds to buy the bankrupt Ozark Mine.   At the sale in September 1914, the court-appointed Trustee, J. C. Pinnix of Murfreesboro, received four sealed bids for the thirty-acre property:  Reece Lamb and Lee J. Wagner, $2,500; Howard A. Millar, $2,505.50; Austin Q. Millar, Trustee [Kimberlite Company], $2,101, excluding the diamond washing plant and equipment; and Ike Kempner and Rosco Brewer, $3,001, including both the Ozark Mine and some additional property.   Pinnix considered the offers much too low and recommended rejection—a panel of appraisers had suggested $30,000 for the thirty-acre tract and $6,188.63 for structures and equipment.  The Referee in Bankruptcy, Gustavus G. Pope, agreed.[1]

    A final sale in November-December, 1914, still under the original sealed-bid order, again fell short of the total appraised value.  R. D. Duncan bid $5,100 (November 14); Austin Q. and Howard A. Millar, $5,000 (November 24); E. J. Rodman, an associate of Sam Reyburn, $6,000 (November 24).  Two weeks later, Thomas C. McRae of the State National Bank, Texarkana, Arkansas, bid $6,000 (December 8); and Austin and Howard Millar offered a tentative $10,000 (December 8).  Although the sale had been advertised at the beginning as both sealed bid and “cash in hand,” the Millars requested the purchase at $1,000 down and the balance within ninety days.[2]

    Interestingly, the Millars’ offer of December 8 was handwritten on letterhead stationery of the Referee in Bankruptcy for the Texarkana Division of the [Federal] Western District of Arkansas, Gustavus G. Pope, who formally accepted it a week later.  Also notable:  neither the Millars’ previous bid of $5,000 nor Rodman’s bid of $6,000 is in the bankruptcy case file.[3]


    Howard Millar’s later memoir, Finders-Keepers, lent some insight into this stage of the bankruptcy proceedings, and at the same time provided another example of Millar’s efforts to rewrite unfavorable or unflattering episodes of history.  Upon hearing of the bankruptcy, he said, he and his father talked with the attorney who was settling Horace Bemis’ estate, Thomas C. McRae of Prescott, and “agreed to buy the [Ozark] property.”  Of course, “the sale had to be concluded in federal court.  A date was set for this at Texarkana . . ..”[4]

    According to this account, Millar arrived at the courtroom to find a representative of Reyburn’s bank, who insisted the property be sold to the highest bidder.  “I immediately surmised that New York or London had sent more money to Texarkana than we had in hand,” Millar said.  “Mr. McRae” asked the court for a two-week postponement.  “I took the first train to Chicago to see our old friends and financial supporters.  They sent me back to Arkansas with a cashier’s check for much more money than I anticipated would be necessary.”  When the court reconvened, Millar doubled his “original” bid.  “The bank representative from Little Rock did not raise it, and so the property was ours.”[5]


    The official record has a different ending.  In their tentative bid of December 8, 1914, the Millars assured the Trustee, and thereby the court, that if they failed to pay the balance of $9,000 within ninety days, they would forfeit the $1,000 cash payment to the estate of the Ozark Diamond Mines Corporation.  Yet, they passed the deadline without making a payment, and then began bargaining again.  According to Pinnix’s next report to Pope, on April 7, 1915, they offered two alternatives for paying the $9,000.[6]

    First, Pinnix said, bankruptcy officials could sign the property over to the Millars and place the deed in escrow, in which case “they will be able to pay the full amount of money on or before the first day of May.”[7]  If the escrow could not be arranged, they would simply pay $2,000 cash on May 1st; $1,000, June 1st; $1,000, July 1st; and the balance, August 1st—without a signed deed beforehand.  The Millars further agreed that W. F. Armstrong and W. L. Wilder would, “if required,” co-sign a bid for the property under this latter proposition.  In an unusual move, Pinnix deferred to the referee’s judgment rather than make a recommendation.[8]

    G. G. Pope approved an even better arrangement for the Millars.  The deed was signed over and placed in escrow, but only a $2,000 payment was required by May 1, 1915.  Pope’s order blended the Millar’s preferred approach with the flexibility of the alternative.[9]  Even in escrow, a deed of ownership provided leverage as the Millars sold stock and sought loans within their Midwestern financial base.  Now the promotional literature of the Kimberlite Company could feature the Ozark Mine along with the Mauney, as it soon did.


    For the Millars, the purchase was timely, considering the rapid depletion of surface material on the Mauney Mine.[10]  But it also created more problems.  Along with  increased pressure for fundraising came increased conflict with the Mauney family over the diversion of time and resources from their property:  using the Prairie Creek plant to process material from the Ozark, as the Millars proceeded to do, hardly seemed consistent with the lease contract.[11]  When Millard M. Mauney died in April 1915, thirty-five year old Walter was free to do battle.  More lawsuits followed.  The Millars’ financial strain continued even though the Mauneys almost always lost in court and had to pay all costs.


    Gradually, the Millars’ fundraising efforts grew more misleading.  The nine-page prospectus for 1915, for instance, began by underscoring the need to expand the “test” washing plant, then implied the planned expansion, itself, was evidence of commercial success.  “More than One Thousand diamonds, many of them of exceptional beauty, have been recovered by the test washing.  This fact alone bespeaks successful exploitation.”[12]  Another paragraph declared, “It only remains for capital to be concentrated, applied in a businesslike way and guided by technical knowledge, in order to reap rich rewards from the successful treatment of this parent rock of the diamond.” Then came the boldest statement:


      The realities of our prospects in this original American field of industry cannot be exaggerated,  or the great probability of successful exploitation of our properties overestimated, as a greater relative showing of diamonds recovered has been made on one of our properties than is shown by the early records of the Kimberley field.[13]


    Next, the prospectus qualified these comments a bit.  The “novelty” of the undertaking in the United States “calls for a cautious and conservative entry into this new field of industry and our present plans only contemplate the operation of our plant to first test our ‘Mauney’ and ‘Ozark’ Mines where conditions are most favorable and require a smaller investment.”  The project required $50,000 to cover plant expansion and operating expenses “for several months.”[14]

    Concluding, the 1915 edition repeated the standard comment about the difference between a regulation plant and “this preliminary operation,” which company officials believed would “prove very profitable.”  Restating the point, the writer said, “. . . a large margin of profit may reasonably be expected by complete development when rightly managed and we feel that the ‘proposition’ presented you is sound and there is little doubt of permanent success along the lines outlined . . ..”[15]


    While work slowed at the Mauney Mine, Howard Millar’s trenching moved eastward across the slope, encompassing the Ozark’s old pit and extending into the alluvial wash beyond the rim of the pipe.[16]  The material was scraped up, shoveled into tramcars, and hauled by tramline to the plant on Prairie Creek.  There was no hydraulic sluicing to leave residue scattered about for future recreational miners.  Under close supervision, the carloads were brought in, washed, screened (“sized”), and visually examined on well-lighted tables; then the fine concentrates were run through a grease table to recover any gems missed.  The records show the recovery of even the minuscule “sands” and “grains.”[17]

    In 1915-1916, the Millars ran a series of nine tests from the Ozark Mine, completing the last on December 24, 1916.  These totaled about 1,700 loads and averaged almost 10 carats per 100.  Individual test averages ranged from 4.74 to 21.30 carats per 100 loads. The “Confidential Report No. 9” acknowledged the washed material consisted of “the yellow ground, blue ground, the volcanic debris and overburdens just as nature deposited them in the mine.”[18]  In promotional efforts, Austin Millar later referred to these as “special test runs made by us from the pure volcanic material of the Ozark mine.”[19]  The Millars’ final composite mining map, made after 1916, described the testing as “Developing Work in the Kimberlite Matrix.”  Cryptically, the legend said the map indicated “214 proven claims.”[20]



[1] “Report of Bids Received by Trustee,” J. C. Pinnix to the Honorable G. G. Pope, Referee in Bankruptcy No. 364, October 6, 1914, with attached appraisal Order and paperwork, August 25 and September 12, 1914.  The bids were also attached (Lamb and Wagner, September 19; Millars, both September 28; Kempner and Brewer, September 28).


[2] Report, Pinnix, Trustee, December 14, 1914; bids attached to ibid.; printed bulletin, “Bankrupt Sale of Valuable Property–Ozark Diamond Mines,” attached to initial Report of Trustee,” October 6, 1914 (“cash in hand”).  The Trustee cited the sale order at the beginning of each report.


[3] Bid attached to Trustee’s Report, December 14, 1914; “Order Approving Sale,” G. G. Pope, Referee in Bankrupcy, December 14, 1914 (the sale would “be approved and confirmed upon the payment of the residue of the purchase money”).


[4] Finders-Keepers, 43.


[5] Ibid.  Millar said the purchase surpassed expectations.  “The greatest area of diamond-bearing land in the crater proved to be on the Bemis tract” (ibid.).


[6] Report of Trustee, April 7, 1915.  No bid document accompanied the report.


[7] The Millars’ friends in Chicago, and St. Louis, evidently refused to risk money at first.  As indicated infra, two close associates at least agreed to co-sign a pledge of installment payments.


[8] Report, April 7, 1915.  Ordinarily, Pinnix and other bankruptcy trustees summarized the facts and made a recommendation, then submitted the report with signed bids attached.  In this unusual case, there was no bid document; the information was submitted for Pope’s “consideration, orders and directions.”


[9] “Order Revoking and Recinding [sic] Sale, Unless Payment is Made on or Before May 1, 1915,” Pope, Referee, April 8, 1915. 

    Beyond Pope’s order, the outcome is obscured.  The case file contains no further detail.  Moreover, deed searches failed to turn up an instrument transferring the property to the Millars, the Kimberlite Company, or any of the Millars close associates, which suggests one was never filed at the Pike County Court House.  The only related document on file is a deed Howard, Austin, and Austin’s wife, Margaret, signed October 27, 1927, transferring the Ozark property to their new Consolidated Diamond Corporation, chartered in Missouri (Pike, Deed Record 46, 528, Warranty Deed).  While promoting the Ozark as part of the Kimberlite Company’s holdings after early 1915, the Millars evidently held it as personal property; after the transfer to the Consolidated Diamond Corporation, stockholders of the Kimberlite Company were left with the original, almost worthless property in the hills.

    Only four items relating to the Ozark purchase were found in the Crater of Diamonds archive.  Austin Millar to S. C. Scotten, Chicago, September 18, 1914 (I.H), discussed the current bankruptcy proceedings, with Millar reporting he had learned two other bidders were interested, a local property speculator (“Owens”) and Reyburn.  Austin Millar to George B. Webster, St. Louis, December 10, 1914 (ibid.), added:  “We secured another option on the purchase of the Ozark property but at such a large price we may have to let it go when the time comes round for closing it up” (seemingly implying another bidder got the property, then optioned to Millar, but instead referring to the payment plan approved by the court).  Also, Pike County Real Estate Tax Record, 1915, p. 165, showing A. Q. Millar, “trustee,” paid the $123.08 tax due on a valuation of $5,500 for “40” acres, including the Ozark and the leased Mauney Mine (the final arrangement with the court included assumption of property taxes for 1914).  Over ten years later, Howard Millar wrote a law firm in Prescott, Arkansas, complaining about a current tax assessment.  Correctly, he said his group paid $10,000 dollars for the thirty acres of the Ozark Corporation “and this was by far the best offer [J. C.] Pinnix as Trustee for the Bankrupt Corporation could get after advertising the sale three times” (Howard Millar to Tompkins, McRae & Tompkins, Prescott, November 19, 1925, I.N).

    In the Crater archive, there is a sharp drop in the Millar’s correspondence for the years 1915-1918.  Although that was a decisive period for the Kimberlite-Ozark group in various ways, the correspondence provides very little insight into the issues.


[10] See the test reports in 1915, supra.  The Millars’ last detailed mining map, completed after 1916, indicated very little area was left outside the trenches on the Mauney Mine (VI, Crater archive; cf. O. L. Brace, Petroleum and Mining Geologist, Camden, Arkansas, Report to Gordon Ingalls, El Dorado, Arkansas, October 17, 1923, “Misc.,” box, Crater archive).  The Millars’ earlier map, which was integrated into the US Geological Survey map of 1916, shows more open area; but much of that was hardebank.

    This comment appears in an undated document in the Mauney Records:  “The overburden or top soil on the Mauney Mine has all been removed something like two years ago and the diamond dirt is now exposed.”  This evidently related to one of the final law suits. 


[11] Austin Millar declared the Ozark plant inferior to his setup at Prairie Creek.  But the Ozark’s rock crusher was useful, particularly in working the plentiful hard material of the northeast slope.


[12] Prospectus, p. 3, V.B.3; no date, but content indicates late 1914 to early 1915.  The prospectus had virtually the same lineup of company officials as before:  Austin Q. Millar, secretary and “general agent“; Howard Millar, chief engineer (after his move to Murfreesboro, early 1914); W. L. Wilder, Chicago, manager; John W. Bishop, Nashville, Ar., counsel; and W. F. Armstrong, of the Brown Shoe Co. of St. Louis, director.  The company now had an office in Murfreesboro as well as St. Louis (Howard still had a practice there).


[13] Ibid., 6.


[14] Ibid., 7.


[15] Ibid., 8-9.


[16] The Millars composite mining maps reflected the extension into the Ozark (“Mauney and Ozark Mines,” 1916, and “Developing Work in the Kimberlite Matrix” [1917-1918], VI.A-B, Crater). 

    A statement in one of the lawsuits suggested the Millars might have reworked the Ozark Company’s tailings and recovered diamonds:  “. . . the said Ozark mine, after expending more than Fifty Thousand Dollars, in an effort to test said land, became bankrupt and its property was sold, and . . . a test of the tailings of the Ozark mine developed that their machinery would not recover the diamond content of the land, whereby their venture proved disastrous” (“Amended and Substituted Answer and Cross Bill, ”Bettie L. Mauney, et al., vs. Austin Q. Millar and Howard A. Millar as Trustees, 1919, Pike Chancery Court, No. 931; 1920, Arkansas Supreme Court 219 Sw. 1028).  This question has practical application to Crater of Diamonds State Park:  those large deposits of diamond-bearing tailings would have become an important reserve for recreational hunting if they remained untouched.


[17] The Millars began reporting a few sands and grains from the Mauney Mine in 1914; the report to Mauney of April 7 included four sands.  The undated “List of Diamonds in Box” included twenty-one sands (II.N, Crater archive).  This is what Miser referred to when he wrote, “Some of the diamonds are so small that 250 would be required to weigh one carat . . ..” (Miser & Ross, “Diamond-Bearing Peridotite,” Economic Geology, 673).


[18] “Separate and Distinct Tests of Widely Separated Localities on Ozark Mine and Analysis of Recovery,” V.B.8;  “Confidential Report No. 9, Ozark Mine Trial Test Washing,” V.B.6.


[19]   Austin Millar to Wm. De Burgh Whyte, London, October 17, 1922, I.N.  This was a basic assertion in the Kimberlite group’s promotional campaign during that period (infra, “Roaring ‘20s”).


[20] VI.B, Crater archive.


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