The ADC’s Dilemmas

    All that promotional fervor, along with disappointing yields from the peridotite matrix, soon left the Arkansas Diamond Company in financial doldrums.   After organizing the company in late 1908, Reyburn and associates still owed $72,000 on their properties, and then found it difficult to attract the kind of investors they wanted.[1]  As John Fuller reported in the Mining and Engineering Journal, “The progress of diamond mining in Arkansas during 1909 was slight, due principally to lack of capital for development.”[2]

    Fuller’s report in January 1911 offered more insight.  “It has proved a difficult task to persuade the average investor that genuine diamonds actually exist in America and that these Arkansas fields show great promise of being a profitable venture.  On the other hand the large investors held off due to the fact that the owners [of the ADC] refuse to consider any offer involving the surrender of a controlling interest in the property.” [3]


     The issue of control had arisen immediately after Reyburn’s original group became a mining company open to other investors.  In the spring of 1908, for instance, John Fuller had come to Arkansas to evaluate Reyburn’s property for a client in New York City, and in June wrote a favorable report addressed to L.F. Loree, President of the Delaware & Hudson Railroad Company, New York.[4]  According to a later statement, Loree “did not purchase the property because the Arkansas group would not let control pass from their hands”.[5]

    Finding few investors in Arkansas, the ADC turned increasingly to New York for financing, and in March 1910 thought it had an agreement with the president of the Yorkville Bank, August Zinsser, and some of his associates.  Zinsser already had invested in Reyburn’s venture.[6]  In a public statement, the ADC projected a “permanent plant” and full-scale testing for six months at a cost of $208,000, all in line with Fuller’s original plan.  The company said it expected the test to yield some 25,000 carats of diamonds. “We have now reached the final stage in financing the proposition,” it announced, “and after completing this part of the work, will begin the steady development of the property.”[7]

    Finally, John Fuller thought he had an opportunity to prove the commercial reserve.  Finally, he was being lauded as “one of the noted engineers of the South African diamond mines,” the man who was preparing to install “extensive machinery to open up the new American discovery.”[8]  Then, again, final negotiations failed.


    The Zinsser affair blended into the most controversial negotiations the ADC ever undertook.  About May 1910, two representatives of financial interests in London visited the Pike County field and tentatively agreed to fund the ADC’s operation.[9]  On May 24, 1910, the company authorized a $250,000 increase in its capital stock, enough to execute Fuller’s plans.[10]  In early June 1910, Reyburn, Stifft, Cohn, and Fuller sailed to London to wrap up the details and order equipment.  Stifft told reporters they were securing the newest mining machinery while in England, but did not discuss the negotiations.  “We expect to have the machine built and installed within six months after the order is placed,” he said.[11]  With an uncharacteristic touch of optimism, the Arkansas Gazette declared, “Their departure marks the first step in the active operation of the only discovered diamond fields in the United States.”[12]

    After a long stay in London, the four returned, declining to issue an immediate statement about accomplishments.  Rumors in Little Rock suggested “London financiers” had purchased $175,000 worth of ADC stock.”[13]

    In response, Fuller’s next annual report in the Engineering and Mining Journal addressed the issue directly.  The ADC’s property “was visited during the year by representatives of an English syndicate.  A provisional agreement for the development of the property was signed by both parties, but at a subsequent meeting in London, this agreement was not ratified owing to difference over the details of the transaction.”  In his opening paragraph, Fuller had commented about the difficulty of dealing with “large investors,” who required “a controlling interest in the property.”[14]  As suspicions continued, Reyburn issued a more succinct statement ten years later:  “In 1910, partners in a London banking firm visited the property and offered to finance it, but insisted upon the control of the project.”[15]

    Into the early 1920s, the foreigners involved were referred to as “financiers,” an “English syndicate,” or “a London banking firm.”  No one suggested they or Reyburn’s group engaged in illegal behavior—before World War II, syndicates abroad virtually had a free hand to get involved in American activities.  Despite suspicions of outside influence, the only noticeable reference to the DeBeers diamond interests appeared in June 1910, in brief reports that DeBeers had asked Fuller to return to South Africa.  According to the Arkansas Gazette, “he received an offer to resume his old position at a salary considerably greater than the one he is receiving from the Arkansas Diamond Company, but declined it, believing that the possibilities of the Arkansas field were much greater.”[16]

    In the 1920s, frustration and suspicion developed into a conspiracy theory.  Sam Reyburn supposedly had enriched himself by agreeing to suppress the Arkansas diamond field and keep it from competing in the market place.  He was, the critics said, an ambitious betrayer who undermined aspiring diamond miners, costing them a fortune and derailing prosperity for Arkansans generally.[17]

    The details of the London meeting began emerging much later.  An account written after the 1920s offered a brief summary:


     . . . Sir Ernest Oppenheimer, of London, England, now Chairman of the Board of the Diamond Corporation, the organization that markets 95% of all diamonds now produced, and others representing the DeBeers interests of South Africa, visited the property.  The result of this visit was a series of negotiations held in London between the DeBeers group and Messrs. Reyburn, Stifft, and others of the Arkansas stockholders.  These conferences, arranged with the intention of British participation in the development of the property, fell through, the point of control again proving the impediment to cooperation.[18]


    Shortly before his death at age ninety, Sam Reyburn finally considered it worthwhile to answer a writer’s questions about that experience. The rare interview addressed various longstanding accusations that he and the ADC had conspired with the international diamond cartel to keep the Arkansas mine out of production.[19]  Asked for his account, Reyburn said two bankers representing Lewis and Marks of London “turned up suddenly in Murfreesboro” in 1910.  He “soon figured out” they worked for DeBeers and refused their offer to buy the ADC’s property.  Instead, he proposed they take a minority interest for $250,000, which the ADC needed to proceed with plans.  “They agreed tentatively and that June I got a cable to come to London.”[20]

    Abroad, “they wined and dined” Reyburn for three weeks before offering $450,000 for full control of the operation.  “Old man Lewis” took him to lunch and admitted plans to close down the Arkansas mine if the London group got it.  Lewis offered him personal inducement:  a three-year contract worth $150,000.[21]

    In that interview, Reyburn denied long-standing “rumors” that he had sold out to DeBeers.  He turned down the offer, he said, “in order to keep the mine under American control.”[22]



[1] Deed Book S, 492, Warranty Deed, ADMC to ADC, December 3, 1908.  Both companies had assumed responsibility for paying off a balance of $72,000 owed on properties, plus promised interest.


[2] John Fuller, “The Arkansas Diamond Fields in 1909,” p. 767. 


[3] “Arkansas Diamond Field in 1910,” p. 6.  Also see the earlier comment of William C. Rodgers, a lawyer in nearby Nashville, Arkansas, who was involved with mining interests.  Citing leading authorities who “do not hesitate to pronounce the diamonds genuine and of excellent quality and the dirt as indicative of at least probably large paying ventures,” he continued:  “The public, however, have not accepted the reports of the discovery of these gems as more than a joke or fake.  Those living at a distance, and even many in the state laugh at the claim that these fine gems are being found” (“The Arkansas Diamond Fields,” unpublished ms., spring of 1909, W. C. Rodgers Collection, Box 2.IV, File 17, AHC).


[4] Fuller to Loree, June 25, 1908, in “Reports and Information.”


[5] Fuller, et al. “Historical Summary of Arkansas Diamond Corp. of Virginia,” in “Reports and Information,” 1; cf. “Public Statement by John T. Fuller on April 7, 1929,” ibid., 33.


Bibliographic Comment.  The “Summary,” finished shortly after July 9, 1940, contained details only Fuller could have commanded, but it also reflected some interpretations originating with Howard and Austin Millar.  The original information was Fuller’s, who died before 1940, and evidently that was summarized and expanded by a mining engineer from Chicago, George N. Vitt, who was influenced by Howard Millar.  A group from Chicago had recently gotten an option on the Arkansas Diamond Corporation’s property and hired Vitt to write a favorable report on it.  They supplied Fuller’s various reports.  Vitt spent time in Murfreesboro and at the property, where the Millars still held the four acres of the northeast slope they had gotten from the bankrupt Ozark Corporation in 1914-1915 (infra,Further Disappointments in the ‘40s”; “George Vitt’s Analysis”; “Northeast Slope—Millars—Ozark Purchase”).


[6] In contrast with almost all the ADC’s negotiations, this case was publicized at the time.  See “Diamond Mining in Arkansas is First in America,” New York World, February 28, 1910, clipping in W. C. Rodgers Collection, Box 2.IV, File 26, AHC; reprinted as “The Pike Diamonds,” Nashville News, March 9, 1910, p. 3; also “The Pike Diamonds,” News, February 23, 1910, p. 3 (Kunz’s previous statement), and “Operations–To Be Resumed at the Pike Diamond Mines,” News, February 2, 1910, p. 1 (“Superintendent Fuller, of the Stifft-Reyburn diamond mines in Pike country, has returned to the mine, and operations will open up on a large scale in the near future. . . .”).  One of those appearing on the scene in Pike County during negotiations was L. F Loree, who had tried to buy the ADC’s property in 1908 (“Notable Visitors–Were at Pike Diamond Mines Friday,” News, March 12, 1910, p. 2).

    Fuller, Report to Loree, June 1908, p. 14, said Zinsser “was taken into partnership” earlier; but the paperwork for the original Arkansas Diamond Mining Company lists only Reyburn, Stifft, Cohn, John Peay, and C. P. Perrie (supra, ADMC corporate filings).   In any case, he remained obscure until 1910, and did not participate with other principals of the ADC as they continued to finance operations afterward.


[7] Nashville News, February 23, 1910, p. 3, Stifft’s statement. 


[8] News, March 9, 1910, p. 3, citing Kunz.


[9] Discussed infra.  At this point, the diamond syndicate and other interested groups evidently were influenced by Fuller’s optimistic reports—regardless of all the general information about surface and subsurface yields.


[10] “Amendment of Articles of Agreement and Incorporation of the Arkansas Diamond Company, Providing for Increase of the Capital Stock of the Company from $1,000,000 to $1,250,000,” May 24, 1910, Arkansas, Corporate Records, No. 478, Record 4-14-199.  


[11] “To Buy Diamond Mine Machinery,” Arkansas Gazette, June 2, 1910, p. 1; reprinted as “Four Diamond Men,” Nashville News , June 4, 1910, p. 3.  As quoted, Charles S. Stifft seems to have been somewhat deceptive, saying of the machinery:  “. . . it is for this reason that we are obliged to go there [to London].”  He and the others had learned, however, not to broadcast financial agreements before concluding them.


[12] Ibid.


[13] “Machinery Bought,” Nashville News, July 20, 1910, p. 2.


[14] Fuller, “Arkansas Diamond Field in 1910,” 6.


[15] Samuel W. Reyburn and Stanley H. Zimmerman, “Diamonds in Arkansas,” EMJ (April 24, 1920), 984; also Reyburn’s previous statement:  Reyburn, President of ADC, letter to stockholders, May 1, 1914, Crater archive, I.H.


[16] “Machinery,” Gazette, June 2, 1910, p. 1; “Diamond Men,” Nashville News, June 4, 1910, p. 3.


[17] Although still muted in public expression, the sentiment gained a bit of publicity during a court case in the mid 1920s (Infra, “Frustration, Suspicion, and Taxes”).  It was more evident behind the scenes (infra, “Millars–New Speculative Heyday,” passim). 


[18]   “Historical Summary,” (c. 1940) in “Reports and Information,” 1.  This must have come from Fuller, who participated in the event.  After that statement appeared, an article in the Arkansas Gazette mentioned the London episode:  “With Mr. Stifft and three other directors, Mr. Reyburn went to London for the purpose of obtaining British backing, but the British wanted to control the Arkansas mines and there was no deal.  Albert D. Cohn, W. B. Smith and Arthur E. Van Etten were directors who accompanied Mr. Reyburn and Mr Stifft to London, it was recalled by J. F. Loughborough, lawyer who is a former director of the company” (“Diamond Field Hoped For,” Gazette, June 16, 1940, p. 11).

    In the mid 1920s, the issue emerged in Pike County, basically because of agitation by Reyburn’s old critic, Austin Q. Millar (infra, “Frustration, Suspicion, and Taxes”; “Millars—Dealing with ‘Conspirators’”).


[19] Infra, “Millars—Dealing with ‘Conspirators.’”


[20] Gross, “Diamond Mine Mystery,” 98.  Although Gross obviously accepted the conspiracy theory, his reporting on Reyburn was largely straightforward and no doubt true to the interview:  during his career, Reyburn had become one of the nation’s eminent business leaders, as Gross suggested in the article.  The writer erred, however, in identifying his subject as “Samuel Winston Reyburn.”


[21] Ibid.


[22] Ibid.  In March 1943, the New York diamond firm Schenck & Van Haelen honored Reyburn with a gift of cut stones accompanied by a special certificate reading, “The enclosed Diamonds from The Arkansas Mine [the original ADC property] are presented as a token of esteem recognizing the sound judgment which under your guidance helped in preserving for this Mine its American ownership” (I.P, Crater archive, originally in the Lee J. Wagner records).  Schenck & Van Haelen, operating at the center of the international diamond trade, had handled diamonds from the ADC’s property since the first years of the venture and no doubt had substantial information about the company’s financial negotiations.

    Samuel (Sam) Wallace Reyburn died in June 1962 and was buried in Mount Holly Cemetery, Little Rock.  An extraordinarily long and detailed obituary in the Arkansas Gazette did not mention his diamond-mining experience (“Samuel W. Reyburn, 90, Dies at Home in Florida,” June 8, 1962, p. B1), nor did an obituary in the Arkansas Democrat (June 7, 1962, pp. 1-2) or an entry in Who Was Who in America, IV (1961-1968), 787.

    Apparently, the harsh criticism setting in after World War II, fomented basically by Howard Millar, dealt Reyburn a final disappointment.  As he told an associate late in life, he “learned the hard way that mining at Murfreesboro held no prospect of fortunes” (S. D. Dickinson, Prescott, Arkansas, letter to Dean Banks, September 29, 1989, in author’s files.).


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