There used to be a popular hobo song called "The Big Rock Candy Mountain". It was sung quite frequently in the 19th Century, and I keep wondering if it is based somehow on this particular story of a business fraud that shook up San Francisco in the 1870s.
Due to the California gold rush and the subsequent Comstock Lode in Nevada many great fortunes were made. One was the Ralston fortune made by banker William Ralston. His Bank of California was the most successful west coast banking house of his day. But Ralston was a booster of California - and he was constantly seeking new ways of investing money for profit.
Ralston in this story was played by Barry Sullivan (who played the cagey newspaper reporter Edwards in the episode dealing with the "disappearance" of President Grover Cleveland). As the story continues two prospectors (John Stack - John McGiver - and Philip Arnold - John Fiedler) come into the bank one day and want to open an account. They act mysteriously, and the teller soon realizes why. Their "money" is diamonds. They are taken to see Mr. Ralston, and they explain that they have discovered the richest diamond field in the world in the desert of New Mexico. Ralston is interested, but insists that the samples be checked. At great expense he calls in Louis Tiffany from New York. Tiffany studies the diamonds and pronounces them real and worth many thousands of dollars. Ralston proceeds to buy the field from the reluctant prospectors (a real steal for only $100,000.00 he pays them). He and his associates start floating a company to mine the rich harvest in diamonds.
Somebody on the periphery of these events is Clarence King, the founder of the U.S. Geological Survey and one of the best field geologists of his day. King, when not working for the government, did occasional work for mine owners to check locales for possible exploitation. He asks where this field is, and is told it's in Wyoming. There is a problem here: King has recently been through that area and he's damned if it has the right physical features to enable a diamond mine to exist there.
King (wonderfully and dryly played by J.D. Cannon in this episode - he rarely had such a fun part) goes with an assistant to the area. He finds enough things to show that a real fraud was perpetrated. He returns to San Francisco and confounds Ralston and his backers:
1) Yeah there were diamonds in the field - they were in the tree branches and the ground in holes (apparently the ground is rich enough for diamonds to sprout in it).
2) The odd location of diamonds showed that they walked too - frequently footprints of one or two men could be seen walking to or from a site where a jewel was dropped.
King eventually learns another thing that embarrasses Louis Tiffany. Yes the diamonds were good - but they were all cut. Tiffany never saw an uncut diamond in his career.
Arnold and Slack (last shown joy riding in a carriage with two "ladies") never were punished for this fraud. Slack disappeared. Arnold opened a bank back in his home state of Kentucky, only to be shot and killed by a rival banker.
As for Ralston, rumors spread that he had tried to buy off King from making public his discovery of the truth - King supposedly said that there was not enough money in the Bank of California to keep him quiet. As it turned out the bank did close due to a cash crisis a year or more after the fraud. The Bank actually was solvent, but the public did not realize this. Ralston was eventually asked to step down from his bank presidency. That afternoon he went to take his customary daily swim. Whether he died from a sudden cramp or he swam intentionally outside his safety limit and drowned was never established. The death of Ralston was not part of the episode, which was unusually funnier than expected.
