A couple of years ago I had the pleasure of writing a study guide to the great American author Mark Twain. I was asked to
include some of his many witty aphorisms in an appendix, a terrible task of
selection. One that didn’t make the cut was this definition: A mine is a hole
in the ground, owned by a liar.
John Sadleir
(1813-1856)
Which brings me to my ancestor John Sadleir, MP
for Carlow in Ireland and a liar and swindler on a grand scale. In the end he took his own life, belatedly weighed down with remorse
about the thousands of investors whose lives he ruined. One of them was, I believe, his cousin my great great grandfather Richard William Ralph Sadleir. John started out being
fairly honestly successful in amassing wealth through business and land
transactions. But when his financial star waned he turned to increasingly
desperate and ill-judged speculation to fund his earlier investments. One of
his more colourful get-rich-quick schemes was the founding of the Carson’s Creek Gold Mining Company in February
1852.
Gold was discovered in California at the start of 1848. Although word
was at first slow to spread, the trickle of prospectors travelling to the
territory soon became a flood. In 1849 some eighty seven thousand men (and
three thousand women) joined the Gold Rush. Known collectively as Forty-Niners
they found gold in abundance more or less lying around in surface ore. You didn’t
even have to go underground – a stick of explosive would send up a shower of gold-bearing
quartz, or you could just pan for gold in the silt of the rivers.
A Forty-Niner
(pictured in 1850 – picture from Wikipedia)
In 1849 the pan-handlers extracted $10 million
worth of gold. In 1850 it was $41 million. In 1851 it was $75 million and in
1852 $81 million. It must have seemed the answer to all John Sadleir’s prayers,
if he could just carve himself out a tiny fraction of the wealth being
generated in California.
He found his opportunity and went into
partnership with the new American owners of a mine on Carson Hill, which stand
above the Stanislaus River in central California. Carson Creek, through which the
river flowed below the mine, was one of the early centres of the gold rush
after James H. Carson found plentiful gold in the riverbed and staked his claim
there.
But by 1852 the easy gold was running out. Now
you had to dig for it, hard work with uncertain returns. In pitching to London investors Sadleir was able to
assure them on the matter of legitimate ownership of the mine (previously
occupied by illegal squatters); but there was no knowing how much ore the mine
might deliver. But greed, like love, is blind: when Sadleir described the
luxury in which the squatters had lived, and wheeled out a tame U.S. attorney eager to buy up any shares
left over after the flotation, the money, £154,000 of it, poured in.
A mine and mill on Carson Hill, still being worked in the 1920s
And out again. John Sadleir, now the chairman
of the Carson’s Creek Gold Mining Company, borrowed large amounts of money from it which
he told investors had been earmarked for the purchase of mining machinery. He could not repay it
when it became due in January 1855; so he lodged the deed of some of his Irish
property with the London and County Bank as security.
But he was also the chairman of the London and County Bank, and he quietly
retrieved the deed without the knowledge of the bank’s directors and lodged it
elsewhere as security against further loans – a bit like selling the land
twice. At least the bank had
directors; the Carson’s Creek company had none, and after John Sadleir’s suicide no one even
knew where he had kept the invested sums, let alone that he had by then spent
it all, every last fool's gold penny.
When in the depths of his remorse he swallowed
prussic acid one night on Hampstead Heath, his overdraft at the Tipperary Joint
Stock Bank, of which he and his brother James were directors, had risen to around
a quarter of a million pounds, while he and his brother had reduced the bank’s
assets to only £75,000. Besides defrauding that bank's and the Carson’s Creek Mining Company’s investors,
Sadleir had also been selling forged shares in the Royal Swedish Railway
Company, to which he owed at the time of his death a further £300,000.
Landmark sign in Carson Hill,
now a ghost town
Gold extraction never again reached the glittering heights of that 1852 value. But nine months after John Sadleir’s death, Morgan
Mine elsewhere on Carson Hill yielded a giant piece of gold weighing over
thirteen pounds and worth $43,000 at 1856 prices. It is still the largest single nugget ever
found in California.