Ohio History Journal

Robert C Schenck and

The Emma Mine Affair

 

By CLARK C. SPENCE*

 

 

 

"THE PLAYER WITH A WORTHLESS HAND had generally

better begin by 'raising' when he goes in, or else nobody will

be likely to believe in his pretended strong hand." Thus

wrote Robert C. Schenck, celebrated author of Draw-poker,

in 1880.1 Schenck was of course referring to the game on

which he was the country's foremost expert, but this statement

might also have been applied to another area within the field of

his experience--the promotion of American mining property

in Great Britain. Nine years earlier, as minister to the

Court of St. James, Schenck had played a vital, if ill starred,

role in the Emma mine affair, an incident which aroused

public sentiment on both sides of the Atlantic, ultimately

brought about his recall, and added to the growing list of

scandals being charged against the Grant administration.²

The Emma was Utah's prize silver mine. In 1871 it was

owned by a New York company dominated mainly by two

enterprising Vermont lawyers, Trenor W. Park and Horace

Henry Baxter. Late that year, after a thoroughgoing pub-

* Clark C. Spence is assistant professor of history at Pennsylvania State Uni-

versity.

1 Quoted in Beckles Willson, America's Ambassadors to England, 1785-1929:

A Narrative of Anglo-Amercan Diplomatic Relations (New York, 1929), 359.

2 There had been no detailed account of the Emma mine affair previous to the

publication of my book, British Investments and the American Mining Frontier

(Ithaca, N. Y., 1958), from which a great part of this article is drawn. A less

recent description, giving scant treatment to Schenck's relationship to it, is W.

Turrentine Jackson, "The Infamous Emma Mine: A British Investment in the

Little Cottonwood District, Utah Territory," Utah Historical Quarterly, XXIII

(1955), 339-362.

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142     THE OHIO HISTORICAL QUARTERLY

licity campaign, it was sold to British investors largely

through the efforts of Park and Senator William M. Stewart

of Nevada, the latter ostensibly representing the interest

of a client in the mine.³ The actual process of promoting

the sale and eliciting investment, however, was placed in the

hands of Baron Albert Grant, one of the leading and most

detested London financial wizards of the last half of the

nineteenth century.⁴ In November, Grant organized the

Emma Silver Mining Company, Ltd., to acquire the prop-

erty at a purchase price of ??1,000,000, half in cash and half

in fully paid-up shares. Nominal capital of the concern was

??1,000,000, in shares of ??20 each; operating capital was to

come from ore on hand, already in transit, or to be taken

out in the near future.⁵

 

3 Park (1823-1882), born near Bennington and trained in the legal profession,

became a member of the California firm of Halleck, Peachy, Billings and Park

in the 1850's, specializing in land titles. In 1863 he participated in an abortive

attempt to form a company to acquire John C. Fremont's Mariposa Estate.

Returning to Vermont, he established the First National Bank of North Benning-

ton, organized the Vermont Central Railroad, and served as a state senator from

1865 to 1869. He was also president of the Panama Railroad and a director of

the Pacific Mail Steamship Company. Baxter (1818-1884) also served as a director

of these last two enterprises. In addition, he once held extensive quarry holdings

at Rutland, Vermont, and was for a time president of the New York Central

Railroad until Cornelius Vanderbilt took control. Stewart (1827-1909) taught

mathematics in a New York high school, studied law briefly at Yale University,

and was drawn to California in the early 1850's, where he ultimately became one

of the finest mining lawyers on the Pacific Coast. A Republican senator from

Nevada, 1864-75, he was instrumental in the passage of the mineral laws of 1866

and 1872. From 1887 to 1905 he again served in the senate as a champion of the

free silver cause.

4 Born in Dublin as Albert Gottheimer (1830), Grant was given the title of

baron by King Victor Emmanuel for his contributions to the Galleria Vittorio

Emanuele at Milan. He was M.P. for Kidderminster in 1865 and again in 1874

and donated land in central London to establish Leicester Square. He is described

as "the pioneer of modern mammoth company promoting."

5 Certificate of Incorporation, November 8, 1871, and Memorandum of Agree-

ment between Park and George H. Dean, November 4, 1871. File No. 5809, Emma

Silver Mining Company, Ltd., Companies Registration Office, Board of Trade,

London. Cited hereafter as C.R.O. File 5809. Grant's agreement with the

vendors--Park and Stewart--was secret, but by it he was not only to organize

a joint-stock company to take over the mine, he also was responsible for sustaining

the market to hold share prices up until subscription was completed. Memorandum

of Agreement between Park and Stewart (vendors) and Grant and Company,

November 2, 1871, in Emma Mine Investigation, House Report No. 579, 44

cong., 1 sess., 252-253. Cited hereafter as House Report No. 579.

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SCHENCK AND THE EMMA MINE                      143

As part of his promotional campaign, Grant issued fifty

thousand copies of an elaborate prospectus designed to sweep

the potential investor off his feet and loosen the strings of

his purse.     Included was testimony of the mine's richness

given by the distinguished Benjamin Silliman, Yale professor

of chemistry. A net yield of nearly ??700,000 a year was an-

ticipated and immediate monthly dividends totaling eighteen

percent per annum were promised. More striking to the

prospectus-reading public, however, were the imposing names

appearing among the board of directors: George Anderson,

M.P. for Glasgow; Edward Brydges-Willyams, M.P. for

Cornwall; Edward Leigh Pemberton, M.P. for West Kent;

John Stanley, heir to a title; and finally, as the central at-

traction, Major General Robert Cumming Schenck, poker-

player extraordinary and minister plenipotentiary of the

United States to Great Britain.⁶

Behind the selection of these names--particularly Schenck's

--lay a story unknown to the average Englishman. Schenck

had been introduced to Park and Stewart by William M.

Evarts, then in London as counsel to the commission working

on the Alabama claims arbitration. Schenck had found it

impossible to maintain suitable living standards for himself

and his family on his meager salary of $17,500, and he

listened with attention when the topic of the Emma mine

6 Emma Silver Mining Company, Ltd., Prospectus (November 9, 1871). Library

of the Stock Exchange, Share and Loan Division, London. See also Report of

Professor B. Silliman on the Emma Silver Mine (Salt Lake City, October 16,

1871). Western Americana Collection, Yale University. Schenck (1809-1890)

was a graduate of Miami University. He practiced law in Dayton, served in the

national house of representatives (1843-51), and was American minister to Brazil

from 1851 to 1853. He fought at both battles of Bull Run, was made a major

general, but resigned his commission during the war to serve again in the house,

where he became chairman of the committee on military affairs and later of the

committee on ways and means. Defeated in his bid for re-election in 1870, he

was appointed to the post in England in the following year. For sketches of his

life, none dealing in detail with the Emma episode, see Fred Joyner, "Robert

Cumming Schenck, First Citizen and Statesman of the Ohio Valley," Ohio State

Archaeological and Historical Quarterly, LVIII (1949), 286-297; Howard Carroll,

Twelve Americans: Their Lives and Times (New York, 1883), 219-262; Epiphanie

Clara Kokkinou, "The Political Career of Robert Cumming Schenck" (unpublished

M.A. thesis, Miami University, 1955).

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144     THE OHIO HISTORICAL QUARTERLY

was casually introduced into dinner conversation. When he

pointed out that his interest in the proposed undertaking was

greater than his cash resources, Park agreeably offered as-

sistance, which was promptly accepted. By a secret agree-

ment dated November 1, 1871, Park advanced Schenck

??10,000 as an interest-free loan to invest in the Emma ven-

ture, at the same time guaranteeing monthly dividends and

even promising to take the shares off Schenck's hands in the

future if the diplomat wished.⁷

Park, Schenck, and Stewart all subsequently maintained

that Schenck was approached to become a director only after

he had arranged to take shares. Promoter Albert Grant--the

"Jay Gould of London"--insisted that he undertook to float

the company only after Park had informed him that the

American minister was willing to join the directorate if his

presence would inspire confidence. Under pressure of a con-

gressional investigation, however, Park was forced to admit

that though the arrangement with Grant was verbally com-

pleted before Schenck was asked to sit on the board, the

written contract with Grant was not signed until afterward.

The house committee on foreign affairs therefore was in-

clined to support Grant and "raised strong doubt" concerning

the authenticity of the dates on documents submitted as evi-

dence by Park.⁸

Not only did Park lend Schenck money and safeguard his

investment, he went so far as to hand over to the minister

part of what he made in private speculations in Emma shares.

7 The guaranteed monthly dividends were originally two percent per month,

but were scaled down to one and a half percent by an amendment of December 2.

The loan was to be secured on shares to be taken up by Schenck, or, if Park desired,

on the further security of Schenck's house in Washington. If at any time Park

offered to take the shares at par and Schenck refused, Park was then released from

his obligation to take over Schenck's shares. Park to Schenck, November 1, 1871,

in House Report No. 579, 280. For Schenck's financial woes, see Schenck to

Hamilton Fish, November 30, 1872, ibid., 303.

8 Park testimony (April 12, 1876); Stewart testimony (March 22, 1876);

Schenck testimony (March 28, 1876); Grant circular issued to Emma shareholders

(January 5, 1876), all ibid., 34, 161, 281, 310, 642, 550, iii, v. The customary stamp,

giving legality to such documents in England, was lacking, and there was no way

of verifying the dates.

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SCHENCK AND THE EMMA MINE             145

This beneficence he explained as a result of a desire to aid

Schenck, whom he instinctively liked, and the wish to have a

capable person in London to protect American interests in the

company.⁹ It was obvious, however, that Park's magnaminity

was dictated by but one prime motive: the desire to use

Schenck's name as an added lure to investment.

And the lure was effective; capital was subscribed rapidly,

even though public reaction to Schenck's association with the

new company was mixed. While applause was forthcoming

from several British periodicals, the more conservative ones

expressed regret and recommended that Schenck withdraw

from the board immediately. No diplomat of importance

should have time for such demeaning sideline activities, in-

sisted the London Economist. The Daily Telegraph of the

same city believed Schenck's connection with the Emma

"imprudent," if not "indecent." No representative "of a

great Power at a Foreign Court should permit his name to

be hawked about the purlieus of the local bourse in intimate

connection with a highly speculative joint-stock enterprise,"

said the Telegraph.¹⁰

In the United States Legation in London, veteran secretary

Benjamin Moran noted that feeling in the "City" toward

Schenck's being a director was "intense and hostile."  "A

storm on the subject will come from Washington," he pre-

dicted, "or I am in error." But, he added, "I do not keep his

conscience and am not responsible for his acts."¹¹ Moran was

right; while a few American editors cited the Emma as a rare

example of honest mine promotion or adopted a "let's wait

and see" attitude, most believed that, at best, the mine had

 

9 Schenck accepted ??1,894 in this fashion, the sum being credited on his

promissory note late in 1872. Park testimony (April 12, 21, 1876), ibid., 646, 805.

10 Economist, November 1l, 1871, p. 1365; Daily Telegraph, November 24, 1871.

For a more favorable reaction see London Iron Times, November 11, 1871; London

Mining World, November 11, 1871.

11 Journal of Benjamin Moran, XXX (November 13, 1871), 275-276. Library

of Congress.

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146    THE OHIO HISTORICAL QUARTERLY

been overpriced and that Schenck's position was indefensible.12

Godkin of the Nation erroneously declared that Schenck had

violated a state department ruling against speculation by

diplomatic personnel and feared that scandal might be brought

down upon the general's head before the affair was closed.13

To anti-administration newspapers, Schenck's conduct was

"disgraceful and unbecoming," but to be expected under the

Grant regime. The more outspoken termed the transaction

from the beginning "a miserable mining swindle" in which,

to the promoters, the name of Schenck "would weigh more

than all the precious ore that has been taken out of their

mine."14

Several papers, the New York Evening Post among them,

almost immediately demanded Schenck's recall, and London

observers thought it not unlikely that this request would be

met.¹⁵ The London Times bluntly announced that Schenck

would be replaced unless satisfactory explanations were forth-

coming, a suggestion which generally distressed Schenck and

prompted him to cable Secretary of State Hamilton Fish on

November 27, outlining his position in self-righteous, if not

completely accurate, terms:

 

Have no pecuniary interest except some shares for which after

investigation fully, I paid dollar for dollar. Having thus decided and

raised means to invest was solicited by respectable Americans to act

with gentlemen of known high character as director, to protect their

interest and my own in what I believe very valuable property. Perhaps

made mistake in consenting. Want only honorably and usefully to serve

my government and countrymen, but have not deemed it wrong to try

12 See New York Wall Street Journal, November 25, 1871, quoted in London

Mining Journal, December 9, 1871, p. 1102; New York Engineering and Mining

Journal, December 12, 19, 1871, pp. 377, 393; Pittsburgh Gazette, November 27,

1871.

13 The Nation, November 30, 1871, pp. 345, 348-349.

14 Harrisburg Daily Patriot, December 4, 9, 1871; New York World, November

29, December 6, 1871. The rumor was even spread that Schenck had received

$200,000 outright for the use of his name and that Senator Chandler of Michigan

stood to gain half a million dollars. New York World, December 20, 1871.

15 Moran Journal, XXX (November 23, 1871), 299-300.

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SCHENCK AND THE EMMA MINE                    147

 

and make something honestly for myself and family. Will withdraw from

board or do whatever you advise. Will not embarrass administration.16

Fish was already aware of British criticism of Schenck

and did not hesitate to bring the matter before the cabinet,

explaining that while no law or departmental regulation

prohibited a diplomat from being affiliated with a business

undertaking of this nature, it was distressing that Schenck's

name had been used in London to advertise "an inchoate and

possibly speculative concern."17 Fish also read Schenck's

cable of explanation to the cabinet, then immediately sent

back a reply, which President Grant said was "precisely

right." Schenck was informed that his action was "ill-advised

and unfortunate" and was "calculated to subject him to criti-

cism." Though Fish assumed that he had not taken an

active role in promoting the company, he "earnestly advised"

Schenck to withdraw his name from its management.18 In

reality, however, this was more than a mere recommendation;

Fish was giving Schenck the choice of resigning from the

directorate or resigning from his post as minister.

The decision was not a difficult one for Schenck. He made

it promptly and confided in Benjamin Moran as early as

November 29, but not until a week later did he write a letter

resigning from the board, and not until January 12 of the

new year was this made officially public in England.¹⁹ Very

likely this time lag was to provide an opportunity for all shares

to be taken up before Schenck's name was withdrawn. Even

16 London Times, November 27, 1871; Moran Journal, XXX (November 27,

1871), 307; Schenck to Fish, November 27, 1871, State Department Dispatches,

Great Britain, National Archives.

17 Hamilton Fish Diary, III (November 24, 1871), 143. Library of Congress.

18 Ibid., III (November 28, 1871), 145; Fish to Schenck, November 28, 1871,

Fish Letter Copy Book, V, 38-39, Fish Correspondence, Library of Congress. At

the same time the British charge d'affaires in Washington confidentially informed

his government of this advice to Schenck. Pakenham to Grenville, November 28,

1871. Great Britain, Foreign Office Dispatches, 5/1218. Cited hereafter as F.O.

19 Moran Journal, XXX (November 29, 1871), 315-316; Schenck to Fish,

December 9, 1871, Fish Correspondence; London Times, January 12, 1872. Shortly

after Christmas it was "semi-officially announced" in American newspapers that

Schenck had withdrawn from the directorate. See New York World, December

27, 1871; Pittsburgh Gazette, December 27, 1871.

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148 THE OHIO HISTORICAL QUARTERLY

then, the resignation was couched in terms expressing great

confidence in the Emma mine, and strong evidence suggests

that it was at least revised, if not written in its entirety, by

Park.²⁰ The whole tone of the withdrawal, including

Schenck's parting statement that it came "upon grounds

purely personal," was misleading and to partisan observers

exasperating. "This unreserved puff of a financial specula-

tion is rather more unworthy of an ambassador than was

the loan of his name as a director," cried the New York

World.21

Nor did Schenck let the matter rest. Along with a copy

of his resignation from the directorate, he sent a defense of

his action to Fish, pointing out that the Portuguese minister

in England, the duke of Saldanha, was a director of several

important Anglo-Portuguese companies. He also took the

occasion to attack bitterly the Economist and the Evening

Post as free trade organs and the Telegraph as the sounding

board of a London Jew who had sympathized with the Con-

federacy.²²  Such arguments, however, did not convince

American editors: Schenck's assault on the hostile press was

lame and diversionary; Saldanha was "a notorious old

'operator' and adventurer and no model for American diplo-

matists."²³

According to Moran, Schenck's connection with the Emma

gave "both him and the Legation a great deal of trouble."

Continued newspaper reports predicting his recall distressed

the general most.²⁴ Particularly disconcerting was the news

carried by the Times of December 20, that the senate had

agreed to inquire into the role of diplomatic personnel in

foreign business ventures. Schenck immediately cabled Fish

for information and was reassured on the same day that such

20 London Times, January 12, 1872; House Report No. 579, xiii.

21 New York World, January 31, 1872.

22 Schenck to Fish, December 10, 1871, Fish Correspondence; Schenck to Fish,

January 12, 1872, State Department Dispatches, Great Britain.

23 The Nation, December 28, 1871, p. 410; New York World, December 27, 1871.

24 Moran Journal, XXX (December 14, 1871), 353, 365; London Times, De-

cember 13, 1871, January 5, 1872.

• 8
 

SCHENCK AND THE EMMA MINE    149

was not the case.²⁵ Actually the senate had passed a resolu-

tion, introduced by Francis Blair of Missouri, calling for an

investigation as reported by the Times.²⁶  Park's immediate

reaction was to send papers, including a copy of his secret

agreement with Schenck, to Luke Poland, representative from

Vermont, and to ask him to line up Senators Morrill and

Edmunds of the same state.²⁷ When news reached Schenck

that he had been exonerated, he and Park took the agreement

and note to his home, according to Moran, and "laughing

over the trick, burnt them in his drawing room."²⁸

Meanwhile, as Schenck remained the center of controversy,

Park was consolidating his position in London. To avoid

possible litigation, the claim of Stewart's client was settled

for a lump sum of $250,000, less heavy lawyer's fees. Then

Stewart, on behalf of Park, scurried to New York, where he

purchased at ludicrously low rates the outstanding shares of

the original New York concern. Park probably gained nearly

$1,000,000 by this coup.²⁹ At the same time, Park bulled

the English market to bolster share prices until he could

dispose of the $500,000 worth of vendor's shares to the public

at premium prices. This he accomplished in the spring of

1872, when he threw the bulk of his holdings on the market,

25 London Times, December 20, 1871. The resolution, said Schenck in his inquiry,

"is aimed, I presume, at me. Please inform me. Am not afraid of investigation."

Schenck to Fish, December 20, 1871, State Department Dispatches, Great Britain.

Fish replied: "No such resolution to my knowledge." Fish to Schenck, December

20, 1871, House Report No. 579, 7.

26 For this resolution, see Congressional Globe, 42 cong., 2 sess., 211.

27 Poland testimony (April 21, 1876); Park testimony (April 19, 1876), House

Report No. 579, 758-759, 795.

28 "Such conduct may cover up fraud," said Moran, "but fraud still exists &

it cannot be denied that Gen'l Robt. C. Schenck . . . did take a bribe of $10,000

from the Emma Mining Co., to aid in swindling the British Public." Moran

Journal, XXXIV (February 17, 1873), 143.

29 On behalf of Park, Stewart bought 21,875 shares from the old shareholders

in New York who were entitled to a proportionate interest in the new British

concern. Each old $100 share entitled a shareholder to one $20 share in the new.

Park acquired the shares for $50 each at a time when the new ones were worth the

equivalent of $115 on the London market. Stewart's client, James E. Lyon, settled

for $250,000, but lawyer's fees took $100,000 of this. Stewart testimony (March

21, 1876); Memorandum of Agreement between H. H. Baxter, et al. and Park,

December 9, 1871, House Report No. 579, 158, 271.

• 9
 

150   THE OHIO HISTORICAL QUARTERLY

ostensibly so that the Emma Silver Mining Company, Ltd.,

could meet requirements for a quotation on the London Stock

Exchange.³⁰

Apart from this, Park made profits of ??16,700 from Emma

speculations exclusive of his original vendor's allotment.31

Schenck, too, was playing the markets, but with more disaster

than success. His initial plunge had been for five hundred

shares, representing an "investment" of ??10,000. In June

1872 Secretary Moran noted that Schenck had lost ??6,000

in a speculation in Emma mine shares "entered into by that

blockhead Woodhull."³² "That blockhead"--Maxwell Wood-

hull, second secretary of the legation--was shortly replaced

by Colonel William H. Chesebrough of New York, who also

came down with the fever, as frequent references by the

puritanical Moran attest. "Col. Chesebrough was in today

and says he has been smashed up by the Emma," commented

Moran several days before Christmas, 1872. "He frankly

told me that he spends his time dealing on the Stock Ex-

change."³³

When Park threw his vendor's shares on the market "to

obtain a Stock Exchange quotation" for the company,

Schenck applied for five hundred, but was allotted only three

hundred, which he sold within three weeks at a profit of

30 For the "bulling" campaign, see Mining World, May 11, 1872, p. 749; Samuel

T. Paffard, The True History of the Emma Mine (London, 1873), 17-19, 56;

Hiram A. Johnson to Henry Teller, January 9, 1872, Teller Manuscripts, Univer-

sity of Colorado Libraries; Supplemental Report of Professor B. Silliman on the

Emma Mine in Little Cottonwood Canyon, Utah Territory (Salt Lake City, Febru-

ary 29, 1872), 1-3, Western Americana Collection, Yale University. Because of

discrepancies in the original prospectus the company did not receive a quotation

on the London Exchange even after Park released his shares. London Times,

June 6, 1872; Economist, June 8, 1872, 709.

31 Park testimony (April 21, 1876), House Report No. 579, 805.

32 Moran Journal, XXXII (June 18, 1872), 165.

33 Ibid., XXXIII (December 21, 1872), 357; XXXV (May 21, 1873), 29.

Maxwell Van Zandt Woodhull, lawyer and breveted colonel in the Civil War was

second secretary of the legation in London in 1871-72, but resigned later to become

chief of division, consular bureau, department of state (1878-81). Chesebrough

was apparently the son of Robert Chesebrough, founder of the Chesebrough Manu-

facturing Company. Woodhull had been linked with Schenck in other business

transactions. London Hour, April 1, 1876; Who's Who in America, X (1918-19).

• 10
 

SCHENCK AND THE EMMA MINE                      151

??2,000. Schenck originally insisted that Park had nothing

to do with this transaction, but was later forced to retract

his words and admit that the Vermont lawyer and banker

had advanced the funds that made it possible. Then, using

the profit thus derived as margin, Schenck joined with Wood-

hull to purchase an additional five hundred shares at prices

ranging from ??10 to ??11 above par, these to be carried by

Cooke, McCulloch and Company.³⁴ While in Paris in De-

cember 1872 Schenck received confidential word from Park

that dividends would be discontinued and promptly tele-

graphed Chesebrough, handling his affairs in London, to

sell two thousand shares short. Chesebrough would take

no such responsibility and failed to follow instructions.

Schenck and Woodhull finally disposed of the five hundred

shares carried by Cooke, McCulloch and Company, but at

a loss of ??13 a share, according to Schenck.³⁵

But that Schenck would gladly have sold short had his in-

structions been carried out was clearly established. Before

the house committee on foreign affairs in 1876 he hemmed

and hawed, but when confronted with the evidence he had

no defense, save a lapse of memory. Little wonder the com-

mittee condemned his stock market activity as having sub-

jected "the name and station of the minister of the United

States to criticism."³⁶

34 Schenck testimony (March 28, 30, 1876), House Report No. 579, 290-

291, 351.

35 Schenck testimony (March 28, 1876); Chesebrough to Thomas Swann, May

8, 1876, ibid., xiii, 293; Chesebrough to Fish, April 1, 1876, Fish Correspondence.

Several writers state that Schenck used his inside information of Emma affairs to

unload his shares at high prices while the British public suffered. Allan Nevins,

Hamilton Fish (New York, 1936), 814; William B. Hesseltine, Ulyssess S. Grant

(New York, 1935), 397. Actually Schenck retained 475 of his original 500 shares

throughout subsequent reorganizations of the company down to his death in 1890.

Summary of Capital and Shares to September 26, 1890, Emma Company, Ltd.,

C.R.O. File 31459.

36 At the hearings, Schenck insisted that he "didn't think" he telegraphed Chese-

brough from Paris, and that he had never for a moment thought of selling short.

In the midst of the investigation, however, much to Schenck's chagrin, Chesebrough

produced a copy of the telegram. Schenck testimony (March 31, 1876); Chese-

brough to Swann, May 8, 1876, House Report No. 579, xiii, xv, 375, 377.

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152    THE OHIO HISTORICAL QUARTERLY

After these losses Schenck was forced to return home

temporarily in the spring of 1874 to raise funds to meet his

obligations. Park gave him a loan of $15,000, taking a

mortgage on his house, and to pay the original note of 1871,

Schenck transferred certain American stocks to Park's name.

In 1876, while under oath, Schenck estimated his total loss

in the Emma affair at $41,700.37

Meanwhile, the company had announced in December 1872

that monthly dividends would be deferred in favor of quar-

terly ones; in the next month came the bleak announcement

that no dividend whatever would be available for February.

Subsequent investigation by competent experts showed that

there was little or no ore remaining in the mine--"the eyes

had been picked out" without thought of the future.³⁸

Irate British shareholders filled the air with cries of "fraud"

and "swindle," as it became increasingly apparent that days

of calm seas and smooth sailing were over. The secret Park-

Schenck agreement was brought to light. Actual results--

less than $30,000 in profits produced by the mine in the four-

teen months prior to the end of 1872--were compared with

promises--the nearly $700,000 per year net yield estimated

in the prospectus. It was further pointed out that during the

same period that the mine had produced $30,000, the company

had paid thirteen dividends totaling $195,000, the money

coming mainly from proceeds of ores taken over with the

mine, although the final two dividends had been met by bor-

rowing $33,848 from Park.³⁹

 

37 Stocks transferred were valued at about $35,000 and included shares in the

Vermillion Coal Company of Illinois, National Insurance Company of Washington,

Lake Superior and Puget Sound Land Company, and the Tecoma Land Company,

along with a $3,000 note of Woodhull's. Schenck testimony (March 28, 1876), ibid.,

296, 298, 806.

38 Mining World, December 28, 1872, p. 2001; London Times, January 16, 1873.

39 Paffard, True History of the Emma Mine, 22; Mining Journal, February 1,

1873, p. 127; Mining World, January 25, March 1, 8, 1873, pp. 190, 404-405, 453.

• 12
 

SCHENCK AND THE EMMA MINE                  153

While indignant Britons complained loudly and threatened

to carry their protests directly to President Grant,⁴⁰ attention

was once more focused on Schenck at home. E. L. Godkin

now thought Schenck had outlived his usefulness and that he

should return to Ohio and run for the senate--"the Senate

being a much better place for stock operations than the Court

of St. James, and the commercial morality of the United

States being sufficiently represented abroad without him."41

In the summer of 1873 disturbing reports came to Grant,

probably from Louis Jennings of the New York Times, who

had just returned from London. The president thereby in-

formed Fish that it would be necessary to discuss "some un-

pleasant rumors" regarding Schenck, and at least to let the

general know of them and get his statement for defense

against any possible attack. At the cabinet meeting of Aug-

ust 5 Schenck's position was warmly discussed. Secretary

of the Interior Columbus Delano staunchly defended him, but

others were suspicious of his activity. Grant, however, wish-

ing statements with which to defend Schenck, directed Fish

to write a letter of inquiry to his minister in Great Britain.⁴²

Fish brought his draft of a letter before the cabinet the

following day. In it he detailed the principal charges against

Schenck, including the allegation that Schenck had profited

from his sale of the Emma mine shares and was now living

in a style which his salary could not justify. The president,

continued Fish, still had complete faith in his representative's

integrity and the inquiry was being made only as an act of

justice and friendship, that Schenck might know that accusa-

tions were being made.⁴³

40 S. T. Paffard promised to expose Schenck to both the British and American

governments and insisted that William M. Evarts be called upon to hand down a

legal opinion as to whether measures might be taken to obtain restitution of lost

investments. Mining World, May 17, 1873, p. 950; Paffard, True History of the

Emma Mine, 42-46; Paffard, Emma Silver Mine (Circular, October 21, 1871)

F.O. 5/1452; Paffard to Lord Tenterden, November 7, 1873, F.O. 5/1452.

41 The Nation, June 12, 1873, p. 393.

42 Fish Diary, IV (August 5, 1873), 78.

43 Ibid., IV (August 6, 1873), 83-84. A draft of the letter appears in the dairy.

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154   THE OHIO HISTORICAL QUARTERLY

Although Fish personally may not have believed Schenck

innocent, he was aware of the embarrassment which might

follow if the administration pressed for an explanation. Thus,

after reading the letter to the cabinet, Fish suggested that it

might be best to ignore the matter completely. "If General

Schenck makes a denial," he said, "the administration is bound

to accept his denial and stand by it; if he explains, it will be

bound to examine and become a prosecutor." "Do not send

the letter," replied Grant. "I will not become the accusor

of General Schenck. If he is accused or charged we will call

upon him and will investigate."⁴⁴ There the matter rested.

So while no executive action was taken in 1873, attention

was drawn to the Emma affair, although the ultimate day of

reckoning was postponed. Soon Park, demanding the ??33,848

owed him by the company, attached the mine, and a new

British directorate commenced suit in New York against the

American vendors for recovery of ??1,000,000.⁴⁵ This litiga-

tion helped to keep the controversy alive and to keep Schenck

in the public eye, for the general gave voluntary testimony to

be used on behalf of his fellow Americans.

In turn, friends rose to Schenck's support. Reverdy John-

son, himself a former minister to the Court of St. James,

defended him in a long public letter in the Baltimore American

late in 1875. But more than one commentator, agreeing with

the New York Tribune that an investigation was in order,

found nothing to applaud in Johnson's apologia; the old Mary-

lander, they believed, had been taken in.⁴⁶

With the press clamoring for a long overdue airing of the

whole episode, the house on February 7, 1876, adopted a

resolution introduced by Representative Pierce of Massachus-

etts, calling for the committee on foreign affairs to ascertain

what exectuive action, if any, had been taken with regard to

44 Ibid., 82.

45 Mining Journal, January 30, 1875, p. 109; Economist, January 15, November

18, 1876, pp. 65, 1342; London Times, April 1, 1875.

46 Baltimore American and Commercial Advertiser, December 31, 1875; The

Nation, January 6, 1876, pp. 5-6; New York Tribune, January 15, February 1, 1876

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SCHENCK AND THE EMMA MINE 155

Schenck's connection with the Emma.⁴⁷ Americans in London

--mostly of the mining set--protested in support of Schenck

and cabled Grant to ask if he would stand by his minister.

"General Grant always stands by a friend in trouble," said the

New York Tribune sarcastically, even though the conse-

quences of such fidelity often involved the government in

disgrace.⁴⁸

While the committee report was brief and colorless,⁴⁹ it

was sufficiently damaging to warrant further investigation.

Consequently, on February 28, Thomas Swann, Maryland

Democrat, introduced a resolution in the house which author-

ized the committee on foreign affairs to inquire further into

Schenck's affairs. It was readily adopted, and the investiga-

tion, which the Tribune thought would be "a very pretty little

party," promptly got under way, with due attention from

both sides of the Atlantic.⁵⁰

As soon as the original Pierce resolution had been made

known to Schenck, he cabled the secretary of state, promising

to resign if the president believed his actions had harmed the

administration. Fish replied quickly that Grant did not think

it necessary to act upon this offer. But two days later, he

reversed his position, informing Schenck that while the ad-

ministration had not lost faith in its minister, his connection

with the Emma had been "an unfortunate indiscretion" and

that a resignation would relieve any embarrassment.⁵1

Within a week Schenck mailed his resignation, then cabled

asking for a leave of absence to appear in Washington before

the foreign affairs committee. The leave was granted and

47 Congressional Record, 44 cong., 1 sess., 921.

48 New York Tribune, February 15, 1876.

49 Connection of Hon. Robert C. Schenck with the Emma Mine and Machado

Claim, House Report No. 123, 44 cong., 1 sess.

50 Congressional Record, 44 cong., 1 sess., 1345; New York Tribune, March 4,

1876. The London Times gave careful coverage, and Sir Edward Thornton kept

his government closely informed of each new development. See Thornton to

Derby, February 8, March 13, 20, 1876, F.O. 5/1538; May 29, 1876, F.O. 5/1539;

June 5, 1876, F.O. 5/1540.

51 Schenck to Fish, February 8, 1876; Fish to Schenck, February 9, 11, 1876.

State Department Dispatches, Great Britain.

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156     THE OHIO HISTORICAL QUARTERLY

Schenck replied that if the Emma inquiry proceeded he would

return to the United States, setting March 11 as his sailing

date. The resignation was received in Washington on March

4 and was accepted two days later, despite Schenck's hastily

cabled request that it be set aside while the investigation was

under way.⁵² The British minister in Washington, Sir Ed-

ward Thornton, informed his government that Fish had ex-

pressed regret at Schenck's withdrawal but that it was forced

upon the president "by the great pressure which had been

brought to bear upon him by influential men of the Republican

party."⁵³

Schenck did not wait until the eleventh to leave, however.

When reports of damaging testimony were published, he

branded them "a tissue of infamous falsehoods," and left

London on March 3, with almost no notice and without taking

formal leave of the queen, an oversight which caused com-

ment in British circles. His exit was further marred when

solicitors for the Emma Silver Mining Company, Ltd., en-

deavored to serve a writ on him while he waited in Euston

Station. This attempt brought suggestions by the foreign

office to the home office that immediate steps be taken to

prevent any similar breach of diplomatic privilege in the

future.⁵⁴

These events convinced  the editor of the New York

Tribune, who did not at the time understand what had hap-

pened, that Grant had deliberately refrained from accepting

52 Schenck blamed ill health for the week's delay in writing his resignation. His

letter of withdrawal was an apologia for his connection with the Emma. Schenck

to Grant, February 17, 1876; Schenck to Fish, February 21, 24, March 1, 2, 1876;

Fish to Schenck, February 23, March 2, 1876, ibid.; Schenck to Fish, February 19,

1876, Fish Correspondence; Fish to Schenck, April 5, 1876, Fish Letter Copy Book,

XV, 294.

53 Thornton to Derby, March 12, 1876, F. O. 5/1538. Among others, James A.

Garfield of Ohio had been asked to consult with his party colleagues on Schenck's

role in the affair. Fish to Garfield, February 10, 1876, Fish Letter Copy Book,

XV, 214.

54 Schenck to Fish, March 1, 3, 1876, State Department Dispatches, Great

Britain; Wickham Hoffman to Fish, April 15, 1876, Fish Correspondence; London

Hour, March 30, 1876; Schenck testimony (March 29, 1876), House Report No.

579, 306, 308; Tenterden to Thornton, March 11, 1876, F. O. 115/599.

• 16
 

SCHENCK AND THE EMMA MINE                    157

Schenck's resignation so that the general would be cloaked

with diplomatic immunity until he was able to leave England.

In poker terms, said the Tribune, Grant had "raised every-

body else out" and let Schenck "get away with the pot."⁵⁵

Secretary of State Fish defended Schenck, believing that

the use of his name had not been consistent with his position,

but that he had not been guilty of wrong in purpose or in-

tent.⁵⁶ Rumors circulated in England--and were denied on

the floor of the house of commons by the undersecretary of

state for foreign affairs--that Schenck had been recalled at

the request of the British government.⁵⁷ On the other hand,

it was reported that Fish expected a British claim against the

United States on behalf of disgruntled Emma investors. But

no such claim was ever made, although parliament threatened

to investigate the entire affair.⁵⁸

Testimony was heard before the house committee on for-

eign affairs beginning February 28 and continuing through-

out March and intermittently into early May. All the major

cast was present, except for Albert Grant, who tendered writ-

ten testimony. Cross currents of testimony, obviously at

variance, attested to the presence of "one or two distinguished

rascals," as the press put it,⁵⁹ and Schenck did not show to

best advantage. It was a small-town Pennsylvania newspaper

which suggested that if he could not put up a more convincing

defense he ought to "T.U.S."--"Throw Up the Sponge."⁶⁰

55 "We appear now to have assisted Gen. Schenck in bamboozling the British

courts," said the Tribune. "We have tripped up the heels of the policeman to let

the prisoner run away." New York Tribune, March 8, 9, 1876.

56 Fish to Swann, November 19, 1876, House Report, No. 579, 4.

57 Hansard's Parliamentary Debates, 3d Series, CCXXVII, 1798.

58 London Times, March 10, 1876. M.P. Phillip Callan asked Disraeli, then

first lord of the treasury, on May 29, if her majesty's government had considered

bringing criminal charges against those involved in the Emma. Disraeli replied

that he was aware of the house probe in Washington, but that no such action was

contemplated in England. Callan, an investor in several Anglo-American mining

companies, promised that he would soon move for an investigation on the British

end. Hansard's Parliamentary Debates, 3d Series, CCXXIX, 1352-1353. No

investigation was made, however.

59 New York Tribune, March 4, 1876.

60 Centre Reporter (Centre Hall), April 6, 1876.

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158    THE OHIO HISTORICAL QUARTERLY

The committee, predominantly Democratic in make-up,

weighed the mass of conflicting evidence carefully, seeking

to determine the extent of Schenck's culpability in the episode.

"A man of less confiding nature," it decided finally, would

have been on guard against such a connection. By identifying

himself with the company without consulting his superiors,

Schenck had placed himself "in a false position with his own

government"; by accepting special favors from the vendors

and lending his name to the prospectus, he had "placed him-

self in a further false position with the public." While he was

deemed innocent of any fraud or intent to defraud, his con-

nections with the concern and its promoters were "of such

character as to cast suspicion upon his motives and subject

his action to unfavorable criticism." His subsequent specula-

tive dealings with Emma shares the committee believed were

inconsistent with his diplomatic usefulness at the Court of St.

James. These findings were unanimous and the committee fol-

lowed up its report by submitting a resolution to the house con-

demning Schenck's activities as "ill-advised, unfortunate, and

incompatible with the duties of his official position."⁶¹

In explaining the committee's conclusions and recommenda-

tions, Representative Abram S. Hewitt of New York implied

that the administration should have acted to recall Schenck

earlier. This was a circumstance in which "ignorance is as

mischievous as crime," he insisted heatedly. Hewitt was

particularly indignant with the conduct of Stewart in aiding

Park throughout the whole episode. It was ironic, he thought,

that Stewart, the lawyer, should have received $275,000 in

fees from  his work regarding the Emma, while his client

could claim but $150,000 for his own.⁶²

61 House Report No. 579, vii, viii, xv, xvi.

62 Congressional Record, 44 cong., 1 sess., 3336, 3337, 3338. Standard accounts

of Stewart's life omit any reference to the Emma episode. Dictionary of American

Biography, XVIII, 13-15; George Rothwell Brown, ed., Reminiscences of Senator

William M. Stewart (New York and Washington, 1908); Effie Mack, "Life and

Letters of William Morris Stewart, 1827-1909" (unpublished Ph.D. dissertation,

University of California, 1930).

• 18
 

SCHENCK AND THE EMMA MINE            159

The censure resolution was ultimately adopted by the house

on July 12, after petitions from the "honest miners of Utah"

had complained that published reports of the investigation

had misled the public as to the worth of Utah's mines in

general and the Emma in particular. The territory's mines

were extremely rich, contended the memorialists: the cause

of failure was merely "the very wasteful, negligent, and un-

skilled management in the hands of a foreign corporation."63

By adopting the resolution, the legislative arm of the fed-

eral government saw fit to reprimand Schenck where the

executive branch had been unwilling to do so for a period of

more than four years. But a mere reprimand did not mean

restitution of money to the British investor. As he dispatched

copies of the committee's 833-page report and comments from

the Congressional Record to the foreign office, Sir Edward

Thornton could categorize these documents sardonically under

the heading of "Preservation of American Honour."⁶⁴

Additional "American Honour" was preserved in April

1877, when the United States Circuit Court in New York

decided the British company's case brought against the Amer-

ican vendors and held that no fraud had been perpetrated

in the Emma sale. In denying a petition for a new trial,

the court admitted that "the evidence discloses many circum-

stances . . . which strongly impeach the honor and morality

of the transaction, but which are to be entirely eliminated

from the case, except so far as they bear upon the question

of fraud in law." The question before the judges was not

whether individual shareholders had been induced by fraud

to buy shares, but rather whether the English directors had

been led to purchase the mine by misrepresentation or conceal-

ment of material facts.⁶⁵

 

63 Congressional Record, 44 cong., 1 sess., 1964, 4520; Mining Journal, April 15,

1876, p. 428.

64 Thornton to Derby, May 29, June 5, 1876, F.O. 5/1539, 5/1540.

65 Emma Silver Mining Company, Ltd. v. Trenor W. Park and H. H. Baxter,

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160     THE OHIO HISTORICAL QUARTERLY

"The vindication goes beyond the parties to the suit," com-

mented the New      York Evening Post. "It relieves Ex-Minis-

ter Schenck and Professor Silliman from the taint of fraud.

It does not indeed excuse the former for the blunder in

judgment and breach of propriety and taste which he com-

mitted in permitting his official name to be associated with

any stock speculation, no matter how promising a one."⁶⁶

Probably this was a charitable summary of the case. Cer-

tainly Schenck was in error. But was it an error committed,

like many of the president himself, in ignorance and naivete?

Or was he knowingly playing the same type of game, in a

slightly altered circumstance and setting, as were others in

the Grant administration? Certainly the evidence against

him was damning. Yet his record as a diplomat had been

excellent apart from this lapse; his subsequent private prac-

tice of law showed intelligence and competency. His con-

nection with the Emma stands as an indelible stain on an

otherwise distinguished career in public service and out.

14 Blatchford (1878), 420-422. In subsequent cases settled in London, the company

did recover legally more than ??180,000 from Albert Grant and various persons and

concerns connected with promotion of the company in England. See Emma Silver

Mining Company, Ltd. v. Grant, et al., 11 Chancery Appeals (1879), 940-941;

Emma Silver Mining Compay, Ltd. v. Lewis & Son, 4 Common Pleas Division

(1879), 396-410; Mining Journal, December 20, 1879, p. 1302; London Times,

May 15, 1879, January 13, 1880. But though it eventually recovered its mine from

Park by compromise, the company paid no dividends after 1872; instead it hung

on grimly, pouring more funds into the property for nearly a quarter of a century

before being convinced that it was not a paying proposition. Nor did the mine

prosper under subsequent American ownership.

66 New York Evening Post, April 30, 1877.

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