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.
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.
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).
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.
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.
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.
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.
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.
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.
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).
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.
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.
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.
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
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.
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.
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.
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).
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,
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.