Posts Tagged ‘chaffee’

All That Glitters, 1909

Tuesday, October 15th, 2013

One-hundred and five years ago today, a gold miner from California arrived at the doorstep of Herbert Chaffee, the president of the Amenia and Sharon Land Company, in Amenia, ND.  This seventy-something, gray-haired man called himself John Armstrong, and he believed Chaffee to be a long-lost uncle.   Having established their family trees didn’t cross branches, Armstrong brought up a deal that Chaffee couldn’t refuse: a loan with gold held as collateral.   This wasn’t just a few nuggets for a bit of pocket change: Armstrong’s collateral was over a hundred fifty pounds of gold worth $40,000 at the time.  At about 2,000 ounces, this would be over two million dollars of gold at today’s prices, but even at the inflation rate $40,000 is worth over a million 2013 dollars.  Chaffee offered $30,000, but Armstrong played it conservative and insisted that $25,000 was all he needed.

Gold scams have been going on for centuries, as long as people have ascribed a precious desire for the shiny gold metal.  All the gold that has been mined, ever, out of the entire history of mankind, would form a cube about 60 to 80 feet on a side, depending on who you ask.  That’s even accounting for the fact that gold mines are still in operation, and amateurs and professionals alike head down to the river with a pan and high hopes every day.

There’s other ways people intend to get their gold, though, and not on the open market.   The ridges on your coins harken back to days when people shaved off the edges of coins, making them imperceptibly smaller but still appearing to have their full value.  People would put coins in a bag and shake them around, causing a bit of gold dust to get rubbed off; other soaked coins in acid briefly to take a layer off, to be decanted from the corrosive fluid later.

Chaffee tried to head off being scammed: his son, Eben Chaffee, was a gold assayer, so Herbert brought Eben along to Minneapolis to evaluate the old miner’s gold.   The three men went to where the gold was stored, and a drill was used to get a small sample.

Just testing the outside of a bar of gold is the least reliable way of testing it:  gold leaf can be only a few atoms thick and a layer can make a chunk of lead appear to be a solid bar of gold.  Reports of desperate-sounding people peddling 5oz gold bars at malls has relied on this trick.  Scammers bought real bars of gold and filled the centers with a non-precious metal, keeping what they removed and selling the much-smaller amount of gold to gullible customers at full price.    So, you take a core as deep into the gold as you can get, also to make sure that the gold is of a consistent quality throughout and not just quality-gold on the outside.

Armstrong got the names of a few independent, impartial assayers to get the gold tested.  Eben Chaffee made arrangements to purchase some nitric acid, a component of the test for gold content, from an outside source to guarantee accuracy.   The three men took their little shavings to assayer W. H. Harper and had him perform the test.   Harper’s result: the shavings were the highest quality gold, almost completely pure.  The Chaffees cashed a check for $25,000 and gave Armstrong his loan in cash.

It’s no wonder that both Armstrong and Harper disappeared shortly after.

Their scam didn’t rely on adulterating the gold or covering base metals with precious ones.   Armstrong — not his real name — relied on a confidence game.  His story was believable: he, of course, had the name of a reliable assayer; and he was happy to let the Chaffee’s bring whatever testing materials along they liked.   Armstrong knew that once they got to Harper’s office the test was going to show the gold bars to be real gold,and then the Chaffees would be hooked.

Herbert Chaffee was out $25,000, over a million dollars in today’s money, and what he had to show for it was 80 pounds of polished brass.   The Chaffees missed one of the more obvious gold tests:  gold is a very heavy element, and a scale could have quickly identified the scammer’s metal as something other than gold.

And Armstrong, whose real name was so inconsistent in the papers that I’m not even sure which is correct, would have gotten away with Chaffee’s money if he hadn’t gotten caught performing the same scam on a woman in Ohio. Back in his home state of California, Armstrong paid his bail and was left to his own recognizance pending his extradition court appearance.

He missed the trial and a few days later a body washed up on shore.   Armstrong’s wife and a “business associate” were both quick to identify the body as Armstrong’s.  With little other evidence to go on, the case was closed…but police were suspicious at the circumstances of Armstrong’s supposed death.   Both California authorities and the Minneapolis detectives sent to extradite Armstrong believe it wasn’t the old “miner’s” body.  It was one last switcheroo, brass switched for gold, to let the con man get away.

Amenia, ND, 1880s.

Monday, July 15th, 2013

If you head north on Highway 18 from Casselton, on your way to Arthur and Hunter, you’ll pass by the little town of Amenia.  You might not even notice it: the highway takes a bend to the east, and a thick shelterbelt blocks the view of town, other than the grain elevator peeking over the trees like a giant on patrol.

Eben Chafee was an old man when his family contributed a large chunk of money to what would become the Amenia and Sharon Land Company.   The investment group had bought railroad shares, which hadn’t done well in the 1870s, and they cashed in their stock to reinvest in something else West-related.   Rather than trains, the group bought land in Cass County, North Dakota, and send ‘ol Eben west to run the place.

Most of the other “bonanza” farms were merely owners, not farmers; the investors managed inventory and land and workers, but land was leased out, or crops were grown on a cost-sharing method, so there wasn’t a whole lot of tools lifted by the full owners of a bonanza farm.    Chaffee saw things differently:  sure, it was a lot of work to grow crops, and labor was expensive, but Chafee knew that the fertile land of North Dakota could be very profitable if the Amenia and Sharon Land Company controlled everything, from seed to trains.

They attempted to build their own rail line, but not much came of it; the big railroad companies were happy to run rail lines themselves where needed.   Everything else, though, Chaffee build himself: a network of grain elevators, towns full of general stores and blacksmiths and gas stations and hotels, everything needed to support an army of farmers hired to work the land for the Amenia and Sharon Land Company.

The company existed until the 1920s, well past the age of the bonanza farm, but the towns Chaffee built are still there.   Amenia may not be much today, less than a hundred residents on the census, but in its day the town was a industrial hub, providing a valuable service to hundreds of farmers, all for the profit of the Amenia and Sharon Land Company.

The town might not be visible, but Amenia was where this photo was taken — which was immortalized on a two-cent stamp commissioned for the 1891 Trans-Mississippi Exposition.   The stamp shows Chaffee’s farmers working the land with a massive horse teams all lined up.   This stamp bent the rules a bit: only in the past years have US Postal Service rules allowed for a living person to appear on a postage stamp.     In the “Farming in the West” stamp, however, it was quite certain that there were at least a couple of the people in the photo still living when the stamp was released.   Although the town of Amenia might not have the value it once did, the “Farming in the West” stamp still holds value to stamp collectors.

Learn more about Chaffee and the founding of Amenia in the Dakota Datebook story I filed for today.