Mark Twain, Diamonds in Africa and a Fantastic Insider Trading Story

I have recently finished reading Mark Twain’s “Following the Equator.” The writing is of course wonderful – what a joy. Twain writes about his journey around the equator around 1896, and provides very insightful observations about the locals and western attitudes to the locals. There are a number of stories I particularly liked and which he told with great humor: the discovery of diamonds in South Africa and a fantastic insider trading story associated with Cecil Rhodes.
The story of the discovery of diamonds in Africa is often told and, as I remember it from Mark Twain’s account, is one where a child discovers the stone but uses it as a toy; a farmer tries to buy it from the child thinking it indeed to be a toy but one which could be sold to some unsuspecting fool for more, but that it was that farmer who was the fool as he sells it for far less than it was really worth.
As far as I have been able to determine, the facts on the diamond discovery are as follows: the story begins in 1867 with a child discovering a big clear stone in his garden while playing. A Boer farmer, Daniel Jacobs, had a son who was playing with “a small white stone which sparkled so in the sun” that nearby neighbor Schalk van Niekirk offered to buy it[2]. Not believing it to be worth anything, the stone was given to him for free, and Niekirk took it to a travelling trader, John Reilly to get an appraisal. Reilly did not believe it to be a diamond, but after showing it around to various merchants, he had enough doubts to send it to the leading mineralogist of Cape Colony, Dr. W Guybon Atherstone, who then verified that the stone was indeed a diamond, and placed a value of £500 on it. Upon Atherstone’s valuation, the diamond was sent over to the Paris Exposition where it ‘created interest but no great sensation’)[3].  The diamond was then bought by a Philip E Wodehouse, the governor of Cape Colony, for the same estimated price of £500 ($79,000)[4]. I do much prefer the fun and excitement in the Mark Twain account though – with different traders thinking they are fooling others, when they are themselves are the ones being fooled. The truth is still interesting. In the book, Mark Twain also muses about why the local Africans in the area did not have much use for those stone in those days and did not “discover” their use earlier, and provides very colorful accounts of the Boers[5].
There is a second related story in the book I really enjoyed. This is associated with Cecil Rhodes, whose company De Beers of course eventually monopolized a big part of the World’s diamond trade, is the founder of the Rhodes Scholarships and who lived between 1853 and 1902 [8]. Mark Twain writes
that while in Australia Rhodes sees a shark washed up on the shore discovered by a fisherman. He proceeds to buy the shark, and cut it open. Inside, he finds a copy of the European newspaper from ten days prior, learned that war was at hand and was able to invest in wool before anyone else knew[9]. Cecil Rhodes then uses this “insider” information to make the first of his many fortunes. When I first read this, I thought this would be a great insider trading story for the undergraduate Econ class I am about to teach. Unfortunately for those of us who love great stories, I believe this story is fictional; the only other sources that we have been able to find that support this tale are footnoted, and each of these refer to Mark Twain’s account as the primary source.
I recommend the book for those looking for great stories, and great observations of local Indian, Australian and African customs and people from the late 1800’s and, of course, for really exciting writing.

Footnotes
1.   I thank Beatrice Choi at NYU for great research assistance with this article.
2.”About the History of South African Diamond Discoveries”.  “About the History of South African Diamond Discoveries”. JJKent Inc, Online, 2004. Online: http://www.jjkent.com/articles/southafrica-diamond-discoveries.htm.
3.”About the History of South African Diamond Discoveries”.
4.”Diamond in Africa”.   Swiecki, Rafal. “Diamond in South Africa: Historical Review of Diamond Geology and Mining”. Website: Alluvial Exploration and Mining, February 2008. Online: http://www.minelinks.com/alluvial/diamondGeology23.html.
5.”Star of Africa”. There is a second diamond story similar to this first diamond discovery story – the same Schalk van Niekirk is connected with the “Star of South Africa”, an 83 ½ carat stone he obtained from a Kaffir in 1869 . The first diamond sold to Wodehouse was a stone of 21 3/16 carats.
6. Verschoyle, F. Cecil Rhodes: His Political Life and Speeches, 1881-1900. Pg. 2. UK: Chapman and Hall Ltd., 1900. Online: http://books.google.com/
7.  Sweet, Matthew. “Cecil Rhodes: A bad man in Africa”. The Independent, 03/16/2002. UK. Online Source: http://www.independent.co.uk/news/world/africa/cecil-rhodes-a-bad-man-in-africa-654195.html.
8.”Oxford and the Rhodes Scholarship”.  “Oxford and the Rhodes Scholarship”. UK: Oxford University. Brochure. Online: www.rhodesscholar.org/get/11/2010_final_brochure_7_6_10.pdf.
9.”Shark History”.  Website: Shark History: Devil Sharks and God Sharks. Online: http://www.shark-info.com/shark-history/devil-sharks-and-god-sharks.htm. See also: http://www.sharkattacks.com/historical.htm