Pictures & Engraving Courtesy Nevada State Museum via Nevada Historical Association 

 

The Great Carson Mint Theft of 1892

The Characters:

The Crime:

In 1894 the Chief Melter at the Carson City Mint began to suspect that certain silver bars had been "sweated",  eg. that the small percentage of gold normally present in the bars had been substituted with copper instead.  Such a slight discrepancy took some time to be noticed, but when assays continually mismatched  Harris's suspicions piqued and the US Treasury was called in to investigate.  The Treasury official discovered that various methods had been used in the refining process to steal $75,000 worth of gold bullion, a considerable sum at the time; using a ratio of  15 to 1 gives a total over one million dollars in today's money.  Below we have a John T. Jones signature, and Mr. Jones was one of the chief protagonists in the mint theft.  Signatures belonging to all of the major players in the theft and subsequent trials (excepting Heney) were recently found in a cache of old bank documents.

 

 The mint theft was a huge scandal in it's day and the political intrigue surrounding the Carson mint always always cast something of a pall over it's existence. In previous years there had been other incidents at the Carson mint, including the escapade of Henry Piper, where a colleague became suspicious upon lifting his lunchbox,  finding that the heavy weight inside was due to the contents being filled with gold bullion instead of sandwiches.  Piper promptly dumped the bullion into a disused hoist shaft in one corner of the mint but he was fired the next day. Some time later when Piper was implicated in the mint scandal the Superintendent explained that law enforcement was not called in because the stolen bullion belonged to a depositor at the time and did not belong to the US government when it was dumped down the shaft.

 

The first trial of the conspirators resulted in a hung jury when no definitive testimony was elicited from the witnesses because the key figure in refining and distributing the stolen bullion had been paid $400 to stay away; this was Joseph Langevin.  At the second trial Langevin gave his damning testimony as expected and both Piper and Jones served considerable time for their participation in the theft.  

 

Heney was the culprit as far as the public was concerned, because Heney's association with the theft was easily understood by the public and the Treasury hoped to set an example by Heney;  eg. an example to any average citizen that might be tempted in future to take a similar criminal path.  Even though Heney served as the "fall guy" for this crime, he still managed to attract powerful friends prior to his fall, namely Jacob Klein, President of the Bullion and Exchange Bank.  Although it will take more research to understand the financial relationship between Klein and Heney, it can be surmised that the publicity in the Carson press that exposed the association of the two led to the eventual downfall of Klein as president of the bank.  Unfortunately, thorough examination of bank records, as they presently exist, has revealed no account activity by Heney at the bank.

 

[The Bullion and Exchange Bank operated the refinery at the mint after the mint lost it's coinage charter, and it was only when Richard Kirman the younger assumed command from Klein and Superintendent of the Mint Hofer that careful banking revived the B & E.  As an interesting aside, it is interesting  to note that T R  Hofer was married to Klein's daughter.  Thankfully the B & E was reorganized as a clean bank by Kirman and Harris as the State Bank & Trust, and it became very successful until the bank was sold to Rickey just prior to the Panic of 1907.]

 

Although seemingly a relatively minor crime today, with historical perspective the Carson mint theft had severe repercussions. At this time the US government was beginning to understand and define the model and it's role with regard to coercion of it's citizens to obey the law as it applied to currency, coinage and bullion.  Even though the word "coercion" has negative connotations the ability of a government to reasonably coerce it's citizens to obey the law is a well-known principle of state-building however the subject is a large one beyond the scope of this article.  In conclusion it must be remembered that by 1894 the massive wave of counterfeiting of currency and other problems that beset the Treasury were just beginning to be brought under control at the Federal level.  

Carson City Mint in the early 1900's

 

Deposits of John T Jones  

Nevada historians agree that the big heist in the Carson City mint took place before 1893.  Heney himself is credited with saying, "... hell will pop here [at the mint] inside of two years" (ref: Hickson) at the time of his dismissal.

 

Because of the method used with regard to "sweating" the silver bars, it is likely that the gold bullion was accumulated in small amounts over a period of several years and that such small discrepancies in assay could have been overlooked within the margin for error at the time.  However once the gold cache was complete --  presumably about the time Mr Harris was making his suspicions known -- the actual Reno reduction work by Langevin would have taken a very small amount of time with the ill-gotten gains soon to follow. 

 

This means that Jones was likely to "come into money" suddenly, and the deposits in 1891 appear to be fast and furious.  It was later proved that the Jones mining stock speculations actually resulted in a loss, so the deposits cannot be explained in terms of mining stock settlements:

  1. July 11, 1891            $ 500

  2. July 20,  1891            1800

  3. July  31,  1891            160

  4. Aug. 17, 1891            400

  5. Aug. 18, 1891            1500

  6. Aug. 31, 1891            140

Total between July 11, 1891  to August  31, 1891:    $4500

Total for three weeks deposits when accounting for 1500% inflation between now and 1891: $67,500

Panic of 1907