Jernegan's wheeze

This is the third in a series. You can go back and read them first, if you like: they are Gold for free and More modern gold makers, but this is a stand-alone tale.

In the cases mentioned in the last two entries, "gold making" was just a device to defraud, but one ingenious case went a lot further—and unlike most gold swindles, it had an Australian element. Professor Liversidge, professor of chemistry in Sydney University, had his efforts reported in both The Lancet and also in the journal Science, when he began studies on the prevalence of gold in New South Wales coastal seawater.

The concentration was a mere of ½ to 1 grain per ton, but that converted, said the breathless newspapers, to somewhere between 130 and 260 tons of gold in every cubic mile of seawater. The news also reached the USA, and that is probably important in what follows. Here is the source: 'Scientific Notes and News', Science, OCTOBER 23, 1896, 615. (This erroneously gave the yield as "230 to 260 tons per cubic mile").

Liversidge, a highly respected scientist, gave learned papers on his work, and these also were reported both in Australia and overseas. You can read a further report in Science, November 6 1896, 685-6.

… this would be in round numbers about 200 tons of gold per cubic mile, and if the volume of the ocean be considered 300,000,000 cubic miles, a total amount of gold in sea water of sixty billion tons. Yet this amount is probably insignificant in comparison with the amount of gold disseminated in crystalline and sedimentary rocks apart from gold in veins and other deposits. Experiments seem to indicate that sea water contains about the same amount of silver and gold.

Nobody got too excited by this. In a philosophical piece, the Sydney Morning Herald (Saturday 12 December 1896, p. 15, http://trove.nla.gov.au/ndp/del/article/14079389) considered that if a gold magnet were invented, the hundred billion tons of gold that might be in the hundred billion cubic miles of the oceans might be accessible, but that, said the paper, was unlikely.

Liversidge's work wasn't even new, except that he had shown that the gold concentration estimated by Edward Sonstadt in 1872 was too high, but given that his results were published in 1896, there must surely be a link between that and the approach made to a jeweller by one Prescott Ford Jernegan, described as the pastor of a Baptist church in Middletown, Connecticut.

Jernegan claimed to have the equivalent of a gold magnet. It was a wooden box with holes, wires that connected to a battery, and inside, there was mercury and a secret ingredient. Together, these would draw gold from the sea. He invited the jeweller, Arthur Ryan, to test his invention, and if it worked, to join him in forming a company to profit from the company.

Now Ryan would have known how to test gold, so he was safe from fakery there. He must have heard of Liversidge's work, or maybe Jernegan had a clipping to show him. Later, the inventor explained how the idea had come to him while recovering from typhoid fever and after reading a news article headed "Gold in the Sea".

A note to would-be hoodwinkers: it is these idle sidelights and mundane addenda that add sparkle to a bald and otherwise unconvincing narrative. He asked Ryan to set up the accumulator (as the device was known), to ensure that there was no trickery—another ploy of the stage magician and the con-man alike. The test went ahead in February 1897, and lo and behold! The next morning, there was gold in the mercury.

 (For more, see The Inquirer & Commercial News, Friday 18 February 1898, 5, http://trove.nla.gov.au/ndp/del/article/66692015 — and no, that is neither an idle sidelight, nor a mundane addendum.)

The gold passed assay, and was valued at $4.50, but it was a start, and with just two or three boxes, a man could "make wages", as gold diggers used to say. They founded a company to install 1000 accumulators, which would process 4000 tons of water each day.

Larger-scale trials were soon bringing in $145 a day—and a stream of investors. Assays continued to prove that the gold was the real thing, and the share price rose from $33 to $150. Then in July 1898, Jernegan and his assistant, a man named Fisher, both disappeared. That would not have mattered, because they had left the gold-making equipment, but the accumulators stopped working.

The secret to their success was that Fisher was a trained diver, and while potential investors sat on a pier to ensure that nobody came along and interfered with anything, the dark of the night and the chop of the waters stopped them detecting the diver who came stealthily, bearing gold to feed to the boxes.

Nobody seems to know what happened to Fisher, but there is some trace of Jernegan. He debarked from a ship at Le Havre in France on August 1, but a lack of the proper paperwork made it impossible for the police there to arrest him. He started for Paris by train, and while he was reported in October to be willing to return to America and face charges, he never did. On the other hand, he refunded $75,000 of the estimated $200,000 he had collected, and in April 1899, he was in Belgium

Tradition has it that Jernegan fought off an extradition case in Vienna, but lost all his money when he invested in a gold-from-seawater scheme, but this claim seems to lack evidence — I suspect that it is wishful thinking. He seems to have later gone to the Philippines and published books there on geography between 1905 and 1914, and at the age of 61 in 1927, on religion in Palo Alto, California.

See also two earlier entries: Gold for Free and More modern gold makers.