Spenazuma Mine
The discovery in Arizona of valuable mineral deposits created an environment fertile for fraud. In 1898 the town of Geronimo, which had grown as a satellite to Fort Goodwin, crawled with almost a thousand land speculators, prospectors, and miners, as well as hundreds of hangers-on, awaiting the opening of the San Carlos Strip (or Apache Strip), a piece of the San Carlos Apache Reservation four miles wide and fourteen miles long and thought to be rich in copper and silver.704 On November 19, 1898, at the sound of a pistol, the rush was on. Some valuable mines resulted, but also at least one great hoax.705
In 1899 a “Dr.” Richard Flower abandoned his patent medicine business to establish the Spenazuma Mining Company in the Apache Strip. Flower and his mining superintendent, Thomas McInery, bought up a number of claims and then hired carpenters and miners to establish make-believe mines and a mining camp. They brought in equipment to simulate mining operations. Flower had photographs made and used them in a publicity campaign for selling stock. He declared a dividend on the first stock sold, raising the apparent value of shares sharply. Stock which sold at $10 rose to $15 through an elaborate publicity campaign in eastern newspapers.
When Flower brought major eastern investors to the site, they saw men working feverishly and could hear frequent blasts of powder. Flower invited them to take samples from ore piles that had been salted with high-grade ore. The newspaper reported good news, men working two shifts, and a rich strike.706
A Tucson newspaper reporter, George Smiley, finally exposed the fraud by talking with owners of other claims who had sold rich ore samples to Flowers.707 Flowers disappeared until arrested in Canada sixteen years later, but he died while awaiting trial.708
Mammoth Tunnel
The next year Thomas McInery set up another mining scam, but this one had a twist. The scheme was to drill a tunnel through Mount Graham, with the expectation not only of finding and mining gold and copper deposits, but also of capturing enough water to irrigate the entire Gila Valley.
McInery approached Andrew as a community leader in June 1902 and laid out the plan.709 McInery explained that such a major effort would need a townsite, store, bank, smelter company, and, as the town grew, a hospital, newspaper, power company, and streetcars, all of which presented opportunities for investment. Andrew’s journal says that he and others “met Wm. Thomas McEnery. We went over his proposition for boring a hole in the Mt. Graham and the Mamouth Tunnel Min’g scheme.”710 Andrew wrote to the First Presidency asking whether he should allow his name to be used in connection with the project. The First Presidency replied, “Stay away from any involvement with scheme of Thomas McEniry who plans to cut tunnel through Mt. Graham and collect water for lower end of Gila Valley.”711
Even without Andrew’s endorsement, McInery in July 1902 hired Andrew and John Nash, county surveyor, to make a preliminary survey of the tunnel route. The survey party consisted of Nash as surveyor, Andrew as flagman, two chainmen, a cook, and two men to handle the livestock. For a week they followed the line marked out by McInery, going as far as the camp at Columbine, a mountain refuge from summer heat and illness. While there Andrew organized a temporary branch of the Church.712 The project was called the McInery Tunnel, the Mammoth Tunnel, or the Triumph Tunnel. McInery actually got so far as to drive a tunnel some distance into the mountain before the project fizzled.
In Andrew’s papers are five certificates, each of them for a thousand shares of The Triumph Tunnelsite Company stock, par $10. It seems likely that this worthless stock was taken by Andrew as compensation for the week of survey work he did.713
Banana Plantation
In early 1907 Andrew’s brother Elias714 came to Gila Valley and worked with Andrew selling life insurance for Beneficial Life Insurance Company. While there he talked about the Montezuma Orange and Banana Company plantation near Tampico, Mexico. Elias tried to interest Andrew in investing in the venture, but Andrew told him that if he had money to invest he would invest locally and, further, there were probably no more than ten men in the valley who had surplus to invest. Despite Andrew’s efforts to dissuade them, on January 2, 1908, Elias and his companion, Richard A. Shipp, came to the valley. They offered Andrew $1,000 if he would use his influence to help them. He refused that, but he did accept $300 for providing living accommodations and team and buggy while they were in the area.715 Andrew’s journal entry for January 6, 1908, says he accompanied them “in our efforts [emphasis added] to place stock in the Montezuma Orange and Banana Co., in Old Mexico.” From the 6th to the 12th the three men went about the valley together. Further, Elias, who had been stake and mission president, spoke in a number of Sunday meetings, giving him credibility even beyond Andrew’s endorsement and involvement.
It appears that as late as July the swindle still lived. At that time Elias wrote an investor concerning the company, “The secretary of the Montezuma Orange and Banana Company reports the affairs of the company are in a prosperous condition both here and at the plantation. . . . The pumping is installed and in working order. The future for the banana business is incouraging.”716
Several months later it turned out that, although there was a real banana plantation, Elias was not an authorized agent. And the stock he had sold, rather than being primary (capital) stock, was from a secondary offering at greatly inflated prices.717 By December the fraud had been exposed.
Seven men in the Gila Valley who had bought stock wrote to the First Presidency, asking for one or more apostles to investigate the matter and determine responsibility, since they had relied on Andrew’s involvement as evidence of the integrity of the sales presentation.718
In a high council meeting R. G. Layton blamed Andrew for his losses and they both refrained from participating in the prayer circle.719 On Christmas Day other investors came to his home to discuss the matter and Andrew felt he and they had been “reconciled.” At year’s end he wrote, “This little ruffle caused by the business transactions of Messers Kimball and Shipp on Banana business is cleared up some. I was unjustly blamed for their doings.”720 But the matter festered for another year.
About twenty people in the valley lost money in the Banana Plantation scheme. Seven said they had been influenced by Andrew directly, and all blamed him to a degree for their unfortunate investments. Andrew wrote of “a difficulty which had grown up between myself and several of my Brethren in the Stake over what little part I had taken in the sale of Banana and Orange Stock associated for about two days with Messrs Kimball and Shipp of Salt Lake.” Andrew asked for an investigation by the Church in order to establish his good faith.
When Elders John Henry Smith and Rudger Clawson came to stake conference in December 1909 they conducted a two-day inquiry.721 Elias and Shipp were arrested and brought to the valley by the sheriff under $5,000 bond each. They asked Andrew to go on their bonds, but he declined, giving his tangled financial affairs as the reason, but he may have felt put upon by them. The men got bond through another Church member.722
Feelings at the hearing ran high against Andrew.
After all the evidence was in I explained the true situation from my stand point, and wherein I had injured my brethren I asked their pardon. I was so badly overcome by the suffering from the effects of my [injured] foot and the heavy strain of public duty incident to conference and the unjust accusations and trouble brot upon me by and through the actions of the Messrs Kimball and Shipp that when the strain broke I broke with it. . . . I did not go to afternoon meeting I was so badly used up.
A newspaper report describes the result of the hearing as exoneration, “that while President Kimball had been unwise in this matter, that the mistakes were mistakes of judgment and not of the heart. . . . he was misled with the others who now regret the investment.”723
A grand jury in Solomonville indicted Elias Kimball and Richard A. Shipp for obtaining money by false pretenses. Two of the investors went to Mexico and came back saying the stock was worthless. Andrew was told confidentially that he had himself nearly been indicted by the grand jury for involvement in the fraud.
The trial finally took place in July 1910. Andrew wrote, “The Abominable Banana Case came up for trial. I was greatly tried in my feelings.” The men were convicted in Solomonville and sentenced to a year and a day in the territorial prison at Florence. A year later, however, the Arizona Territorial Supreme Court reversed the conviction for inadequate proof of criminal intent and ordered a new trial. Apparently after that the prosecution was dropped upon payment of restitution.724
Andrew wrote the next October 5, concerning his attendance at general conference,
I met . . . Kimball relatives, among whom were Elias S. Kimball. I . . . asked him to meet me and Golden in Golden’s office so we could talk over our trouble and let Elias know that I had succeeded in getting the Banana Business trouble compromised, but Elias never met me again during my stay in Salt Lake. . . . I feel I have done my full duty to my brother and am under no further obligations to him, unless he does his part to me.
The ill feelings generated by the fraud persisted. Andrew recorded on December 31, 1911, nearly four years after the incident:
In High Council meeting, I urged everyone to meet their obligations, and if there was any one had feelings against us in any way we should make good. Richard Layton said he was not satisfied in regards to a matter, so after council meeting we talked it over. Bro. Layton considered he should have the Banana team back, as it was taken under fraud, he considered it should be repleved by himself as the former owner. I had bot the team at a time when there was no shadow hanging over the transaction, but notwithstanding, the unjust position I was placed in I joined in the compromise and gave him my note for $300 to satisfy the claim, be it understood that I bot the team in good faith and gave hard earned means for it. . . . I wanted nothing to do with any thing in this world that carried with it any shadow of dishonor.725
