April 1968 | Volume 19, Issue 3
There is, as everyone knows, more than one kind of fish in the sea. And, as some bunco artists will tell some poor fish, there is more than fish in sea water.
Near the turn of the present century, Prescott Ford Jernegan, a respected Baptist minister from Edgartown, Massachusetts, claimed that a dream had revealed to him the way to extract gold from the ocean. The process involved passing an electrical current through a submerged, zinc-lined wooden box (an “accumulator”) containing chemically treated quicksilver. The gold was supposedly absorbed by the mercury.
A pair of wealthy parishioners, A. B. Ryan and A. N. Pierson, had a box constructed to Jernegan’s specifications. Jernegan hired Charles Fisher, a deepsea diver who later became his partner, to submerge and connect the device for preliminary testing. Then, on a cold February night in 1897, Ryan and Pierson themselves lowered the box into Narragansett Bay. After a full running of the tide they hauled it up. Government assayers found five dollars’ worth of pure gold—not sensational but promising, promising.
Ryan, Pierson, Jernegan, and two others put up $20,000 for a more extensive test at a remote inlet near Lubec, Maine. Some of the investors were sure they had another Klondike. In December of 1897 they formed the Electrolytic Marine Salts Company, capitalized at ten million dollars. “Mining” operations were centered at Lubec, but the company’s headquarters were set up in Boston. Wealthy eastern Baptists bought most of the first 350,000 shares. Within six months another 350,000 were issued and snapped up. There were now 250 accumulators yielding $1,250 on each turn of the tide. The firm made well-publicized shipments of gold every week to New York City.
Jernegan declined to get a patent, maintaining, among other things, that sea water was public domain. He preferred to rely on secrecy: only he and Fisher, who remained in charge at Lubec, knew the formula.
There were skeptics, but even the press was guarded in its comments. Gold was known to be in suspension in sea water, and others had worked to try to get it out. Maybe Jernegan had hit on the right method.
The clincher came when a dubious Boston investment counselor named Tibbetts hired a chemist, one Dr. Carmichael, to investigate. Picking an accumulator at random, Carmichael demanded that salt water be scooped up at a spot he designated. Jernegan said that the process required a continual flow. “Use your hand to stir the water,” said Carmichael, “and keep it open .” The clergyman complied. At his laboratory, Carmichael analyzed the contents and found gold.
Lubec boomed. The firm now had 700 workmen; the goal was 10,000 accumulators and an annual potential of $17,500,000.
But there were hitches and suspicions. A workman was found murdered. Then, one day in July of 1898, the accumulators were found damaged and disconnected—and Fisher had vanished. Jernegan said he thought Fisher had fled to Europe to open his own plant. He offered to go after him.
Jernegan’s share in the operation was forty-five per cent of the proceeds from the sale of the stock. Soon after he left, it was discovered that he had withdrawn most of some $300,000 he had stashed in various banks and that he had carefully paid his debts. There was one man, however, who claimed that Jernegan owed him money, and he gave his story to the press.
William Phelan said that he had been hired to help Fisher, who, he said, had salted the boxes with scrap gold that travelled a continuous triangle—from the accumulators to New York to a secret room in Fisher’s house and back to the accumulators. As public skepticism had waned, said Phelan, it had been necessary to salt just a few boxes, to meet unpredictable investigations.
Hoping to maintain a surprisingly unshaken public confidence, Jernegan sent $85,000 from Paris to help repair the boxes and resume operations, but when letters between him and Fisher were uncovered, the hoax was confirmed and Phelan’s story substantiated.
Jernegan returned to America, and a court case held that the returned $85,000 had left him with only the forty-five per cent of stock sales he was entitled to. He was free, but his reputation was ruined—and he was apparently broke. He disappeared and eventually died in Manila. Fisher’s obituary appeared in an Australian newspaper in 1900. Some thought he had written and planted it himself. The Lubec plant was sold (it became a cannery producing Klondyke brand finnan haddie); Electrolytic stockholders got thirty-five cents on the dollar.
Again and again Tibbetts and Carmichael went over the hoax. Where had they been tripped up? Finally Tibbetts had a thought: When Jernegan stirred the water, had he been wearing a ring? Come to think of it, he had—a gold ring, traces of which had dissolved in the mercury.
But what of the money Jernegan had taken to Europe? While there, as he later confided to his family, he had heard of a similar gold-from-sea-water scheme in England. He had invested everything he had in it—and had been swindled.