A depression in gold country

The prosperity that San Francisco and all of California had enjoyed since the gold rush began reached its peak in 1853 and by 1854 economic trouble had spread across the state. There were a number of reasons for this. The rains of the winter of 1853-54 had been unseasonably light and the lack of water caused the production of gold to decline. When the amount of rain did increase during the spring, allowing almost all of the miners to return to profitable employment, it was hoped that a continued large production of gold, though not as large as that of 1853, would be enough to support the business of what many already recognized as an over strained San Francisco. Unfortunately this was impossible.

San Francisco 1854

A clipper ship

The recent building boom in the city had resulted in many more houses and fireproof buildings than were needed, causing in a drop in rents, a fall in the price of lots, and the failure or serious embarrassment of the real estate operators. At the same time more merchandise had been imported than could be consumed. The markets were glutted and prices dropped rapidly, while the onset of agriculture in the last few years, and particularly the production of wheat, had reduced the demand for these imports. Much of the legislation passed in 1853 was ill advised and added to the problems. This depression lasted several years and was considered to be so serious that at one point several ships were sent back to New York with goods that had been shipped from there.

 

Comments

  1. That is a very fascinating piece of history. Thanks.

    • San Francisco had a very limited economy and was heavily reliant on gold production. The long supply line from the east coast and slow communication didn’t help much either. From the beginning it was boom or bust but there did seem to be a whole lot more boom.

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