Adams & Co. a planned failure

On that Black Friday morning, perhaps with knowledge they could not pay their obligations, Adams & Co. set about to implement a plan for failure. An amicable, some called it collusive, lawsuit for dissolution of the partnership was to be filed in the fourth district court with Adams as plaintiff and Haskell and Woods as codefendants with Alfred J. Cohen appointed as receiver to take charge of their property. This happened early in the morning on February 23 and when the other banks opened at their usual ten o’clock time, Adams & Co. was already in the hands of Cohen and remained closed.

Parrott Block former home of Adams & Co.

The reason, or at least the pretense given, for this action was that under California law of the time and with the absence of any federal bankruptcy act or any other state insolvency law that would insure equitable distribution, and so creditors of the company could file suit and levy attachments on the property and be entitled to be paid in full in the order of the date of their filing without reference to the claims of other creditors. There would naturally be a scramble to secure these priorities and some would be paid in full but others would get nothing. So it was to avoid this injustice that the lawsuit to dissolve the partnership was brought and a receiver appointed whose duty as an officer of the court was to hold the property in trust for all creditors.

Adams Ad

To this end, Cohen, in accordance with this plan and perhaps to avoid threats of violence, took all the coin, bullion, gold dust and other valuables from the vault at Adams & Co. and stored it in the safe at Alsop & Co., Commission Merchants, at their offices on California between Montgomery and Sansome. Cohen also tried to gain control over all the cash and other property in the various Adams offices around the state, but in many of those locations depositors and creditors were unwilling to let him have his way. With the assistance of local law officers attachment lawsuits were hastily filed, the assets seized and distributed among local depositors and creditors, who were paid in some cases not only the principal debts but large sums over and above what they were owed as costs of the suits. At Sonora in Tuolumne County the offices and vault of Adams & Co. were broken open and the forty thousand dollars in money and gold found there was paid out by a committee of citizens to anyone with a certificate of deposit or other authenticated claim.

 

Comments

  1. I’ve been thoroughly enjoy this series, John! Well done!

    • Thanks Carol! The original vigilantes dealt with regular crime and criminals. In the 2nd coming the criminals were some of the biggest men in both politics and business. Corruption was everywhere in 1855 San Francisco. Alfred Cohen was one rattlesnake who managed to slither off with his head intact.

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