Fraud in the Adams & Co. failure

Adams Express Company Logo

After the run on banks in San Francisco on February 23, 1855 the situation was not as bad as it had at first seemed. While Page, Bacon & Co. as well as Adams & Co. and several other firms had failed, Lucas, Turner & Co. and a few others had survived. They had paid all demands made on them and, at the close of business that fateful day, when they announced a readiness to meet all future claims made upon them, a certain confidence was restored and by the next day depositors began to return.

Adams & Co.s Express handbill

However Page, Bacon & Co. had closed, though the failure of its St. Louis branch was given as a reasonable cause, it had still paid out almost all of the money it had. There was therefore no suspicion and no one was charged with any deliberate fraud. Things were different with Adams & Co. who had closed at once, before the run began, and with considerable money on hand. Because this fund provided a grand prize for the lawyers it was subsequently squandered. That led to fraud charges against not only the original partners but also against nearly everyone connected to the long, drawn out litigation.

While there can be little doubt that some of these charges were true and that some of the people who shared in the spoils of the Adams & Co.s failure were guilty of improprieties, it was hard to ascertain how much of this fraud was deliberately planned from the onset of the Black Friday collapse. But it is clear that the methods of getting to these funds and dividing them in a way that left out the depositors, creditors and others who were deserving of them were the product of developments that came after the failure.

 

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