Archives for February 2012

A run on gold rush banks

Early in the year of 1855 the St. Louis office of Page, Bacon & Co. found itself in financial difficulty because of its involvement in the Ohio and Mississippi Railroad and sent a partner to San Francisco so that he could ship back all the money possible from the bank there to help with the crisis. Unfortunately the St. Louis branch failed after the partner left and due to an accident the steamer that would have brought the news of that failure to the west coast was detained. Two steamships … [Read more...]

Adams & Co. expands into banking

As Adams & Co. added to a growing express business that already delivered more gold than anyone else it moved naturally into banking as well. It established a system of assays that set the value of gold from different mining districts from fourteen dollars and fifty cents for gold on the Mariposa to nineteen dollars and fifty cents for the mines in the lower Yuba region. This was the price, less a small discount to cover expenses, which Adams & Co. was willing to pay for gold. The … [Read more...]

The biggest banks of the gold rush

The Tallent & Wilde bank opened in February 1850, followed in June by Page, Bacon & Co. and Felix Argenti & Co. In September during a business setback common in those days, there came a financial panic and a run on the banks. These new institutions weathered the storm well as did the older firms of Burgoyne & Co., Wells & Co. and James King of William, but the Exchange and Deposit Office of Henry Naglee was forced to close and never reopened. Between that time and the … [Read more...]

Banking starts in California

California’s constitution, enacted in 1849, prohibited the granting of any charter for banking purposes as well as the creation, issue or circulation of bank notes or any other kind of paper that could be used as money. It did allow what are commonly known as banks of deposit, those banks could exercise the powers of exchange and loan therefore all the new banks in the state fell into this category and banks notes were unknown. But even before the adoption of the constitution there had … [Read more...]

The financial crash of 1855

The San Francisco business failures of 1854, mostly a result of over speculation, were merely a preamble to the failures of 1855. In retrospect the first year could be seen as profitable compared to the second. In 1854 the total monetary yield was sixty-four million dollars while in 1855 it came to only fifty-five million. Mean while forty-eight thousand immigrants came to California in the first of these two years and only twenty-nine thousand the second. The departures from the city in 1854 … [Read more...]

Henry Meiggs, railroad tycoon

After he fled San Francisco, Henry Meiggs cruised the Pacific and even stopped at Tahiti before he headed for Chile, known in those days as the California of South America. There he took a job as overseer of a small gang of railroad workers. His reputation preceded his arrival and he was regarded with suspicion, but his business skills and unbounded energy soon made him indispensable and he became the general contractor for the most difficult part of the line between Valparaiso and Santiago and … [Read more...]

Henry Meiggs escapes California

Recognizing that his exposure for forgery was imminent, Henry Meiggs carefully planned his escape, knowing how dangerous it would be to stay in California after he had swindled so many powerful people. He had control of a small brig of several hundred tons that he supplied with ample provisions including fine wines and delicacies. On October 6, 1854, after spreading the word that he was going for a cruise around the bay, he took his brother and family aboard and sailed out through the Golden … [Read more...]

The unraveling of Henry Meiggs

Once Henry Meiggs began using forged warrants from the city of San Francisco he found it was necessary to extend his criminal acts to the forging of promissory notes and signatures. And after Meiggs exposure for his unquestionable forgery of the warrants there were several charges made to this effect and some named amounts of several hundred thousand dollars. But even before Meiggs fled the city, the rumors began. By the fall of 1854 Meiggs must have realized that he could not escape detection … [Read more...]

Honest Henry Meiggs

At the time Henry Meiggs began his fraudulent use of San Francisco city warrants there was no money in the street fund, but the warrants were considered satisfactory as security for a loan. And this was how Meiggs used them. Always a large borrower it was his way of doing business. Almost never out of debt he spent most of his time “shinning around”, as he called it, after money and considered it a rare day when he didn’t leave home without the need to find a loan of at least forty thousand … [Read more...]

The fraud of Henry Meiggs

The various improvements to San Francisco made by Henry Meiggs, such as the wharf he built, cutting a road around Telegraph Hill and the Musical Hall on Bush Street, ingratiated him to the residents in general and to North Beach in particular, so much so that in 1853 he was elected as a delegate to the convention to revise the city charter, a revision that was never adopted, and in September of that same year he was elected to the board of aldermen of the city council. Here he represented North … [Read more...]