The lowest point of the business depression of 1854 was passed by the middle of the year. The public auction of twenty-two lots of the Government Reserve on the block bounded by Pacific, Broadway, Front and Davis Streets made over one hundred thousand dollars on June 6, nearly twice as much as was realized from the March 9 sale, less than three months before. While rents, which had been greatly reduced during the depression, did not rise, they had been much too high before and were still high enough to yield a good return. The same was true with wages that had fallen but were sufficiently high in comparison with the cost of economical living. The price of building material had also dropped to what were considered reasonable rates and didn’t return to the high prices of former years.
Merchants Exchange SF
Improvements continued to go on in the city and particularly in that part that was near the deep water off Clark’s Point, supposedly the city’s most promising location. A new Merchant’s Exchange and US Customs House, among other large buildings, were constructed on opposite sides of Battery Street near Washington in 1854 while most of Market Street and the southern portion of the city remained sandy wastes, providing proof that the landings at the north end of Yerba Buena Cove and the streets leading to it were favored locations of business and thus worthy of being improved.
Old Custom House SF
Even Portsmouth Square, which before had been an open, unoccupied waste, was graded and fenced in 1854. There was talk at this time of covering the square with a structure of iron and glass that would rival in splendor and magnificence the crystal palaces at the great world’s fairs and far out do them not only in the variety and excellence of the natural productions exhibited there but also in articles of luxury and taste.
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