The Cecil Whig. [volume] (Elkton, Md.) 1841-current, 1875-09-25
LETTER FROM CALIFORNIA.
san FRANCISCO, Sept. 9TH, 1875

SAN FRANCIsCo, Sept. 9TH, 1875.
This city has just passed through a mon
etary crisis and panic, the like Of which
was never before known on the Pacific
coast, and our people will be well satisfied
should it never be known again. The
Bank of California was organized eleven
years ago on capital of five million dol
lars. From the first it has been specu-
lating bank. The subjects of speculation
here are principally mines and mining
stocks, and anything more capricious and
hazardous is not to be conceived of. The
bank did very large business in this line.
1t was the custom to make large advances
to promising mines and trust to the posi-
Die future for reimbursement. Sometimes
this course gave large profits to the bank,
and sometimes the reverse. In San Fran
cisco gambling in mining stocks is almost
reduced to science, and this bank was
owned by, and was the headquarters of,
the chief operators in stocks. 1t also did
very large business with stock brokers, and
Often ADVANCED nllllOnS Vi uOlldES W UlO-
kers on overdrafts. Sometimes they receiv-
ed this money back with heavy interest,
and sometimes the brokers failed and it
was lost. But on the average the profits
were very large, amounting often to one
hundred thousand dollars a month. Had
the bank dealt only in mines and stocks it
would have perhaps been always well with
it, but an excess of prosperity turned the
head of it's manager. He lived in royal
magnificence and thousands of visitors to
California will long remember the gorgeous
hospitality of William G. Ralston. There
was n glamour over his name that almost
concealed his faults. His friendship Sc
cured success; his cooperation was essen
tial to all new enterprises. There was
wealth in his touch, and charity never ask
ed of him in vain. He was popular with
all except his victims. In the tide of his
affairs there was seemingly no ebb. But the
evil day was coming. Gold rose in New
York, and some forty millions in coin we're
transported thither to pay the debts of our
merchants and make purchases of new
goods at low rates. The California harvest
was also at hand and five millions of coin
had been sent into the country. A couple
the scarcity of coin and locked up some
six millions more. This was nearly all the
coin on the coast available for business
Mr.. Raston saw the trouble from afar and
began to call in the loans of the bank
But the resolution to do SO was easier than
its accomplishment. The money of the
bank was scattered all over California and
Nevada in mines, in stocks, in manufac-
tories, in hotels, and in every enterprise
that promised large gains. Borrowers
could not pay because coin could not be
procured. The bank had thirteen million
dollars deposits and only some two and
ahalf millions in coin to meet them. To
secure more coin the bank began to sell
it's stock collaterals in the Stock Exchange.
Millions of mining stocks were offered at
any price obtainable, and the consequence
was that values sunk and panic struck
the street. 1t did not take long for the
public to detect the cause of the crash in
stocks. They saw that it was the Bank of
California that was selling so low, and
they knew it was because the bank was
straitened and must have money. Some
cautious depositors wanted their money
out; they were Joined by others, and still
others, until a crowd was assembled and
then all knew that a run was begun Oh the
how ut
few minutes the excitement reached fever
heat. An immense crowd of excited men
gathered around the bank building and
filled the outside lobby SO it was impossible
for the later arrivals to gain admission.
Screaming men and women filled the street,
insane depositors fought for precedence,
and the roar of the angry and bowling
multitude sounded like tempest. In the
midst of this wild sea of commotion, the
bank clerks were busy in cashing checks,
and coin was paid out as fast as it could be
handled. The end soon came, the money
was all gone and in the face of the despair
ing crowd the doors were shut, and at half
past two on the afternoon of August Goth
the powerful Bank of California ceased to
exist. The fact could not be realized
Men could not believe that this great bank
had failed, and that the sun of its wealth
and power had set. The story was incred-
ulous, and not for days could men realize
that it was so.
Another run at once began on the Ma
tional Bank and Trust Company, which,
also, soon suspended, not being prepared to
stand panic, but in a few days afterward
this bank resumed business. The hour for
closing the banks having now arrived there
were no more suspensions for the day. In
the meantime fearful scene was being
enacted in the Stock Exchanges. The
boards met at the usual hour in the after
noon, and hundreds of operators who had
contracts to fill were perfectly wild, not
knowing how or in what manner they could
! fill their engagements. When they were
called to order all outsiders were ordered
to leave the room, and then ensued a scene
which, perhaps, was never witnessed in any
city in the world. A stock board at ordi-
nary times seems a theater of wild con-
fusion, but now it was as the very jaws of
hell The Internal noise and bowling of
the anguished brokers was appalling
Brokers who could count their wealth the
day before by the hundreds of thousands
were frantic by the frightful outlook, and
knew not what action to take. After a
stormy session of fifteen minutes it was
agreed that the boards should adjourn sine
die, or unto such time as financial affairs
should assume different and healthier
aspect. The minute the motion to adjourn
was carried, the doors were burst open by
the ruined and yelling brokers within, and
their attempts to reach the street were un,
availing, until officers came and drove the
panic stricken crowd from the corridors
Upon the streets without the scene was nc
less fearful. The streets were perfectly
packed with an excited, pushing swearing,