Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1881-08-13

dustry, and gold almost the only export, may
be said to have extended up to about 1860,
when agriculture began to assume leading
place, and the discoveries which led to the
great development of silver mining were
made.
THE PANIC OF 1857
Was not felt in California, yet in 1858 the
Frazier river excitement which led thousands
to abandon their claims or business and waste
time and money in what was for the most OF
them fruitless expedition into British Co.
lumbia, produced in California something
like the results of the panic in the East. But
the wave of fortune-seekers, which had for
the time left some localities almost depopu
lated, returned again, industry resumed its
normal course, and with 1861 or 1862 GEN.
menced period Of marked prosperity.
! For despite the fact that the surface pla-
GERS, which could be worked with the most
primitive appliances, and had constituted the
first attraction of California, yielded less and
less, a more elaborate system of mining, call
ing in the aid of large amounts of capital,
kept up in great measure the gold yield the
growth of agriculture began to show itself in
a constantly increasing surplus for export !;
various branches of manufacture which had
gradually taken root began to assume consid-
cradle Importance and the development Of
the silver mines of Nevada stimulated all in
dustry with fresh stream of bullion; while
the pushing eastward of the Central Pacific
Railroad, largely by means of capital drawn
from abroad by the sale of bonds. gave addi-
tional vigor to industrial and commercial life.
As there were no large Government expend-
itures in California during the war, the
greater part of the Federal revenues being
drawn to the other side for disbursement, the
HEAVY TAXATION
Which the war necessitated fell with peculiar
severity upon California as did the increase
in freights and marine insurance caused by
the depredations of the rebel cruisers, since
all her commerce with the Atlantic States
had, under the navigation laws, to be con-
Quoted in American vessels. Yet, while the
activity in business caused by the great Gov
eminent demands and the superabundance of
currency forced into all the arteries of trade,
did not affect the Pacific coast. the healthful
development of great natural resources,
aided by the energy infused into railroad
building, produced an activity which, if it
did not rival that shown in the East during
"the flush times" had far more solid basis,
and was not liable to be brought to close
when Government expenditures were cur
tailed and speculation was no longer fed by
an increasing volume of paper money.
There happened in California, however.
what seems always to happen among people
of active temperament in times of continued
prosperity, and in the tendency to which is
doubtless to be found the primary cause of
those fluctuations in business activity to
which all countries seem liable. Expectation
outran reality, and speculation, growing by
what it fed on, began TO
DISCOUNT THE FUTURE
At rates based on rose-colored imaginings.
rather than on sober calculation.
The establishment of new industries the
opening of new mines, the building of new
railroads, the growth of population and in
crease of wealth-in short, all the things in
which material progress consists, tell imme-
diately and powerfully upon the value of
land, and in a rapidly developing community
the quick increase of land values which takes
place is sure to beget speculation. which car
ries up nominal values far faster than real
values increase.
In some respects. the initiation of values
thus produced is worse than initiation of other
kinds. 1t not only creates fictitious wealth
which promotes extravaganza and turns the
minds of men from those pursuits that add to
the wealth of the community while they in
crease that of the individual, but it discour-
ages settlement and Improvement, and does
not SO readily come to an end by sudden col
lapse, since, even when land becomes unsafe
able at the speculative prices at which it has
been bought or quoted, its owners generally
hold on as long as possible in hopes that its
market value will come up again.
1t was not merely the steady and legitimate
increase in land values due to the develop
ment of the country, that gave an impetus to
land speculation in California; but the
GREAT EXPECTATIONS,
Which as the transcontinental road drew
towards completion, arose in the popular
mind as to the stream of immigration which
would pour over it. In nearly all sections
real estate values felt the speculative tend
ency. Around San Francisco land was sur.
veyed into building lots, and sold or quoted
at high prices, which will hardly be needed
for urban purposes when the city begins to
count her population by millions, and large
tracts of available, but as yet unused, agri-
cultural land were taken up and held in the
same way.
But the great expectations based upon the
completion of the railroad were not realized.
Even after the junction of the Union Pacific
and the Central Pacific had linked San Fran
cisco with New York by continuous line of
rails, the journey from the Atlantic to the
Pacific still remained long and costly one
there were yet great areas of fertile land on
the eastern side of the Rocky Mountains, over
which the tide of immigration, setting from
the East, would naturally spread before push
ing on across the sterile ira cts Of the interior
basin, and the policy Of the roads which con-
stituted the eastern links in the transconti.
mental chain, and upon which the Central Pa
cifc was dependent for the fixing of
through rates, was naturally directed to the
settling up of the lands tributary to their own
way-business before Offering any facilities to
more western flow of the tide of immigra-
ton. Under these circumstances, the avidity
with which speculation had seized upon the
lands in California that would be first sought
by the settler, and the high prices at which
they were held, left 80 little inducement to
immigrants that comparatively few came
through, and the hopes built upon the great
influx expected came, for the time, to nau ght,
and in fact have not yet begun to be realized.
COMPETITION.
At the same time the completion of the
railroad brought San Francisco merchants, in
markets in which they before had undis-
puted control, face to face with the COMPETE
ton of the larger capital, the lower interest,
the more active solicitation and rivalry Of the
great Eastern cities and to some degree
changed the course of trade. Further than
this, the increasing diversion Of freight from
the long and tedious route around Cape
Horn to the railroad route across the CONT
nent did not prove of unmixed advantage.
A very large proportion of California iu.
ports, consisting of manufactured goods,
can bear high rate of freight. and natur-
ally seek the quick railroad route but
the wheat of California, which constitutes
such large item in our exports, and for
which Great Britain is the great customer,
will not bear the cost of railroad transporta-
ton across the continent by routes as yet
completed, and thence across the ocean in
steamers. Thus the diversion of the import
trade to the railroad has caused scarcity OF
outward tonnage, and freights have ruled at
prices high enough to attract to San Fran
cisco ships in ballast-prices which of course
lowered the net return TO California farmers
for their crops.
Yet, while the completion OF the railroad,
instead of bringing at once the rapid growth
that was expected, brought rather
TIME OF TRANSITION,
During which the accommodation Of bust.
ness to new relations and new channels has
been going on, the remarkable development
of the Comstock mines, which in twenty
years yielded no less than three hundred
millions of dollars. poured food of wealth
into California, and maintained such degree
OF prosperous activity as in large measure
to obscure popular appreciation of the fact
that the golden days were over, and that in
creased energy and greater economy were
needed to maintain the commercial position
of California and insure continuous progress.
1t is not to be wondered at that when the
great bonanza began to show signs of ex-
haustion, and the production of the Comstock
dropped nearly thirty-three millions in three
vaars the cry of hard times went mn