Los Angeles herald., 1890-12-21
SUNDAY, DECEMBER FL. 1890.
THE FINANCIAL CRISIS AND SOUTHERN
CALIFORNIA.

THE FINANCIAL CRISIS AND SOUTHERN
CALIFORNIA.
When the "boom burst" three years
ago, and local financial crisis was pre-
cipitated on this section, few of us saw
the benefits that really lay concealed in
that episode. a good many of Us had
been the victims of sharp practices
played on us by the mild and seemingly
confiding tenderfoot. That interesting
biped sauntered in here for his health,
and saw corner lots offered for song,
while ranch property might be gathered
in as gift. He gathered both lines of
property in at great rate, sold it to his
relatives who came the next winter at
an advance of 100 to 500 per cent. He
then blandly told us he had sold the
property too cheap, and we began to see
he was right. The old-timer became
frightened and rushed into the market
as buyer of his own property
at an enormous advance over the
price he had sold for. The con-
sumptives went home with all the
money they ever brought here in their
pockets, and with mortgages on our
homes for two or three times the
amount. Trading in real-estate stopped
and the ''boom burst" The tenderfoot
returned home and told his friends how
he had played the game on the natives,
and added that the country out here
was gone to the demnition bowwows. He
went to sleep with visions of foreclosed
mortgages dancing before his eyes, when
he hoped again to get back all our
homes:
But there the turn of fortune came in
our favor and the game was ours. Mort
cages and scale-bugs co mbined failed to
destroy, almost to interrupt the produc
tions of marvellous crops on the fertile
lands OF the semi-tropics, blessed
by her genial cline. Year
by year we kept on sending
out increasing am cunts of oranges, de-
ciduous fruits, vegetables and all the
wonderful specialties OF the section. As
the eastern people looked at the long
train-loads of the marvellous products
of this valley, and as they continued to
feast on the luscious fruits, the thought
would force itself that even the "busted
boom" must have left something behind
it. So out here people continue to come
with their little store OF funds. The
new army was smaller than the old one;
but they were honest farmers and enter
prising trades people, rather than land
sharks. They proceeded to buy homes,
plant trees and raise truck OF one sort or
other. They went into the business OF
developing the country.
Thus money kept up a steady flow
into the hands of those who were over
burdened with debts. Sales of land and
returns from crops poured millions in
here. Mortgages were lifted; the sher-
IFS services were dispensed with; the
eastern boomer got his money, and we
kept our homes. The great mass of OBJ
legations were adjusted the great weight
of membranes on the land was lifted;
hardly failure was recorded in all this
process of liquidation. The world stood
in wonder as the section was seen to rise
out of the slough of debts in which it
had been sunk.
So nearly all the money that has come
into the country has gone back to the
east to pay off these vast debts. But the
money has been forthcoming and the
debts have been paid. While this has
been going on, our people have returned
to their old habits of conservative econ
omy and of industry. The lands have
been cultivated for all there was in them
and not dollar has been spent in un-
necessary outlay. While we have been
paying off the mortgages on our lands,
we have carefully avoided running in
debt for other things. Besides this the
S'boom" drew no end OF all sorts OF stuff
into the section, and we were we'll sup
piled with nearly all lines OF merchan-
disc imported from the east. Again,
the impression prevailing outside
that our position was an extremely bad
one, tended to make it difficult for rash
dealers to run in debt. 30 while we
were selling much we were buying little
Here came in the blessings in dis
guise. The great crash came in London,
and one of the heaviest private banking
houses in the world snapped in two un-
der the strain. The failure of the Bar
ings precipitated a demand for money
hardly ever paralleled. Every man
who owed dollar was called
ON to pay. Firm after firm and
bank after bank went down before
the fury OF the storm. Both hem
sspheres are strewn with wrecks.
Not failure has been heard of 80 far in
Southern California. We have been
doing our liquidations for three
years past, and now that the
storm breaks it finds our crafts
AL safe in harbor or sailing under bare
poles in the lea of some friendly head
land. Had the crisis now shaking the
world to its center come three years