The record-union., 1893-09-11
CALIFORNIA's STRENGTH.


mercial affairs which has existed of late
all over the country-in fact over the
financial world-it Is a pleasure to see
how well our State, its merchants and
financial institutions, have withstood the
seige. 1t has undoubtedly been the hardest
experience since the State began to as
sumo great Importance in the commercial
world.
In its earlier history from 1849 to 1854
California was the great producer of gold
in its crude state. No coin was required,
the buyer paying for his purchases in
dust" and often giving more than full
weight, for gold was abundant and a
grain-more or less-cut very little fig
ure. When the State beg an to fall into
line with other commercial communities
and regularly coined money came into
general circulation, California suffered
from frequent disasters and disappoint-
ments. Floods and fires swept over
thriving towns, and Sacramento espe-
cially, suffered from both-but there
were always those who had been more
fortunate and were not swept off the
earth, who generously came to the aid of
the unfortunate and the devastated dis
tricts were rapidly rebuilt, stronger and
on a irmer basis than ever.
When the Central Pacific Railroad ap-
preached completion everybody looked
for an era of unequaled prosperity to be-
gin as soon as the last spike should be
driven. 1t was expected that immigra-
ton would set in at once and almost ex-
ceed the capacity OF the railroad to
handle. In all directions towns were sur
veyed and laid out in small lots. and in
and around San Francisco alone there
were homestead lots sufficient to provide
for 10000 families. The spring of 1869
saw the last spike driven and the rail-
road open for business and capable of
hauling everything offered, but no large
immigration came. 1t was a great disap-
pointment and the fall OF 1869 saw very
stringent money market.
The Bank of California was then the
great financial institution and almost the
sole dependence for money all over the
State. Interior banks were very few and
absolute coin was carried by express all
through the State to move crops and pay
for grain. The Bank of California was
extended to its fullest capacity and
largely to few favored customers, who
had borrowed far beyond their proper
limits. Loans were called in and it was
almost impossible to obtain money even
to move the grain crops then ready for
market. Real estate schemes fell per-
fectly flat and several heavy failures took
place, but the people weathered the
storm, and once getting over the worst
the great ship of finance, close-reefed, be-
gan to glide along into smoother waters.
Soon tairer winds came from the Com
stock mines with strong currents of pre-
cious metals from Belcher and Crown
Point, followed by a regular "bonanza''
from Consolidated Virginia, while the
gold mines Of California, and especially
the hydraulic mines, served to place CAL
ifornia, from 1872 to 1879, in the front
rank of the more prosperous States of the
Union.
It was during this period that the fail
ure of Jay Cooke & Co. and Duncan
Sherman & Co. paralyzed the Eastern
States and created a distrust and lack of
confidence that required several years to
restore, but California went through this
period with ease and was prosperous. In
1875 the closing of the Bank of California
took the financial world by surprise and
naturally created great alarm. The timid
rushed to the savings and commercial
banks for their money to hide it away,
and in many cases embark in enterprises
that lost it all. But California had be-
come rich and strong. Capital was
abundant and principally belonged to
our own people, though large amount
of foreign capital was employed in COM
mercial banking. Interior banks of
ample capital and under good manage
ment had been established and almost
every town of any size had bank. The
stringency and lack of confidence did not
last long, and the stockholders of the
Bank of California, finding themselves
personally liable for its debts, at once be-
gan to re-establish it till in few years it
became one Of the strongest banks in the
United States, with a credit in all the
financial centers Of the world second to
none.
Since that time our State has steadily
gained strength, though the mines have
produced less and the hydraulic mines
have been stopped, but the commercial
world has moved quietly and steadily
forward until met by the present crisis,
which has been universal. It has not
only been a storm, but a cyclone. 1t did
not start in any one place or from one
particular cause, but from several. Fam
inc and distress in Europe, collapse Of
great expectations in South America
over-speculation and failure of land
booms and labor strikes in Australia,