Los Angeles herald., 1905-11-05
Until recently the multiplication
of banks in Los Angeles has been
like the othar- nar-veIs of oIYr.

T UNTIL recently the multiplication
of banks in Los Angeles has been
like the other marvels of our
growth, and of the making of many
1noneyed institutions there promises
soon to be no end. All at once the
consolidation of the First National, the
Los Angeles National and the South
western National banks, into a great t
unit. has given much theme for thought
hereabouts both amongst people who
control and those who use banks.
This tendency towards consolidation
started in New York, and emanated
from the Rockefellers. 1t was followed
by remarkable number of consolida-
tions in San Francisco, being led off
by the Bank of California and followed
by the Nevada National bank. The
latter, under the leadership of I. w.
Hellman, its president, who is looked
upon here as a fellow townsman, from
his long headship of our own Farmers
and Merchants bank, which he
founded, and of which he is still presi-
dent, has absorbed the Wells Fargo
and some northern banks.
The history of the Nevada bank has
had some peculiar features. When the
noted Bonanza firm had made their
multi-millions from the California and
consolidated Virginia mines on the
were pouring into San Francisco divi-
dends monthly of $1.0S0OOO each, the
Messrs. Flood, O'Brien, Mackay and
Fair naturally thought that they ought
to rule the roost in all financial lines.
Flood and O'Brien, who had supplied
Mackay and Fair with the money for
prospecting from their ten cent whisky
saloon, thought it more dignified to
pose as bankers, and the Nevada bank
ad VSrit1 a1 90
Then a very extraordinary thing hap
pened. The commercial community alb
solutely declined to patronize the bank.
For while it got along in a manner
by its mining business and as n but
tress to the stock market, receiving
stocks as collateral for loans. About
1877 the stock market began to natten
out. There grew up bad blood between
the partners. At one time 1t would
have surprised no one who knew the
men II Mackay and Fair were at any
time to come to pistol points.
Let 1t Alone
notwithstanding the enormous col
lective wealth of the partners, easily
amounting to upwards of one hundred
millions of dollars-for those days a
prooigious sum-the bank dragged
Business men would not take hold. AS
there was no need of such a prodigious
capitalization. the stock OF the institu-
tion was reduced from $10,OO0.OOO tc
$5.000000. OBrien died. Jim Fail
withdrew from the bank and carried
over his account to the California anc
other banks.
At this stage Flood and Mackay were
running the bank. They started i'm tC
corner the wheat market at Chicago, as
Jim Keene had done before them
when he drew out of California street
and hied himself to the east, with the
same result, only more so. This wheat
venture nearly resulted i'm the CLOSING
of the bank. and would have done so Il
Fair had not Telented and come TO the
aid Of his old partners. Dray loads oi
gold coin were hauled from the BanI
OF California 10 the Nevada bank on
Jim Fairs orders and the storm wa.
weathered.
In this little transaction Flood anC
Mackay dropped fourteen or hfteeI
million dollars. This would have beer
a mere basatelle IL II We're not that il
this case time was the essence Of tn,
contract. They needed a tIemendOuI