Year: 1870

The story OF sau Francisco and
Chicago.


From the San Francisco Bulletin.l


The banking capital of San Francisco
is more than double the amount en-


ployed in Chicago. In the former city


It is represented by gold, in the latter by


paper. Chicago, with double the popula-
| ton and less than half the banking cap
ital Is doing annually a business ex-


ceeding four times the amount done IN


San Francisco. The fact is we have a
plethora of capital and stagnation of


business. In Chicago capital creates


business. In San Francisco it appears


to stihe enterprise. In the former city


capital is nimble, and is not only acces-


sible for all business purposes, but is


turned over 30 often that it is made to


serve the legitimate uses of much


larger amount in more stagnant chan


nels. For many years the increase Of
Chicago was called mushroom growth;


and it was designated as city without
capital. But it managed to control the
grain and lumber trade OF, the north
west, and its merchants sell annually
the largest amount of goods sold in any
inland city on the continent.


We have to do with the fact that capi-
tai is more sluggish here, and stimulates


business less than in any new city in the
country We bring in bullion and coin,


and send it away Money is loaned at


high rates. For two years the people


have paid from two to four per cent


more than legitimate business could bear
There are from $25,000, 900 to $780,
100000 loaned out by the savings banks,


chiefly on real estate security. This
capital stimulates house building and
the acquisition of homesteads. But it
does little in creating other business.


Before thousands of people can buy


homesteads they must have employment


by which they can earn some part of the
money in addition to the daily expenses
of living Aside from the savings banks


there are in the custody Of other bank
ing institutions $50, 100000 in coin, and
probably half that sum in the hands of
private capitalists, all seeking temporary


investments or more permanent ones,


and most of them at high rates of inter
est. We have more money than bnsi-


ness; at the same time the country is


poor-that is, the mass Of the people


have not yet attained a moderate com


petence and there are few really rich
men. blntfb tQbflfsnff 81
This financial anomaly is attracting
attention abroad. Chicago, with half
the number of dollars in paper, is con-
tinually adding new branches OF busi-
ness to the resources of that city. OF
the whole amount Of capital invested in
this city, we doubt If so much as $780,
900 is accessible for any new manufac-
turing enterprises. We bring our wheat
to tide water and then charter foreign
iron ships to take it away. We need a


feet of twenty medium-sized iron ships,


to be built and owned at this port. But


what capitalist is willing to come for


ward with his money and go earnestly


about the building of these ships2 We


expect at no distant day to rank, in the


extent of our foreign commerce, as the


second city Of the Union. But hardly


so many as dozen large vessels are


owned at this port which are fit for long


voyages, and these being of wood, are


depreciating every year.


| We have an unlimited quantity of rich
ores dCCtsslulc liOI ohSiuhB pui iPooSo.


But only one establishment of that kind
lis in operation in this city, Ten mill


lions might be proftably employed in


buying and reducing ores. And yet, al


though the business fairly conducted
promises handsome returns, and would


contribute greatly to the prosperity OF
the city, less than one hundred thousand


dollars are probably employed in the re-


duction of ores in this vicinity.


| The newspaper, book and job business
Of this city and State requires as much


paper annually as could be turned out
by six or eight paper mills of ordinary
capacity. But to-day not more than
half the coarse wrapping paper re-
Quired for consumption is made on the


coast; and not one Of the large news.


papers does or can get a supply OF
printing paper from any mill in Cali
fornia. l''


are we a self-reliant, prosperous peo-


pie. when these things and much more


can be said of us2 1t avails little that


we have from sixty to ninety millions OF
cspital in this city so long as the greater


part OF It is pot accessible for any in


crease Of business. We have been swap
ping and trading, but have not been de
yelos;pg the country. Two-thirds of the
yexatioas land lawsuits which have been
instituted during the last FIVE years, to
impoyerish and turn people out of their
homes, have been instigated by persons
living in this city, who have Employed
more or less capital for that purpose
Every candid observer believes that the
prospetity Of this coast encouraging as
| L may have been, ought to have been


threshold greater. We do not lack cap
itaI, but we lack faith in bold and legiti-
mate enterprises. And when this comes,
thers will be new life in these sluggish


channels of business, eyHg