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News & Tall Tales. 1800s. The Circular to Bankers


San Francisco Gold Rush 1849.

May 23, 1851, London, United Kingdom

THE CIRCULAR TO BANKERS

To Our Subscribers

It is requested that all Communications, Notices, and Orders for this Publication be addressed to the Editor, No. 12, Abingdon street, Westminster, London.

GENTLEMEN,

Of all the wonderful and extraordinary events that have occurred during the present age, there is probably none that claims so prominent a place in the annals of time as the rise and progress of the "Golden City" of California. The realities of San Francisco appear to surpass even the most extravagant fictions that have been found amongst the fabulous writers of the East. It is almost a literal accomplishment of the language of the prophet "A nation has been born at once." Three years ago, the spot which is now peopled with human beings from almost every country on the globe, and covered with lofty buildings, that are raised as if by magic, in every quarter, was occupied only by a few mud huts, and a race of people that knew nothing of the vast sources of wealth that surrounded them. That this extraordinary change has been brought about by the discovery, and the thirst for the possession, of gold, there is not a doubt; but nevertheless, the rapid progress of industry, the opening of new markets -- for all descriptions of produce, and the distribution of the population of the old world over a territory that has hitherto been almost uninhabited, all serve to prove the mighty power which man possesses over the boundless sources of wealth which Nature has spread before him.

The spot which has been fixed upon for the metropolis of this newly acquired territory, is one of the most remarkable to be found in any country. It appears from its natural formation to have been designed as the destination of some great and powerful people. The rocky mountains of California, which stand like a wall of brass against the waters of the Pacific, are impenetrable for a considerable distance along the Western shores of the Continent, until we reach the point where there is a break that forms an entrance to the finest bay in the world. This passage is about one mile wide, and five miles long. The waters of the Bay of San Francisco extend 75 miles, and the length of coast is about 275 miles; it might therefore, with more propriety, be termed a Sea than a Bay; and its waters are only a small distance from the Pacific Ocean. On the ridge which forms a part of the rocky wall that divides the Pacific from the Bay of San Francisco, the town of San Francisco is built; and it is to the progress of its advancement that we shall now direct attention.

The principal ideas which floated about in the minds of many people in this country, when the metallic wealth of California was first discovered, were, as to the result that it would produce upon the relative value of the precious metals, gold and silver; and it is to this point only that a great number of persons still confine their views when reference is made to the subject. We have, as far as we have examined the matter, never been able to express any decided views upon this complicated question, because we have felt that no sufficient data have been at our command to enable us to give a decision. There can no longer be any doubt whatever, that the auriferous productions of California are very great, and that they may at some distant period affect materially the relative value of gold and silver: but we have never thought that the extraordinary demand for. and the consequent rise in the price of, silver, was occasioned by the influx of gold from California; the causes of that increased demand, arose from a complication of circumstances both of a political as well as of a commercial nature, which equally affect the demand for the precious metals.

When, however, we look at the present financial position of England and of Europe generally, we think that all the changes that do occur, ought to be carefully recorded, that in the event of any material alteration taking place in the relative value of money and commodities, we may be able to trace it to its proper causes. Independent of the ultimate effect which the mineral wealth of California may produce throughout the monetary world, there is already abundant evidence to show that at no distant period that commerce and navigation will rival those of New York, and that the two cities which are situated nearly under the same parallels of latitude, will command the principal portion of commerce on the shores of the Pacific on the West, and on the shores of the Atlantic on the East. Some idea may be formed of the amazing rapidity with which the commercial intercourse of California has been advanced by the following account of the shipping in the Port of San Francisco on the 21st February, 1851;

Ships Barques Brigs Schooners Total
American
128
110
98
56
392
British
19
35
20
13
87
Other
24
24
24
20
92

The principal part of the American vessels were from New York, and the English vessels from London, Liverpool, and Glasgow.

Our Banking subscribers will naturally be most interested about the gold productions in California, we therefore give a statement below of the amount of Gold Dust shipped in each month during the year 1850, from January the 1st to December 30th inclusive, from official sources:

dollars
January
448,444
February
734,351
March
1,250,000
April
2,201,000
May
1,731,863
June
2,669,045
July
3,020,000
August
5,282,880
September
918,000
October
4,598,461
November
5,337,539
December
1,250,000
Total
29,441,583

This does not include the amount taken away by private parties, which is estimated at about 12,000,000 dollars , nor the amount required for circulation amongst the inhabitants, which may be from 6 to 8 millions more, making a total of 50,000,000 dollars,, or about 10,000,000 sterling. The amount of bullion imported into the port of San Francisco from the 1st of January, 1850, to December the 81st, was as follows :

dollars
January
227,331
February
19,600
March
100,000
April
400,000
May
267,000
June
116,669
July
157,000
August
295,000
September
45,000
October
-
November
95,000
December
0
Total
1,722,600

The principal part of this amount was received from the Atlantic States, and large sums from the continent of Europe, from parties tempted by the high rates of interest obtainable.

It seems almost incredible that in so short a space of time as that which has elapsed since the first discovery of gold was made, that the facilities for commercial intercourse should have reached their present point. The Pacific News says, that in no part of the globe are the generality of Bankers more careful, judicious, and business-like, than in San Francisco. The rapid changes which are noticed every day, necessarily compels them to watch the course of events with a careful regard for their own interests; and the exceptions to the general classification for integrity and business capacity, are but few. It is but a short time since most of them, in San Francisco particularly, passed through a panic that would have shaken the commercial circles of other cities to their centre; yet all but one or two came out unscathed, meeting every demand upon them promptly, and to the "last dollar."

We may here remark that the effects of of commercial panic in San Francisco under existing circumstances cannot be compared with any of those which have taken place in countries where the commercial and trading operations are carried on by extensive credits. Transactions performed by the use of the precious metals, must at all times be more limited in their extent than when they are carried on by the introduction of of bank paper, which is a species of credit, although its foundation is based on the precious metals. But by the constitution of California, which was ratified by the people on the 19th of November, 1849, it was expressly declared that, no charter should be granted for banking purposes, nor should any paper of any kind be permitted to circulate as money. This we believe, will account in some degree, for the brief duration of the Californian panic.

The principal Bankers established in San Francisco, are:

  • Messrs. Burgoyne & Co.
  • Messrs. Bolton, Barron & Co.
  • E. E. Dunbar
  • T. J. Tallent & Co.
  • W. F, Young

The following houses represent parties not residents in California:

  • B. Davidson represents the Messrs. Rothschild of London. F. Argenti & Co. represent Brown, Brothers and Co., New York, and Brown, Shipley & Co., Liverpool.
  • Wells & Co. represent Willis & Co., Boston, and Drew, Robinson & Co., New York.
  • Page, Bacon & Co. represent Page, Bacon & Co , St. Louis.
  • James King represents Corcoran & Riggs, Washington.
  • S. Beebee Ludlow represents Beebee Ludlow & Co., New York.
  • Godeffroy, Sillem & Co. represent J. C. Godeffroy & Co., Hamburg.

Besides these, there are parties engaged in the purchase and sale of gold dust that cannot be classed amongst the Bankers above-named. This list contains the names of the principal houses engaged in Banking and mercantile pursuits, both in Europe and in America.

During the year 1850, the number of vessels which entered the port was 1,743; and the number that cleared was 1,461. The number of immigrants that arrived was 35,581, of whom 1,248 were females; and the number who left the port during the same period amounted 26,593 males and eight females.

It appears from these statements that the clearances from San Francisco during the year, were nearly equal to half the number at New York; and, when compared with those of New Orleans, the arrivals in favour of San Francisco were 645, and the clearances 330; the comparison with Philadelphia was still greater in favour of the Californian city, the difference in clearances being 922, and the arrivals 1,137.

The total value of the merchandize received by foreign vessels, from November 21, 1849, to September 30, 1840, was 3,351,962 dollars 65 cents; and the tonnage of the vessels was 151,604. The total value of the merchandize received during the same time in American vessels, was 797,275 dollars 10 cents, and the tonnage 82,949 ; making the total value of the merchandize received 4,149,237 dollars 75 cents, and the tonnage 234,553. So that if we deduct the total value of the imported goods from the amount of gold exported from the ports of California, we find a large balance in favour of the merchants of the " Golden city."

The following statements, compiled from official documents at the port of San Francisco, will show the extent to which provisions have been imported during the past year

Chart of Imports to San Francisco 1850.

We may gather from these statements that San Francisco is destined to become, at no distant period, the greatest commercial city in the Western hemisphere, although it was only in the month of March, 1849, that the first steam-ship trading between San Francisco and Panama, entered the port of the "Golden City;" and the number of steamers now running between the two ports is said to exceed the number employed in the trade between New York and Liverpool, and New York and Havre combined.

There are already employed in the Pacific Mail Steamship Company's Line, the following superior vessels, the California, Panama, Tennessee, Unicorn, Oregon, Northerner, Sarah Sands, and Carolina, with a tonnage of 8,250 tons: and the following vessels belonging to Law's Line of Pacific Steamers the Columbus, Isthmus, Republic, and Antelope. The first steamer that was designed for the river trade, called the "Senator," arrived in the port in October, 1849, The number of steamers employed in April last, was 47, with a tonnage of 6,632, besides 270 craft of various kinds, engaged in navigating the rivers and the bay. The number of vessels in the port which had been abandoned by their crews, and are now engaged as storeships, amounted to nearly 600, and many of them vessels of the finest description.

The auctioneering trade of San Francisco appears to be rather a profitable affair, for the City already contains 17 firms engaged in this business, besides several others of less note.

The social and religious progress of San Francisco appears to keep pace with its commercial and industrial movements. There are ten places of worship which belong principally to dissenting congregations. Under the head of law, there are the Supreme Court, the Superior Court, the Recorder's Court, and the District Court, in which regular Sessions are held, for the purpose of adjudicating upon all cases that are brought before them.

The total population of the City is estimated at about 35,000. There are 7 daily newspapers; 8 express companies; above 100 brick buildings; 10 first class hotels, the principal of which are the "Union," the "St. Francis," the "Delmonico's," the "Revere," and the "National." There are 107 miles of street laid out, of which one-fourth is already built upon and occupied, 7 miles substantially planked, and the greater part of it properly drained. There is one Marine Insurance Company established, and another in the course of formation. The most stupendous undertaking on which the labours of the citizens have been engaged is the Central Wharf of the port, which reaches 2,300 feet, or nearly half a mile into the Bay. This work was begun in August, 1849. It is now lined with handsome buildings, placed upon the water, and vessels of every variety lying at it, and merchandise of all descriptions exposed upon it for sale.

Such are some of the leading features of the rise and progress of the chief city of California. Whether the immense stores of metallic wealth that surround this new-born kingdom, will produce any serious changes in the countries of the old world, has vet to be seen. That its vast treasures have already greatly enriched the cities of the Atlantic is beyond all doubt; and the progressive improvements which are still being carried on with such amazing rapidity, are the most enduring proofs of what the industry of man can perform. The paper to which we are indebted for most of our leading facts, has correctly said, "The change is wonderful and surprising; but when we add that nearly all this has been accomplished within two years and-a-half, it is no secret that the world looks on, and wonder.

Civilized and uncivilized nations alike have heard of California, and many of them have witnessed, in some degree, enticing specimens of her mineral treasures But she has a mine of wealth in her broad acres undeveloped agricultural riches that lack only the hand of industry, the energy of the people into whose hands destiny has placed the country, to make the wilderness 'blossom like the rose,' arid her plains and valleys to yield riches far more lasting and stable than even the glittering ore that each stroke of the miner's pick exposes to "the broad light of the noonday sun."

We are, Gentlemen, Yours, &c,
London, May 23rd, 1851.
H. A. & Co.


Freaks of Fortune.Freaks of Fortune: The Emerging World of Capitalism and Risk in America
Jonathan Levy
Until the early nineteenth century, "risk" was a specialized term: it was the commodity exchanged in a marine insurance contract. Freaks of Fortune tells the story of how the modern concept of risk emerged in the United States. Born on the high seas, risk migrated inland and became essential to the financial management of an inherently uncertain capitalist future. Focusing on the hopes and anxieties of ordinary people, Jonathan Levy shows how risk developed through the extraordinary growth of new financial institutions-insurance corporations, savings banks, mortgage-backed securities markets, commodities futures markets, and securities markets-while posing inescapable moral questions. For at the heart of risk's rise was a new vision of freedom. To be a free individual, whether an emancipated slave, a plains farmer, or a Wall Street financier, was to take, assume, and manage one's own personal risk. Yet this often meant offloading that same risk onto a series of new financial institutions, which together have only recently acquired the name "financial services industry." Levy traces the fate of a new vision of personal freedom, as it unfolded in the new economic reality created by the American financial system.

Amid the nineteenth-century's waning faith in God's providence, Americans increasingly confronted unanticipated challenges to their independence and security in the boom and bust chance-world of capitalism. Freaks of Fortune is one of the first books to excavate the historical origins of our own financialized times and risk-defined lives.

Imperial San Francisco.Imperial San Francisco: Urban Power, Earthly RuinImperial San Francisco.
(California Studies in Critical Human Geography)
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Millionaires and Kings of EnterpriseMillionaires and Tycoons.
The Marvellous Careers of Some Americans Whose Pluck, Foresight, and Energy Have Made Themselves Masters in the Fields of Industry and Finance

James Burnley

Gold Rush and Riches.All About America: Gold Rush and RichesGold Rush and Riches.
Paul Robert Walker
Meticulously researched, with specially-commissioned illustration, detailed reconstructions and original artwork from each period, reading lists, and resources for further study, this series is an immersive introduction to the history that shaped America. In 1848, carpenter James Marshall made a chance discovery: a few shiny flakes-of gold in a riverbed he was digging. Within a year 800,000 gold-seekers from all over the world were on their way to California, and the Gold Rush was on.

The Big Spenders.The Big Spenders
The Epic Story of the Rich Rich, the Grandees of America and the Magnificoes, and How They Spent Their Fortunes
America's Super Rich.

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The Big Spenders was Lucius Beebe's last and many think his best book. In it he describes the consumption of the Gilded Age. Beebe enjoys it all immensely, and so do his readers, whether it is James Gordon Bennett buying a Monte Carlo restaurant because he was refused a seat by the window, or Spencer Penrose leaving a bedside memo reminding himself not to spend more than $1 million the next day.

Tycoons and Millionaires.The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American SupereconomySuper Economy.
Charles R. Morris
Acclaimed author Charles R. Morris vividly brings the men and their times to life. The ruthlessly competitive Carnegie, the imperial Rockefeller, and the provocateur Gould were obsessed with progress, experiment, and speed. They were balanced by Morgan, the gentleman businessman, who fought, instead, for a global trust in American business. Through their antagonism and their verve, they built an industrial behemoth — and a country of middle-class consumers. The Tycoons tells the incredible story of how these four determined men wrenched the economy into the modern age, inventing a nation of full economic participation that could not have been imagined only a few decades earlier.

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