USA > California > San Francisco County > San Francisco > San Francisco, a history of the Pacific coast metropolis, Volume II > Part 3
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Doubtless this was the natural point of view in the early Seventies. Exports of breadstuffs, which amounted to only $1,178,676 in 1860, had increased to $10,090,179 in 1870, and when the latter decade was half completed $15,813,941 of such commodities had passed through the Golden Gate destined to European ports. Visions of feeding the inhabitants of the old world dazzled men, and it cannot be said that they were unsubstantial for, seven years later, in 1882, there was actually shipped through the port of San Francisco $40,138,557 worth of breadstuffs. When these dreams were being dreamed the great resource which has since become one of the mainstays of the state was hardly considered. In 1860 we find in the customs statistics a record of $120 worth of fruit and nuts exported ; in 1870 the value of such shipments was only $44,156, and that amount probably came near to the total of our surplus in the year named, for the shipments by rail, if there were any, were too insignificant to be taken note of, and indeed very little was known about California fruit outside of its boundaries until four or five years later.
San Francisco Without a Rival
American Products Underrated
Prosperity and Wheat Growing
490
SAN FRANCISCO
Great Changes in Pro- duction
There had been tremendous changes in the character and volume of the products of California during the twenty years following 1850, but they were not of a nature to suggest the vast transformation that was to take place after that date. The student of statistics observing the fact that the exports of tallow had dropped to $6,585 in 1870 and to $1,879 in 1875, would have inferred the disappearance of the herds that once roamed the great ranches of the state, but he must have been endowed with more than ordinary prevision to have foreseen that the time would speedily arrive when California would be an importer of breadstuffs and an ex- porter of tens of thousands of car loads of fresh and canned fruits; and that an almost unconsidered mineral product would outrank in importance as a source of wealth the output of the placer and gold mines of the state.
Oit Industry in its Infancy
It is doubtful whether the baser metals or petroleum engaged much of the attention of San Francisco in the early Seventies. "Coal oil" was sought for in a perfunctory manner after the dissemination of the news of the discovery in Pennsylvania but without practical result. It would have been extraordinary if the peculiarities of the region where the California discoveries of importance made in later years had escaped notice. As a matter of fact they did not. Men ac- quainted with the formations in the Titusville region were sure that the search for oil in California would be rewarded, but they could not enlist the interest of cap- italists. In 1876 the "Ventura Signal" published an article complaining of the indifference shown by the latter, but was rebuked by a San Francisco paper, which scouted its contemporary's assertion that oil found in the vicinity of San Buena- ventura could "be reduced and placed in the market as a first class burning fluid." "If," remarked the San Francisco editor, "the 'Signal' desires to gain the ear of capitalists and induce them to look at the subject seriously with a view to investing it must go into it more in detail."
Cautious San Francisco Capitalists
This "you must show me" attitude of San Francisco capitalists was character- istic of the period and applied to almost every sort of enterprise excepting the search for the precious metals. The men who had made their money in mines or by speculating in mining stocks were ready to embark in undertakings of the most dubious sort if the lure was gold, and they were not reluctant to invest in real estate and were even ready to put up buildings, but they were disinclined to take up occupations about which they knew nothing. They lacked the confidence which inspired men in the older communities to back the proficient, and not without some cause, for experience had demonstrated quite early that the conditions which made the investment of capital in manufacturing and other industries quite safe in the East were not present in the new state.
That the discovery of the great ore body in the Comstock contributed to this attitude of indifference towards other enterprises than mining is not surprising. For a period it turned the minds of San Franciscans from the contemplation of other modes of acquiring wealth than by speculating in stocks or making a lucky strike in a mine. From 1872 until the decade was well spent the community was kept in a whirl of excitement. Occasionally the flames of speculation flared up more brightly than at other times, but during the entire period they burned with a consuming heat which destroyed the commercial vitality of the people. This was the greatest evil produced by the discovery of the big bonanza. The unscrupulous manipulation of the stock market, and the robberies practiced by unprincipled men who unhesitatingly took the last dollar of their victims, were criminal offenses
Evil of Excessive Speculation
Bradley & Rulofson's Celebrities.
OPINIONS : [KEY TO BRADLEY & RULOFSON'S CELEBRITIES.]
" I consider the Photographic Portrait you have taken of me, by far the very best I have scen." EDWIN BOOTH. S. F. Sept. 14, 1876. " Many thanks for my Photos-they are very good," MHH, SCOTT-SIDDONS. 23d J noe, 1876.
" Have one thousand of my Photos finisbed in time for the next Australian Steamer." GEO. RIGNOLD, July 14, 1876.
" The best I ever had." CHAS. FECHTER. " Never had any better in my life." RisTour.
" Your pictures don't need any recommendation ! They speak for themselves." ALICE DUANINO.
" The best pictures ever taken of me were inade at your establishment." BARRY SULLIVAN. " The finest photography I ever had." THEODORE WANTE" ..
" Bradley & Rulofson bave bronght the Art to the highest degree of perfection." Boston Cut'miFa, Jidy 2, 18"G.
" Bradley & Kulofson's pictures beat the world. Overtwo thousand of their " ('clubrity" pictures were sold in two weeks." SYDNEY HERALD, Sept. 25, 1875. " As giving some idea of the fuvor in which Bradley & Rulofson are beld in the East, we note that they received yesterday forty-
three orders trom Dramatic Celebrities in the Eastern States." S. F. DAILY ALTA. April, 1876.
" Bradley & Rulofson's pictures are creditable to the state of arts io f'alitoroin. It the Golden State could make wine that would compare
with their photographs, it would be the talk and envy of the world." PHILADELPHIA ITEM, Muy 26, 187G. " Sono d'opinione che non si possano superare i vostri lavori fotografici." G. TAGLIAPIETRA,
" Your work is considered by the whole dramatic profession to be the best in the world." JOHN MCCULLOUGH.
1. Mrs. Jas. A. Oates. 29. Annie Pixley.
57. Mine Riatori,
85. Jas. O'Neil.
2. Harry Elwards.
30. Frank Lawler.
58. Harry Sullivan. Geo. Fawcett Rowe.
3. Mar, 12:00owa.
31. Anna El& r.
50. Edwin Adatos.
87. Theodore Habilunao.
4. John T. Raymond.
32. Jaroh Mueller.
60. Jeunic Le.
88. Lonisa Hawthorne.
5. Jos. Maas,
33. Madame Fabbri.
G1. Billy Emerson,
89. Ftenben Maesett-Jrems Pipes
. G. Emma C. Thursby.
34. Mleanor Carey.
1
62. Mrs. Mary Gladstane. 90. Mrs. Richings Bernard.
7. Billy Crane,
35. Alice Dana. ng.
63. Louis L. James. 91. Minnie Walton.
8. NcilHoa.
36. George Rigr nid.
64. John Wilson.
92 Hattie Roach
D. W. S. Carleton.
37. Mad. Janau-click.
65. Parepa Rost,
93. Frank Mayo. 94. Joe Mmphy.
11. 3. C. Williamson.
-
1
41. Mary L. Young.
69. Lawrence Barrett.
14. Bella Paternao.
42. Dickie Iargunl.
70. Edwin Forrest.
98. Jump Lewis,
15. Barton Hill.
71. Jou Emoiett.
99. Clara Morris. 100. Catherine Rodgers.
17.
Ilna de Muiska.
45.
73. Emily Kugel.
Iul. M. A. Kennedy.
18. Carrie Wyatt.
74.
Marie Annee.
102. Theresa Cujefio Sauret.
19. M'lle Anna de Belorea.
47. Marie Gordon.
75. Lewis Morrison.
103. Lottu.
21. N. Long.
49. Nelson Decker.
77. C. B. Bishop.
Wmu. Mostnyer.
50. Frank Chantran.
78. Horace Iangard.
23. Fanny Davenport.
1
51. Mary Andrison.
:9. Win. Castle.
107. Robert F'nteman.
21. Nelle Cummings.
52. T. W. Florence.
80. Mrs. Bowers.
1ny. Tony Pastor.
25. Maggie Mitebell.
8t. Gro. Chaplin.
26. Surnor Taghametra.
82. Mme. Zelda Seguin.
27. Jettreys Lewis.
53. Mrs. Chantinu.
'83. Manrire Barryzoore.
28. Emma Waller.
56. Edwin Booth.
- Kl. Jus. W. Wallick.
95. Emily Melville.
12. May Howard.
40. Ellie Wilton,
68. Tom Keene.
96. Juba Deau. 97. W. Peakes.
16. Annie Beaumont.
41. Charlotte Thenopson.
72. Katy Mayhew.
46. Chas Fechter,
20. Maggie Moore.
18. Alice Hurison.
76. E. A. Sothern.
104. Gertie Granville.
10. Mrs. Julah.
38. Charlotte LaClereq.
G6. 'I heodore Wachtel.
39. Chas Pope.
67. Winoetta Montague.
13. E. J. Buckley.
43. Alice Kingsbury.
103. John Jack.
lur. Mrs. Scott-Siddons.
53. H. J. Montagno. 54. John Mot'nllough.
H9. John Mortimer. 110. Owen Marlowe.
Entered according to Act of Congress hy Bradley & Ru'ofson, in the office of the Librarian of Congress, at Washington, D. C., 1876.
491
SAN FRANCISCO
whose consequences were disastrous to the individuals whose cupidity caused their misfortune, but the most serious result was that which flowed from the arrestment of progress, due to the diversion of capital from productive enterprises and turn- ing it into the pockets of men who were neither desirous nor capable of making a proper use of their acquisitions.
The so-called "big bonanza" was discovered during the period of speculation which began with the uncovering of rich ore deposits in the Crown Point and Bel- cher mines on the Comstock and the Raymond and Ely mine at Pioche, Nevada, in 1872. The excitement produced by these discoveries immeasurably surpassed that which attended the speculative era that began in 1863, when Gould and Curry, Savage, Ophir and Hale and Norcross, all on the Comstock lode, were the stocks chiefly dealt in by the brokers and which a gullible public stood ready to buy de- spite the fact that watering was unblushingly practiced and that absolutely no dependence could be placed on reports of those in control of the mines, who were more interested in manipulating them so as to absorb the earnings of the people by levying assessments than they were in extracting their ores. There was no doubt about the great richness of some of these mines. Between 1860 and 1876 those in control of Gould and Curry took out $15,178,118, and during the same period there was extracted from Savage $15,703,279, yet these two companies paid dividends amounting to only $8,286,000, while over $23,595,000 was con- sumed in operating or was grabbed by the manipulators.
The experience of the Sixties did not serve as a warning to the people of San Francisco and the rest of the state. That they disregarded it was not due to ignor- ance of the villainies practiced by the manipulators, for the community clearly understood that it was being fleeced, and that in nine instances out of ten the money risked by those who bought on margin was at the mercy of sharpers who were playing a game with marked cards. With most of those who dealt in stocks the process was a gamble pure and simple. There was much affectation of con- sideration of the possibility or probability of ore bodies being uncovered, but no one was deceived by it; least of all the victims of the villainy who were well in- formed concerning the propensity of the manipulators, even when rich ores were found to so manage matters that few excepting themselves derived any benefits from the discoveries.
Side by side with the speculation involved in buying and selling on margin there was a practice equally pernicious which caught the credulous in great numbers. Mining companies were created by wholesale whose stocks were greedily absorbed by silly people who permitted themselves to be deceived by lies concerning develop- ments which were circulated to induce the dupes to pay assessments. Men went on year after year paying the demands made upon them by unscrupulous rascals who consumed the money they received in paying themselves extravagant salaries and in maintaining costly offices. The amount thus abstracted by these cunning operators was enormous, while the returns to the investors were comparatively insignificant.
It would be impossible to describe all the methods resorted to by the manipu- lators to absorb for their own use the wealth extracted from the mines with the money paid in by stockholders for their operation. In a message to the legislature in 1872, Governor Newton Booth made reference to a notorious practice which is punished with imprisonment when the offender is a workingman, or a mere servant, Vol. II-2
Discovery of the Big Bonanza
Victimized by Sharpers
Fake Mining Properties
Corrupt Acts of Manipulators
492
SAN FRANCISCO
but was passed over in the case of the leading spirits controlling the large mines which should have paid handsome dividends to the stockholders if their proceeds had been honestly distributed. He said: "It is not uncommon to find one class of stockholders enriching themselves from a company which impoverishes another. So common is this, especially with mining companies, that it has become proverbial and grown into a distinct and disgraceful code of morals, one of whose tenets is that to own a majority of stock or a controlling interest is to own it all. No stock- holder in a corporation," urged the governor, "should be allowed to hold any interest in a corporation which is distinct from and may become antagonistic to the interest of the company as a whole." In this criticism Booth indicted the practice by which mine operators in control managed to divert into their own pockets all the gold extracted by paying extortionate prices to subsidiary companies for performing services which should have been performed by the companies for the benefit of the body of stockholders. This disreputable trick was copied from the managers of the Central Pacific, but the avarice of the men who obtained control of the Comstock mines was so great that at times their operations made those of the railroad men seem mere petty larceny affairs by comparison. Mention has been made of the enormous amount extracted from Savage and Gould and Curry, and the insignifi- cant sum paid to stockholders. A large part of the money robbed from the latter was obtained by the practice denounced by Booth.
If thus early a governor was called upon to denounce this refined system of robbery there was certainly some excuse for the impassioned sand lot oratory in which the mining manipulators were denounced as "the cormorants and vultures of society." The excesses of the speculative era of the Sixties were small by com- parison with those which became glaringly apparent after 1872, and continued until the community was nearly squeezed dry. Saturnalia is a much overworked word, but it is one that best describes the activities of the years of unblushing recklessness during which San Francisco was exploited by the mine manipulators. The astonishing alacrity with which the people embraced the opportunity to get rid of their earnings by cutting loose from all economic traditions is too suggestive of a sort of madness to be classed as a mere experience. Nothing short of a term which implies a complete abandonment of ordinary restraints and disregard of the future can convey an adequate impression of the condition which existed in San Francisco between 1872 and 1877.
Crazed by Speculation
There have been speculative disturbances in New York which have surpassed the magnitude of the operations in San Francisco following the discovery of the big bonanza, but there never was one in which a whole community involved itself so generally as the people of the Pacific coast city did between the years men- tioned. The best testimony on this point is that of a broker who subsequently in reviewing the conditions produced was actually able to find some words in defense of the iniquities of the period. He tells us that the infection pervaded all ranks of society. Asking the question "From whence come our orders?" he answered it by saying: "Imprimis from San Francisco and literally from the kitchen to the pulpit; from every shade in life, and every nationality represented in San Fran- cisco. Chinamen were large gamblers in mining stocks, and wherever the tele- graph wires extended large orders would roll in."
Exciting Scenes
During the height of the excitement the streets in the neighborhood of the mining stock exchanges were so crowded that they became almost impassable.
Cormorants and Voitures of Society
493
SAN FRANCISCO
Police were required to clear the tracks when a slow moving horse car passed through Montgomery street, although that thoroughfare was a half block distant from the scene of operations. So dense were the throngs that brokers had to be assisted by officers to reach their places of business, and the board rooms. And so keen were the people to engage in the gamble that it became necessary to hold informal sessions during which the heaviest business of the day would be transacted.
The term credulous when applied to the participants only describes the prac- tices and not the beliefs of those who took part in these exciting scenes. One of the marvels of the situation was the cynical attitude of the participants. It was no uncommon thing to hear men who had invested their money in stocks speak of the prevalent roguery of those who manipulated them. Volumes could be filled with stories, some of them apocryphal but all illustrative, describing rascalities which resulted in the impoverishment of the victims. A curious feature of these relations was the utter absence of indignation attending the recital which even when tragic would be considered humorous. One current story seemed to impress all classes as particularly funny. It was to the effect that one of the bonanza quartette had imparted in confidence to a minister that a certain stock was going to move upward. Although he was enjoined to keep the information secret nearly every member of his congregation received a tip, and they all bought largely. Exactly the re- verse happened; the stock went down and the dupes lost heavily. The minister when he reproached the mining manipulator was met with expressions of regret, accompanied by an offer to reimburse him for his losses, but of course the specu- lative members of his congregation, in the parlance of the street, had to "take their medicine."
The story as related may have been untrue, but those who told it, and their hearers, believed it, or at least were convinced that there was no trick too base or deception too vile from which the big men who controlled the mines would shrink in order to get money. It might be imagined that a community possessed of such beliefs would arise and drive its despoilers from their midst, but queerly enough resentment was modified by the illogical opinion that in some inscrutable fashion the men who were robbing them were conferring a benefit upon the City. The process of reasoning was something like this: "A healthy stock market, one founded upon a discovery of rich ore has always proved a great advantage to San Francisco. With a rise in value, a small owner of stock purchased at low figures becomes comparatively wealthy. Experience shows that, as a rule, a man struggling with debt on his shoulders, should he be one of the fortunate owners of stock in a mine where rich ore has been found will sell at about the time when his profits will pay all his debts, and debts of say $10,000 paid in this way may pass through the hands of a hundred other people, each one paying some long neglected obligation. This in a way means prosperity to the community; money placed in circulation in this way always does an immense amount of good, taking the stagnation out of a previously dull period."
It would be a waste of words to point out the fallacies of this argument made by a well informed broker, but there is not the slightest doubt that a very large proportion of the people of San Francisco really believed that it was the speculation which produced the brief period of prosperity that followed the discovery of the California and Consolidated Virginia mines, and not the wealth which they added to the community. It might have been urged that the sales of stocks of even those
Duping the Public
No Trick Too Vile
Betting as & Source of Prosperity
494
SAN FRANCISCO
companies which never returned any dividends to their investors contributed to the prosperity of the City by stimulating the search which resulted in finding paying mines, but it is incredible that any one should have imagined that the betting trans- actions known as dealings in futures could have profited any one but the brokers, and the winners, except upon the theory that the latter were easily separated from their gains.
Tremendous Fluctuations of Mining Stocks
And indeed this was true. Almost as disastrous in its effects as the losses of dupes was the example of extravagance which successful operators set the com- munity. "Easy come, easy go" was their motto. In the whirl of excitement which marked the close of the year 1874, both Con. Virginia and California made the extraordinary advance of $500 in price per share in less than thirty days. The fluctuations during the four months beginning with November, 1874, and ending February 25, 1875, of the three leading stocks were no less remarkable than the phenomenal rise above mentioned. California which sold at $90 on No- vember 17, 1874, advanced to $160 on December 3d, was sold at $300 on Decem- ber 17th, at $400 on the 23d and at $480 on the 30th. On January 7th it reached $790, the top price. A week later it was down to $590 and on February 18th it was $50. Con. Virginia had a nearly similar experience, rising from $160 on November 17, 1874, touching $710, its highest point, on January 7, 1875, and descending to $415 on February 4th, from which it mounted to $440 on February 25th. Ophir which started at $90 November 17th, touched $315 January 7, 1875, and dropped to $77 on February 25th.
Irrational Conduct of Speculators
These tremendous fluctuations were caused by the interests battling for control, and those who entered the contest were under no illusions respecting the cause of the phenomenal advances, nor were they wholly unprepared for the subsequent recessions. The volume of transactions was large and the number participating was great. Those not in the ring were without any information whatever and were simply staking their money on the turn of a card, for in the moments which at- tended the fights for control the people who gambled did not have the sorry excuse which they consoled themselves with at other times that they were acting on a "tip" which they believed to be reliable. One of the most extraordinary features of the mining stock craze in San Francisco was the utterly irrational conduct of the majority of those who speculated. Those who have any acquaintance with the movement of the Eastern stock market, the principal dealings of which are in rail- roads and industrials, know that the whole line moves up and down in sympathy at times. There is nothing surprising in this unison for the same cause which affects one stock may extend to all similar stocks, and communicate itself to all securities dependent upon business prosperity and adversity. That the value of mining stocks should have displayed the same sympathetic variations seems pre- posterous and proves conclusively that the mass of San Francisco speculators, in the parlance of the street, were "suckers."
The manipulators were perfectly aware of this fact and were quite willing to pay for the privilege of angling in the muddy stream for the silly fish. The sales of stocks on the boards had fallen off greatly during the opening year of the Seventies, the total of 1870 reported by one exchange aggregating only $51,186,000. In the ensuing year this amount jumped up to $127,888,000, and great eagerness was displayed to secure the listing of new companies. The brokers were prompt to take advantage of this pressure and advanced the listing price from $200 to
Fishing for "Suckers"
495
SAN FRANCISCO
$600 in April, 1872, and later on raised it to $1,000. Before the fires of the excite- ment were extinguished by the calamitous failures of 1876, the listing price was $2,000, and many utterly worthless mines received the stamp of approval of the exchange because their owners or those in control were willing to pay that figure for the privilege of having their stocks quoted.
In 1876 there were 226 companies listed on one board. No one has attempted to ascertain how many of this number represented absolutely valueless properties. That most of the properties were not paying dividends seemed to make no differ- cnce to the infatuated gamblers, who were perfectly aware that many of them were not expected to do anything of the sort. Some pretense of making inquiry into the professions of the listed companies was kept up, but it was only a sham, for most of the stocks dealt in were proved by the event to be those of companies whose existence depended upon the ability of the men managing them to extract assessments from dupes ready to pay out their money in the hope that a rising market would increase the price of their stocks, or that a lucky strike would give them a real value and make them rich.
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