USA > California > San Francisco County > San Francisco > San Francisco, a history of the Pacific coast metropolis, Volume II > Part 8
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A compilation made by Wright discloses that up to the end of 1878 dividends had been paid by the savings banks of San Francisco aggregating $40,981,479. There were then in existence the following banks receiving deposits and paying in- terest upon them: Hibernia Savings and Loan, the Savings and Loan Society,
Eight Banks Closed
No Bank Suspension
Bank Commission Act of 1878
Operations of Savings Banks
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French Mutual and Provident, San Francisco Savings Union, Odd Fellows Savings bank, German Savings and Loan Society, Masonic Savings bank, Security Savings bank, Humboldt Savings and Loan, Farmers and Merchants Savings and Califor- nia Savings and Loan. They are enumerated here in the order of their importance as determined by their dividends, the Hibernia heading the list, with a showing of $11,890,806 to the date named, while the. California Savings and Loan appeared at the foot with $127,317 to its credit.
Establishment of Clearing House
The San Francisco Clearing House was established in March, 1876, and in- cluded in its first list of members the following banks: Bank of California, Bank of British Columbia, Bank of British North America, Bank of San Francisco, B. F. Davidson & Co., Belloc & Co., Donahue, Kelly & Co., First National Gold Bank of San Francisco, Hicox & Spear, London and San Francisco bank, Merchants Exchange bank, Sather & Co., Swiss American bank, Anglo California bank and Wells, Fargo & Co. In 1877 the Nevada bank, Lazard Freres, Pacific bank, Na- tional Gold bank and Trust Company and Tallant & Co., were added, and in 1883 Crocker, Woolworth & Co., making a total of twenty-one members at the end of the period 1871-83.
These banks were of varied organization. They consisted of private, incor- porated, state and national banks, those in the first named category predominating and the national system being least favored. The clearings of the first full year after the organization of the clearing house aggregated $519,948,803. In the en- suing year, 1878, they increased to $715,329,319, but the expansion was largely if not wholly due to the addition of five new members. After 1878 the clearings begin to tell the story of the business activities of the City with more or less exact- itude to the careful statistician who takes into consideration other sources of evi- dence, such as the prevalence of speculation on an unusual scale. Allowing for such aberrations the clearing house records show a remarkable decline after 1878, which was marked by but one mining stock deal of consequence. In 1879 they aggregated $553,953,955; in 1880 they had fallen off still further to $486,725,953. After that date there was an improvement, the amount cleared in 1882 being $629,- 114,119.
If the spirit of the times was responsible for the incautiousness displayed by some of the banks in the Seventies it cannot be said that their management was entirely devoid of conservatism. It is related that the first bank in San Francisco occupied quarters over a stable on the corner of Kearny and Washington streets, and that the Hibernia Savings and Loan Society, now one of the strongest savings banks in the country, began its career in leased quarters. There was no disposition shown to abandon this frugal course until the expanding business of the City, and its growth of population imposed the necessity of providing better quarters. The Bank of California moved into the handsome structure it occupied up to the time of the fire of 1906 in 1866, and the other institutions sought to advertise their pros- perity by external appearances, not always with the same success architecturally as that institution, although one of them enjoyed the proud distinction for a long time of having introduced the first iron front into San Francisco. In 1878 it was estimated that only 2% of the resources of the banks were invested in premises, buildings and furniture. In that year the largest value reported as devoted to that purpose by any bank was $250,000. Some idea of the change in this regard
Bank Buildings in the Seventies
Records of Clearing House
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will be inferred from the statement that in 1910 bank premises in San Francisco were valued at $22,656,000, an amount representing 4% of their resources.
An event of financial interest occurred in 1874. In that year the Mint build- ing on Fifth street between Market and Mission, begun in 1867, was completed and occupied. Up to 1874 a building on Commercial, about sixty feet west of Montgomery street, had been serving the purposes of the government. The prop- erty had been acquired in 1853, and the sum of $335,000 was expended in its pur- chase and in revamping and adding to an old building which, although called the U. S. Assay Office, was not recognized by the government, and in providing coinage machinery. The lot was only 60x60 feet, and the transaction occasioned consider- able scandal at the time, it being asserted that the property and plant were not worth at the outside more than $75,000. It was illy adapted to the use to which it was put, and there was persistent criticism, which, however, did not accomplish anything until 1867, when the government bought the Fifth street property, and later began the structure which was completed in 1874 and was for many years regarded as one of the chief architectural ornaments of the City. It is built of sandstone with a classical facade on Fifth street, and is surrounded by streets on all sides. Its equipment was of a superior character, and its opening, and the subsequent importance attached to it by the government proved a source of satis- faction to the state and the entire coast, implying as it did a recognition of the fact that, although situated three thousand miles or more from the seat of govern- ment, the people living on the Pacific slope were citizens of the Union.
After the abandonment of the Commercial street property by the mint in 1874 the old buildings were torn down and a new, but very unpretentious structure was erected on the site for the officers of the subtreasury and other federal officials. By 1877, however, the business of the subtreasury had expanded to such an extent that the whole building was taken possession of by the subtreasurer and his force, and the other government officials had to find quarters elsewhere. One of the in- teresting features connected with this important office, whose transactions mount into the millions, and in which many millions of government money are stored under the care of a subtreasurer, is the short roll of men who held the latter office up to 1883. The list embraces the names of Jacob R. Snyder, David W. Cheeseman, Charles N. Felton, William Sherman and Nathan W. Spaulding.
The banking annals of this period indicate that the tendency toward combination was not developed at that time. The disposition was entirely in the direction of creating new institutions and the result of multiplication was to weaken, whereas judicious mergers might have strengthened the banking power of the City. The California Trust Company, organized in 1867, and incorporated in 1868, and re- organized in 1872 as a national gold bank, was a victim to the diffusive tendency. In the troubles of 1875 it was obliged to close its doors, but was able to resume in 1876. In 1880 it went into voluntary liquidation, paying its depositors in full.
In 1871 congress passed an act authorizing an issue of $45,000,000 gold notes redeemable on demand. A Boston company had applied for the privilege of or- ganizing a bank which would use these notes but it never put its project into execu tion, and no national gold bank was ever put into operation outside of California. The first bank of this sort organized was the First National Gold Bank of San Francisco, which went into business in January, 1871, and received its notes for circulation in the following March. The yellow notes emitted by this and other
The United States Mint
The United States Sub-Treasury
Combination Not Favored
Paper Money Unpopular
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gold banks became measurably familiar in San Francisco during the Seventies, but greenbacks did not circulate. The disinclination for paper money, however, was no greater during that decade than it is at present. Although there are now nu- merous national banks in San Francisco whose circulation runs up into the mil- lions, the notes emitted by them under the authority of the government are almost wholly used outside of the state, the tender of paper money in ordinary business transactions being very unusual.
Unsuccessful Experiment of Farmers
A freak experiment in banking was made in 1874, when the Grangers' bank was incorporated. It was the outcome of a movement of the farmers against the middleman. There was great dissatisfaction on the part of the wheat grower over the manipulation of ocean shipping charters, and the existence was charged of a ring which neglected no opportunity to put up rates for carrying grain to Europe. The purpose of starting the bank was to finance a scheme of securing ships under favorable conditions and loading them with cargoes to be sold on the way to Europe, or on arrival in port. The theory of the farmers that they were made the victims of charter speculators seemed to have been borne out by the facts, but the experiment of the Grangers' bank proved a failure, and while it maintained a precarious existence for many years, it was finally obliged to go into liquidation in November, 1895.
In 1875 the safe deposit system was introduced in San Francisco by the Cali- fornia Safe Deposit Company in the basement of a building erected on the corner of California and Montgomery streets. Prior to that time the practice of allow- ing depositors to place tin boxes in the vaults of banks had prevailed, and the innovation was hailed as a great convenience. The subsequent failure of the bank which maintained the vaults, and the flight of its manager, gave a great shock to renters, who at first feared that the confidence they had reposed in the safety of the contents of their boxes had been violated, but examination disclosed that the apprehension was groundless. Curiously enough, however, the agitators of the sand lot, with whom the corruption of bank officials was a favorite theme, persisted to the last in asserting that Duncan had robbed the vaults before his flight.
Safe Deposit Vaults Introduced
A VIEW OF NORTH BEACH AS IT APPEARED IN 1876
CHAPTER LI
THE SAND LOT TROUBLES AND THE NEW CONSTITUTION
STATE RIPE FOR REVOLT-THE LONG AGITATION FOR A NEW CONSTITUTION- THE LEG- ISLATURE OF 1877-78-A LONG LIST OF GOOD MEASURES TO ITS CREDIT- "PIECE" CLUBS-NUMEROUS REFORMS EFFECTED-THE MAIL DOCK RIOT AND THE PICK HAN- DLE BRIGADE-THE FIRST POLITICAL MEETINGS ON THE SAND LOT-THE WORKING- MAN'S PARTY-DENIS KEARNEY AS A LEADER-KEARNEY'S ATTAINMENTS-HISTO- RIAN BRYCE'S BLUNDER-THE MANIFESTO OF THE WORKINGMAN'S PARTY-FIRST W. P. C. TRIUMPH-SIMILARITY OF WORKINGMEN'S PLATFORM TO THAT OF 1912 PROGRESSIVES --- CROCKER'S SPITE FENCE-KEARNEY SHOWS THE WHITE FEATHER- "WORK OR BREAD"-A GAG LAW PASSED-AN INADEQUATE POLICE FORCE-THE FIGHT FOR THE NEW CONSTITUTION AND ITS ADOPTION-THE NEW ORGANIC LAW NOT A SAND LOT PRODUCT-REFORMS EFFECTED-PROMINENT PART PLAYED BY "CHRONICLE" IN SECURING ADOPTION OF THE CONSTITUTION.
HE conditions described in the preceding chapter make clear the fact that the state was ripe for revolt against the ex- isting order of things, but it would be wrong to infer from what has been related that the adoption of the constitution of 1879 would have been impossible had there been no sand SEA OF SAN FRI lot agitation. That impression has been conveyed by writ- ers who were opposed to the many radical innovations of the new organic instrument, and who sought to destroy its effect by charging that it was the product of a lot of violent agitators and lawbreakers. That the disaf- fected elements headed by Kearney supported the instrument when it was sub- mitted for adoption, and that their votes contributed to its acceptance by the elec- torate of California is true, but it is well to keep in mind the fact that it required the majority rolled up in the interior of the state in favor of the constitution to offset the majority cast against it in the City, where the Kearneyites were strongest.
That a new constitution would have been adopted sooner or later is evident, and it is highly probable that the desired result would have been achieved much more readily if Kearney and his followers had not furnished opportunities for misrepresentation which put the advocates of the new organic law formed by the convention chosen in 1878, on the defensive. The movement for a new constitution was not the outcome of the agitation of 1877. It may be said to have begun as early as 1852, when the subject was introduced in the legislature and a proposition to revise was defeated because it was charged and believed that the main object of the proponents was to bring about state division. It was again revived in San Francisco in 1856, when dissatisfaction with the judges inspired Samuel P. Webb,
The State Rife for Revolt
Agitation for a New Constitution
529
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an ex-mayor, to urge the Vigilance Committee to bring pressure to bear on the governor to call an extra session of the legislature for the purpose of considering the proposal to revise. The committee refused to act on the suggestion on the ground that the Vigilante constitution prohibited interference in political matters. In view of the fact that the Vigilantes, not as an organization, but nevertheless with a solidarity that proved highly effective, supported the new people's party, it may be assumed that it was the conservatism and not the limitations of the Vigi- lance Committee that caused opposition to this innovation which foreshadowed the "recall" proposition that became popular half a century later.
Numerous Proposals to Revise
In the same year Governor Johnson, in a message to the legislature, referred to the subject of revision and declared that the only opposition to making the at- tempt came from those who feared that a constitution if framed would not be sub- mitted to the people. He pointed out that this apprehension was groundless, as the amendment to the constitution proposed by the legislature of 1855, which re- quired such submission, had been ratified by a vote of the people in 1856. In 1861 Governor Downey called attention to a third failure to secure revision and intimated that he was satisfied with the result as the reforms demanded were such as could easily be secured by a simple amendment. The matter came up again in the legislature of 1873-74, and there was much talk about the law's delays and the dilatory tactics of the courts of San Francisco. Land monopoly and the stupen- dous frauds practiced by the grabbers of the public domain were discussed, and woman suffrage was made the subject of a report and a recommendation that the question be taken up in the coming constitutional convention, which was believed to be imminent.
Convention Ordered by Popular Vote
.
These successive efforts to bring about action proved fruitless, but in the legis- lature of 1875-76 reports were made in each house denouncing the evils of land monopoly, and calling attention to the flagrant abuses of the timber and desert land acts passed by congress. Specific charges of grabbing land on a wholesale scale were made, and it was urged that the result of the illegal appropriation of the public domain would be to greatly accentuate the troubles already experienced by the state because of the existence of the large Spanish and Mexican grants, whose owners refused to divide them, thus deterring settlement by perpetuating a land monopoly. The outcome of the discussion was the passage of an act recommending the calling of a convention "to revise and change the state constitution," which provided in accordance with the law that the question should be submitted to a popular vote at the next general election.
The Demand for Revision
This act was approved April 3, 1876, and the proposition to hold a convention was voted upon September 5, 1877, and the people decided in favor of revision, 73,460 favoring the holding of a convention and 44,200 against, out of a total of 146,199 voting. The failure of the 28,521 to express their desires was later crit- icized as indicating that the majority of the people were not eager for revision, but there was no comment of that sort at the time, the vote being accepted as decisive. The mandate of the people was accepted by the legislature of 1877-78, and an act calling the convention was passed during the closing days of the ses- sion and approved April 1, 1878.
Legislature of 1877-78
The legislature of 1877-78, which passed the act calling the convention, was spoken of as being under the influence of the sand lot, but there is absolutely no
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foundation for this assumption. It was overwhelmingly democratic in its com- position and elected a United States senator representing that party named Far- ley, who was unquestionably under railroad domination. But while the anti monop- oly sentiment was in the ascendant, as was evinced by the determined effort to amend the law of eminent domain, so that the railroad might have its aggressive tendencies restrained, and also by the earnest attempts to pass a railroad commis- sion bill which would pave the way to the regulation of freights and fares, the legislature was in no sense a radical body and had no sympathy with violent meth- ods, a fact attested by its readiness to consider a law, inspired by fear of the turbulent methods of the unemployed in San Francisco, which, had it been passed and enforced, would have abridged freedom of speech.
Curiously enough this legislature which, like the constitutional convention, has been stigmatized as under the influence of the sand lot, has to its credit a greater number of reform measures and acts directly affecting San Francisco than any preceding California legislative body. It was the last legislature privileged to deal with special matters, consequently many of its enactments have had a per- manency which otherwise would not have attached to them. Among the number was the one-twelfth act, introduced by Frank McCoppin, a former mayor of San Francisco, and chairman of the city delegation in the senate. It provided that the revenues for the year should be divided into twelve parts, and that the expenditures of the different funds should be made on this basis, the object being to avoid the creation of deficits. The principle of this act was subsequently embodied in a charter and worked admirably. There were attempts to disregard the curb, and the law was violated in the interests of contractors; but it proved a stone wall against their predatory attacks, which, however, was breached later by a vote of the people which amended the constitution so as to compel the City to pay claims which arose through flagrant violations of law, thus presenting an instance of direct legislation striking down a safeguard devised under the representative system, and sanctioning loose methods and venality by a popular vote.
The legislature of 1877-78 also passed a bill reducing street-car fares to five cents, and making them uniform throughout the City. Up to this time the charge for a single fare was ten cents, but four tickets could be obtained for twenty-five cents. A law was also passed to regulate the quality and price of gas to consum- ers, fixing the maximum rate at $3 a thousand cubic feet. Henry George, the author of "Progress and Poverty" was the first inspector appointed under the provisions of this act. A measure, also inspired by the demand for regulation, and which was subsequently known as the free gas and water act, was likewise adopted. Its authors fondly imagined that they had devised a method which would insure the people of San Francisco against the rapacity of corporations, and that the privilege which the measure accorded of allowing anyone to use the streets to lay gas or water mains, would assure cheap gas and water to the community. The expected competition never materialized, for the established gas company absorbed all would-be competitors who entered the field. There were several which did so, chiefly for the purpose of selling out. No attempt was made to introduce a rival water system. The chief result of the reform measure was to practically turn over the streets to irresponsible persons who were continually excavating and de- stroying pavements as fast as they were laid, to the great annoyance of the com- munity.
Much Legisiation for San Francisco
Street Car Fares Reduced
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"Piece" Clubs Made Uniawful
Another great reform measure, which failed of its purpose, was the so-called "piece club" bill, introduced in the assembly by John F. Swift, an independent member from San Francisco, subsequently appointed minister to Japan and later defeated in an attempt to be elected governor. Swift was a republican and a man of exceptional ability and force and was a student of politics. The act re- ferred to was designed to put an end to the practice which existed in San Francisco at the time of groups of men assuming that they controlled votes, forming them- selves into clubs and offering for a consideration to give their influence to candi- dates. The name "piece club" was derived from the slang use of the word "piece" for money. The measure never proved efficacious, and finally lost all virtue when, in accordance with the changing mood of the people, legal sanction was prac- tically given to the process of disintegrating parties by putting a premium on the small group system.
Other Reforms Effected
It was this legislature that passed the act under which the system of public libraries in California was inaugurated, and under which nearly every city and town in the state has provided itself with free reading facilities. The author was a San Franciscan named Rogers, whose chief aim was to secure for San Francisco a privilege which would permit it to imitate the example of Boston, but he broad- ened the scope of the act so as to permit all parts of the state to take advantage of its provisions, with the result above mentioned. Another bit of legislation which effected a partial reform of the defective banking laws of California was the creation of the bank commission referred to at some length in the preced- ing chapter, and which placed the operations of financial corporations under the supervision of the state and was the first decisive step in the direction of much needed publicity. The excesses of the stock market also came in for attention and an act was passed imposing a tax of ten cents on every certificate of stock issued or transferred, the object being to make dealings in futures unpopular. The law did not prove effective, but the craze for dealing in margins came to an end a short time after by the complete subsidence of the mania for dealing in mining stocks.
It will be seen from the above resume of the efforts to secure a revision of the organic law of California that it was not a sand lot movement, but that it was state wide, and that all of the features which were later denounced as radical innovations had been demanded by large sections of the people before the name of Denis Kearney had been made familiar to the public by the newspaper accounts of his denunciations of capital and the Chinese. It is a fact not entirely over- looked, but the significance of which has escaped attention, that Kearney's partici- pation in the only riot which occurred during the troubled days before the adoption of the constitution was on the side of law and order. The affair referred to oc- curred on the 25th of July, 1877, and its occurrences were grossly exaggerated. A couple of days previous some hoodlums had made attacks on several Chinese laun- dries and set fire to one, on the corner of Turk and Leavenworth streets. On the following day a committee of safety was organized under the auspices of William T. Coleman. It was decided by the leaders that this citizen's committee should bear no other arms than pick handles, and this fact was seized upon to give it the name it bore. Denis Kearney was a member of this "pick handle brigade," and acted with it on the night of July 25th when an attack was made on the Pacific Mail
The Pick Handle Brigade
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dock by a mob with intent to burn it, which however, was frustrated without much difficulty by the police and the citizen's committee, some of the latter being pro- vided with rifles for the occasion. On the same night a lumber yard was fired, or accidentally burned. In the attempt to disperse the crowd which gathered, and which was chiefly composed of idle spectators attracted by the flames, several shots were fired. It was reported that a number of persons were killed, but the police records merely state that "several men were shot and otherwise wounded on this occasion." Two days later a man named James Smith was arrested on the charge of having fired the lumber yard and was held in $20,000 bail, but the crime was never proved against him.
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