The situation need not have been serious, for tucked away in the United States sub-treasury were $14,000,000 in gold coin. It seemed the most legitimate transaction in the world to deposit gold bars in the Treasury and carry away an equal value in coin. But President Grant, who was rather new on the job, for some unaccountable reason absolutely refused to sanction the transfer, although the bankers almost burned up the wires with their appeals. An uneasy feeling was over the town, the overcharged atmosphere of panic, apt to break loose at any moment into a resistless storm.
While the tension was at its height I called at the Bank of California one afternoon and was ushered into the private office of Mr. Ralston. To tell the truth, I was feeling the pinch myself, and wanted to know something of the outlook.
The banker said I was just the man he wanted to see. “If things go on as they are,” he said, “every bank will be closed by tomorrow afternoon. Not one of us can stand a half day’s run, and all will go down in a heap. Then look out for hell in general to break loose. This will happen if I don’t get a million dollars in coin in the vaults tonight. But I intend to get it, and want you and Maurice Dore to help. Be at the bank at 1 o’clock tonight, and put on an old suit of clothes, for you will have plenty of hard work to do.”
Dore and myself met by appointment shortly after midnight. We were utterly mystified. Together we tramped through the deserted, dimly lighted streets. It seemed just like old times—the time we boarded the Chapman to become privateers. We found Ralston at the bank with one of its trusty officials, still alive and prominent in San Francisco. The financier was in high spirits, but counseled caution. We walked noiselessly to the United States Sub-Treasury, then located on Montgomery between Sacramento and California streets, where the Selby offices afterward stood. A dim light was burning within. Mr. Ralston asked us to halt a few paces from the entrance; then to our great surprise he opened the door of the Sub-Treasury, without challenge of any kind, and closed it after him as he stepped inside. Presently he emerged with several sacks of coin. “Take that to the bank,” he said. “The gentleman there will give you something to bring back.”
The party at the bank received the cash, tallied it and handed us gold bars for the same value. These we took to the Sub-Treasury, where we found Mr. Ralston smilingly awaiting us with a new cargo of sacks on the sidewalk. We turned over the bars and made another journey to the bank.
Thus, at dead of night, passing to and fro, we transferred in actual weight, between the Sub-Treasury and the bank nearly five tons of gold. We did not get quite as much as Ralston wanted, before the light began to break. It was a heart-breaking job from a physical standpoint. I was young and athletic and stood my end of it in good shape. But Maurice Dore was of sedentary habit, soft as mush, and he was on the verge of collapse. He was nearly chest foundered and had a swayback appearance for a month. During all this time, not a person passed to interrupt us. This was doubtless due to a prearrangement with the policeman on the beat.
When the Bank of California opened the next morning a rather ominous looking crowd was in waiting. Lines began to form behind the paying tellers’ windows. It wasn’t a “run,” but a “near-run.” Ralston appeared on the scene and looked annoyed, as he said, “Why are you making so many of our customers wait on a busy day? Put more tellers on the windows and have your coin on hand.” More tellers went to the windows. Porters brought tray after tray from the vaults. It was amazing how the crowd changed their minds about wanting their money and melted away. And all over the troubled city the report spread that the Bank of California had coin to burn, and the news caused a general relief.
Nevertheless, a serious run started on one of the leading banks. Ralston hurried to the spot, mounted a dry goods box and addressed the crowd. He told them they were doing the bank and the city a great injustice. He declared that the bank was absolutely sound—which was the truth. He further told the crowd that they need not wait for a line-up. Just bring their books to the Bank of California and they would be accommodated with the cash there. Again, the crowd slunk away abashed.
Thus a tremendous panic, the consequences of which might have been world-wide, was averted by a bold front, a nervy bluff backed by a million in cash. Three days later, President Grant reversed himself and allowed gold to be exchanged at the Sub-Treasury for cash, which settled all anxiety. This was brought about through the agency of Jesse Seligman, the New York banker, who gave the President a banquet and then showed him his mistake.