Matthew Keller
Samuel Meyer
Business conditions in the fifties were necessarily very different from what they are to-day. There was no bank in Los Angeles for some years, although Downey and one or two others may have had some kind of a safe. People generally hoarded their cash in deep, narrow buckskin bags, hiding it behind merchandise on the shelves until the departure of a steamer for San Francisco, or turning it into such vouchers as were negotiable and could be obtained here. John Temple, who had a ranch or two in the North (from which he sent cattle to his agent in San Francisco), generally had a large reserve of cash to his credit with butchers or bankers in the Northern city, and he was thus able to issue drafts against his balances there; being glad enough to make the exchange, free of cost. When, however, Temple had exhausted his cash, the would-be remitter was compelled to send the coin itself by express. He would then take the specie to the company's agent; and the latter, in his presence, would do it up in a sealed package and charge one dollar a hundred for safe transmission. No wonder, therefore, that people found expressing coin somewhat expensive, and were more partial to the other method.
In the beginning of the fifties, too, silver was irregular in supply. Nevada's treasures still lay undiscovered within the bowels of the earth, and much foreign coin was in use here, leading the shrewdest operators to import silver money from France, Spain, Mexico and other countries. The size of coins, rather than their intrinsic value, was then the standard. For example, a five-franc piece, a Mexican dollar or a coin of similar size from any other country passed for a dollar here; while a Mexican twenty-five-cent piece, worth but fourteen cents, was accepted for an American quarter, so that these importers did a "land-office" business. Half-dollars and their equivalents were very scarce; and these coins being in great demand among gamblers, it often happened that they would absorb the supply. This forced such a premium that eighteen dollars in silver would commonly bring twenty dollars in gold.
Most of the output of the mines of Southern California—then rated as the best dust—went to San Francisco assayers, who minted it into octagonal and round pieces known as slugs. Among those issuing privately-stamped coins were J. S. Ormsby (whose mark, J. S. O., became familiar) and Augustus Humbert, both of whom circulated eight-cornered ingots; and Wass Molitor & Co., whose slugs were always round. Pieces of the value of from one to twenty-five dollars, and even miniature coins for fractional parts of a dollar, were also minted; while F. D. Kohler, the State Assayer, made an oblong ingot worth about fifty dollars. Some of the other important assaying concerns were Moffatt & Co., Kellogg & Co. and Templeton Reid. Baldwin & Co. was another firm which issued coins of smaller denomination; and to this firm belonged David Colbert Broderick, who was killed by Terry.
Usurers were here from the beginning, and their tax was often ruinously exorbitant. So much did they charge for money, in fact, that from two to twelve and a half per cent. a week was paid; this brought about the loss of many early estates. I recollect, for example, that the owner of several thousand acres of land borrowed two hundred dollars, at an interest charge of twelve and a half per cent. for each week, from a resident of Los Angeles whose family is still prominent in California; and that when principal and interest amounted to twenty-two thousand dollars, the lender foreclosed and thus ingloriously came into possession of a magnificent property.
For at least twenty years after I arrived in Los Angeles, the credit system was so irregular as to be no system at all. Land and other values were exceedingly low, there was not much ready money, and while the credit of a large rancher was small compared with what his rating would be today because of the tremendous advances in land and stock, much longer time was then given on running accounts than would be allowed now. Bills were generally settled after the harvest. The wine-grower would pay his score when the grape crop was sold; and the cattleman would liquidate what he could when he sold his cattle. In other words, there was no credit foundation whatever; indeed, I have known accounts to be carried through three and four dry seasons.
It is true, also, that many a fine property was lost through the mania of the Californian for gambling, and it might be just as well to add that the loose credit system ruined many. I believe, in fact, it is generally recognized in certain lines of business that the too flexible local fiscal practice of to-day is the descendant of the careless methods of the past.