BANK CRISIS IN SAN FRANCISCO.

Mount Ida Chronicle, Volume VI, Issue 345, 15 October 1875, Page 3

BANK CRISIS IN SAN FRANCISCO.

The ' New Zealand Herald's' special at San Francisco writes :—" Thursday, 27th August, will long be remembered in San Francisco : it was a day of broken banks and broken hearts. For some time it has been generally known that the Bank of California had been engaged in stock speculation, which had materially crippled its capital, but no one expected the crash which has followed. The bank was the principal institution in California, and was the parent of most of the" great enterprises that have, made the State what it is. Its president, Mr. W. C. Kolston, was a man of interest, energy, and the most popular business man in the State. Unfortunately, his judgment was not equal to his enterprise, and many of his gigantic schemes did not bear the fruit he had hoped for. Himself and bank have been mainly instrumental in the development of the principal mines, and the support given to them led Tvolston into large personal ventures, to sustain which he was obliged to draw upon the bank. ]t is more than likely that Ids grand schemes had undoubted genius, and his indomitable will and splendid pluck would have pulled the bank thiougii,. but recently there sprang into existence powerful rivals in the persons of Hood and O I3nen, the Bonanza millionaires. who, having acquired gren» wealth.

were ambitious of starting an opposing bank. With this view they gradually withdrew from -circulation- all the gold they could secure locking up about & J ,000,000 sterling in their vaults About the same time the Bank of California, through its president, entered the New York market as speculators, in gold. This led to the withdrawal from this city of upwards of 19,000,000d01. i. gold. The operation was not a success. Of course this transaction was known to .Messrs. Hood and O'Brien,---and their action was caused from the' belief that the fate of the Bank of California was -sealed, and their hour of failure had arrived. Early on Thursday reports were spread abroad that the bank was not all right; but it was not until 2 o'clock that the run began. Up to 2 80 the tellers had paid.out 1,000,800d01. in gold. This exhausted the bank's coffers, and the doors were closed at that hour. The tide : turned towards the National Gold Bank, I which paid out 1,500,000d01. between 3 and 4 o'clock, and then closed. A similar run took place on the Merchant Exchange, where some 800,OOOdol. was paid in gold, and then that bank closed. On Friday morning the London and San Francisco Bank was rushed, but the bank was too strong- to be affected, and the run ceased about noon. All the savings banks as a protective measure put in force their right to demand 30 days' notice, and thus saved themselves from the evils of a panic. On Friday afternoon the directors of the Bank of California, after a very hasty examination of affairs, and impelled by a desire to do the right thing, requested their president to resign. Eolston immediately | complied with the request, and handed to the directors a short deed, conveying to them, for the benefit of the bank, everything he possessed in the world. He then walked down to the beach for a swim, but having eaten nothing all day, and being heated mentally and physically, the result was an apoplectic fit, and then partial drowning. He was got out before death ensued, but expired shortly afterwards. His reported suicide was the result, but he too brave a man ever to think of a coward's graye. The directors have since taken thb credit of the bank on their own shoulders, and a closet' examination of accounts'shows that every liability can honorably be met, and that, tnough Sflston had incurred large overdrafts, he had covered them with valuable assets. The 'Bulletin' and ' Call' are partially responsible for the calamity, as they have hounded Kolaton and his-bank for months, and . used their efforts to destroy both Strangely enough, not a commercial failure has followed, and though business is not brisk, there is not a trace of the storm left, except in connection with stock operations. At Eolston's funeral 60,000 persons were present, and all the principal buildings were -draped in black. The crush in the streets on the day of the burial was fearful, and the excitement intense