Early Day Money
To be sure, the goldseekers from the forty-four corners of the earth had not come empty-handed. They soon released a veritable jigsaw puzzle of currency. Had that money talked, it would have sounded a Babel indeed. French, English, German, Danish, Italian, South American, Chinese and East Indian coins clinked volubly, and so merrily that no one interjected the solemn question of exchange rates.
Was a silver piece about the size of an American half-dollar? Then it was good for a half-dollar purchase, even though, back where it came from, it would have looked like thirty cents. What if Austrian zwanzigers were quoted at 17c or 18c American? They were as big as quarters, and were allowed to do the work of quarters--to the everlasting satisfaction of one financial genius who imported $100,000 worth of them and pocketed the earnings!
Making confusion worse confounded, a number of private mints began turning out currency as soon as California discovered in her dust and nuggets an embarrassment of riches. The earliest issues were of gold slugs or bars stamped $200, $100, $50 and $20. Next came gold pieces in denominations of $50, $25, $20, $10, $5 and $2.50. They bore designs similar to those on coins of federal issue, or jauntier, such as that of a horseman whirling a riata. As well they were stamped with the name or initials of the coiner, and sometimes with the words "California gold." Some were marked "S. M. V.", for "Standard Mint Value." That was generally a mere reassuring gesture, as some two-thirds of the privately minted currency assayed below standard. In the case of some issues, the deficiency was slight and disregarded; the others were discounted from 5 to 20 per cent. The Wass, Molitor and Company five dollar piece issued in 1852, however, actually overvalued the corresponding federal coin by four cents.
According to a Philadelphia Mint report, fifteen independent comets were operating in California in 1851, issuing from one to four denominations each. Private coins continued legal tender until 1856.
With so much profit to be made in legitimate coinage, it might have been expected that manufacturers of bogus money would be tempted to go straight. But the making and passing of spurious currency became a business of considerable proportions, in many cases evidencing workmanship and production facilities of the first order. In the `50s, a complete and handsomely equipped counterfeiting plant was discovered by police far out in the sandhills. All the elements of the mystery thriller were present, including a house with a two-story cellar. No claimant appeared to acknowledge ownership of the outfit. Nevertheless, there was a sequel. An old adventurer calling himself a Turk bought the machinery and declared his intention of taking it to Shanghai where he would manufacture Spanish dollars--then at a 25 to 35 per cent premium in China. Sequel to the sequel, the "Turk's" actual scheme proved to be the fleecing of marine insurance companies for the loss of alleged bullion (actually shot and iron bolts) which he shipped to China ostensibly to feed his money presses.
The need of an adequate supply of official American currency was early recognized. The first United States Mint in California had been set up on General Fremont's Mariposa diggings, where its old rock walls and crude furnace may be seen today, brush-grown, beside a little-travelled road near Mount Bullion's slope. But the output of the Mariposa mint had been limited to $20 and $50 slugs. The first government mint for the issuance of coins was not opened until spring of 1854.
It was on Commercial Street in San Francisco, between Montgomery and Kearny--a private assay establishment remodelled and re-equipped for government purposes with up-to-the-minute machinery specially constructed in Philadelphia. The building was sixty feet square, three stories high, of brick overlaid with cement, and "thoroughly fireproof." Its capacity was said to be $100,000 in gold coin daily, and a smaller output of silver currency. The charge for turning gold dust into coin was one and one-tenth per cent--slightly higher than the Philadelphia rate of seven-eighths of one per cent.
Until the San Francisco Branch Mint began to operate, approximately three-fourths of California's gold had been coined in the east. By 1868, two-thirds of all the metallic currency manufactured in the United States was being made in the sixty foot brick building on Commercial Street. No wonder its hundred employees kept three presses constantly at work! From 1854 to 1867, inclusive, $242,000,000 was issued. The Philadelphia Mint, by steady production since its establishment in 1793, had turned out scarcely more than twice as much! That 11,000,000 double eagles were coined in San Francisco between `54 and `67--nearly half the total number of pieces issued--indicates an era of high and wide prosperity. The stamping presses poured out as well over 335,000 eagles, 429,000 half-eagles, 314,000 quarter-eagles, 62,000 $3 pieces and 87,500 lowly dollars.
At first, all the chemicals, acids, alloys and other supplies used in refining, "parting" of gold and silver, and other processes had been shipped from the east. Very soon, however, California was mining her own borax, manufacturing her own acids and employing her own alloys--all at a saving; and her mint was paying its own way.
The plant became as remarkable for its economy of management as for its enormous output. Uncle Sam allowed a wastage of one-fifth per cent on gold and silver bullion coined; but in 1865, for an example, San Francisco availed itself of only three and one-half per cent of that margin.
In the melting and refining department, where normally the loss in manipulation was greater than in coinage, the record of thrift was still more striking.
It would be anticlimax should scandal, if come it must to such an institution, be of less than prodigious proportions; and California held true to scale when, in 1857, she rocked the country with the sensational disclosure that the San Francisco Branch of the United States Mint had been looted of between $300,000 and $400,000!
From 1864, the Denver Branch Mint drew off its share of the Colorado and Montana metal which had till then been shipped to the San Francisco money factory. Nevertheless, and although San Francisco's silver coinage had always been far below its gold issue, the growing silver production of the `60s necessitated more extensive minting facilities. The present site of the Branch Mint, at Fifth and Mission Streets, said to have been purchased for $100,000, was first occupied in 1874.
One energetic easterner who built up his prosperity with that of the Mint has left an account of his adventures in gold-broking. With a few thousand dollars' capital, he engaged a room in the Howard Building, 137 Montgomery Street, at a monthly rental of $800, and hung out his shingle: "Gold Dust, Banking and Exchange." That was in the late `50s.
He operated on the early bird principle, opening his door at daybreak and hailing in visiting miners whose eagerness to see the big town had drawn them betimes into the streets. He bought their dust at $16.50 the ounce, until he had spent all his cash. By the time he was thus cleaned out, the larger "banking" establishments were open, and off he would scurry to borrow more capital, using his purchases of the early morning as collateral.
Again he would exchange coin for dust, with a briskness which itself stimulated trade. His funds once more exhausted, he would hasten to the Mint (on Commercial Street), which would be open by then; sell his day's second batch of dust; obtain a Mint certificate; and on the strength of that borrow more cash from the "bankers."
There were just two important things for him to do, his reminiscences of those days relate: he had to be quick on his feet, and he had to contrive to keep his prospective clients awaiting his return with the wherewithal to buy their dust. He accomplished that latter purpose by fitting up for them a comfortable rear room supplied with "liquors, cigars, gold scales and all the apparatus for cleaning (gold dust)."
His profit for the first seven months was $15,000--of which $10 to $15 a day came from the sweepings of the back room, the refuse left by the miners who cleaned their dust there while he scuttled about the money markets, raising the cash with which to buy them out.