San Francisco: 1875. Unbound.
The three documents are all in nice shape. They are:
A two-page “State of California / City & County of San Francisco” partially printed “Public Instrument of Protest,” dated August 28, 1875. The document reads in part:
"Sing Tie Kee . . . did between the hours of 2 o clock P.M. and 3 oclock P.M. of said day, present the said original drafts at the Counter of the Bank of California in this City, and then and there demanded payment thereof from the Paying Teller of said Bank, which he refused, the Bank being closed, and payment suspended. . ..”
Two notarized claims against “L. H. Hershfield Bros / Helena Montana” filed by Quong Sing Tie Kee, both dated August 28, 1875. One is for “Five hundred Dollars . . . in Gold Coin” and the other “Two hundred & fifteen <215> Dollars . . . in Gold Coin.”. Item #010080
While not specified, it appears that Quong Sing Tie Kee was a San Francisco merchant who had done business with L. H. Hirshfield & Brother of Helena, Montana.
The Hirshfield brothers, Aaron and Lewis, were the preeminent bankers in Montana. The Jewish Museum of the West notes that Lewis Hershfield was among the most prominent, successful Jews in the American West: “In the early 1860s, Lewis Hershfield journeyed with a team of oxen from Leavenworth, Kansas to Central City, Colorado. In Colorado, Hershfield collected 26 wagons full of dry goods. He drove this collection of goods through Colorado and Utah and settled in Virginia City, Montana in 1864. He found success among the miners of Virginia City. In addition to his dry goods store, he established a bank, storing gold as well as exchanging gold dust for money. During the 1870s, Lewis Hershfield moved his bank to the mining boom town of Helena, Montana.”
The Montana Blue Book of 1891 adds, “His brother Aaron was admitted as a partner in the business in 1868,” until he initiated what became a sensational combination of divorce trail (driven by his Jewish relatives who wanted his marriage to a Catholic woman annulled) and a simultaneous investigation for check fraud. In his defense Aaron claimed that the stress of his divorce diminished his ability to make rational decisions, which, in turn, provided a legal excuse for his kiting bad checks. The court did not agree
The Bank of California opened for business in 1864, with Darius Ogden Mills as president and William Chapman Ralston as its cashier. It grew and expanded rapidly through dealings with other San Francisco bankers and through unethical, but legal, machinations, it earned enormous profits by providing loans to Comstock Lode minors on terms that would almost certainly end with default. When that occurred, the bank pounced and with its vast wealth was able to control industry and commerce in San Francisco and Virginia City. On the morning of August 26, 1875, the San Francisco morning papers reported that a rival group of silver investors had withdrawn two million dollars in gold coin from the Bank of California at the same time the bank spent an additional four million dollars on a speculative investment in grain. As word spread, a crowd began to gather at the bank, and by 11 a.m. withdrawals were noticeably brisk. By 1 p.m. the panic had begun, and the lobby was soon jammed, and before 2 p.m. a shoulder-to-shoulder crowd surrounded the bank clamoring to be let in, and when the bank ran out of gold coins at 2:30 p.m. it locked the doors. That afternoon, per the Sacramento Daily Union, Ralston answered questions from reporters.
“Question – ‘Will you resume in the morning?’ / Answer – ‘No, sir.’ / Q. – ‘How soon will you resume?’ / A. – ‘We will not resume.’ / Q. – ‘Not at all?’ / A. – ‘No, sir. Not at all.’”
The next morning Ralston met with the bank’s board of directors (some of whom may have known what he was doing) and was fired. After the meeting Ralston, who enjoyed long swims walked into the ocean and swam toward Alcatraz. A witness saw him floundering after he was too far from shore to be saved. Officially his cause of death was listed as a stroke, but many believe it was suicide. The bank remained closed, until October while Ralston’s “Ring” of cronies reorganized and raised capital to reopen. During that time, they discovered (although some sources suggest some members knew what was happening) that Ralston had embezzled nearly $5 million dollars, which is equivalent to about $135 million today. No depositors, other than those that left the bank with coins in hand on the afternoon of the 27th of August, are known to have recouped anything from the bank.
(For more information, see “Lewis Hershfield: Early Jewish Pioneer Merchant & Banker of Helena, Montana” at the Jewish Museum of the West website, Montana Blue Book of 1891, “History Professor Mallory Szymanski examines limits of 'neurasthentic defense'” in the 27 October 2022 edition of the Albert University News (online), Brechin’s “Bank of California and William Ralston” at the FoundSF website, Lilly’s “Ralston’s Ruin” in The System of the River. . .. at the Stanford University website, and “Failure of the Bank of California” in the August 27 edition of the Sacramento Daily Union.)
Rare first-hand documentation of the California Bank Failure from the time that it occurred, made even more intriguing by the connection to a Chinese merchant and the most important bank in Montana, which was owned by the most prominent Jews in the West. At the time of listing, nothing similar is for sale in the trade. Nothing similar has ever appeared at auction per the Rare Book Hub. OCLC lists nothing similar as held by an institution, although the California Historical Society holds two telegrams sent between August 26 and 28, reporting the bank’s collapse..