agriculture, of the increased development of its mines, of the absence of unusual floods or droughts or general disasters in business pursuits; and he characterized its growth as rapid and wholesome. As a matter of fact it was much more rapid than wholesome. Instead of the slow but steady and temperate advances of some of the old states, which were wholesome, California made extraordinary strides by fits and starts, which however tended to make its people more wasteful and prodigal than they had been before. They had always been to some extent careless and extravagant; they knew almost nothing of economy, and now, in the craze to participate in the unparalleled development of the resources of the country and become rapidly wealthy, they became a community of virtual gamblers. The old People's party of 1856, though it was in one sense confined to the city of San Francisco, had, by its wonderful influence in favor of economic administration, redeemed the state from its old insolvency consequent upon the failure of the placer mines. But that party unfortunately could not last; it was in fact ahead of the times, and it had to give way to a system more in accord with the character of the people and their disposition to extravagance. That party, and much of its economic spirit along with it, had gone down in 1867, when Frank McCoppin, the Democratic candidate for mayor and the first man to break the uniform. success of the old organization, was elected over all competitors, and Haight, the Democratic candidate, defeated George C. Gorham, the candidate of the combined Union and Republican parties, for the office of governor.

At or about the same time that these political changes were taking place, and indicative of the kind of growth and progress that had been and was going on, the community, and particularly San Franciscans, became infatuated with a desire to speculate in real estate. A few fortunate ventures in what were known as homestead associations, which consisted in the purchase of large tracts of land, chiefly suburban, and in subdividing and selling them off in small lots at large profits, attracted the attention of enterprising men; and the result was that nearly everybody became interested in the business, either as a buyer or a seller; many of those who purchased bought to sell again; and many

of those who sold did so only to form new associations and go still deeper into speculation. In and about San Francisco, which was the center of the excitement, there were several scores of associations, covering nearly all the unoccupied land within five or six miles of Portsmouth Square on one side of the bay and the Oakland wharf in San Antonio creek on the other side; but there were many in other cities and various parts of the country; and all for a time seemed doing well. In some cases, and particularly in the earlier ones, the division into homestead lots was fair; many improvements went forward; families secured homes at reasonable rates; and the general effect was beneficial. But as the excitement grew into what was called a craze, all sorts of frauds were resorted to for the purpose of giving fictitious values to lots and deluding ignorant but confiding purchasers into buying them-frequently for two or three times their value and almost invariably to their great loss in one way or another. The certainty of the completion of the transcontinental railroad gave an impetus to the speculation and also furnished an argument to the speculators; while a very marked increase in the immigration, even prior to the opening of the road, gave color and added weight to the reasons advanced why the pretended opportunity of making a fortune, in the real estate offered, should not be neglected.1

The homestead association excitement had barely cooled when a more terrible and disastrous craze seized the community and raged for a number of years like an epidemic; infected all classes, and in the end, while enriching a few, left a very large portion of the people impoverished and ruined. This was the so-called mining-stock mania. Curiously enough it had little or nothing to do with gold and hardly touched the Californian mines—which in the form of hydraulic and quartz workings continued to be carried on in enormous investments and with corresponding success-but was confined almost exclusively to Nevada silver deposits. It had already to some extent commenced in 1863, when the rich yields of the Comstock lode and particularly those of the Gould & Curry, Savage, Ophir, Hale & Norcross and Chollar mines led to speculations in mining stocks over brokers' Hittell's San Francisco, 369.

counters, that far outdid in deceit and recklessness the old gambling ventures over faro and monte tables. Even at that early day, many of the methods of fraud in the management of mines and mining companies, that afterwards played so important a part in the sociological history of the state, were started and developed. It was then or soon afterwards learned how to water stock and sell the new issue for about the same price as the original shares; how to pay large dividends in worthless mines for the purpose of working off the stock; how to get the control of good mines and do the reducing at one's own mills and prices and thus absorb all the profits; how with the aid of diamond drills and otherwise to find out the real value of a mine in advance of others and buy or sell in violation of trust and in fraud of the rights of others; how to conceal discoveries of rich deposits; how to lic; how to combine and conspire; how to expand or depress or, as it was called, "bull" or "bear" the market, and in fine how to cheat, steal, rob and commit other felonies in the neatest, smoothest and safest manner up to that time invented. But that early stock excitement in the course of a couple of years, with the decline of the yield of the Comstock mines as then developed, measurably passed away. About 1868, the discovery of argentiferous chlorides at White Pine in southeastern Nevada caused another excitement; and as usual there was a rush of adventurers, numberless reckless speculations, almost invariable disappointment and in most instances immense loss.

All these excitements, however, were small in comparison with that of 1872, when recent discoveries of rich deposits, or "bonanzas" as they were called, in the Crown Point and Belcher mines on the Comstock lode and in the Raymond & Ely mine at Pioche in Nevada again rendered people wild with the fever of gambling in stocks. The brokers of San Francisco, where most of the mining-stock business was transacted, had already in 1862 organized a sort of auctioneering association called the San Francisco Stock and Exchange Board; and, though it consisted of eighty members of extraordinary dash and quickness and held daily sessions at which stocks amounting to hundreds of thousands of dollars were bought and sold, with a noise resembling the snarling of a pack of wolves fighting over a car

cass and a rapidity that was absolutely confusing to uninitiated spectators, it was found entirely inadequate to the frenzied demands of the market; and in January, 1872, an additional association was organized of forty members, afterwards increased to between sixty and seventy, known as the California Stock and Exchange Board. Though these boards did not originate the stock excitement, they fostered and increased it. In a few months, the market value of the Nevada stocks shot up from seventeen millions to eighty-four millions of dollars, and sales amounted to millions. As an instance of how these stock transactions, or "deals" as they were sometimes called, were worked, that of a prominent dealer in Crown Point, which took place about this time, may be particularized. Before the discovery of the bonanza was announced, but apparently not before a shrewd suspicion of it amounting in fact to certainty was entertained in knowing circles, the dealer referred to commenced buying up Crown Point stock at a few dollars a share and increasing up to a couple of hundred dollars a share until he had secured a majority of the entire stock, consisting of twelve thousand shares. As the mine itself consisted of only six hundred feet, it will be seen that each share represented only about half an inch. But when the discovery of the bonanza was announced and had been sufficiently magnified by well-understood arts, people seemed to consider the mine almost as valuable as if it were solid silver; prices of shares advanced to nearly two thousand dollars a share; and the dealer was credited with making several millions of dollars. About the same time, in this and other stocks that were carried up by the same upheaval, a few others, who understood the deal, made vast sums; but, on the other hand, thousands of the community were "cinched" and ruined.1

It was about this time, and while the mining stock excitement of 1872 was at its height, that an extraordinary discovery of a somewhat different kind was whispered around and for a time threw into the shade even the greatest wealth that could be claimed for the Comstock lode. The new discovery purported to be that of a diamond field of wonderfully large extent and 1 Hittell's San Francisco, 339-343, 351, 376-378, 392, 393, &c.

richness in the interior of the continent, where the precious stones were as plentiful as in the famous valley of diamonds, described by Sinbad the Sailor, and could be gathered by the sackful, without the dangers and risks encountered by that renowned adventurer. The exact location of the find was undivulged except to a very few large capitalists, whom it was designed to inveigle first, for the reason that it was very well known that, if they could be induced to invest largely, their influence and the spirit of speculation in the country would soon bring in the entire community; and the manipulators of the scheme, by adroit disposal of their stock, would be enabled to make millions of money. For the purpose of carrying out the fraud-for such it was-a certain wild and rough region in the Rocky mountains, not more than a day or two's journey from Green River Station on the Union Pacific railroad, had been selected and, in advance or subsequently but before examination by experts, liberally "salted" with quantities of diamonds, rubies and emeralds, including a number of valuable stones from Brazil and some from the recently discovered fields of South Africa. There appear to have been several persons engaged in the business; but, as it was conducted with great mystery, it is difficult to say with certainty who was the originator of it.

Among those whose names first appear in the transaction were Philip Arnold and John Slack. They claimed to have been employed in prospecting in the Rocky mountain regions on a contract with Asbury Harpending, the same individual who had been concerned in 1863 in a magnificent project of seizing, under a letter of marque from the president of the southern confederacy, a few of the outward bound Pacific mail steamers and possessing himself of their millions of treasure. Notwithstanding his complete failure in that attempted scheme of plunder, Harpending, whose mind teemed with large projects, had managed to gather considerable pelf and, in spite or perhaps to some extent on account of his manifested buccaneer proclivities, was well received among the mining stock manipulators and doubtless more or less admired by some of them for the largeness and dash of his undertakings. It is true that he afterwards claimed to have been himself deceived; but, under