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Overview

On 03/18/1852, Henry Wells (1805-1878) and William George Fargo (1818-1881) chartered their banking and express services business, Wells Fargo and Company, in New York State. From their headquarters in New York, they sent representatives to found a San Francisco bank by 06/1852, which navigated a precarious and unscrupulous banking scene in the Gold Rush capital. Samuel P. Carter, head of express services, and Reuben W. Washburn, head of banking, opened the first bank headquarters at 424 Montgomery Street. a tidy, two-story, brick building. Wells Fargo and Company would operate in these small quarters from 1852 until 1855.

Building History

When Wells Fargo and Company opened this first Pacific Coast headquarters on 07/13/1852, the company already had two competitors in banking and express services. The Saint Louis-based bank Page, Bacon and Company had established itself as the leading bank in the state, and the Adams Express Company had become its primary express service provider. Gold was the primary focal point of San Francisco business, with both Adams and Page, Bacon doing business in both banking gold deposits and moving mined gold physically within CA and between CA and New York CIty, the nation's banking capital. While sustained panning in streams proved too labor intensive to be practical, the 1853 introduction of hydraulic mining techniques in CA greatly increased gold production until the 1880s. Hydraulic mining involved the use of machines that could force water through hoses at high pressure, enabling miners to separate large amounts of gold-bearing alluvial soils and quartz veins and direct the gold-soil-stone gravel through filtering mechanisms such as rocker or sluice boxes. The densest mineral, gold, settled at the bottom of these sifting machines.

"Hydraulicking" proved very successful until a drought began in CA in 1854. This drought greatly curtailed the water available for hydraulic mining and caused severe econmic repercussions. Miners could not find the gold with which they could repay loans for new equipment; merchants were not paid for equipment and provisions sold on credit, and banks soon faced runs that devastated financial reserves. All of this economic dislocation in CA triggered mulitple runs on San Francisco banks in 1855, now known collectively as the Bank Panic of 1855. (Signficant runs on San Francisco banks occurred on 02/22/1855 and another beginning on 05/01/1855. The February run seriously depleted Page, Bacon's reserves, and the May run ruined it.)

The Saint Louis headquarters of Page, Bacon and Company faced a run in early 1855. According to the Huntington Library: "...Various factors, among them falseness on the part of Page & Bacon's New York correspondents, and involvement in the financing of the Ohio & Mississippi Railroad, compelled the St. Louis house to close its doors." (See Huntington Library, "Inventory of the Henry Douglas Bacon Papers, ca. 1766-1906," accessed 08/25.2016.) News of the Saint Louis bank made its way back to San Francisco by 05/01/1855. The manager of the American Theatre in San Francisco got the first news of the bankruptcy and withdrew his $10,000, triggering a run on the holdings of both the Page, Bacon and Adams offices in San Francisco's Parrott Building. (Another bank, Markwell, Caspair and Company, declared bankruptcy on 05/07/1855.) The panic depleted both leading institutions of their deposits and eroded public confidence in them. In the breach, Wells Fargo and Company, a more conservatively-run institution, gained public favor and deposits. Business became so good for Wells Fargo that it took over the spaces vacated by its two main competitors in the grand Parrott Building by late 1855.

PCAD id: 20467