a. A recession in CaliforniaThese were our possessions and prospects when the first wave of money panic struck California, and swept over America with such disastrous results, from 1853 to 1859. It is said that during two months in 1857, in New York, discounts at the banks fell off $24,000,000 and deposits $40,000,000; interest went up 36 per cent per annum and there were six thousand failures, involving an indebtedness of $300,000,000. Yet how small are these sums when compared with the direct and indirect losses suffered by the whole people during those years of panic! The breaking up of business, the depreciation of property, the enforced idleness of labor and machinery, and the check to enterprise, all combined to make up a loss impossible to compute, not counting the heartache and mental anguish arising from loss of business and homes.
Men of families, wealth and enterprise, were driven from their homes and reduced to poverty and in consequence, on the Pacific coast, self destruction was resorted to, to end their misery. Some poisoned themselves some shot themselves, some went crazy, all of which was brought on the people by our private currency system.
This loss cannot be measured by dollars and cents, no power but the Supreme can weigh the sufferings of the human heart. Upon the first appearance of panic on the Pacific coast, business began to shrink, property decreased rapidly in value, money withdrew from circulation, depositors withdrew their money from the banks, business failures were frequent, larger interest was exacted for the use of money, more property was demanded as security for a given sum, laborers were turned adrift by the thousands, some becoming tramps; two or more families of the less fortunate were compelled to occupy one house in the towns, which before was hardly thought ample for one, and to get along with scant clothing and still scantier food. At the same time thousands of tons of farm products were never sent to market, for there was no sale; good potatoes were ten cents per bushel, but there were no ten cents. All this happened in the Golden State of California, in 1854, where millions of gold and silver were dug from its mines every month. Most, or all of it was sent to San Francisco as soon as produced, and tons of it were hoarded in banks, treasury vaults, napkins, old bonnets, and other places, though swift to keep money, after drawing it from the banks. Gold was gloated over and worshiped. A man with a few hundred dollars in gold coin was independent, while the owner of scores of thousands of property was poverty stricken, and permitted it to be sold for taxes, and in some cases never redeemed it. Some with ready money held it for purchasing properties at the depreciated rates for which it was sold by the sheriff, and money could not be borrowed on real estate, however good the title.
Journal of John M. Horner; http://www.boap.org/