of Jackson Street, and the new
Metropolitan Theatre was in progress diagonally opposite us.
During the whole of 1854 our business steadily grew, our average
deposits going up to half a million, and our sales of exchange and
consequent shipment of bullion averaging two hundred thousand
dollars per steamer. I signed all bills of exchange, and insisted
on Nisbet consulting me on loans and discounts. Spite of every
caution, however, we lost occasionally by bad loans, and worse by
the steady depreciation of real estate. The city of San Francisco
was then extending her streets, sewering them, and planking them,
with three-inch lumber. In payment for the lumber and the work of
contractors, the city authorities paid scrip in even sums of one
hundred, five hundred, one thousand, and five thousand dollars.
These formed a favorite collateral for loans at from fifty to sixty
cents on the dollar, and no one doubted their ultimate value,
either by redemption or by being converted into city bonds.
The notes also of H. Meiggs, Neeley Thompson & Co., etc.,
lumber-dealers, were favorite notes, for they paid their interest
promptly, and lodged large margins of these street-improvement
warrants as collateral. At that time, Meiggs was a prominent man,
lived in style in a large house on Broadway, was a member of the
City Council, and owned large saw-mills up the coast about
Mendocino. In him Nisbet had unbounded faith, but, for some
reason, I feared or mistrusted him, and remember that I cautioned
Nisbet not to extend his credit, but to gradually contract his
loans. On looking over our bills receivable, then about six
hundred thousand dollars, I found Meiggs, as principal or indorser,
owed us about eighty thousand dollars--all, however, secured by
city warrants; still, he kept bank accounts elsewhere, and was
generally a borrower. I instructed Nisbet to insist on his
reducing his line as the notes matured, and, as he found it
indelicate to speak to Meiggs, I instructed him to refer him to me;
accordingly, when, on the next steamer-day, Meiggs appealed at the
counter for a draft on Philadelphia, of about twenty thousand
dollars, for which he offered his note and collateral, he was
referred to me, and I explained to him that our draft was the same
as money; that he could have it for cash, but that we were already
in advance to him some seventy-five or eighty thousand dollars, and
that instead of increasing the amount I must insist on