They, and the classes they directly and indirectly encouraged, had at last brought the city fairly on the financial rocks. There was no more revenue. Everything taxable had been taxed. The poll tax was out of all reason; property paid 4 per cent. on an actual valuation; theatres, bankers, brokers, freight, miners, merchants, hotel, keepers, incorporations, every form of industry was levied upon heavily. Still that was not enough. Even labour was paid now in scrip so depreciated that the cost of the simplest public works was terrible.
And to heap up the measure, the year of 1855 was one of financial stringency. The season of '54-'55 had been one of drought. For lack of water most of the mining had ceased. The miners wanted to be trusted for their daily needs; the country stores had to have credit because the miners could not pay; and so on up to the wholesalers in the city. Goods were therefore sold cheap at auction, and the gold went East to pay at the source. Money, actual physical money, became scarce. The gold was gone, and there existed no institution legally entitled to issue the paper money that might have taken its place. All the banking was done by private firms. These took deposits, made loans, issued exchange, but could not issue banknotes.
Still, things had looked a bit squally many times before, but nothing had happened. Men had the habit of optimism. No one stopped to analyze the situation, to realize that the very good reason nothing had happened was that the city had always had behind it the strength of the mines, and that now the mines had withdrawn.
Out of a clear sky came the announcement that Adams & Co. had failed!
At first nobody believed it. Adams & Co. had occupied in men's minds from the start much the same position as the Bank of England. The confirmation of the news caused the wildest panic and excitement. If Adams & Co. were vulnerable, nobody was secure. Small merchants began to call in their credits. The city caught up eagerly every item of news. All the assets of the bankrupt firm were turned over to Alfred Cohen as receiver. Some interested people did not trust Cohen. They made enough of a fuss to get H. M. Naglee appointed in Cohen's place. Naglee, demanding the assets, was told they had been deposited with Palmer, Cook & Co. The latter refused to give them up, denying Naglee's jurisdiction in the matter. The case was brought into court. Then suddenly it was found that Palmer, Cook & Co. had mysteriously lost their paramount interest in the courts. They had counted on the case being brought before their own judges; but it was cited before Judges Hazen and Park, both of whom, while ultra-technical, were honest. The truth of the matter was that the rats suspected Palmer, Cook & Co. of sinking, too, and had deserted. Judges Hazen and Park called upon the firm to turn over to Naglee the assets of Adams & Co. They still refused. One of the partners, named Jones, and Cohen were imprisoned. Some where $269,000 was missing. Nobody knew anything about it. The books having to do with the transaction had mysteriously disappeared. Two days later an Irishman found them floating in the bay, and brought them to the court. But the crucial pages were missing. And then suddenly, while both Judge Hazen and Judge Park were out of town, application was made to the Supreme Court--of which Judge Terry was head--for the release of Jones and Cohen. The application was granted.