In addition to the political and social corruption of the times could be added over speculation in consumer goods and a decline in the production of the placer mines that began in 1853, all of which combined to lead to the commercial depression of 1854. And while there continued to be extravagant spending on some luxury goods, the consumption of staple good decreased, the prices of merchandise declined, interest rates fell, businesses left town, others failed and bankruptcies piled up everywhere.
The flight of Henry Meiggs in 1854 exposed the pestilence of the municipal and business corruption and that, coupled with the extensive and disastrous failures of Page, Bacon & Co. and Adams & Co. in 1855, threw the community into a frenzy of insecurity and uncertainty, full of terror and almost completely without hope. The legal proceedings that followed these failures and bared the frightful ramifications of corruption extending into nearly every walk of life, and which became more exposed as developments proceeded, caused the better classes of citizens to despair of any improvement. Many comparisons were made with cities of old that became so wicked that they had to be purified by a fire so intense it destroyed them.
John Putnam is the author of Hangtown Creek, a thrilling saga of the early California gold rush available online from Amazon and Barnes and Noble.