per lot.  The prices were so absurd that these sales were treated as a joke.  The joke came in on the other side, however, when the officials proceeded to ratify these sales.  The public then woke up to the fact that it had been fleeced.  Enormous prices were paid for unsuitable property, ostensibly for the uses of the city.  After the money had passed, these properties were often declared unsuitable and resold at reduced prices to people already determined upon by the ring.

Nevertheless commercially things went well for a time.  The needs of hundreds of thousands of newcomers, in a country where the manufactures were practically nothing, were enormous.  It is related that at first laundry was sent as far as the Hawaiian Islands.  Every single commodity of civilized life, such as we understand it, had to be imported.  As there was then no remote semblance of combination, either in restraint of or in encouragement of trade, it followed that the market must fluctuate wildly.  The local agents of eastern firms were often embarrassed and overwhelmed by the ill-timed consignments of goods.  One Boston firm was alleged to have sent out a whole shipload of women’s bonnets—­to a community where a woman was one of the rarest sights to be found!  Not many shipments were as silly as this, but the fact remains that a rumor of a shortage in any commodity would often be followed by rush orders on clipper ships laden to the guards with that same article.  As a consequence the bottom fell out of the market completely, and the unfortunate consignee found himself forced to auction off the goods much below cost.

During the year 1854, the tide of prosperity began to ebb.  A dry season caused a cessation of mining in many parts of the mountains.  Of course it can be well understood that the immense prosperity of the city, the prosperity that allowed it to recover from severe financial disease, had its spring in the placer mines.  A constant stream of fresh gold was needed to shore up the tottering commercial structure.  With the miners out of the diggings, matters changed.  The red-shirted digger of gold had little idea of the value of money.  Many of them knew only the difference between having money and having none.  They had to have credit, which they promptly wasted.  Extending credit to the miners made it necessary that credit should also be extended to the sellers, and so on back.  Meanwhile the eastern shippers continued to pour goods into the flooded market.  An auction brought such cheap prices that they proved a temptation even to an overstocked public.  The gold to pay for purchases went east, draining the country of bullion.  One or two of the supposedly respectable and polished citizens such as Talbot Green and “honest Harry Meiggs” fell by the wayside.  The confidence of the new community began to be shaken.  In 1854 came the crisis.  Three hundred out of about a thousand business houses shut down.  Seventy-seven filed petitions in insolvency with liabilities for many millions of dollars.  In 1855 one hundred and ninety-seven additional firms and several banking houses went under.