image credit - William Ralston Driving His Two Horse Buggy, by Thomas Hill. Oil on canvas, 30" x 40.5".


William Ralston’s grand-scale ambitions--for himself and for the city he loved--eventually proved his undoing.

By J. Kingston Pierce


If any single person symbolized San Francisco's boomtown, nothing-is-impossible attitude of the late 19th century, it was banker William Chapman Ralston. Brimming with self-confidence, energy, and the splendid madness of optimism, Ralston never plodded ahead cautiously when rushing was an option. He never followed if he could lead. He never attempted anything on a small scale when doing it up grandly could fetch him substantially greater profits -- or win his beloved city some greater prestige.

His trajectory of success was long and precipitous, if not always steady, and he intended to pull San Francisco up the rainbow right behind him. While other men dreamed of this place becoming merely a vital force in the West, Ralston imagined San Francisco transformed into one of the world's corporate and cultural capitals. Toward this end, and using the seemingly unlimited resources available through his Bank of California, he charged boldly, brashly into the maw of financial risk, building factories and mammoth hotels in this city, investing in steamship and telegraph companies, and plotting for supreme control over the silver hidden in Nevada's Comstock Lode. There were times when it seemed that nothing happened in the Bay Area without Ralston's involvement.

Some people today would say that Ralston behaved rashly, that he was too quick to gamble with his investors' money and too slow to protect against economic disaster. Heck, many of his fellow millionaires said something just like that way back in Ralston's heyday, during the 1860s and '70s.

But Ralston lived in a naïve and hopeful era. With the Nevada silver boom practically tumbling in succession over the California Gold Rush, railroads finally connecting the Atlantic Ocean with the Pacific, and Americans flooding recklessly into the West, Californians didn't hesitate to dream. And their dreams could be as oversized as the landscape they found here. Anything seemed possible, from bridging the Pacific with irrigating the state's driest valleys for flattening Rincon Hill and creating a new commercial zone. All that was needed was money. And visionaries such as Billy Ralston.

* * *

When he took his first breath, in January 1826, it was of air sweetened by the farmlands of eastern Ohio. "Chap," as he was known in his boyhood, grew up beside the Ohio River, listening to steamboat whistles and watching barges chug along the shore. Similar experiences filled other boys (notably the slightly younger Samuel Clemens) with romantic notions of one day piloting riverboats. But Chap was interested in commerce. When he finally did move to New Orleans and work on Mississippi River paddlewheelers, it was as a clerk.

Ralston was 22 years old when Sam Brannan brought word to San Francisco that gold had been discovered on the American River. It took Chap another year (and the burning of his ship) before he was ready to join the human stream to California. And then he got hung up for two years at Panama City, Panama, where he threw in with two friends -- Cornelius K. Garrison and Ralph Fretz -- who were developing a bank and charter steamship business. Not until 1851, when Ralston agreed to fill in for one of his captains, who'd become too sick with cholera to sail to San Francisco, did the future mogul finally at least visit California.

Three years later, after his most able partner, Garrison, moved to the Bay Area to operate an office for shipping magnate Cornelius Vanderbilt, Ralston followed. He worked with Garrison again for a while in this city, but then returned to banking. Several partners came and went over the next eight years, but Ralston never lost his wish to create a financial institution that would stand at the center of development in San Francisco and Northern California. Toward that end, he gladly made loans to entrepreneurs with great ideas, people who might contribute something substantial and permanent to the area. He also became a major investor in the Comstock Lode, which had been discovered in 1859. The Lode took some time to heat up, and it would never be the bonanza that it has been portrayed as in some histories. However, when it did boom, Ralston wanted ties between it and San Francisco to be strong enough that the riches belched from the ground there would funnel back to the Bay Area.

In 1864, Ralston created the Bank of California, soliciting 22 of the state's leading businessmen to buy enough shares of stock -- at $100 a share -- that he'd have $2 million in capital funds. Then he convinced Darius O. Mills, the premier financier of Sacramento, to serve as president of the new bank, although in name only. "I will do all the managing," Ralston explained. For the next 11 years, this town's foremost captain of industry would carry the modest title of "cashier" at his own bank.

* * *

San Francisco ranneth over with wealthy men during the second half of the 19th century. Conniving Sacramento shopkeepers-turned-capitalists Collis P. Huntington, Mark Hopkins, Leland Stanford, and Charles Crocker -- the "Big Four" -- would become obscenely rich after they convinced Congress and President Abraham Lincoln to let them construct the western section of the first transcontinental railway. They went on to turn their Central Pacific Railroad (later known as the Southern Pacific) into a California rail and water transportation monopoly that set high rates for its services, punished anybody who refused to pay up, and kept its stranglehold secure (until 1910, anyway) with judicious distribution of bribes around the smoke-filled hallways of Capitol Hill.

The other most significant cabal of Midases featured the four so-called Bonanza Kings -- former mine superintendents John W. Mckay and James G. Fair, and saloon proprietors James C. Flood and William S. O'Brien -- who eventually broke Ralston's hold over the Comstock Lode. Like the Big Four, these nouveaux riches spent extravagantly, building magnificent palazzi and trying to turn their monetary muscle into political power, whether as national legislators or behind-the-scenes manipulators.

Billy Ralston could be as covetous and cruel as any of those other gentlemen. For instance, after encouraging German entrepreneur Adolph Sutro in 1865 to construct a tunnel beneath the Comstock Lode, which was supposed to bleed off steam and hot water that were plaguing deep-earth miners, he and his business partner, William Sharon, suddenly turned on the ambitious Sutro and tried to bankrupt him out of Nevada. Six years later, Ralston's greed got the better of his common sense and he fell for an elaborate diamond mine fraud that cost him millions of dollars.

But the sheer acquisition of lucre didn't charge Ralston's batteries. He was thrilled by what he could do with the money he made. And he wanted to do everything. So he invested in woolen mills and cigar factories and the Alaska fur trade; he constructed a multicolumned Bank of California headquarters on the northwest corner of Sansome and California streets, a building meant to reflect the stability and strength of his enterprise; he raised an opulent country mansion for himself and his wife Lizzie at Belmont, 22 miles south of the city; he opened the giant California Theater on Bush Street as a lure for high-caliber international performers; and he gave money to widows and grubby street urchins and even Joshua Norton, the colorful former rice merchant who'd allegedly gone mad and proclaimed himself to be the Emperor of North America. (As George Lyman observed in Ralston's Ring, "No one was ever turned away from Ralston's office who had something to contribute to California welfare or who needed help or a word of encouragement.") To attract visitors and the finest mercantile enterprises to his precious city, Ralston put up an impressive hotel (the Grand) at the corner of New Montgomery and Market streets. Then he turned right around and outdid himself with a second, grander edifice just across the street: the original Palace Hotel.

* * *

Ralston dreamed so expansively, so expensively. His funds were often stretched by the breadth of his interests. In his later years, he seemed always to skirt the edge of calamity. Yet he was unchastened by periodic failures, believing -- from experience! -- that he was the comeback kid.

But between losses on the Comstock and the Panic of 1873, brought on by bank failures back east, Ralston was forced to start looking for fresh and substantial sources of funds that would float his empire above the westward-flowing tide of red ink. In 1875, he thought he'd discovered a solution. Going further into debt, he and a friend named Charles N. Felton gained control of the private company that brought San Francisco its drinking water. They then offered to sell their stock and watershed to the city for $15 million -- half again its physical value. To Ralston, this seemed a win-win deal for both himself and San Francisco. But the local newspapers, especially the Bulletin and Call, were irate at the idea of pumping more money into the pockets of rich speculators. Their editorials eventually convinced the board of supervisors to turn thumbs down on Ralston's proposition.

Desperate to cover his assets, the visionary banker borrowed heavily and still found himself short of money. He finally asked William Sharon for help, expecting that the years of trust he'd shown Sharon would bring that financier to his rescue. But instead, Sharon desperately started dumping his Comstock mining shares, depressing the value of Ralston's shares in the process. When word got around on August 26, 1875 that Sharon might be selling out in order to raise money necessary to save the Bank of California, frightened depositors rushed to the bank, anxious to withdraw their funds -- funds that, of course, weren't actually there, thanks to its "clerk's" recent profligacy. Ralston was forced to close his bank's doors when his vault went empty.

The next day, a Friday, Ralston was told by his bank directors that he would have to relinquish his control of the institution. He took the news with equanimity and then, as was his usual daily routine, he went to work off tension with a swim. He stroked vigorously from a North Beach bluff in the general direction of Alcatraz Island -- and then watchers saw him thrashing desperately in the cold tide. Cause of death was reportedly stroke, although some skeptics suggested, given what else had happened that day, that suicide might be more likely.

* * *

Because he had become so representative of his times and this place, when Ralston died, San Franciscans seemed to collectively bow their shoulders just a bit, as if fearing what catastrophe might follow. Billy Ralston had always helped keep doubts about the future at arm's length; now they rose suddenly like Marley's Ghost. Recent concerns about Ralston's ability to manage his bank vanished as people praised him as "the father of the city," "the magician of San Francisco." At his funeral, speakers recounted his accomplishments and imagined what he might have done had he lived past age 49. When his casket was removed from the church near Union Square to its burial ground, it was reportedly followed by some 50,000 people, forming a line that covered streets from curb to curb and extended for three miles.

Those folks didn't come only to mourn the passing of William C. Ralston, banker and speculator. They came to shed tears for the end of their innocent dreams.

(Excerpted from San Francisco, You’re History!, copyright 1995 by J. Kingston Pierce. Reprinted with permission from the author.)

See also: Black Bart, Bret Harte and Lotta Crabtree by J. Kingston Pierce.


J. Kingston Pierce, a Seattle writer specializing in history, travel, and politics, is the author of San Francisco, You're History! (Sasquatch Books, 1995) and America’s Historic Trails with Tom Bodett (KQED Books, 1997). He is currently at work on a collection of stories about significant events and eccentrics from Seattle’s past.

Index - San Francisco History