A sterling silver puzzle, pt. 2

In his last post, Ryan introduced the story of Silver King John Mackay, and how he was a big winner in Nevada silver strikes in the 1860s and 70s. With success in the Comstock Lode, Mackay and his partners battled (business-wise, that is!) with other mines and other capitalists who would be Silver Kings. To stave off the Bank of California, Mackay and others established the Nevada Bank. (CR)

Nevada National Bank note (Click for larger image in a new window)A decade after pushing Bank of California to the brink, the Nevada Bank itself faced collapse. Mackay had bought out his partners’ interest in the bank in November, 1884, while Flood stayed on as President.

Unfortunately, in 1887 a rogue Vice President secretly extended massive loans to a group of brokers who were attempting to corner the wheat market. In the 19th century, California was a major wheat producer, and Nevada Bank owned a large grain warehouse where farmers could get loans with wheat as security.

Although Flood was in San Francisco, the first warning signs were seen by Mackay in London when Nevada Bank’s correspondent account in London was overdrawn by $500,000. By the time Mackay got to San Francisco, he found less than $1,000 in cash left in the bank.

While Mackay could have let Nevada Bank fail and retain his personal fortune, he drew on personal lines of credit to support the institution. He reorganized the institution and in 1890 brought in famed Los Angeles banker Isaias W. Hellman to increase the level of banking expertise. The bank converted to a national charter at the end of 1897 and received charter number 5105.

After Mackay’s death in 1902, the Nevada National Bank would merge with Wells Fargo & Co’s Bank to form the Wells Fargo Nevada National Bank, retaining the NNB’s headquarters at Pine and Montgomery Streets.

Nevada Bank wax seal, Virginia City Agency (Click for larger image in a new window)Once I had read Makley’s biography of Mackay, I was able to put together the pieces of a silver puzzle of documents I acquired earlier this year.

The first document that I was looking to put together in the puzzle is a cover sent by Wells Fargo Express from San Francisco to John Mackay in Virginia (City), Nevada. It is canceled May 7 with a pencil docket notation of “Private acct up to May 1, 1878.”

Imagine the information that this envelope contained, transmitted to one of the wealthiest men on the West Coast just after the Comstock mines had peaked in production! Notice the wax seal on the reverse—whose crest is this? Could it be Flood’s or McLane’s, the two men in charge of the Nevada Bank at the time? The motto is Praestat Opes Sapientia: “Wisdom Surpasses Wealth.”

The second document is a cover sent via Wells Fargo Express from the Nevada Bank agency in Virginia City (the local office) to the head office in San Francisco, with a cancellation of April 25, 1887. What did this envelope contain? Maybe transfer of funds to San Francisco as wheat lending began to expand, and ultimately prove catastrophic?

The third document is a cover sent via Wells Fargo Express in San Francisco to the Nevada Warehouse and Dock Co., with four cents postage due. Did this contain loan documents as part of the failed attempt in 1887 to corner the wheat market?

Via Wells Fargo & Co's Express (Click for image in a new window)While some people may view these documents as simply old envelopes, the enjoyment I derive from the research is touching documents that directly connect with the Nevada Bank, the Silver Kings and the Big Bonanza!

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