by Paul R. Spitzzeri
As discussed here in recent posts, the bank of Temple and Workman was closed on 1 September 1875 after an economic panic broke out in San Francisco, leading to a run on the bank by shaken depositors. The bank was already vulnerable to problems because of its heavy investment with depositors’ funds in a wide range of development projects, including in oil, real estate, mining, railroads and others during a long-running growth boom in Los Angeles.
While bank president F.P.F. Temple negotiated a thirty-day suspension in banking activity with John G. Downey, president of Farmers and Merchants Bank, the other commercial bank in town, the end of September did not bring the desired reopening of Temple and Workman. Whereas Isaias W. Hellman, managing cashier of Farmers and Merchants was able to rush home from a European vacation and reopen his bank before the end of the month, Temple had his hat in his hand in San Francisco seeking a loan to resume business and found it tough going.
Finally, towards the end of November, he found a willing lender. Elias J. “Lucky” Baldwin, who was investing in greater Los Angeles real estate, had money to loan but was eyeing the extensive landholdings of Temple and his partner and father-in-law, William Workman. The money borrowed was over $420,000, but, as Temple’s 20 November letter to Workman expresed it, the deal was “on rather hard terms.”
Not only was the loan, divided into two payments with the first and smaller amount due in a year and the larger remainder in two, subject to high rates of interest, but the security to cover the amount comprised of large properties held by Temple and Workman. Believing bankruptcy to be “the lesser of two evils,” Temple made the deal, which was realized on 2 December.
Four days later, the bank resumed business and articles in the following day’s newspapers trumpeted the news. For example, the Los Angeles Star gushed
The opening of Mr. Temple’s Bank yesterday was one of the most interesting, as well as of the most auspicious, events that has ever occurred in California; and, with one exception—the re-opning of the Bank of California [in San Francisco]—has no parallel on record.
The article went on to state that:
Mr. Temple had been so noble, so humane, so open-handed and open-hearted, so true to the wants of his people, that he was left, so to speak, without coin to meet a ‘run.’ At the same time his famous honesty of purpose, his admitted great wealth, and the securities in his possession, gave his depositors the confidence they have harmoniously maintained through the past three months; and which is unprecedented in the annals of the trust one man has in another.
With the reopening of the bank the day before, the Star continued, “with the noble millionaire, E.J. Baldwin at his back, Mr. Temple opened his bank with a quarter of a million dollars in the sacks more than he owned to his depositors.” The article then claimed that “here was made a run as famous as it was unexpected. Twenty thousand dollars were drawn out of the institution and ninety thousand dollars deposited [italics original]!”
Continuing with an appalling lack of mathematical skill, the paper observed “that $80,000 more were deposited yesterday than were drawn out!” when it was, of course, $70,000, but the hyperbole rose when it was stated that “the scene as viewed by hundreds of spectators through the windows was an ovation.”
More sanguine in its coverage was the Los Angeles Herald, which counted Temple as one its owners in 1874. It’s short article stated that “the precious gold which was to re-establish Temple & Workman’s Bank on a secure basis” arrived early in the morning on a Sunday on a heavily-guarded stagecoach. Consequently,
yesterday morning at an early hour an immense crowd besieged Temple & Workman’s doors, all in good humor and jubilant . . . At ten o’clock the doors opened and, when the crowd saw Mr. Temple standing behind his counter, smiling pleasantly as he stood flanked by piles of gold, a hearty cheer went up which meant encouragement to the bank and confidence in Los Angeles.
The Herald reported that “very few checks were presented, but the crowd in its good humor rushed in by scores to congratulate Mr. Temple and his gentlemanly cashier, Mr. [Henry S.] Ledyard.” The paper concluded its piece by expressing the wish that the resumption of business by the bank was “a harbinger of prosperity in Los Angeles city and county.” In a separate editorial, the paper cliamed that the reopening “restores our financial matters to their old basis.”
The third major daily paper in town, the Express, joined in the chorus by stating that the reopening of Temple and Workman “was availed of by the friends of Mr. Temple, who really compose the whole population of Los Angeles, to signalize their respect and warmth of friendship towards that gentleman.” It repeated the assertion that “the Bank was being stormed by hosts of eager depositors, so great was the throng, and so lively the demonstrations when the Bank doors were opened.” However, the piece went on
for one person who called upon business, at least a dozen more were engaged in the pleasant task of congratulating Mr. Temple. Mr. Ledyard, who so long has stood behind the counter with an imperturable good humor and courtesy, turning a smiling and unwrinkled front upon anxious depositors during the suspension of the Bank, was also the recipient of many attentions.
The fulsomeness continued: “this curious scene was kept up all through the day, and the word is not strained in the slightest degree when we say that the incident of the re-opening was really a personal ovation to Mr. Temple.” It repeated the assertion that deposits overshadowed withdrawals, in this case by a ratio of 4 to 1.
Tomorrow, we continue with coverage of the reopening of Temple and Workman, specifically a banquet thrown to honor Temple and Baldwin, so check back then!