by Paul R. Spitzzeri
While the Los Angeles Express was able to break the news of the final closure of the Temple and Workman bank in its late afternoon edition of 13 January 1876, the other major dailies in town, the Herald and the Star had to wait until the following morning to cover the incident, as did papers outside of the city who received dispatches by telegraph.
The Herald, which in 1874 was part-owned by bank president F.P.F. Temple as part of a short-lived publishing corporation, had relatively little to say about the financial disaster.
A brief notice merely articulated what leading bankers interviewed the previous day by the Express stated; mainly that the collapse “will not seriously affect financial affairs in the vicinity” largely because the stricken institution “has made no loans” since the crash of August 1875. Instead, the bank spent its time since resumption in paying “a large amount of money to its depositors, and this money now is in circulation.” In fact, the piece ended, there was plenty of cash in town “and no financial stringency need be apprehended.”
Another short piece in the paper observed that news of the closure and assignment “caused by little excitement as it was not unexpected” with most of the money borrowed by Baldwin going to depositors “and those who had not [closed their accounts] were men of wealth].” Repeating what Hellman, Slauson and Patrick stated the day before, the Herald assured readers “that there will be no serious inconvenience experienced” and that the owners of the failed institituion had “ample assets to pay all liabilities.”
The Los Angeles Star was the town’s oldest paper, having started as a weekly in spring 1851 and operated continuously for a quarter century, excepting a four-year stint from 1864-1868, when its Confederate-sympathizing firebrand editor was jailed and shut the paper down. By the mid-Seventies, though, the paper was a shell of its former self and was outpaced in subscriptions and advertising revenue by its competitors.
In its coverage of the Temple and Workman bank shuttering, the Star began by noting that the institution went into assignment with two prominent figures appointed to sort out the affairs of the failed bank. Edward F. Spence, erroneously referred to as “C.F.” by the paper, was a relatively new arrival, but was highly regarded for his careful management of the Los Angeles Commercial Bank.
A native of Ireland, Spence came to America at age 20 and arrived in Gold Rush California, spending years in the north. Originally a miner, his health gave out and he turned to the drug business. A treasurer of Nevada County, Spence entered banking at San Jose and then moved to San Diego to serve as cashier at a financial institution there. In 1875, he was asked to work for the new Los Angeles Commercial Bank, founded by John E. Hollenbeck, a wealthy new arrival who’d just invested in the new suburban community of Boyle Heights.
Later, Spence joined the First National Bank of Los Angeles, which took over the Commercial Bank, and Hollenbeck’s failing health elevated Spence to the presidency of the new institution. He became an officer of several financial enterprises and insurance firms and served as a councilman and mayor of Los Angeles from 1884-86. He was also the major contributor of funds to the first telescope put on Mount Wilson (a recent post on this blog discussed the telescope) before his death at age 59 in 1892.
Freeman, a native of Canada with American roots, had a university law degree and was involved in shipping in his native province of Ontario. His wife’s poor health led Freeman to California and he came to Los Angeles in fall 1873 and leased the Rancho Centinela and a large flock of sheep on it, owned by Scottish nobleman Sir Robert Burnett.
Soon after, Freeman made the acquaintance of F.P.F. Temple shortly after arrival. Together, the two men and other interested parties decided to subdivide a good portion of Centinela and a neighboring rancho, which sale began in the opening weeks of 1875. When the Temple and Workman bank reopened in early December with the loan from E.J. Baldwin, Freeman was one of those in attendance at the celebratory banquet at the Pico House hotel.
With the Centinela subdivision cut short by the financial debacle of the late summer of 1875, Freeman turned to raising grain on the ranch. When the Boom of the Eighties came after the completion of a direct transcontinental railroad line to Los Angeles, he sold most of his ranch to arriving land-seekers. Freeman was a two-term president of the Los Angeles Chamber of Commerce and a director of the Southern California Railway, a subsidiary of the Atchison, Topeka and Santa Fe, which opened that transcontinental route in 1885. He died in 1914.
The Star’s coverage looked to assuage anxiety by noting the great wealth of Temple and Workman and the capable management expected from the assignees. Moreover, it claimed that “depositors will get dollar for dollar or pretty near that” when all was sorted out. It reiterated that statements by the other papers that some would be “inconvenienced” and that the financial stringency was temporary.
The paper also lionized Temple, who stood to take office as Los Angeles County Treasurer (he won the election the day his bank first suspended in September) in March, and “his liberality and unquestionable integrity and honesty of purpose.” The Star concluded by claiming that Temple “has the sympathy of the entire community.”
The news of the financial debacle was carried by telegraph to San Francisco, the scene of the great crash that brought down the Bank of California, the state’s largest, and the fall of its manager, William Ralston, who was found dead in the bay after his usual morning swim the day following the bank’s collapse. Notably, F.P.F. Temple was sometimes referred to as “the Ralston of Los Angeles” in a highly positive context, at least until the financial disaster struck.
It is interesting to note that, when the Bank of California was resurrected, one of its saving graces and a new director was E.J. Baldwin. Another major figure was San Francisco mayor William Alvord, who became the bank’s vice-president. In 1880, when Baldwin executed the foreclosure of Temple and Workman land used as collateral for the loan made to their bank, it was Alvord who was the party to the legal action.
Meanwhile, Freeman and Spence had a huge task ahead of them. The complexity of the assignment was not known to the press or most citizens when they began to inventory the assets and liabilities of the stricken Temple and Workman bank. A little more than two weeks after the closure, however, the men completed their work and that will be the subject of the next posts about the failed institution in about two weeks.