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.
There were two immediate results of this state of affairs. In the first
place, every citizen became more intensely interested and occupied with
his own personal business than ever before; he had less time to devote
to the real causes of trouble, that is the public instability; and he
grew rather more selfish and suspicious of his neighbor than ever
before.
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