Bank of California
| Company type | Private |
|---|---|
| Industry | Banking, Financial services |
| Founded | July 4, 1864 in San Francisco, California, United States |
| Founder | William Chapman Ralston, Darius Ogden Mills |
| Fate | Merged with Union Bank in 1996; became MUFG Union Bank |
| Headquarters | San Francisco , United States |
Key people | William Chapman Ralston (cashier), Darius Ogden Mills (president) |
The Bank of California was established in San Francisco, California, on July 4, 1864, by businessmen William Chapman Ralston and Darius Ogden Mills. As the first commercial bank in the Western United States, it significantly influenced the financial development of the American Old West.
History
The bank's roots extend to the San Francisco banking partnership Garrison, Morgan, Fretz & Ralston, formed in January 1856 by Ralston and his associates. In 1864, Ralston launched the Bank of California by offering shares priced at $100 each to 22 prominent businessmen. Upon opening, Mills served as president while Ralston took the role of cashier; among the key executives was board member Louis McLane. A branch was soon opened in Gold Hill, Nevada, catering to mining activities near Virginia City. William Sharon acted as the bank’s long-term representative in Nevada.
Constructed from stone sourced on nearby Angel Island, the Bank of California Building became a notable San Francisco landmark that represented the institution’s financial solidity.
The bank supported various mining enterprises on the Comstock Lode and often took control of mines when owners defaulted, which proved highly profitable. Through monopolistic strategies, Ralston and his partners wielded considerable power over commerce and industry in both San Francisco and Virginia City.
In July 1869, Ralston averted a potential bank run by discreetly swapping nearly $1 million in gold bars for gold coins from the U.S. Sub-Treasury, thereby reassuring depositors with tangible reserves.
Mills stepped down as president in October 1873; Ralston replaced him but kept Mills on the board to maintain prestige.
During August 1875, amid turbulent trading in Nevada mining stocks, a run forced the bank’s collapse and caused Ralston’s financial downfall. He transferred his assets to Sharon and confessed to banking irregularities before being removed as president. Shortly thereafter, Ralston died from a stroke.
The bank resumed operations in October 1875 with $2 million in gold reserves under Mills’ reinstated presidency. By 1876, it had become one of San Francisco’s leading banks alongside the Nevada Bank and Wells Fargo. However, the economic downturn of 1878 reduced its capital by $2 million.
After Mills retired in 1878, merchant William Alvord assumed the presidency. Under his guidance, the bank expanded its position as a principal exchange center connecting European markets with Asia, especially Japan and China.
In 1887, Alvord warned James C. Flood about irregularities at the Nevada Bank, helping prevent its failure following speculative losses.
Alvord remained president until his death in 1904. In January 1905, Homer S. King joined from Wells Fargo to take charge of the bank. In 1910, the Bank of California incorporated San Francisco National Bank, which succeeded Peder Sather’s institution.
Merger with Union Bank
On April 1, 1996, the Bank of California merged with Union Bank to create Union Bank of California, becoming California’s fourth largest commercial bank. In 2008, it became a wholly owned subsidiary of Japanese company Mitsubishi UFJ Financial Group and was rebranded as MUFG Union Bank. At that time, Union Bank of California ranked among the top 25 banks nationwide.