Page, Bacon & Co.
| Company type | Subsidiary |
|---|---|
| Industry | Banking |
| Predecessor | Page & Bacon (parent company) |
| Founded | 1850 |
| Founder | Daniel Page, Henry D. Bacon |
| Defunct | February 22, 1855 |
| Headquarters | San Francisco , United States |
Area served | California |
Key people | Henry Haight, David Chambers, Francis W. Page |
| Products | Banking services, gold dust purchasing, bills of exchange discounting, loans, drafts on correspondent banks |
| Parent | Page & Bacon (St. Louis) |
Page, Bacon & Co., a subsidiary of Page & Bacon based in St. Louis, was established as a banking institution in San Francisco in 1850 amid the California Gold Rush. The St. Louis parent company became financially overextended in 1854 due to complications financing a railway project, leading to its closure in January 1855. Approximately five weeks after the news reached San Francisco, it incited a bank run on the local branch, resulting in its shutdown. This event triggered widespread panic among other financial institutions, causing numerous small depositors to lose their savings and forcing the closure of over 200 businesses in San Francisco.
Page & Bacon
In 1848, Daniel Page, a former mayor of St. Louis, joined forces with his son-in-law Henry D. Bacon to establish Page & Bacon. While Page possessed considerable wealth mainly tied up in real estate, Bacon took charge of the bank’s daily operations. Page & Bacon earned a reputation as one of the most dependable banks west of the Mississippi.
Restricted from issuing banknotes in Missouri, they instead circulated certificates of deposit ranging from $1 to $20, which were redeemable at a slight discount of 0.25%. These certificates effectively operated like banknotes. To circumvent Missouri’s restrictions, they partnered with Flagg & Savage to create Quincy City Bank in Quincy, Illinois. Although this approach received some commendation, critics warned it might lead to excessive risk-taking. In 1853, the firm was penalized for unauthorized banking activities and compelled to redeem all outstanding notes, which placed significant pressure on their finances.
Page & Bacon expanded beyond banking into various enterprises including railroad financing in Illinois, improvements to navigation on the Des Moines River, steam engine innovation, and land drainage initiatives in Missouri. They extended substantial loans to contractors working on the Ohio and Mississippi Railroad, eventually assuming their debts and borrowing heavily from New York lenders to cover expenses. The firm also directed Page, Bacon & Co. in San Francisco to send gold dust shipments and maintain substantial balances in New York to uphold creditworthiness.
In 1853, Henry Bacon successfully marketed railroad bonds in London and Paris; however, these markets collapsed as a result of the Crimean War (1853–1856). By 1854, securing financing became increasingly challenging. On July 24, 1854, their London correspondent Frederick Huth & Co. reported that American securities markets were stagnant due to elevated Bank of England rates and limited capital availability for foreign investments. By late 1854, Bacon’s financial situation deteriorated; he dispatched Page to San Francisco for additional gold shipments while seeking credit lines in New York. Compounding these difficulties, major debtor Belcher & Brothers encountered distress over a $300,000 liability. On January 12, 1855, New York’s Duncan, Sherman & Company began rejecting drafts from Page & Bacon; two days later the St. Louis bank suspended operations. Unaware of this collapse, between January 12 and February 17, 1855, Page, Bacon & Co. shipped nearly $2 million worth of gold from San Francisco aboard five steamers.
Page, Bacon & Co.
Following James Marshall’s discovery of gold near Coloma, California in 1848, the California Gold Rush dramatically reshaped the region’s economy.
In 1850, Daniel Page and Baron sent associates Henry Haight, David Chambers, and Page’s son Francis W. Page to launch the San Francisco banking house Page, Bacon & Co. They departed New York in May and arrived by June 21, 1850. Henry Haight oversaw operations at this firm which shared partners with St. Louis-based Page & Bacon; Haight, Chambers, and Frank Page managed the Sacramento branch.
California law prohibited private issuance of banknotes and restricted banking activities to individuals or general partnerships with unlimited liability such as Page, Bacon & Co. Capital investment, brand recognition, and correspondent banking support were provided by the St. Louis parent company.
By June 1850, Page, Bacon & Co. had opened an office on Clay Street in San Francisco and expanded to Montgomery Street by October. Their services included secure storage for valuables, discounting bills of exchange, arranging loans, and selling drafts on correspondent banks across the country. A significant component of their business involved purchasing gold dust or exchanging it for bills of exchange forwarded eastward on behalf of clients.
By late 1851 it had become San Francisco’s largest banking institution; by mid-1852 it handled approximately one-quarter of all gold shipped from California via steamer. Although precise proportions between customer shipments and internal transfers remain unclear, from 1853 through 1855 the firm dominated California banking with deposits nearing $2 million—including around $700,000 held in stable certificates of deposit owned by thousands of miners—demonstrating its financial robustness.
Page, Bacon & Co. also supported the Willamette Falls Company in Oregon City—a shipbuilding enterprise founded in 1853. Its second steamer named Gazelle experienced a boiler explosion in April 1854 that resulted in more than twenty fatalities.
Bank run
On February 17, 1855, a mail steamer docking in San Francisco delivered news of the collapse of Page & Bacon in New York, triggering widespread alarm. Newspapers attempted to minimize the impact by reporting that only a few acceptances had been protested and stressing that Page, Bacon & Co. operated independently, with all drafts honored in New York. Nevertheless, a bank run targeting Page, Bacon & Co. unfolded over three days, with approximately $600,000 in gold coin withdrawn on the initial day. To help quell the panic, twenty-five prominent local businessmen, among them Archibald Alexander Ritchie, were appointed.
William Tecumseh Sherman, managing the San Francisco branch of Lucas, Turner & Co., a bank headquartered in St. Louis, extended an offer of support on February 20 but was declined due to the pessimistic stance of Page & Bacon's leadership. Sherman suggested substituting cash for bullion and notes but declined involvement in their impending failure. The bank run persisted through February 21.
Collapse
Page, Bacon & Co. declared a temporary suspension of operations on February 22, 1855, citing a shortage of coin. In response, Judge Chambers issued an injunction mandating the bank's closure and appointed receivers to evaluate its assets and liabilities for creditor repayment purposes. Upon receiving this news via telegraph, the Sacramento branch was compelled to shut down.
That same day saw increased withdrawals at other financial institutions. The closure of Adams & Co. on February 23 intensified the crisis, leading to a widespread banking panic; all banks except Lucas, Turner & Co., including Wells Fargo & Co. and Palmer, Cook & Co., ceased operations. The Sacramento Daily Union characterized this as an unprecedented financial upheaval that halted commercial activity and generated deep anxiety among merchants and business leaders.
According to the Sacramento Daily Union, while Page, Bacon & Co.’s assets were believed to surpass its liabilities, the lack of available cash for immediate disbursements and uncertainty regarding loans made to Page & Bacon raised concerns about recoverability. Ultimately, Page, Bacon & Co., Adams & Co., along with several smaller firms, collapsed—inflicting severe losses on small depositors and contributing to roughly 200 business failures in San Francisco. This event led to a reorganization of California’s banking system and became locally known as Black Friday.