Leland Stanford – The Intelligent Collector Magazine

Late ’60s marked a dangerous era of tensions over Vietnam, Civil Rights

Posters by Walt Kelly with the popular slogan “We have met the enemy and he is us” (1970) occasionally appear at auction.

By Jim O’Neal

In 1968, we were living in San Jose when national politics got complicated after President Lyndon Johnson made a speech that concluded, “Accordingly, I shall not seek and will not accept the nomination of my party for another term as your president.”

The date was March 31 and less than a week later, on April 4, Martin Luther King Jr. was assassinated in Memphis. The assassin, James Earl Ray, was on the loose and believed to have fled the country. Later, he would be apprehended at London’s Heathrow Airport and extradited to face first-degree murder charges. He pled guilty in return for a 99-year sentence and died in 1998 while still in prison.

The year had started off with an upset on Jan. 20 when the University of Houston, led by Elvin Hayes, defeated top-ranked UCLA, 71-69, in the Astrodome before 52,693 fans. It had been billed as the “Game of the Century” and was the first NCAA basketball game to be nationally televised in prime time, ultimately leading to “March Madness.” Although UCLA would go on to thrash Houston in the semi-finals (101-69) and defeat North Carolina in the championship game, the loss to Houston snapped a 47-game winning streak. Coach John Wooden simply commented, “I guess we’ll just have to start over.” From 1971 to 1974, UCLA won another 88 straight games.

Ten days after the UCLA upset, on Jan. 30, 1968, about 80,000 enemy troops launched a surprise attack on over 100 cities and towns in South Vietnam. It was the single most lethal day in terms of killed or mortally wounded U.S. military troops. Although the war would grind on for another six years, the “Tet Offensive” would turn out to be the beginning of the end, since it put the war into 50 million Americans’ living rooms every night on all three TV networks, which dutifully announced all the Viet Cong that had been killed. Even then, I never understood the logic on keeping track of enemy KIA and territory gained in the vain hope it would somehow boost public support (especially since it was the same territory we had won six weeks previously). It seemed analogous to fighting the Battle of Gettysburg (once a week) and then reporting on whether the North or South had won.

After the April murder of MLK, a wave of shock and distress spread across the nation, with riots and burning in more than 100 cities. Then two months later, disaster struck again when Bobby Kennedy was killed on June 5 at the Ambassador Hotel in Los Angeles. Tensions over Vietnam and Civil Rights were at a dangerous level and America’s leadership was being questioned. Walt Kelly’s frequently quoted Pogo line from that era – “We have met the enemy and he is us” – captured the mood of the country.

In August, we had dinner at the five-star Stanford Court Hotel on California Street on Nob Hill. Our host told us an amusing story about their last visit to the restaurant. Without mentioning any names, he explained that during dinner, the wife of his client had slipped a plate from the table into her handbag. Nothing was said, but when the check came, there was one line listed: “One dinner plate $75.” In a perverse way, it eased my concern that discretion and gentility were being eroded during all the domestic chaos.

Later I would learn that the hotel had been built on the same site that Leland Stanford (1824-1893) had built his magnificent mansion, which was legendary for its luxury and art collection. Finished in 1876 for the astonishing cost of $2 million, it was perched on two superb acres surrounded by a grand wall of basalt and granite. The Stanford manse was among the most elegant in the nation, but had been destroyed by fire in the 1906 earthquake.

Leland Stanford was one of the Big Four responsible for building the Central Pacific railroad that started in Sacramento and met the Union Pacific at Promontory Point, Utah, in 1869. This was the joining of the first Transcontinental Railroad that completed an “iron belt” around the country. Leland Stanford and his wife Janie are responsible for creating Stanford University in honor of a son that died. Leland and his cronies – Mark Hopkins, Charles Crocker and Collis Huntington – were well known in 19th century history as “Robber Barons” and Stanford’s correspondence leaves no doubt that he used every trick in the book to cheat his partners, investors, the government and employees.

I suspect he never thought about stealing the silverware or china from restaurants.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Frenetic Times Created Old West Scandals, Hoaxes

A carte-de-visite depicting people gathered at Promontory Point, Utah, for the official ceremony completing the Transcontinental Railroad, sold for $1,750 at a May 2015 auction.

By Jim O’Neal

Undoubtedly, the greatest achievement in America during the 19th century was the completion of the Transcontinental Railroad in 1869. Virtually everyone knows at least part of the story when the two railroad lines were joined on May 10 and Central Pacific President Leland Stanford drove the 14-ounce “Last Spike” (later the Golden Spike) at Promontory Point in Utah. But fewer are aware the spike was dated May 8 – bad weather caused a two-day delay – or that he whiffed and missed it. Still, the telegraph operator sent the message “Done” to both East and West Coasts in the first mass media event in history.

This was a long-overdue project that had been mired in slavery politics when Congress was unable to reach agreement on how to maintain the status quo on new states ready to join the Union. The exception was the Republic of Texas, which was added as the 28th state on Dec. 29, 1845, the same day the annexation took place, bypassing the traditional territorial phase. It also included two unique provisions: Up to four additional states could be created within the territory and Texas did not have to cede its public lands to the federal government.

However, the growth of railroads in the existing states had been astonishing. Starting from a modest base of 762 miles in 1834, 10 years later it had grown to 4,311 track miles and by Jan. 1, 1864, to a staggering 33,860! In the 1850s, an average of 2,160 miles of new track were added every year, more than the rest of the world combined. Horace Greeley, founder of the New-York Tribune, put it in perspective after an overland trip from NYC to SFO. He wrote that a railroad to the Pacific would add more growth and wealth to the nation than acquiring a dozen Cubas!

Eventually, the discovery of gold in California and the rapid growth in population combined to create a booming economy that helped balance West-to-East traffic and improve two-way profitability. It was during the frenetic times after the railroad was completed that two men walked into the Bank of California in downtown San Francisco in early 1872 carrying a canvas bag they wanted to store in the bank’s vault. They claimed to be prospectors and the cashier demanded to inspect the contents.

He found hundreds of diamonds, emeralds, rubies and sapphires of unimaginable value. Bank President William Ralston, who had made a personal fortune mining Nevada’s Comstock Lode, was able to get them to identify themselves and get their version of this remarkable story. Thus began the saga of Philip Arnold and John Slack, who purported to be miners from Kentucky who had stumbled onto a hill where precious stones were protruding and abundantly scattered around the site. Ralston quickly formed a magnificently named company, the San Francisco and New York Mining and Commercial Company, and persuaded blue-chip investors to chip in $80,000 each for a total capitalization of $2 million.

When word got out, it created a diamond frenzy and even the great jeweler Charles Tiffany jumped in after the two men agreed to show two blindfolded diamond experts the site and they brought back another bag filled with diamonds and verified the area was saturated with precious stones. The two nervous prospectors agreed to sell their share for $300,000 each and a percentage of future profits. Naturally, it was an extremely clever scam that involved them “salting” the mine and concocting the elaborate hoax details.

Then, on Sept. 4, 1872, in the middle of the presidential election, headlines in The New York Sun were screaming THE KING OF FRAUDS… COLOSSAL BRIBERY… HOW SOME MEN GET FORTUNES. But they were talking about the biggest scandal of the 19th century: the Crédit Mobilier scam, which involved railroads, bogus companies, worthless bonds and bribes using stocks involving congressmen and even U.S. Vice President Schuyler Colfax.

It was that kind of year.

People Flocked to California in Hopes of Finding Instant Riches

A daguerreotype of a California gold-mining scene by Robert Vance, circa 1850, sold for $83,650 at a May 2011 auction.

By Jim O’Neal

When Brigham Young heard that fellow Mormon Sam Brannan had been tithing the gold miners at the Mormon Diggings in California, he sent an envoy to demand the church’s money. In a version of the story circulated by sawmill operator John Sutter, Brannan replied, “You go back and tell Brigham Young that I’ll give up the Lord’s money when he sends me a receipt signed by the Lord!”

Brannan’s success transcended his dealings with local miners. As the rush to the mines accelerated, his Sacramento store did huge business, as much as $5,000 a day. With the proceeds, the wily entrepreneur opened additional stores throughout gold territory and constructed hotels, warehouses and other commercial buildings. In San Francisco, he organized a consortium that built the city’s first large wharf at a cost of $200,000. By quickly repaying all owner-investors, Brannan’s reputation and wealth continued to grow.

Sam Brannan is widely recognized as the first authentic millionaire in California.

When gold was discovered on the American River above Sutter’s Fort in January 1848, California was a sparsely populated frontier. The gold had been formed over a 200-million-year period with the constant recycling of the earth’s crust as minerals precipitated out in streaks or veins. Gold occurs in the crust of the earth at an average concentration of 5 parts per billion. But, the melting and cooling that produced the Sierra Batholith yielded veins of gold-bearing quartz as high as 100 parts per billion.

Most of this gold was trapped far below the surface of the earth, where it remained for tens of millions of years until the crust crumbled and the glaciers took over. The heat of the earth – which had driven the crystal plates to their collisions with the western edge of North America – then melted the rock and boiled out the precious metal. All that remained was for humans to harvest what the earth had collected. And they did so with enormous zeal.

The astonishing news of “Gold! In California!” prompted hundreds of thousands of people from around the world to flock to California in hopes of finding instant riches. They sailed from Australia and China, from Europe and South America. They ventured across the disease-plagued Isthmus of Panama and through the treacherous waters of Cape Horn. And they traveled by foot, wagon and horseback and over the towering Sierras. They abandoned wives and families, homesteads and farms.

Sacramento and San Francisco popped up overnight as did scores of mining camps. Entrepreneurs such as Leland Stanford, Sam Brannan and merchants like Levi Strauss amassed fortunes simply by supplying miners with picks and shovel, tents, food and other items needed to harvest the gold. By 1850, California had become a state … marking the fastest journey to statehood in United States history.

Sam Brannan hit a bad streak when a divorce forced him to liquidate his entire holdings to pay a court-ordered 50/50 division of assets … in cash. He died penniless and establishing a precedent that would plague future husbands who were divorced in California.