Expansion into Overland Mail services and the Panic of 1855 History of Wells Fargo

wells fargo u.s. mail service



wells fargo & co. express building circa 1860, stockton, ca



wells fargo & co. $2 stamp , 10 cent stamped envelope, carried pony express rider san francisco, ca, new york, ny, in twelve days during june 1861

in 1855, wells fargo faced first crisis when california banking system collapsed result of unsound speculation. bank run on page, bacon & company, san francisco bank, began when collapse of st. louis, missouri parent made public. run spread other major financial institutions of which, including wells fargo, forced close doors. following tuesday, wells fargo reopened in sound condition, despite loss of one-third of net worth. wells fargo 1 of few financial , express companies survive panic, partly because kept sufficient assets on hand meet customers demands rather transferring assets new york.

surviving panic of 1855 gave wells fargo 2 advantages. first, faced virtually no competition in banking , express business in california after crisis; second, wells fargo attained reputation dependability , soundness. 1855 through 1866, wells fargo expanded rapidly, becoming west s all-purpose business, communications, , transportation agent. under barney s direction, company developed own stagecoach business, helped start , took on butterfield overland mail, , participated in pony express. period culminated grand consolidation of 1866, when wells fargo consolidated ownership , operation of entire overland mail route missouri river pacific ocean , many stagecoach lines in western states.

in days, wells fargo participated in staging business support banking , express businesses. character of wells fargo s participation changed when helped start overland mail company. overland mail organized in 1857 men substantial interests in 4 of leading express companies—american express, united states express, adams express company, , wells fargo. john butterfield, third founder of american express, made overland mail s president. in 1858 overland mail awarded government contract carry united states postal service mail on southern overland route memphis , st. louis california. beginning, wells fargo overland mail s banker , primary lender.

in 1859, there crisis when congress failed pass annual post office appropriation bill, thereby leaving post office no way pay overland mail company s services. overland mail s indebtedness wells fargo climbed, wells fargo became increasingly disenchanted butterfield s management strategy. in march 1860, wells fargo threatened foreclosure. compromise, butterfield resigned president of overland mail, , control of company passed wells fargo. wells fargo, however, did not acquire ownership of company until consolidation of 1866.

wells fargo s involvement in overland mail led participation in pony express in last 6 of express s 18 months of existence. russell, majors , waddell launched privately owned , operated pony express. end of 1860, pony express in deep financial trouble; fees did not cover costs and, without government subsidies , lucrative mail contracts, not make difference. after overland mail, controlled wells fargo, awarded $1 million government contract in 1861 provide daily mail service on central route (the american civil war had forced discontinuation of southern line), wells fargo took on western portion of pony express route salt lake city, utah san francisco. russell, majors & waddell continued operate eastern leg salt lake city st. joseph, missouri, under subcontract.

the pony express ended when first transcontinental telegraph lines completed in late 1861. overland mail , express services continued, however, coordinated efforts of several companies. 1862 1865, wells fargo operated private express line between san francisco , virginia city, nevada; overland mail stagecoaches covered central nevada route carson city, nevada, salt lake city; , ben holladay, had acquired business of russell, majors & waddell, ran stagecoach line salt lake city missouri.