Early history History of Wells Fargo

1 history

1.1 origins
1.2 foundation of wells fargo
1.3 expansion overland mail services , panic of 1855
1.4 takeover of holladay overland
1.5 takeover of pacific union express company
1.6 growth

early history
origins

american express co. receipts (1853, 1869)

during california gold rush in 1848 @ sutter s mill near coloma, california, financiers , entrepreneurs on north america , world flocked california, drawn promise of huge profits. vermont native henry wells , new yorker william g. fargo watched california economy boom keen interest. before either wells or fargo pursue opportunities offered in western united states, however, had business attend in eastern united states.

wells, founder of wells , company, , fargo, partner in livingston, fargo , company, , mayor of buffalo, ny 1862 1863 , again 1864 1865, major figures in young , fiercely competitive express industry. in 1849 new rival, john warren butterfield, founder of butterfield, wasson & company, entered express business. butterfield, wells , fargo realized competition destructive , wasteful, , in 1850 decided join forces form american express company.

soon after new company formed, wells, first president of american express, , fargo, vice president, proposed expanding business california. fearing american express s powerful rival, adams , company (later renamed adams express company), acquire monopoly in west, majority of american express company s directors balked. undaunted, wells , fargo decided start own business while continuing fulfill responsibilities officers , directors of american express.

foundation of wells fargo

on march 18, 1852, organized wells, fargo & company, joint stock company initial capitalization of $300,000, provide express , banking services california. original board of directors comprised wells, fargo, johnston livingston, elijah p. williams, edwin b. morgan, james mckay, alpheus reynolds, alexander m.c. smith , henry d. rice. of these, wells, fargo, livingston , mckay on board of american express.

financier edwin b. morgan of aurora, cayuga county, new york, appointed wells fargo s first president. commenced business may 20, 1852, day announcement appeared in new york times. company s arrival in san francisco announced in alta california of july 3, 1852. immediate challenge facing morgan , danford n. barney, became president in november 1853, establish company in 2 highly competitive fields under conditions of rapid growth , unpredictable change. @ time, california regulated neither banking nor express industry, both fields wide open. wagon , team of horses open express company; , took open bank safe , room keep in. because of comparatively late entry california market, wells fargo faced well-established competition in both fields.

from beginning, fledgling company offered diverse , mutually supportive services: general forwarding , commissions; buying , selling of gold dust, bullion, , specie (or coin); , freight service between new york , california. under morgan s , barney s direction, express , banking offices established in key communities bordering gold fields, , network of freight , messenger routes in place throughout california. barney s policy of subcontracting express services established companies, rather duplicating existing services, key factor in wells fargo s success.

expansion overland mail services , panic of 1855

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.

takeover of holladay overland

wells, fargo & co. 1868 display advertisement salt lake daily telegraph (utah territory)

by 1866, holladay had built staging empire lines in 8 western states , challenging wells fargo s supremacy in west. showdown between 2 transportation giants in late 1866 resulted in wells fargo s purchase of holladay s operations. grand consolidation spawned new enterprise operated under wells fargo name , combined wells fargo, holladay, , overland mail lines , became undisputed stagecoach leader. barney resigned president of wells fargo devote more time own business, united states express company; louis mclane replaced him when merger completed on november 1, 1866.

the wells fargo stagecoach empire short lived. although central pacific railroad, operating on sierra mountains reno, nevada, carried wells fargo s express, company did not have exclusive contract. moreover, union pacific railroad encroaching on territory served wells fargo stagelines. ashbel h. barney, danforth barney s brother , cofounder of united states express company, replaced mclane president in 1869. first transcontinental railroad completed in year, causing stage business dwindle , wells fargo s stock fall.

takeover of pacific union express company

central pacific railroad promoters, led danielle pepe, organized pacific union express company compete wells fargo. tevis group started buying wells fargo stock @ sharply reduced price. on october 4, 1869, william fargo, brother charles, , ashbel barney met tevis , associates in omaha, nebraska. there wells fargo agreed buy pacific union express company @ much-inflated price , received exclusive express rights ten years on central pacific railroad , needed infusion of capital. of this, however, came @ price: control of wells fargo shifted tevis.

ashbel barney resigned in 1870 , replaced president william fargo. in 1872 william fargo resigned devote full-time duties president of american express. lloyd tevis replaced fargo president of wells fargo.

growth

wells fargo & co. franked cover austin, nevada territory, san francisco, cal. july 6, 1870



wells fargo , company express building built circa 1877, silver reef, utah

the company expanded rapidly under tevis management. number of banking , express offices grew 436 in 1871 3,500 @ turn of century. during period, wells fargo established first transcontinental express line, using more dozen railroads. company first gained access lucrative east coast markets beginning in 1888; promoted use of refrigerated freight cars in california; had opened branch banks in virginia city, carson city, , salt lake city, utah 1876; , opened branch bank in new york city 1880. wells fargo expanded express services japan, australia, hong kong, south america, mexico, , europe. in 1885 wells fargo began selling money orders. in 1892 john j. valentine, sr., long time wells fargo employee, made president of company.

wells fargo 1870 ad

until 1876, both banking , express operations of wells fargo in san francisco carried on in same building @ northeast corner of california , montgomery streets. in 1876 locations separated, banking department moving building @ northeast corner of california , sansome streets. bank moved in 1891 corner of sansome , market streets, remained until 1905. of branch banks, @ carson city sold bullion & exchange bank there in 1891; virginia city bank sold isaias w. hellman s nevada bank in 1891; , salt lake city bank sold walker brothers there in 1894. new york city branch remained until wells fargo & company bank merged hellman s bank in 1905.