t would help the St。 Louis house； and at the same time pay expenses in California； with a reasonable profit。 Of course； Turner never designed to remain long in California； and I consented to go back to St。 Louis； confer with Mr。 Lucas and Captain Simonds； agree upon further details； and then return permanently。
I have no memoranda by me now by which to determine the fact； but think I returned to New York in July； 1853； by the Nicaragua route； and thence to St。 Louis by way of Lancaster； Ohio； where my family still was。 Mr。 Lucas promptly agreed to the terms proposed； and further consented； on the expiration of the lease of the Adams & Co。 office； to erect a new banking…house in San Francisco； to cost fifty thousand dollars。 I then returned to Lancaster； explained to Mr。 Ewing and Mrs。 Sherman all the details of our agreement； and； meeting their approval； I sent to the Adjutant…General of the army my letter of resignation； to take effect at the end of the six months' leave； and the resignation was accepted； to take effect September 6； 1853。 Being then a citizen； I engaged a passage out to California by the Nicaragua route； in the steamer leaving New York September 20th； for myself and family； and accordingly proceeded to New York； where I had a conference with Mr。 Meigs； cashier of the American Exchange Bank； and with Messrs。 Wadsworth & Sheldon； bankers； who were our New York correspondents； and on the 20th embarked for San Juan del Norte； with the family； composed of Mrs。 Sherman； Lizzie； then less than a year old； and her nurse； Mary Lynch。 Our passage down was uneventful； and； on the boats up the Nicaragua River； pretty much the same as before。 On reaching Virgin Bay； I engaged a native with three mules to carry us across to the Pacific； and as usual the trip partook of the ludicrous Mrs。 Sherman mounted on a donkey about as large as a Newfoundland dog； Mary Lynch on another； trying to carry Lizzie on a pillow before her； but her mule had a fashion of lying down； which scared her； till I exchanged mules； and my California spurs kept that mule on his legs。 I carried Lizzie some time till she was fast asleep； when I got our native man to carry her awhile。 The child woke up； and； finding herself in the hands of a dark…visaged man； she yelled most lustily till I got her away。 At the summit of the pass； there was a clear…running brook； where we rested an hour； and bathed Lizzie in its sweet waters。 We then continued to the end of our journey； and； without going to the tavern at San Juan del Sur； we passed directly to the vessel； then at anchor about two miles out。 To reach her we engaged a native boat； which had to be kept outside the surf。 Mrs。 Sherman was first taken in the arms of two stout natives； Mary Lynch； carrying Lizzie； was carried by two others； and I followed； mounted on the back of a strapping fellow； while fifty or a hundred others were running to and fro； cackling like geese。
Mary Lynch got scared at the surf； and began screaming like a fool； when Lizzie became convulsed with fear； and one of the natives rushed to her； caught her out of Mary's arms； and carried her swiftly to Mrs。 Sherman； who； by that time； was in the boat； but Lizzie had fainted with fear； and for a long time sobbed as though permanently injured。 For years she showed symptoms that made us believe she had never entirely recovered from the effects of the scare。 In due time we reached the steamer Sierra Nevada； and got a good state…room。 Our passage up the coast was pleasant enough； we reached San Francisco； on the 15th of October； and took quarters at an hotel on Stockton Street； near Broadway。
Major Turner remained till some time in November； when he also departed for the East； leaving me and Nisbet to manage the bank。 I endeavored to make myself familiar with the business； but of course Nisbet kept the books； and gave his personal attention to the loans； discounts； and drafts； which yielded the profits。 I soon saw； however； that the three per cent。 charged as premium on bills of exchange was not all profit； but out of this had to come one and a fourth to one and a half for freight； one and a third for insurance； with some indefinite promise of a return premium； then； the； cost of blanks； boxing of the bullion； etc。； etc。 Indeed； I saw no margin for profit at all。 Nisbet； however； who had long been familiar with the business； insisted there was a profit； in the fact that the gold…dust or bullion shipped was more valuable than its cost to us。 We； of course； had to remit bullion to meet our bills on New York； and bought crude gold…dust； or bars refined by Kellogg & Humbert or E。 Justh & Co。； for at that time the United States Mint was not in operation。 But； as the reports of our shipments came back from New York； I discovered that I was right； and Nisbet was wrong； and； although we could not help selling our checks on New York and St。 Louis at the same price as other bankers； I discovered that； at all events； the exchange business in San Francisco was rather a losing business than profitable。 The same as to loans。 We could loan； at three per cent。 a month； all our own money； say two hundred and fifty thousand dollars； and a part of our deposit account。 This latter account in California was decidedly uncertain。 The balance due depositors would run down to a mere nominal sum on steamer…days； which were the 1st and 15th of each month； and then would increase till the next steamer…day； so that we could not make use of any reasonable part of this balance for loans beyond the next steamer…day； or； in other words； we had an expensive bank； with expensive clerks； and all the machinery for taking care of other people's money for their benefit； without corresponding profit。 I also saw that loans were attended with risk commensurate with the rate； nevertheless； I could not attempt to reform the rules and customs established by others before me； and had to drift along with the rest toward that Niagara that none foresaw at the time。
Shortly after arriving out in 1853； we looked around for a site for the new bank； and the only place then available on Montgomery Street； the Wall Street of San Francisco； was a lot at the corner of Jackson Street； facing Montgomery； with an alley on the north； belonging to James Lick。 The ground was sixty by sixty…two feet； and I had to pay for it thirty…two thousand dollars。 I then made a contract with the builders； Keyser； & Brown； to erect a three…story brick building； with finished basement； for about fifty thousand dollars。 This made eighty…two thousand instead of fifty thousand dollars； but I thought Mr。 Lucas could stand it and would approve； which he did； though it resulted in loss to him。 After the civil war； he told me he had sold the building for forty thousand dollars； about half its cost； but luckily gold was then at 250； so that he could use the forty thousand dollars gold as the equivalent of one hundred thousand dollars currency。 The building was erected； I gave it my personal supervision； and it was strongly and thoroughly built； for I saw it two years ago； when several earthquakes had made no impression on it； still； the choice of site was unfortunate； for the city drifted in the opposite direction； viz。； toward Market Street。 I then thought that all the heavy business would remain toward the foot of Broadway and Jackson Street； because there were the deepest water and best wharves； but in this I made a mistake。 Nevertheless； in the spring of 1854； the new bank was finished； and we removed to it； paying rents thereafter to our Mr。 Lucas instead of to Adams & Co。 A man named Wright； during the same season； built a still finer building just across the street from us； Pioche； Bayerque & Co。 were already established on another corner of Jackson Street； and the new Metropolitan Theatre was in progress diagonally opposite us。 During the whole of 1854 our business steadily grew； our average deposits going up to half a million； and our sales of exchange and consequent shipment of bullion averaging two hundred thousand dollars per steamer。 I signed all bills of exchange； and insisted on Nisbet consulting me on loans and discounts。 Spite of every caution； however； we lost occasionally by bad loans； and worse by the steady depreciation of real estate。 The city of San Fran cisco was then extending her streets； sewering them； and planking them； with three…inch lumber。 In payment for the lumber and the work of contractors； the city authorities paid scrip in even sums of one hundred； five hundred； one thousand； and five thousand dollars。 These formed a favorite collateral for loans at from fifty to sixty cents on the dollar； and no one doubted their ultimate value； either by redemption or by being converted into city bonds。 The notes also of H。 Meiggs； Neeley Thompson & Co。； etc。； lumber… dealers； were favorite notes； for they paid their interest promptly； and lodged large margins of these street…improvement warrants as collateral。 At that time； Meiggs was a prominent man； lived in style in a large house on Broadway； was a member of the City Council； and owned large saw…mills up the coast about Mendocino。 In him Nisbet had unbounded faith； but； for some reason； I feared or mistrusted h