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