But now, at the very sources, the full flood of the somewhat turbid tide of prosperity was beginning to fail. The ebb had not yet reached the civic consciousness. It would have required a philosopher, and a detached philosopher at that, to have connected cause and effect, to have forecast the inevitable trend of events. If there were any philosophers they were not detached! Nobody had discovered the simple truth that extravagance, graft, waste, cost money; and that the money must come from somewhere. Realization on its property and taxes were the twin sources of the city's revenues. The property was now about all sold or swindled away. Remained the taxes. And it is a self-evident truth that people will pay high taxes cheerfully only so long as they themselves are making plenty of money easily.

Up to this period such had been the case. Prices had been high, wages had been high, opportunities had been many. Enormous profits had been the rule. Everybody had invariably made money. These conditions upset the mental balance of the shipping merchants back East. A madness seemed to obsess them for sending goods to California. The mere rumour of a want or a lack was answered by immense shipments of that particular commodity. The first cargo to arrive supplied the want; all the rest simply broke the market. It was a gamble as to who should get there first. The immediate and picturesque consequence was a fleet of beautiful clipper ships, built like racing yachts, with long clean lines and snowy sails. They made extraordinarily fast voyages, and they promptly condemned to death the old- fashioned, slow freight carriers. Indeed, four-hundred odd of these actually rotted at anchor in the bay; it had not paid to move them! Some of these clippers gained vast reputations: the _Flying Cloud_, the _White Squall_, the _Typhoon_, the _Trade Wind_. The markets were continually in a state of glut with goods sold at auction. This condition tightened the money market, which in turn reacted on other branches of industry. Again, the great fires of '49-'53 resulted in the erection of too many fireproof buildings. Storage was needed, and rentals were high, so everybody plunged on storehouses. By '54 many hundreds of them stood vacant, representing loss. At that period the first abundance of the placers began to fall off.

Agriculture was beginning to be undertaken seriously; and while this would be an ultimate source of wealth, its immediate effect was to diminish the demand for imported foodstuffs--another blow to a purely mercantile city.

All this made for excitement, some immediate gain, but a sure ultimate loss. Markets fluctuated wildly. A ship in sight threw operators into a fever. No one knew what she might be carrying, or how she would, affect prices. It was, therefore, positively unsafe to keep-many goods is stock. Quick, immediate sales were the rule. And failures were many.

Now in these middle fifties the pinch was beginning at last to itself felt. Everybody was a little vague about it all, and nobody had gone so far as to formulate his dissatisfactions or his remedies. The tangible result was the formation of two as yet inchoate elements, representing the extremes of ideas and of intere............