condition that caused all contractors and supply merchants to charge two
or three hundred per cent over the normal prices for their work and
commodities in order to keep even. And this practice, completing the
vicious circle, increased the debt. An attempt was made to fund the city
debt by handing in the scrip in exchange for a ten per cent obligation.
This method gave promise of success; but a number of holders of scrip
refused to surrender it, and brought suit to enforce payment. One of
these, a physician named Peter Smith, was owed a considerable sum for
the care of indigent sick. He obtained a judgment against the city,
levied on some of its property, and proceeded to sell. The city
commissioners warned the public that titles under the Smith claim were
not legal, and proceeded to sell the property on their own account. The
speculators bought claims under Peter Smith amounting to over two
millions of dollars at merely nominal rates. For example, one parcel of
city lots sold at less than ten cents per lot. The prices were so absurd
that these sales were treated as a joke. The joke came in on the other
side, however, when the officials proceeded to ratify these sales. The
public then woke up to the fact that it had been fleeced. Enormous
prices were paid for unsuitable property, ostensibly for the uses of the
city. After the money had passed, these properties were often declared
unsuitable and resold at reduced prices to people already determined
upon by the ring.

Nevertheless commercially things went well for a time. The needs of
hundreds of thousands of newcomers, in a country where the manufactures
were practically nothing, were enormous. It is related that at first
laundry was sent as far as the Hawaiian Islands. Every single commodity
of civilized life, such as we understand it, had to be imported. As
there was then no remote semblance of combination, either in restraint
of or in encouragement of trade, it followed that the market must