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The author, W.J. Bartnett of San Francisco, was chief consul for the Western Pacific Railroad. At the time, the railroads controlled California politics, and San Francisco was the most important city in the state. So, Mr. Barnett's “suggestions” in the form of this letter to Mayor Schmitz were more in the nature of political instructions.

Bartnett was later indicted by the Grand Jury for his involvement in the collapse of the California Safe Deposit Bank of San Francisco.

Much of what Mr. Bartnett suggested was done, including the bank holiday, authorization of new bonds, cheap rail fares for the importation of skilled artisans, and the drive to raise capital in the East for reconstruction.

The single most important reason for minimizing the effects of the earthquake, and to highlight the fire, was to keep from destabilizing Eastern money markets.


April 29, 1906

HON. EUGENE E. SCHMITZ,
Mayor of San Francisco.

Sir: — I take the liberty of offering the following suggestions for the consideration of yourself and the committee [on reconstruction].


I.

As soon as the immediate work of relief is well in hand, the next step will be to consider the reconstruction of San Francisco. To accomplish this, money in large sums will be required. To supply this money the banks must be rehabilitated as rapidly as possible.

The national banking law authorizes the Secretary of the Treasury to deposit money in the national banks. In times of financial stringency the Secretary of the Treasury has deposited money in the national banks in sections of the country requiring financial aid, in accordance with provisions of the national banking law. Applications can be made to Secretary [of the Treasury] Shaw for aid under the provisions of this law. A better suggestion would be to appeal for aid to Congress. Congress could pass a law authorizing the deposit of moneys, under certain limitations in California banks; Congress could legalize the acceptance of securities other than United States Government bonds. A few days ago the Secretary of the Treasury accepted such securities from the banks of New York, against the deposit of gold by the Treasury Department pending the trans- shipment of gold from Europe to America.

In this way the Secretary of the Treasury was enabled to relieve the financial situation in New York materially. Possibly with Congressional aid the Secretary of the Treasury would be willing to extend the same relief to the San Francisco banks.


II.

San Francisco has approximately $14,000,000 of bonds authorized for municipal improvements, unsold. California should appeal to Eastern financiers to purchase these securities immediately. Changes should be made in our laws to permit the deposit of the proceeds of the sale of these bonds in the banks of San Francisco or in the California banks. This would materially assist in the re-establishment of the credit of our banking institutions. It would mean new money for California. Under the laws of the State of Washington, Seattle today deposits its city funds in the State banks. Our laws should be changed to permit the deposit of the city funds in the state banks. The city will need the proceeds of these bond sales to make the improvements originally contemplated.


III.

The city will require additional sums of money for further municipal improvements. Another issue of bonds, from twenty-five million dollars to fifty million dollars should be authorized. The proceeds of these sales should be deposited in the State banks.



IV.

The harbor should be improved contemporaneously and consistently with the reconstruction of the greater San Francisco. To accomplish this the State should authorize and sell $25,000,000 of bonds and devote the proceeds thereof exclusively to harbor work.


V.

The insurance companies will repay the losses covered by insurance. Payments should be made of those losses as rapidly as possible. A large portion of this money will be payable to the savings banks, the savings banks having mortgages on the properties. The savings banks should enforce the provisions of the contracts of depositors and make no payments to depositors except upon notice.

If the savings banks would deposit their funds, or a portion of them in the commercial banks and trust companies, it would greatly assist in re-establishing the commercial banks and would result in a material expansion of our banking credits.


VI.

Every mercantile concern, every individual, every banking institution, every corporation that can secure money from without the State of California, whether they require it or not, should be encouraged to obtain this money and deposit the same in the banks of San Francisco. With this end in view we are of the opinion that it would be patriotic and wise for the people of California having railroad securities and securities of other companies located without the State of California to sell the same with the view of utilizing the proceeds as far as possible in local investments, and to aid in the reconstruction of our city.


VII.

In rebuilding San Francisco the suggestions that have been made in the Burnham report [for the beautification and adornment of San Francisco] and in the movement that has been inaugurated for the improvement of the harbor should be carefully considered. An effort should be made in laying out the city to avoid some of the defects that have heretofore existed. Perhaps the following suggestions are worthy of consideration in determining how this may be done most effectively.

  • — The municipal government, the banking and other corporations that are of a quasi-public nature will necessarily have to be located. If this is not done soon, many of our mercantile institutions will locate in other cities. With this end in view all standing buildings should be immediately examined by architects, and those that are fit for service should be appropriated for the use that may seem most wise.

  • — Temporary structures should be immediately erected in Union square, Portsmouth square and other public areas as temporary headquarters for architects, transportation companies, insurance companies, lawyers, and for other necessary purposes.

  • — Engineers, contractors and draughtsmen should be secured from other cities of the United States so that there may be the least possible delay in framing the plans for the city. Committees should be appointed to secure immediately all lumber, brick cement, glass and other materials required.

  • — No lumber or other building material should be shipped without the State of California [that] can be used to advantage in the construction of the new city.

  • — Immediate steps should be taken to procure all unemployed carpenters, brick mason and builders that can be obtained from the various cities in the United States. The railroads should be invited to assist in furnishing transportation for labor of this nature and also for materials that will be needed. Speculating in material or supplies should be discouraged. Our banks should be opened for business at the earliest possible date. Mr. Rufus P. Jennings has made the suggestion that all the banks establish temporary quarters in the Fairmount Hotel, pending the construction of their permanent quarters. The banks may begin as they did in Baltimore after the recent fire by receiving deposits and transacting such business as they may think proper, without being under the legal necessity of paying checks and drafts. This can be done by the Governor declaring a legal holiday for thirty days as has been suggested by the bankers.

  • — A special session of the Legislature is undoubtedly necessary. Care should be taken that the proclamation may be sufficiently broad to comprehend all subjects that should be considered.

    Lastly, and most important, the entire state of California should work collectively and not individually. The banks of Los Angeles, Oakland, Sacramento, Stockton and all of our interior towns should be invited to assist in the work of rebuilding San Francisco.

    Your Honor has so energetically and wisely directed the relief work done to date that it seems to the public fitting that all the work of construction of the New San Francisco should be done in accordance with the plans formulated under your personal direction.

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