WELLS, FARGO AND COMPANY

WELLS, FARGO AND COMPANY. The founders of the American Express Company, Henry Wells, William G. Fargo, and associates, organized Wells, Fargo and Company in 1852 to function as a western ally of American Express. The two companies divided the continent approximately at the Mississippi and Missouri rivers. Wells, Fargo and Company installed ocean service between New York and San Francisco via Panama, erected a fine office building in San Francisco, and began to operate not only in the gold region of California but over the entire Pacific coast. In less than ten years, it had eliminated or acquired nearly all competitors and dominated the Far West. In remote mining camps where the mails had not yet penetrated, it was the chief letter carrier; even after the mails came, many preferred it as more dependable. The company spread rapidly through the entire Rocky Mountain region and carried far greater amounts of gold, silver, and bullion than any other agency. In 1861, after the famous Pony Express failed, Wells, Fargo acquired it and extended its operations to western Canada, Alaska, Mexico, the West Indies, Central America, and Hawaii, and for a short time even carried letters to China and Japan. Later, it pushed its service eastward to the Atlantic coast. Along with all the other expresses, Wells, Fargo and Company merged with the American Railway Express Company in 1918, but continued to function for more than thirty years as a separate corporation on fourteen thousand miles of railway in Mexico and Cuba. As a subsidiary of American Express, Wells, Fargo became an armored-car service.

BIBLIOGRAPHY

Beebe, Lucius, and Charles Clegg. U.S. West: The Saga of Wells Fargo. New York: E. P. Dutton, 1949.

Hungerford, Edward. Wells Fargo: Advancing the American Frontier. New York: Random House, 1949.

Alvin F.Harlow/c. w.

See alsoGold Rush, California ; Mail, Overland, and Stagecoaches ; Pack Trains ; Panama Canal ; Pony Express .

WELLS, FARGO AND COMPANY

On the morning of January 24, 1848, a construction foreman working for California land baron John Sutter, discovered something shining in the bottom of a ditch. Though Sutter attempted to keep this discovery secret, word soon spread across the country that gold had been found in California. To meet the needs of the every increasing number of Gold Rush pioneers, Henry Wells, William G. Fargo, and other investors formed Wells, Fargo and Company. Initially the company provided three services: banking, expressing (high-speed delivery services), and mail delivery. Five years later, Wells, Fargo and Company added overland stagecoach services. From these humble, yet inspired, beginnings rose a financial giant.

Wells Fargo opened for business in San Francisco on July 13, 1852. The company's banking department, run by banker Reuben W. Washburn, purchased gold from transitory miners, paying for it with standard-issue gold coins and bills of exchange that could be shipped back east. The company provided extensive communications and shipping services as well. To support these new services offices were built in Sacramento and Placer County to express the gold. Wells Fargo also contracted small banking and express firms to service other areas.

In 1855 a bank crisis felled two of California's largest banking houses causing a financial crisis from which Wells Fargo emerged as the primary bank and express company in the California region. The company continued to expand and it soon had over sixty agencies on the West Coast. The 1860s confirmed the dynamic nature of Wells Fargo. The California economy had expanded to include not only placer mining (which extracts material from deposits by hand, dredging, or with hydraulic nozzles) but also agriculture, manufacturing, and hard rock mining; industries of this type required long-term investment. Wells Fargo survived this economic shift while their express and communications services expanded. In 1861 Wells Fargo's growing express service would take over the famed Pony Express, and in 1864 the company provided the first electronic transaction by telegraph.

In 1866 Wells Fargo purchased the Overland Mail and Express Company. This strategic move placed Wells Fargo in control of essentially all express services west of the Mississippi River. However, in 1869 the new transcontinental railroad effectively brought an end to Wells Fargo's stagecoach empire. However, the "iron horse" became a great asset to the company, because it allowed for faster express delivery. Utilizing this faster mode of transportation as well as the new, expanded economy, Wells Fargo began to market agricultural products nationally. The company became the first express company to provide ocean-to-ocean delivery service. Thanks to this service, the earnings of Wells, Fargo, and Company topped one million dollars annually from 1890 to 1892.

Even the economic panic of 1893 could not damage Wells Fargo's financial earnings. By 1899 company earnings were once again over one million dollars. Earnings increased to almost five million dollars by 1909, with profitability soaring to $27 million in that same year. Soon afterward express business for the company decreased because of railroad disruptions, competition from the U.S. Postal Service, and regulation brought about by the Interstate Commerce Commission. However, by July 1, 1918, Wells Fargo employed 35,000 people in 10,000 domestic offices. This considerable workforce was merged with the American Railway Express during World War I (1914-1918). The express division of Wells Fargo became a subsidiary of American Express, providing secured transportation of funds via armored cars.

The company's banking business merged with the Nevada National Bank in 1905. This move proved to be wise, as Wells Fargo maintained a strong banking presence throughout the Great Depression (1929-1939) and into the 1940s. The company continued to grow. This growth can be partially attributed to the dramatic increase in the population of California after World War II (1939-1945). However, it is easier to understand the company's expansion by taking a brief look at the many strategic mergers and purchases made by Wells Fargo from 1960s to the late 1990s. In 1960 it merged with the American Trust Company. In 1986 Wells Fargo's purchased Crocker National Corporation and Crocker Bank, increasing the company's assets by $19.2 billion. Other acquisitions in the 1980s included the personal trust business of the Bank of America (1987) and Barclays Bank of California (1988). A cooperative agreement with The Hong Kong and Shanghai Banking Corporation Limited in 1989 led to the establishment of the Wells Fargo HSBC Trade Bank.

Wells Fargo continued to grow ever larger and stronger throughout the 1990s. In 1990 alone the company acquired four California-based organizations: Valley National Bank, Central Pacific Corporation, Torrey Pines Group (totaling over $1.5 billion in assets), and Citizen Holdings (with $207 million in deposits). Wells Fargo merged with First Interstate Bankcorp in 1996. A merger with Norwest Corporation vaulted Wells Fargo to the seventh largest U.S. bank holding company in the United States with a total of $92.8 billion in assets as of September, 1998.

See also: Gold Rush of 1849

FURTHER READING

Beebe, Lucius. U.S. West: The Saga of Wells Fargo. New York: Dutton, 1949.

Dictionary of American History. New York: C. Scribner's Sons, 1976, s.v. "Wells Fargo."

Dillon, Richard H. Wells, Fargo Detective: The Biography of James B. Hume. Reno, NV: University of Nevada Press, 1986.

Loomis, Noel M. Wells Fargo. New York: Clarkson N. Potter, 1968.

Ward, Geoffrey C. The West: An Illustrated History. New York: Little, Brown, and Company, 1996.

Wells, Fargo and Company US transport organization, founded by Henry Wells, William C. Fargo, and associates in 1852 to operate between New York and California. Wells and Fargo established a monopoly west of the Mississippi within a decade, succeeding the PONY EXPRESS as the agency for transporting bullion to eastern markets, and for 20 years dominated the postal service in the West. In 1918 it merged with a number of other concerns to become the American Railway Express Company.

Wells, Fargo, & Co. a US transportation company founded in 1852 by the businessmen Henry Wells (1805–78) and William Fargo (1818–81) and others. It carried mail to and from the newly developed West, founded a San Francisco bank, and later ran a stagecoach service (having bought the Pony Express system) until the development of a transcontinental railway service.