Businessmen in New York establish Wells, Fargo and Company, destined to become the leading freight and banking company of the West.
The California economy boomed after the discovery of gold at Sutter's Mill in 1849, spurring a huge demand for shipping. Henry Wells and William Fargo joined with several other New York investors to create Wells, Fargo and Company to serve and profit from this demand. In July 1852, the company began transporting its first loads of freight between the East Coast and the isolated mining camps of California. From the beginning, Wells, Fargo and Company also engaged in banking, making good profits in the traffic of gold dust and providing loans that helped sustain the growth of the California economy.
The company usually used stagecoaches to move gold dust, critical business papers, and other express freight quickly. The stages could carry nine paying passengers, and if the interior seats were full, a few more hardy travelers could ride on top with the driver. The traveling conditions were far from luxurious, and passengers had to tolerate crowding, dust, cold, heat, and the occasional holdup or Indian attack. Nonetheless, the relatively fast pace of travel ensured a steady supply of customers.
Wells, Fargo and Company never hesitated to dispatch a rider on horseback to deliver or pick up an important message or package-provided the sender was willing to pay a premium price. The company operated several small "pony express" routes around California, and these were particularly valuable to the business community during winter, when snow often blocked stage and rail routes in the Sierra Nevada.
In 1866, the company merged with several other major express and stagecoach lines, including Ben Holladay's Overland Mail Company. For the next three years, the expanded Wells, Fargo and Company was the unquestionable leader in western transportation, providing speedy and reliable service at reasonable prices. With the completion of the transcontinental railroad in 1869, the company's dominant position was undermined, especially in the transcontinental mail and freight business. However, Wells, Fargo and Company continued to provide essential local transportation for decades, and the company still exists today as a major banking institution.