Recollections of Pine Gulch: The Story

RECOLLECTIONS OF PINE GULCH
1840-1890
Taken from the Memoirs of Gus Mahler

With the discovery of gold at Sutter's Mill in 1848, the new American Dream of sudden wealth taken from the ground resulted in a population boom in Northern California. Where before there had been barren wilderness and small homesteads, gave rise to "boom towns" and "mining camps" filled with men (and some women) who believed that they were going to be the one to strike it rich.  As some of these opportunists came to realize that they were not going to find the big strike, they saw the need to provide services for those who continued to try to find the Mother Lode. Among those who felt that they could do better in some form of the service industry was Gus Mahler, who saw that he could make a living by providing to the miners a service that they always had a demand for - he opened a saloon.  The following is Gus' story.

"I had one of the first permanent buildings in Pine Gulch.  When every other business was set up in tents, I built a two story saloon that had rooms for paying customers to sleep it off and a poker room in the back of the first floor.  Business was good - too good.  I constantly worried about the amount of gold dust I had on hand.  We didn't use money in Pine Gulch - that was too inconvenient.  If a person found some gold, he would have to ride 85 miles to the nearest assay office in San Francisco, or go to one of the banks there, to get money for the gold.  Since the only reason for being in Pine Gulch had to do with gold, everyone had gold.  We just used gold for money.  Well, there were others in Pine Gulch who were even worse than me in prospecting for gold, and they weren't so particular in how they were going to make a living.  Every businessman in town, me included, was worried about getting robbed - especially those who didn't live in a room located where their business was.  We had many of our businessmen get hit over the head on their way home at night, especially after a good day of selling their wares.  Something had to be done."

"Sometime in early 1851, six or seven of us got together and discussed the problem.  I didn't have to worry about going home with the receipts at night like my fellow businessmen, but I was worried about a raid on my saloon. The saloon in Red Mountain had been knocked over late one night and the owner, a Swede named Ole Svenson, had lost a large supply of dust because he hadn't been to San Francisco in 5 months.  I was afraid that the crooks that had done that job would hit my place one night, even though I made the trip to Frisco once a month and never kept as much on hand as Svenson had that night.  Moon Jenkins, the dry goods supplier, came up with possibly the best idea that Bible-thumping moron ever had.  He suggested that we find the biggest, toughest, best-shooting, most honest piece of man-flesh that we could find and offer him a job.  He takes care of our gold dust for us, and we give him some of it in exchange for his protection. The only problem, according to Moon, was that he didn't know anyone who was man enough and mean enough to handle the crooks in the area and at the same time honest enough for us to trust."

"Smithy Perkins, the blacksmith, said that he knew a man who fit the bill- Slim Johnson.  We all agreed with no reservations.  Slim Johnson was a giant of a man- 6 foot, 7 inches tall and weighing 300 pounds if he weighed an ounce. Slim would have stood out in Pine Gulch just by his size, but what folks around here think about when they think of Slim is the time he dropped a deer at the crest of Skillet Mountain with a single shot from 400 yards below.  Those who saw the shot said that no man could ever match it.  Slim was liked by everyone.  There weren't many in Pine Gulch who hadn't been befriended by Slim at some point.  We all felt a little sorry that a nice guy like that had had such rotten luck in searching for gold.  Slim never seemed to find more than enough to keep him in vittles and the occasional beer. After discussing how we felt about Slim, we adjourned our meeting and went to make him a proposal."

"We found Slim working his claim over on the Elbow Creek and asked him if he was willing to listen to a job offer.  He said that since his luck had been running about normal that day, he might as well take some time out to talk with us.  We described our problem, and explained that we wanted someone we could trust and have confidence in to take care of our gold dust.  Slim asked us what he would earn from this and we told he that we would each give him 1/2 of 1% of our gold that he held each month in exchange for him safeguarding it for us.  Slim asked us how much we would be asking him to guard each month, and, after doing a little calculating, he figured that he would see a lot more gold tending after ours than he ever would working his claim.  He agreed to our deal and asked us give him the weekend to make preparations."

"Slim spent that weekend making arrangements in Pine Gulch.  He rented a small house in town, and all weekend people heard the sound of hammering and sawing coming from the house.  When we went to see Slim on Monday, he showed us his work.  He had put iron bars on the three windows in the house and cut a hole in the floor and placed sheets of steel all around the hole. He told us that he intended to keep our gold in this hole.  When Moon Jenkins asked him what was keep someone from crawling under the house and trying to get into the hole from the outside, Slim told him to go outside and crawl under the house and try.  Moon came running back in within seconds, and I think I actually heard him cuss for the first time.  It was such a shock that I wasn't sure what I heard.  I did hear him say something about a monster and realized that Slim wasn't living in the house alone-- he had brought Daisy to town with him.  Daisy was a creature of indeterminate breed.  Some thought she was a dog, others considered her a wolf.  The only thing I was sure of was that Slim was the only one who Daisy got along with.  I knew that if anyone was going to try to break into Slim's strongbox from the outside, Daisy was a big obstacle that they were going to have to overcome.  Satisfied, we all went back to our businesses and brought most of the gold dust we had on hand and deposited it with Slim.  He gave us receipts for the amount we placed with him and told us to return whenever we needed to put more in or get some out."

"This began Slim's banking career.  As more and more of Pine Gulch's businessmen saw the advantage of having Slim take care of the gold dust that they made, they made the same deal with Slim - in exchange for Slim taking care of the gold dust (and the occasional nuggets that they took in), Slim would receive 1/2 of 1% of the dust that he held with them. Slim, being a sharp businessman himself, began offering his services to the prospectors in the area also, and slowly they too began using his services. As his customers expanded, Slim slowly started on his way to becoming the wealthiest man in Pine Gulch.  But as the years went on and his list of customers grew, he began realizing that the demands on his time were becoming so much that he wasn't able to enjoy his new found wealth."

"The final straw came the night that Orville Kanter got involved in a poker game in the back of my saloon.  I closed the saloon at around two in the morning that night, but allowed the game in the back to continue. Somewhere around four in the morning, Orville, who had been losing steadily for quite some time, got involved in a show down with Two-Fingers Bradley.  Bradley had been the game's big winner that night, and I think that he thought he could buy the pot from Orville.  When Orville wouldn't back down and couldn't match Two- Fingers' bet, he turned to me and asked me to hold his cards while he went to get the money required to match the bet.  I agreed and we waited about 20 minutes until Orville returned with the dust necessary to match the bet. It was a good thing that Orville's straight was better than Two-Fingers' three kings because I sure didn't want Orville to suffer the black eye he had gotten for nothing.

It seems that when Orville went to get the dust he needed to match the bet, he barged into Slim's house to wake him up and get what he needed.  Normally, I don't think would have been a problem, but Slim wasn't alone when Orville burst in, and I think he was a little embarrassed to be found embracing Bessie Nordstrom with both of them in various stages of undress.  Anyway, Slim's first reaction when Orville burst in the door was to leap up and land a haymaker on Orville that gave him a beaut of a shiner. After helping Orville up off the floor, Slim withdrew the gold dust that Orville needed but I understand that he wasn't very happy about being disturbed at that particular time."

"The next day Slim stopped by the saloon and told me that he was going to be gone for a couple of days and that I would need to hold on to my dust until he returned.  He rode off that night without telling us where he was going."
       
"When he returned, he summoned me to his house and told me where he had been.  It seems that he had ridden to San Francisco looking for something that could help him keep from being interrupted at all hours of the night and also from having to be on call for all the people who had left their dust with him.  He told me that he had searched all over San Francisco and finally found something that would fit his needs.  He had found a stationery shop just off Nob Hill, and he had asked the owner if there was any paper and ink that the owner had in stock that was unique. The owner of the stationery shop said that he had had an eccentric old widow who had special ordered a unique combination from him and then died before she had picked up the order.  The order was green paper and purple ink.  Slim looked the material over and, after determining that there was no paper and ink like it on the West Coast, he bought the entire supply."
       
"Why?" I asked him.  Slim answered that from that point on, whenever we left gold dust with him, he would write out a receipt for the amount of dust we had left.  He said that he would even fill out receipts for different amounts.  If I left $100 worth of dust with him, for example, he could give me one receipt for $100, or 2 receipts for $50, or whatever combination I wished.  Then whenever I needed to purchase anything, instead of coming to Slim to withdraw some of the dust I had left with him, I could just give a receipt to whomever I was doing business with and that person would know that if they wanted the dust, they could go to Slim and withdraw it.  If they didn't want the inconvenience of carrying the dust around, they could just hold on to the receipt and use it to purchase something that they wanted.  Slim guaranteed me that he had the only supply of green paper and purple ink on the West Coast and that everyone would know that the receipt was good because of his signature on the receipt.  When I asked Slim if this writing of these receipts would be worth all the trouble that he would have to go through, he replied that they were going to make his job much easier because now people wouldn't be bothering him at all times of the night to get their dust.  In fact, he said that he was only going to be open on Monday through Friday from 9:00am to 4:00pm for people to leave their dust with him or withdraw dust. In this way he could still protect the deposits and have a life of his own.'

"I was skeptical at first but gradually everyone in Pine Gulch accepted Slim's receipts as 'money' and Slim's life began to approach what would be considered by some to be normal.  If it had been anyone else but Slim, I don't think the plan would have worked, but since everyone knew Slim to be an honest and virtuous man (Bessie Nordstrom notwithstanding), Slim's currency became the medium of exchange in Pine Gulch.  Some even joked that Slim should add a slogan to the receipts- one that said 'In Slim, we trust'."
      
"About a year after Slim introduced his currency into Pine Gulch, he stopped into my saloon to have a glass of sarsaparilla.  I had been doing some thinking about how to improve my business, since Pine Gulch was growing and I no longer had the only saloon in town.  I had a few ideas about what would bring more business into my place, but I sure didn't have the money I needed.  I brought Slim his glass of sarsaparilla and took him over to the corner booth to discuss my particular problem.  I wanted to add on to the saloon and build a big stage where I could bring in some of them fancy dancers from San Francisco for a hoochy-koochy show.  The type of fancy place I envisioned would have a mirror running the length of the bar and fancy curtains and all the baubles I saw in those fancy places in San Francisco.  The only trouble was that everything I wanted was going to cost around $5,000 and I didn't have anywhere near that amount of money, especially since the other saloons were taking a large part of my business away.  I asked Slim if there was some idea that he had that could help me with my problem."
       
"Slim thought for a while, and then he said that he didn't have enough to lend me either.  He had spent a large part of his earnings on the new building he bought for his bank.  But, he said, if I would stop by the bank the next day, he might have a way for me to get what I needed to expand.  I went to the bank the next day, and Slim welcomed me and took me into his back office.  After we sat down, Slim told me that he had a solution to my problem.  He reached into his desk and pulled out a stack of receipts totaling $5,000.  He pushed the stack across his desk and told me that the receipts were mine to use for the expansion of my place.
       
"I was shocked!  ’Where,' I asked Slim, 'did the money come from?  I thought you said you didn't have any you could lend me.  What is this?'     I was not prepared for Slim's answer.  He told me that he had written up the receipts that morning."

"I couldn't believe my ears.  We had come to Slim to care for our gold because we trusted him.  Now he was offering to hand me receipts for gold that I didn't have. It had to be stealing."
       
"Slim told me not to worry.  He explained that he had around $20,000 worth of gold dust in his safe, and he had written $20,000 worth of receipts that we were circulating in Pine Gulch as currency.  But few people ever came into the bank and cashed the receipts in for gold dust anymore. In fact, he said that the biggest demand for gold dust in the previous year had been a $1,000 redemption of receipts. Since he had more dust on hand than anyone ever wanted to redeem, he felt that he could write out enough receipts to give me a loan for my expansion and never worry because the people wouldn't demand their gold."

“I was thinking that somehow what we were talking about was illegal. Slim was writing receipts for gold that I hadn't put into his bank and allowing me to spend the receipts.  Something was wrong here.  Slim explained to me that I wasn't going to get the receipts for nothing.  He reached into his desk and pulled out a piece of paper and handed it to me.  The paper said that I, Gus Mahler, was borrowing $5,000 in receipts from Slim's bank and that in six months I would repay the $5,000 plus $1,000 in something called interest.  He explained that the $1,000 was going to my cost of borrowing from his bank.  I was nervous about this, but as long as Slim assured me that he would stick the paper away where no one would see it and wouldn't tell anyone about it, I felt that I could improve my business and make enough to repay the loan without anyone learning about it."

"I accepted the receipts and began ordering what I needed from the businesses in town.  The materials to expand my saloon got to Pine Gulch within a month, and the expansion took about another 2 weeks.  By the end of the 6 month period of the loan, my business had improved to such a point that I could repay the loan in full plus the interest that I owed Slim.  I walked into Slim's office one Monday morning and, after we had gone back into his office, I took the $6,000 in receipts out of my pocket, set it on his desk, and demanded that he give me the note that I had signed. Slim reached into his desk and withdrew the note.  When he handed it over to me, I immediately ripped the note up into little pieces so that it could never be recognizable again. I breathed a sigh of relief (that note had worried me so much for the past 6 months that I had not had a decent night's sleep) and started laughing, as much from relief as anything else. Slim looked at me, started laughing too, and then, to my dismay, he took the receipts that I had put on his desk, set aside $1,000 worth, and ripped up the rest!  I was shocked!  I started choking as my laughter got caught in my throat.

"'What are you doing?' I screamed.  Slim just kept laughing at me, laughing in such a way that I worried about his sanity.  I ran out of his office and back to the saloon. Over a couple of shots of whiskey, I calmed down and thought about what had happened.  Slim had, by loaning me $5,000 of receipts increased the money supply in Pine Gulch.  Then, when I no longer had the need for the money and repaid the loan, he decreased the money supply back to what it had been before.  The only difference, as I saw things, was that now
Slim had $1,000 that he didn't have before he made me the loan.  Somehow, I wasn't sure exactly, Slim's control of the money supply made him more wealthy.  Everyone in town still trusted Slim, and had faith in his receipts as our currency, but I was a little leery.  Somehow, something wasn't right."
       
"As the years went along, Slim made loans to many others in Pine Gulch. I never felt good about borrowing from him again, but I knew many others who went to Slim whenever they needed something and couldn't afford it.  I was sure that if he was making money off their loans the way he did off mine, he had to be the richest man in Pine Gulch.  But the gold strikes were starting to peter out and I wondered if Slim had anywhere near the gold dust in his safe as the amount of receipts that were in circulation."
      
"In the late 1860's a stranger rode into town.  With my first glance at him, all thoughts of Slim being a big man left my head.  This monster was bigger than most bears I had ever seen.  He sat in my saloon, tossing back beers with the regulars, and telling jokes and laughing louder that anyone I had ever heard.  His name was Bart McQueen, but everyone referred to him as Big Bart.  After partying all over town for a couple of days, Big Bart announced his intentions to settle down in Pine Gulch.  He said he was going to need a job, and he wanted the best job in town.  'What is that job?' he asked, and everyone in town knew what the answer was. 'Slim Johnson has the best job in town,' they said. 'He's the banker.'  After listening to the townspeople talk about Slim and his job, Big Bart decided that this was the job for him.
       
"You can't do that," Smithy Perkins said.  "Slim is the banker and he's the one we go to for finances.  We can't have two bankers and two different kinds of money.  That would make things confusing."       

"No problem," said Bart, "just tell Slim that I'll be waiting for him in the street at 3:00 this afternoon.  After we're done, there will only be one person who wants to be banker in Pine Gulch."

"Like wild fire, the news spread through Pine Gulch. When I heard it, I knew that Slim was in trouble.  No one had challenged him for years, and I had been beginning to wonder if he was living off his reputation.  Big Bart was impressive looking, and if he could handle a six-gun, I had a feeling that Slim might have seen better days."

"That afternoon, there was no one on the only street that ran through Pine Gulch, but if you looked behind the curtains that looked out on the street, you would have found everyone who lived within 5 miles of town.  A lot of people were wondering if Slim would show up, but at 3:00 he walked out of his office and took up a position in the middle of the street. About a minute later Big Bart walked out of the office of the Pine Gulch Gazette (I found out later he was helping the copy boy write Slim's obituary), and took up a position opposite Slim."
       
"I heard him tell Slim that this fuss could be avoided if Slim chose to leave town.  Slim's reply was that the person who should leave was the person who was new to town. I'm not really clear about what happened next. I think Bart told Slim that he should draw first, but I did see the one shot that was fired.  Slim went for his gun, but he didn't even get it out of his belt before Bart had drawn and fired. Slim fell immediately, but we knew he wasn't dead. The scream that he let out informed all of us that he was still alive.  Bart had shot him in the knee cap and the bullet had shattered his knee."

"Immediately the street was filled with people. About 5 guys picked up Slim and carted him off to his office, all the while yelling for Doc Adams to come and patch up his knee.  The others milled around Big Bart and went with him to my saloon to join in some celebratory drinks.  The liquor sure flowed that afternoon.  Big Bart announced that he would be opening his bank on Monday morning and that he would be issuing his own receipts for deposits that he expected to be used as currency in Pine Gulch.  Everyone in town thought that Big Bart's new bank was the way to go, and they went running down to Slim's bank to cash in their receipts and get their gold dust to put in Big Bart's bank the following Monday."

"In just a few minutes a huge crowd had developed outside Slim's bank. No one was being allowed inside and after about 15 minutes, Doc Adams came out and said that Slim was closing the bank for the day because of his wound, but that the bank would be open at 8:00 Monday morning for anyone who to redeem their receipts for gold dust.  The crowd dispersed (many of them coming back to my saloon to drink with Big Bart and congratulate him on his impressive handling of Slim) and things settled down for the weekend."
       
"The next Monday a long line developed in front of Slim's bank by 8:00.  Everyone in town was waiting to cash in the funny green receipts with the purple ink and get their gold dust to put in Big Bart's bank. When the doors didn't open at 8:00, there was some grumbling.  When the doors didn't open by 8:30, the grumbling turned into action. The doors were kicked in, and we were greeted with a terrible sight.  Slim's vault was open, and the only thing in it was a pile of promissory notes that almost everyone in town had signed.  Oh, there was one other thing found in the vault- a sealed letter addressed to me.  Sensing the mood of the crowd around me, I didn't think it would be a good idea to take the letter and read it privately.  I got up on the counter, yelled at everyone to be quiet, tore open the letter, and began reading aloud."

"'My old friend Gus', the letter began, 'I'm writing this to you because you are probably the person in this town who will best understand what has happened.  My unfortunate run-in with the impressive Mr. McQueen this afternoon (the letter must have been written Friday evening after the gunfight) has left me unable to handle the financial needs of this community.  As you may suspect, Pine Gulch has been in existence financially because everyone used my receipts as their currency.  Whenever anyone in town needed money, I was willing to write out new receipts in exchange for their promissory notes which I held in my vault. Over the years more and more people came to me for loans for longer and longer periods of time.  I realized that there were far more receipts in circulation in Pine Gulch than I could ever cover with the gold dust that I had available, but as long as people retained their faith in me and didn't all come in to redeem their receipts at the same time, we would have no problems.  The people of Pine Gulch no longer have the faith in me that is required, as is evidenced by the fact that they all wish to withdraw their gold dust and place it in Mr. McQueen's new establishment.  Well, I am unable to redeem all of the receipts in the community.  As you can see by the notes here in this vault, there are almost $200,000 worth of receipts outstanding in Pine Gulch.  Unfortunately, I have never had more than $40,000 worth of gold dust in my vault.  Thus, I am faced with a dilemma. Do I stay in Pine Gulch, pay off the fortunate few who arrive first on Monday morning, and then, after the gold dust is gone, say that I'm sorry to the others who did not get the chance to redeem their receipts?  Or do I leave town, realizing that a man of my skills can get away with a 2 day head start?  If I do the first, I have no doubt that I will be swinging from a tree before lunchtime.  If I do the second, I will undoubtedly have a guilty conscience for the rest of my days.  After a great deal of reflection (and a generous dose of Doc Adams' pain reliever), I have decided to take the second course.  I feel that my conscience can be greatly eased by the gold dust that I feel I am honor bound to take with me.  If I leave the gold, only a small section of the population in Pine Gulch will receive what they feel they are owed, and those who receive none of the gold will feel antagonistic to those who have received some of the gold.  If the people of Pine Gulch are to be antagonistic to anyone, let it be me. I wish the people of Pine Gulch well.  They are all in the same boat now.  I hope that Mr. McQueen will be able to do for them what I have tried to do for the past 20 years. Goodbye, old friend.  Please don't think ill of me.  Signed,
Hector, 'Slim', Johnson."

"As I finished the letter, there was an angry uproar from the crowd around me.  There were cries of anguish and shouts of revenge and a push to gather up a posse to chase after Slim and string him up.  However, most people in the crowd realized that the chances of catching someone like Slim after he had 2 days head start were slim indeed and thoughts of chasing after him gradually died out."

"The next few months after Slim vanished, things were tough in Pine Gulch.  Most people heard about silver strikes over in Nevada and decided that maybe they should try their luck elsewhere.  By the time a year had passed, only about 20 of us still lived in Pine Gulch.  I stayed on.  The occasional traveler through the valley always wanted to wet his whistle before he moved on.  I never was very wealthy again, but I never let anyone else take care of my money (or my gold) either.  I always wondered what would have happened if Big Bart had never come to Pine Gulch.  I guess I'll never know."