William Sharon was a visionary capitalist during the Gilded Age in the latter decades of the 1800s, when American industrialization expanded rapidly and produced unprecedented, yet unequal, economic growth. Uber-wealthy captains of industry such as John D. Rockefeller and Andrew Carnegie were among the richest men in the world. But, their opulent lifestyles could not mask the fact that millions of their fellow American citizens were languishing under grinding poverty. Social unrest erupted during these decades as the extreme inequality of income and wealth angered the population. During the Gilded Age the top 1 percent of Americans owned 51 percent of all property and the top 10 percent owned 75 percent of the nation’s wealth.
Sharon wasn’t on the same level of capitalists such as Rockefeller and Carnegie, but he made a fortune using his Bank of California’s financial leverage to gain control of the best mines working Nevada’s Comstock Lode. During the 1860s and 1870s, Sharon’s ruthless foreclosure policy, shadowy stock deals and steep assessments levied on stockholders invested in his mines catapulted his personal wealth, but his illicit business practices endeared him to no one. He had mines sabotaged, mixed waste rock with silver ore to boost production numbers and committed fraud and price fixing. Insider trading on the stock exchange was not subject to the same legal scrutiny that exists today, but to many Nevadans “Uncle Billy” was a cold, ruthless banker who cared only about the bottom line.
Sharon didn’t have the personality for politics, but in 1873 he jumped into Nevada’s U.S. Senate race to represent the Silver State in Congress, as well as his bank’s mining interests. Sharon was short, weighed 135 pounds, dressed like a minister in black broadcloth and rarely smiled. In his campaign he denigrated and made anti-Semitic remarks about his opponent, engineer Adolph Sutro, namesake of the legendary Comstock tunnel. He energized his white miner constituents with anti-Chinese rhetoric, a popular sentiment in the West at the time. Sharon even purchased the Gold Hill News whose new publisher, Alfred Doten, a former colleague of Mark Twain on the Virginia City Territorial Enterprise, guaranteed editorial support for his candidacy.
Most Nevada newspapers were antagonistic to Sharon’s campaign. On Jan. 4, 1874, three months before the vote, the influential Territorial Enterprise published an editorial that described one of Sharon’s infrequent visits to Virginia City from his mansion in San Francisco, the banker arriving in his luxurious private railroad car. The paper commented that it was Sharon’s first appearance since early November: “If he is elected next month,” the paper stated, “he will again depart and be lost…for many months—maybe many years.”
Testament to the influence Sharon wielded on the Comstock, he was able to run for such an important political position while actually living in San Francisco as a full-time resident. His Republican party allies argued that although Sharon maintained his residence in California due to his ailing wife, he registered, voted and paid taxes in Nevada. For his supporters, that was good enough.
At the time, electing a senator was not a popular vote — legislators made the choice for each state, ostensibly representing their constituents’ wishes. American citizens did not get the right to directly vote for their senators until 1913. Sharon could afford to do favors for these important voting delegates and after his nomination, the difficulty of state residency was ignored since his chronic absenteeism was pinned on his homebound wife’s heroic battle against stomach cancer.
Sharon ran into strong headwinds against his candidacy, but he handily won the election. The Territorial Enterprise’s warning was correct, however, because for the length of his six-year senate term, Sharon failed to represent Nevada citizens’ political or economic interests and he was rarely in Washington, D.C., voting on legislation. Sharon served as chairman of the federal government’s Committee on Mines and Mining, but his role was perfunctory. During his tenure in the Senate from 1875 to 1881, he missed 1,466 of 1,588 roll calls in Congress, meaning the he was absent more than 92 percent of the time. Meanwhile, back on the Comstock and in San Francisco, Sharon was involved in a whirlwind of spurious deals and financial scandals.
In late August 1875, William Ralston, founder of the Bank of California, shocked everyone when he declared bankruptcy due to irregularities in his own investment policies and reckless speculation in Nevada’s volatile mining stocks. One of the country’s wealthiest banks had suddenly gone belly up. Ralston had built a financial empire on a pyramid scheme of risky investments and now it came crashing down. Ralston resigned as bank president and immediately deeded his substantial real-estate holdings to Sharon, including San Francisco’s architectural jewel, the famed Palace Hotel that Ralston spent $5 million to build. That asset conveyance abrogated Ralston’s existing will and left nothing for his wife Lizzie. The next day Ralston drowned while enjoying his daily swim in San Francisco Bay — his death attributed to stroke or suicide. Sharon later argued that there was no money left for Ralston’s widow after settling his business partner’s debts, but an independent audit determined Sharon was lying and he finally settled out of court.
The Bank of California was considered dead in the water, but in an amazing feat of financial prowess and persuasion Sharon revived the bank back to solvency and opened its doors just four weeks later.
Elias “Lucky” Baldwin backed the bank with $2 million becoming its largest investor. Among Baldwin’s extensive real-estate holdings was the Tallac Hotel, a popular summer resort near South Lake Tahoe. Baldwin’s legacy lives on at Lake Tahoe at the Tallac Historic Site, a stretch of century-old, lakefront estates near Baldwin Beach a few miles south of Emerald Bay. Baldwin’s attorney Reuben Lloyd, said that “Sharon grasped ideas quickly and knew how to handle problems. Without him the Bank of California would never have been re-established at all.”
Publicly, William Sharon doted on his sick wife, but over the years he spent a lot of money on paid sexual liaisons and trysts with a variety of women, allegedly including the wives of business associates. One of those extramarital affairs with a younger woman would haunt him in what should have been his final years of relaxing retirement. Stay tuned.
Special thanks to my colleague, historian Michael J. Makley, who authored “The Infamous King of the Comstock: William Sharon and the Gilded Age of the West,” published by the University of Nevada Press.