scrip, which bore a monthly interest of three per cent. till redeemed by cash payments. The common council were meanwhile regularly auditing Smith's accounts, at short intervals; while they continued to give that gentleman the necessary amounts of scrip to satisfy the different balances as they arose. Altogether, the amount of city indebtedness under Smith's contract was $64,431.

The total amount of city scrip granted in 1850 and the beginning of 1851, was exceedingly great, and, as we have already mentioned, an act, after considerable discussion and delay, was finally passed by the Legislature, to fund the floating debt and convert the same into stock, bearing an annual interest of ten per cent. General creditors, however, as well as holders of scrip, were neither obliged to await the passage of this act, nor afterwards to accept the terms of conversion. To those who possessed the obligations of the city, or who held it bound as debtor in any actual or implied contract, the ordinary courts of law were open for ascertaining and making effectual the amounts of their claims. Accordingly, some creditors, and chiefly Dr. Smith,-proceeded to take the necessary legal steps to procure judgments against the city, and to make executions and sales of its property. If all the then holders of scrip or of city indebtedness had acted in this fashion, there would only have resulted "confusion, worse confounded;" and neither Dr. Peter Smith nor any one of the city creditors would have profited by his hasty and preference-seeking proceedings. As it happened, the party named was almost the sole, as he was the chief creditor, who thought fit thus to secure his strictly legal rights.

On the 25th of February, 1851, Smith recovered judgment against the city for $19,239, being a portion of the total amount claimed by him; and on the 8th of July following, the sheriff proceeded to sell so much of the city property as, it was expected, would defray the sum named. At this sale the various wharves belonging to the corporation were sold, as also the old city hall lot, and the city hospital and buildings. By this time the act to fund the municipal floating debt had been passed, and its property conveyed to the commissioners there named. At first sight it appeared improper, and perhaps ridiculous, in the circumstances,

for an individual to sue the city to extremities, and seek to gain a preference over the general body of creditors. The commissioners of the funded debt made both public and private statements in the strongest terms, to the effect that any sales which might take place under the Smith judgments would be held as illegal and of not the slightest value. This conduct on their part, as well as a vague general impression among the citizens, that such was, or certainly ought to be the true state of the case, had the effect of discouraging buyers from attending and bidding at the sales in question; and consequently the property was sold at merely nominal prices, perhaps at not a twentieth, or even a fiftieth part of its real value. The sum realized was therefore insufficient to satisfy Smith's judgment. Accordingly an alias execution for the balance was issued on the 7th of August following, upon which the sheriff, on the 17th of September thereafter, sold forty onehundred-vara lots, fifty-five fifty-vara lots and one water lot. But as the old impression remained that the whole proceedings were illegal, nominal prices were again only obtained for the great amount of property mentioned. On the 2d January, 1852, the sheriff further sold an immense amount of water lot property of the value, at least, of half a million of dollars, also at nominal prices. Still the original judgment was unsatisfied.

Meanwhile a second suit had been raised by Smith against the city, upon which judgment, on the 4th of March, 1851, was duly obtained, for $45,538. Upon this, the sheriff advertised to sell on 14th June following, one hundred and three water lots, twentyseven blocks on South Beach, and seven one-hundred-vara lots. The commissioners, consequently, in order to save the city's property from the threatened sacrifice, appealed to the proper legal tribunals for injunctions to stay the sheriff's sale; but for reasons which may not here be named, their appeal was disregarded. Failing to obtain the necessary injunction, and still determined to protect the interests of the people, the commissioners attempted to compromise matters with Dr. Smith, to effect which object, Col. J. W. Geary and Judge P. A. Morse, on behalf of the Board, personally waited upon John McHenry, Esq., counsel for Peter Smith, and guaranteed to secure to Smith from their own private funds the whole amount of his judgment on condition that the

sale should be arrested. This generous offer, which had it been accepted, would have saved millions of dollars to the city, from the pockets of a few greedy speculators who were instigating and abetting the proceedings of Smith, was not only rejected, but treated with contempt. The commissioners driven to their last resource, and acting under advice of their attorney, Solomon Heydenfeldt, Esq., who subsequently became and was a judge of the Supreme Court, when the decision against the action of the commissioners and confirming the "Peter Smith Titles" obtained from the sheriff, was given, issued the following address:—

TO THE PUBLIC.

"A sale of a large number of city lots is advertised to take place this day, by virtue of an execution in the hands of the Sheriff, in favor of Peter Smith against the city of San Francisco. The public are hereby notified, that the city has no legal title to the said lots, nor had any title at the time of the rendition of the judgment. By virtue of an ordinance of Council the city conveyed the said lots in December last to the Commissioners of the Sinking Fund, in trust for the benefit of the creditors of the city; and by virtue of an act of the last Legislature, the Commissioners of the Sinking Fund conveyed said lots to the present Commissioners of the Funded Debt upon the same trusts. Some time since an injunction was obtained in the District Court to prevent this sale. The injunction was dissolved on the ground that the judgment creditor of the city had the right to sell whatever interest the city may have left after the execution of the trust, and that such sale would not interfere with the trust. Every one will readily perceive that a purchase made at the Sheriff's sale will convey no title, because the property of the city is insufficient to pay all of her debts, and under the acts above referred to, it will be the duty of the present Commissioners of the Funded Debt to sell said property in execution of the trusts confided to them, at which sales the purchasers will be enabled to obtain a complete and perfect title. The public are therefore cautioned to disregard the sale to be made by the Sheriff to-day, and the undersigned have given this notice so that no one can complain hereafter that they were purchasers without actual notice of the title held by the undersigned.

P. A. MORSE,

D. J. TALLANT,

WM. HOOPER,

JNO. W. GEARY,

JAMES KING, of Wм.

Office Commissioner's Funded Debt, June 14, 1851."

Commissioners of Funded Debt.

This address, which was published in the daily papers, and even read to the people on the day it was issued, failed to produce

the effect intended by the commissioners. While, perhaps, they never supposed it would deter the sheriff from proceeding with the sale, which took place according to advertisement; they, at least, and we must believe, honestly supposed that it would prevent citizens from purchasing property which the sheriff, according to their opinion, had no legal right to sell, and of paying money for titles which would never be confirmed, and therefore would be valueless. Their action in the matter, certainly prevented many persons from building or purchasing at the sale, and as before, the lots were disposed of at ridiculously low rates. For this, the commissioners have of late been the objects of much public censure and private calumny. Their conduct has been loudly condemned and their motives impugned. But it should be observed, that they acted by advice of learned counsel; though singularly enough, their adviser subsequently became a judge of the Supreme Court, where he held a seat at the very time the decision was given adverse to his former instructions, and legalizing the sales, by the sheriff, of the city property, under the judgments of Smith.

But it is unnecessary, in this work, which does not profess to be a legal guide to the titles of real estate, to detail minutely the further judgments and sales. It is sufficient to say that Dr. Smith instituted other suits, procured new judgments, and made new executions and sales of the most valuable portions of the property still left to the city. The great sale of the 30th of January, 1852, may only be alluded to, at which about two thousand acres of land belonging to the city, and situated within the municipal bounds, were disposed of by the sheriff in the manner above mentioned. As in the beginning, so to the end of these sales, only nominal prices were obtained. The city was losing piece-meal the best part of its real estate, while what between principal, interest and legal costs, the old debt of Smith long remained nearly as great as ever. In the end it was wiped off, but at what an enormous sacrifice!

At first the general public were inclined to treat the whole proceedings as a farce, though a somewhat expensive one to the purchasers at the sheriff's repeated sales. Farther consideration made people begin to think that, after all, the laugh and profit might really be on the side of those supposed foolish persons. The

commissioners of the funded debt, in pursuance of their duties, attempted to sell various portions of the city property, but were baffled by repeated injunctions on the part of the holders of what were at this time and have since been commonly called the "Peter Smith Titles." The boards of aldermen next meddled in the fray, and they likewise began to deal in injunctions and other legal annoyances. Matters looked bad, and soon the progress of serious lawsuits made them much worse. Opportunities were still given to cancel or remedy the worst parts of the original objectionable measures. The boards of aldermen and the mayor happened to be opposed in this as in many other matters of consequence, while the funded debt commissioners, were also not on the best terms with the common council, which last body again scarcely possessed the public confidence. Thus there was a general want of union and common action in most municipal matters; while especially in regard to the Smith sales, either nobody knew what to do, or every body pretended nothing could be done. At any rate, nothing effectual was done to save the city's interests.

At the last moment allowed by law for the redemption of property sold under the sheriff's authority, a large sum of money was procured through the liberality and public spirit of a distinguished and worthy firm, Messrs. Theodore Payne & Co., and tender was made of the sums, principal, interest and charges, contained in one of the judgments upon which the sale of the 30th January, 1852, had taken place. This redemption-money was refused by those who had purchased at the sale mentioned; and immediately new lawsuits were raised to try the question whether it had been offered timeously and by the proper parties, or whether indeed there could be any right of redemption whatever in the case. By and by the attorney-general instituted an action against the funded debt commissioners, in which was claimed the twenty-five per cent. due to the State of the supposed real value of the water lots that had been sold at nominal prices. That action was based on allegations of fraud, or culpable ignorance, or carelessness on the part of the commissioners. The pecuniary value of the whole property involved in these several sales was estimated, in 1852, at about two millions of dollars, although two