Vermont native Henry Wells and New Yorker William G. Fargo watched the California economy boom (gold rush), with keen interest in 1849 and wanted to be part of it. California lacked a lot of infrastructure including a severe lack of solid financial institutions to deal with the influx of money. By the way, the only regulation regarding being able to open a bank at that time was to have a secure safe and reasonable security…my how things have changed.
Before opening Wells Fargo, their company decided to merge with a major competitor, American Express, whose owner was John Butterfield. Both men kept trying to talk Butterfield and the company’s board of directors to invest in California while the iron was hot but they refused so Wells and Fargo decided to go out on their own in 1852 creating the Wells Fargo Company in San Francisco, California. Because they missed the ‘49er rush, they were jumping in when several large competitors already had a foothold so their start was slow but as we know they ended up outlasting their competitors creating a company that is still at the top of its game over 160 years later. I find this amazing.
So how and why did Wells Fargo get into the shipping business back in 1853? It only made sense as they were constantly running stage coaches from California to New York and back carrying mail, money, packages, and people from the bank. Since they were already going anyway, they decided to check with other businesses (even the Pony Express), to see if they too would like use of their stage coaches and a large number did so Wells Fargo transportation services was born. Increased competition, the Union Pacific Railroad, and the telegraph made this venture of Wells and Fargo last less than two years but they continued to use the wagons for deliveries between their own banks through the early 1900’s.
The greatest problem they faced was robberies as their stage coaches were constantly getting hit. This is where another amazing company comes in, that has also been around since the 1850’s and that’s the Pinkerton National Detective Agency now the Pinkerton Company (still privately held). They were hired as in route security and to investigate stage coach robberies. One of their most famous pursuits was when they were going after the Jesse James’ gang. Hiring Pinkerton ended up helping Wells Fargo immensely as Pinkerton was putting the scare into would-be robbers of stage coaches and trains.
Wells Fargo is a great example of being at the right place at the right time but they also wouldn’t have lasted this long if it weren’t for the fact they have been extremely well managed. It wasn’t always an easy ride (different U.S. financial troubles), as they were about to close their doors on several occasions but their perseverance led to one amazing organization whose success is still studied today in college campuses across America.