What did Dr. Peter Smith do with his windfall?
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That is an interesting question. Indeed, the story of Dr Peter Smith is an influential one in the history of the city of San Francisco. A whole chapter is devoted to it in The Annals of San Francisco by Frank Soulé et al.
In 1850, Dr Smith entered into a contract with the city for the care of its "indigent sick". For this he was to be paid the sum of $4 per patient per day. This was to be paid in scrip, which could be redeemed later at an interest rate of 3% [Soulé et al, 1855, p370].
Dr Smith's hospital stood next to a "famed bordello" [Lavender, 1987, 220]. On 31 October 1850 a fire at the bordello (believed to have been started deliberately) spread to the adjacent hospital. Some 150 patients were rescued, but the hospital was destroyed and Smith suffered a personal financial loss of between $40,000 and $80,000 [Durham, 1997, 178] (depending which accounts you read).
Either way, this was a significant loss, and - at best - would have accounted for almost two-thirds of the amount owed to him by the city. This seems to have been the event that led him to sue the city of San Francisco for the money that he was owed. The city didn't have sufficient funds in its exchequer, and had to sell large tracts of land to settle the debt. That sale was mishandled, and much of that land sold for much less than it was actually worth.
He received the first part of the money owed ($19,239) in February 1851, and the balance ($45,538) later that year. Some of the balance seems to have been paid in the form of 75 of the lots being sold by the city. It appears that Smith sold many (perhaps all) of these lots on to other investors almost immediately.
So, allowing for his losses in the fire, and his expenses while recouping what he was owed by the city, he was hardly walking away with a fortune in his pocket. (The same could certainly not be said of many of those who purchased the land from the city!)
As to where he went, and what he did next, I don't think we really can say for sure. I did find an account published in the New York Times on 23 July 1860 which claimed that:
he went to Illinois; then he came back again; then he went to New-Granada, and there to this day he hangs out his shingle -- "PETER SMITH, M.D."
Presumably, in this case, New Granada referred to the former Republic of New Granada.
I'm always cautious about uncorroborated newspaper accounts, but if the New York Times correspondent was correct in his belief, then Peter Smith continued to practice as a doctor in New Granada (which by that point was known as the Granadine Confederation) until at least 1860.
Sources
- Durham, Frank: Volunteer Forty-niners: Tennesseans and the California Gold Rush, Vanderbilt University Press, 1997
- Lavender, David Sievert: California: Land of New Beginnings, University of Nebraska Press, 1987
- Soulé, Frank, Gihon, John H, and Nisbet, James : The Annals of San Francisco, New York, 1855
Upvote:0
Dr. Peter Smith was initially paid in "scrip" (IOUs), but he demanded that the city "cash out" his scrip. The end result was that the city sold a lot of prime waterfront San Francisco land to him to liquidate their $64,000 debt. He became a land speculator, making (and losing) a lot of money in this line. One of his investments was in a $40,000 hospital that was destroyed by fire (there was no insurance in those days). The "game" didn't last very long; he disappeared in 1854.
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