What happened after the crash of the cattle market?
During the drought that followed the crash of the market, cattle owners began the practice of driving their herds to the Sierra Nevada Mountains in the spring to pasture until fall. Others grew alfalfa and other hay crops to supplement the range feed.
The Los Angeles Star, April 7, 1860, stated that there were 800,000 cattle in the state, and the number was multiplying quickly. Therefore, the editor felt that the only solution was to slaughter for hide and tallow. By 1861 many rancheros went back to hide, tallow, and dried beef to make a profit. Many rancheros borrowed money via short-term mortgages, where collateral exceed the loan amount and interest rates were very high, from 4% to 7% a month to make ends meet. Many rancheros, even from the best families, lost first their cattle, then their land, and finally their casas.
If cattle prices and interest rates on mortgages were bad enough, Mother Nature also hit the Ranchos. At the end of 1861, California experienced unprecedented floods. The prolonged rains caused flooding that paralyzed business, thousands of cattle drowned, it was estimated that one fourth of the states taxable wealth was destroyed. The adobe walls of homes became saturated and collapsed, dry washes becomes raging rivers tearing new channels to the ocean taking with them orchards and gardens.
Following the great floods was two years of drought. Then a series of hard, scorching winds that were followed by millions of grasshoppers. Very few were able to find pasturage for their herds. This was followed by an epidemic of smallpox.
As the drought continued, the price of cattle was determined by the value of the hides. A large hide would have brought two dollars and fifty cents, the cost of tanning reduced the profit by twenty-five cents. Rancheros had to slaughter their herds for the hides and horns before the animals died due to lack of water and pasturage.
January 7, 1865, the Sacramento Union, estimated that from 50% to 75% of the cattle in Los Angeles County had perished in the drought. The Great Drought left heaps of skeletons everywhere drying in the sun. The days of the half-wild unfenced cattle grazing on huge ranchos had come to an end.