The prosperous days of the rancheros were relatively short. Along with the influx of people attracted to California in search of gold, came American cattle of better quality which settles in the lands not yet stocked, which were closer to the northern markets. Thus, the new ranchers had an advantage over their Spanish competitors in quality as well as distance to market. As of 1860, it was reported that the only cattle in demand was fat, butchered cattle, as opposed to the leaner Spanish stock cattle. Thus, the stock cattle that was a large part of the southern cattlemen’s income, brought only nominal prices.
The decline in the southern rancher’s market was aggravated by the fact that, during the prosperous period of ranching, many ranchers has contracted heavy debts as startling rates of interest in order to support their standard of living, counting on a turnaround in the market that, for many, never came. Many of these debts were incurred at the gambling tables in the “A la Bola de Oro” in Monterey, a popular gambling establishment of the day.
In addition of the foregoing, the droughts of 1862-1863 and 1863-1864 combined with the overpopulation of cattle on the rangeland, helped to bring about the economic downfall of the rancheros and the breaking up of the ranchero “land monopolies.” Having already mortgaged their land in the easy-spending days of the Gold Rush, most of the Rancheros could not withstand the losses to their stock sustained during these dry years. Consequently, most of the rancheros were forced to sell or otherwise subdivide their land.