The original Palace Hotel was built by San Francisco banker and entrepreneur William Chapman Ralston who heavily depended on his shaky banking empire to help finance the $5 million project. Although Ralston's Bank of California collapsed in late August 1875, and Ralston himself unexpectedly drowned in San Francisco Bay on the same day that he lost control of the institution, it did not interfere with the opening of the Palace Hotel two months later on October 2, 1875. Ralston's business partner in the project was U.S. Senator William Sharon who had helped cause the collapse of the Bank when he dumped his stock in the Comstock Lode. Sharon ended up in control of the hotel as well as both the Bank and Ralston's debts both of which he paid off at just pennies on the dollar. (Wikipedia)