During the last years of the nineteenth century, following the panic of 1893, the nation as a whole was in an economic slump. Farmers and cattlemen were desperate. NLF decreased its dividends from 1891 to 1895, then stopped paying them altogether.
On July 5, 1900, with no relief in sight, the board of directors of NLF voted to sell the Rancho San Francisco. Walter was selected to negotiate the sale. It was listed, all 45,000 acres for $750,000. Buyers were acquired but the sale fell through.
NLF borrowed $70,000 from private money lenders to stay afloat for a while.. Directors then voted to sell any or all of the land belonging to the company. They then borrowed an additional $38,000 from banks in both San Francisco and Los Angeles.