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The collapse of the Bank of California in the 1870s stands out as a significant economic event that further weakened California's economy during that period. This bank was a key financial institution in the state, and its failure created a ripple effect throughout local economies, leading to a loss of confidence among investors and depositors.

When a major financial institution fails, it not only impacts those with accounts or investments in the bank but can also lead to a broader economic downturn due to reduced lending capacity and liquidity in the market. As businesses struggled to find financing to sustain operations or expand, this would contribute to higher unemployment and lower consumer spending, effectively stalling economic growth.

Other economic events from that era, such as the Gold Rush, had initially sparked California's economy but were not events that directly contributed to its weakening during the 1870s. Similarly, while the completion of the Transcontinental Railroad had substantial long-term benefits, it also created competition that affected local businesses negatively in the short run. The rise of anti-Chinese sentiment, on the other hand, primarily affected social dynamics and labor market conditions rather than the overall economic stability. All these factors played a role in shaping California's economy, but the collapse of the Bank of California was a pivotal