In mid-1850s, riots broke out in California when the sheriff sought to evict squatters from land claimed by John Sutter. During this time, many grants from the Spanish and Mexican eras were lost, as many felt this betrayed the Treaty of Guadalupe Hidalgo. In the 1860s, construction began on the ornate California State Capitol building. By the 1850s, the state established colleges, churches, and its first state prison at San Quentin. The completion of the transcontinental railroad in 1860 connected cities in the East and Midwest to California. In the 1870s, a bank failure in San Francisco caused a financial panic in the city. By the early 1900s, California was leading innovations in