Rick,
Although this article has the faults found in much of wikipedia, the information in it seems to be correct and give a good overview of the Damascening process.
http://en.wikipedia.org/wiki/Damascus_steelProbably fairly rare in the American West, I am guessing that a trade Damascene Belduque could probably have found its way into the hands of a Californio ... probably. There were good trading connections through Mexico and many of the ports of South America, eventually connecting to Spanish traders.
Besides, I have always wanted a big Damascene knife ... I have a wootz steel Indian made Bowie that Chuck Burrows was kind enough to 'antique' for me (again, the chance of owning a Damascene Bowie in the 1870s would be extremely low ... I just wanted one ...)
But when it came up that I would need an Hispanic Belduque for my Californio outfit, I thought: 1.) about how most of the finished products for Californios were imported, and 2.) That a Californio would try to only have the best in fittings and horse, and 3.) That there were established trade routes from Californio all the way back to Spain ....
Hence the Damascene Belduque (and the fact that I am not unlike the Californios in that I would rather get the best and live on beans to afford it ... {and I wonder why I am divorced ... *S*}).