The Nevada journal., 1855-03-02
Our Banking System.

Our BanIgingsSystem.
Experience has fully proved to the people
Of California that corporate banking institu-
tions gre not indispensable to produce specula-
ton, reaction and loss in trade. With gold
andysilycr currency, unalloyed by the least
mixture of paper issue, the State has just been
brought to the brink OF ruin, and O revulsion
created that in no other State in the Union
could be overcome for years. The Californian
system differs from the corporate bank system
in the one important particular that it is ir-
responsible. No one save the immediate man
ayers of Page, Bacon CO., could be aware of
the condition of their business, unless they
chose to make the facts public. So close Is
the exclusion Of the public from any knowl-
edge of the state of such concern that
even another banking house, as in the case
Of Adams & Co may he kept in ignorance,
and be pulled down in the fall The pub
lie have no guarantee and no security
The display Of u few thousand dollars
on a side board is all that meets the
public eye, and millions of money arc passed
through their hands, or deposited in their
vaults, with nothing to reclaim them save a
draft on distant State that may be dishcn-
ored, or a certificate that such deposit has been
made, which may be presented to an empty
vault. Dishonest pToprictors may hide
million Of dollars, and who shall prevent them.
Sub agents may take thousands and the public
not know it until accumulated losses have
rendered fnilurc necessary. The money of de-
positors may be put into expensive buildings,
or used for Improbable display-unproiitabe
save that it dazzles the public, and draws it on
to greater ruin. When run occurs the de-
posts orc in brick and mortar, deprecated by
the convulsion-at any rate not IN the vaults.
The law gives no securiy--the law which is
so jealous Of corporations 1t leaves the peo-
pie to be the victims Of irresponsible private
companies, in fact compcls them to be such,
by prohibiting everything like responsible
banking. The public are compelled to trust
men first, and find out their characters after
wards. If the bankers are honest the deposi-
tors are safe. If they prove dishonest there is
10 remedy The whole system is bad. If
men who. engage in banking are better than
the system it is well for the public but of this
there is 10 guarantee, and when men do busi-
ness in banking house, unless it has been
tried by years of public confidence, they take
a heavy risk.
The banking system, os conducted in some
Of the States, especially the Eeastern States,
might be adopted in this State with most sal
utary effects. The banks there stand year af-
ter year, till their age exceeds that of the
Oldest inhabitant The Suffolk bank of Bos-
tou, the Manufacturers bank of Lynn, the Mer-
rimac bank Of Newburyport, the Bank Of
Commerce, of Boston, the Merchants bank
of Salem, are known and their issue is current
in the Union generally, and so of fifty others
Their stability is owing to the caution with
which their charters are framed, and the safe
A limit is affixed beyond which they cannot
issue their paper, and bears a due proportion
to their capital, and to their funds in vault,
and their real estate and government securi-
ties, Commissioners in every county are ap-
pointed by the State to examine quarterly into
the affairs of every bank, with power to en-
join if any irregularity is detected. Stock
holders ut all times have access to the books
md concerns of the banks, and at regular
meetings of the stockholders the whole bust
ness and condition Of the banks are laid be-
fore them Every official of the banks enters
into heavy bonds for his conduct in its af
fairs. BY this systonfthe public are thorough
" protected. The failure of bank is q rare
occurrence and when it occurs it is little
disastrous, as the precautions against failure
tend to diminish the disaster if it occurs
There are no private banking enterprises, IL
responsible and uncontrolled. The charter
comes directly from the Legislature, and is
framed according to certain principles that ex-
pericncc has justified.
California can never be a great commercial
State unless some means are taken to restrict
the present irresponsible system of barking.
and establish one with more securities to the
public. Il viii always be liable to disastrous
revulsions. A dry wintcr-an oyerstocked
market-a large failure in the East--a thou
sand causes, will upset its affairs, and plunge
it into calamity like the present, which, as
says the San Francisco Herald, is greater in
San Francisco alone than any fire that city
has experienced.
ALI. IsNoCENT.-On Friday last, while the