Oroville daily Butte record., 1857-11-13
banking on state Stocks.

The advocates of banking in California,
driven to the wall by the recent alarming
Developments concerning the rottenness o:
such institutions as have until very lately
been regarded as entirely safe, and forced to
abandon their old arguments, have fallen
back on State stocks as the security upon
which to found banks of issue, discount and
deposite. They talk as loudly and conf
IDENTIFY of State stocks, as State bond holders
did before the decision of the Supreme Court
revealed our utter bankruptcy, and showed
our inability to even assume our liabilities
as honest debts
Banking at any rate, and of any kind, is
at best but system of ruinous and extrav
agant borrowing and lending, in the course
of which the percentage of the game " eats
up all the original capital of one or both
parties engaged in it, and to fasten such an
incubus upon us, having for foundation
the stocks of a State already embarrassed
with the question of " Pay or repudiate,"
certainly seems the most " wildcat" scheme
of any of the thousand and one which have
latterly entered the noodles of visionary
writer's and designing politicians.
The San Francisco .drgus, a well edited
paper, lately started in San Francisco, is
strongly in favor of banks backed by State
stocks. In an article upon the subject, that
paper quotes as follows from the Providence
Journal:
"The value of the provisions for the scar
city Of the circulation of the New York banks
was tested in the case of the Mechanics
Banking Association. Although the bank
has failed, its circulation being protected by
the deposit of public stocks, is entirely safe
and its bills are received the same as be-
fore'
The above is quoted to show how confident
the people of a State, forced to do business
in paper currency, are of the ability of
great and solvent State to redeem the paper
she has endorsed. Why, We would ask,
would notes issued from q bank, which hav-
ing failed while backed up by the State
stocks, be Of any greater value than is Cali
fornia paper to-day, on Wall street, To
take another view of the case, would not
our already bankrupt State be still further
embarrassed, if peradventure, like the
Mechanics Bank spoken of by the Provi-
dence Journal, the proposed California,
stock endorsed institution should fail
We entertain the opinion that State has
no more right to go beyond her depth in
financial matters than an individual, end
when she has done so and by so doing has
entrapped herself into an inextricabe series
of embarrassments, she ought to retrench
and above all things should refuse to risk
being thrown more deeply into insolvency
until she has at last devised some means to
rid herself of her existing Indebtedness. If
the State must pawn her stocks as collatter-
al security for bank notes, she should first
endeavor to pay up what she already owes,
or rather adopt some means that will enable
her to make her present liabilities come un-
der the head of "bills payable"
We regard the establishment of bank. as
the most dangerous project which can be
mooted. considering the present unsettled
state of the public mind, and the contagious
mania for desperate enterprises which has
seized the financial community, here and at
the East. Five years of banking in Cahfor-
MIA would make the people as wild as ever
were the people of Mississippi in their Wild
est days.
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