The Nevada journal. [volume] (Nevada City, Calif.) 1851-18??, 1857-08-14
From the Alta California.
A Banking System in California.

vantageS which this plan, or something
like it, will secure to our State
And first, as to the result upon our
State credit. The first effect of such a
law as l propose, would be to call back
all our bonds from New York and Eu-
rope to our own State. AS the present
holders of these bonds may be safely
considered as having paid not exceed
ing an average of 60 cents on the dollar;
therefore, a compromise might be effect
ed between those now contesting the
question of reputation, by offering new
bonds at the rate OF 60 cents for each
dollar of the old ones. These new
bonds, at whatever they may be issued,
will be worth par, because peculiar
use will be offered them heretofore I'M
known in our State. Be this as it may,
however, the bonds viii come home, and
they will remain at home, and that too
in the hands Of our own Controller. Our
interest will then be paid to our own
banks, who will circulate it at home.
Our State credit will be entirely taken
out of the hands of strangers, and if our
interest be not paid promptly, it will be
our own affair, and no longer an occa-
sion for the sarcasm and insults Of Brit
ish and French capitalists.
Again, whatever bonds are issued and
used in this way, will surely be paid
VIXEN due, for the reason that there will
be dollar in circulation in the shape of
bills for every dollar of that debt con-
sequently injuring the security and
causing the bills to depreciate in the
hands of the holder; and no man will
knowingly vote money out of his own
pocket without an equivalent.
2dly. As to he public,with all due re-
spect to the estimable men now carrying
on private banking business, allow me
to ask: What security, save the re-
spected integrity of the several bankers,
have their depositors for the money en-
trusted to them? Some advertise GER
tain capital. The majority do not. In
either case, how are we to know where
the capital is, or what it is ? or whether
it exists at all The sad experience we
have had by the failure of Page, Bacon
& Co., Adams & Co., Wright, Robin
son, and several other bankers, has
made the question prominent in the
minds of all. The Legislature, year
ago, undertook to introduce some kind
of supervision over our banks, but the
measure was voted down, because the
banking under our present system being
unknown to our laws, and, therefore, on
the same footing with all other private
callings, the Legislature had no right to
meddle with it. Those whose business
obliges them TO deal with bankers arc
now, as heretofore, compelled to work
in the dark; but the miners, the me-
chanics, the laborers of the country,
| these can bury their surplus cash, and
trust no one with the hard earned pro.
ceeds of their labor. They, in their
turn, do what they can to injure the
public by keeping their money out of
circulation. Hence, the scarcity of mo-
ney; hence the ruin growing out of this
stringency in the money market. 1t is
estimated by parties posted in such mat
ter, that there is now larger amount
of gold hidden in holes and corners, than
there is in circulation. What is the
reason? Simply because its owners
have no confidence in class of institu-
tons, to which Adams & Co.. and the
rest, belonged; because they know moth
ing of the condition of our banks, and
under the present system they nerer can
know, should it last an hundred years.
To the depositing public, the plan
proposed gives as great security as
can be given under the best system
known. For the bills they hold, they
have the credit of the State. For de-
posts and bills of exchange, they have
merely personal integrity as their sole
present guarantee, but a good bond from
every officer, (Which bond is matter of
public record and monthly statement
of the condition of the bank, sworn to
and certified by disinterested and re-
sponsible public officer. They have al
so the property held by the bank, all of
which is in this State, subject to the ju-
risdiction of our courts, and the exist
ence and value whereof each deposltor
may ascertain for himself before he as
sumes the position of creditor to the in
stitution.
So much in regard to the security of
the New York system of banking as
compared with the California system.
Let us now trace the effect of the plan
proposed upon the interest of the money
and consequently upon home industry
in all its branches.
Suppose the present debt be refunded
at par. the amount of securities thereby
created would be about $4,000, O0O.-
This would be an abundant capital for
the purposes of banking in our State for
a long time to come. The operation Of
the plan proposed would create al, once
circulating medium of S4,000,00O, Or
an increase of about 80 per cent. on our
present amount of money in circulation.
The confidence that would necessari-
" attach to a, well conducted bank on
the plan proposed, would bring out of
holes and corners the money now hidden
from the public eye. If this amount be
nearly SO large as is supposed, the pres
ent circulation would be augmented by
another sum of hooper cent. on the pres
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