San Andreas independent., 1857-08-01
Banks and Banking.


In looking over our exchanges, we see in GER
tain quarters desire to so amend the Consti-
tuition of our State as to permit banking and
the issuing of paper currency, as practiced in
the older States for the conveniences of trade
and commercial intercourse This matter is
being laid before the people in the shape of cor
respondence to different papers, published in
the Cities and is intended to feel of the public
pulse and discover whether the community will
bear the change from a metallic currency to
that of rags and shin-plasters. We doubt not
the people of California have had sufficient ex-
perience in bankers and banking, in this coun-
try, to last them for number of years yet to
come, and are hardly willing, as yet, to again
place themselves and their chances of prosper
ity in the hands of, and under the control and
influence of California bankers Barton Lee, I.
G. Woods and smaller fnanciers of like ilk, are
still fresh in the memories of the people, nor
until their swindling transactions are forgotten,
will the masses be ready to place themselves in
the power of like set of sharpers.
To know who are the movers in this affair, it
the gamers by the establishment of banks and
the flooding of the country with paper cur
rency.
Bankers, money-lenders traders and prop
erty-holders in the cities, who would have the
immediate control, or receive the direct bene-
fits arising from such institutions, would, no
doubt, be pleased to see some representative of
o currency placed in circulation, as medium,
which would give fictitious value to property,
lessen the immediate pressure of the money
market, restore partial confidence for the time
being and extend the field of operations for the
trading world of San Francisco.
By the creating of banks with a specie basis
of two or three millions and few more mill
ions of real estate security, fifteen or twenty
millions of shin-plasters could in short time
be thrown upon the community then, if the
people were willing to receive this currency
among themselves as q medium of exchange and
trade, the benefits accruing, for time, to the
above class would be almost incalculable
By an increase in the amount of currency,
trade would expand, business would become
active, and that just in proportion to the amount
of money thrown upon the country; yet it would
be an unhealthy state of ofactivity,-engendering
speculation, produce an undue proportion of
trade by the importation of a species and an
amount of articles which the necessities of the
community do not require. but which the in
creased extravagances of the people would JUS
tify from the apparent state of general prosper
ity. The complaint is made that the precious
metal is constantly flowing from our shores, and
that something must be done to prevent this
abstraction from our State; that, for the last
few years it has been shipped from our State
faster than it has been taken from the mines-
But how is this to be prevented? If our mer-
chants receive fifty millions of goods from
abroad, fifty millions of bullion must go out to
meet the payments stop the inflow of goods,
and check will be Immediately put to the out
flow of money. But this cannot be done by an
increase in the amount of currency, which would
give fresh impetus to trade and produce an
additional amount of importation, though the
goods should rot in the warehouses in San
Francisco. The consequence would be, the
substance would be extracted to pay for the
goods the shadow would be left in the hands
of our own people. When the ability to pay
became exhausted, then would follow the re-
lapse extraordinary pessure of the money mar
ket-general stagnation of business-a fall in
real estate-an attempt to withdraw the foreign
capital now used in our State-prostration-
collapse burst up of great portion of the
traders and spectators, followed by bankrupt
cy and ruin, which would directly or indirectly
effect all portions of the community.
The rules of trade and the experience of all
communities go to prove such a result. The
extraordinary issue of paper currency in the
United States in 1S35-although the necessities
of the people were no greater-caused the ex-
cess of imports to rise in two years from fifteen
to sixty millions of dollars. To pay the balance
the country was exhausted of specie, and the
result is well known. The same causes are
now at work in the Atlantic States, and unless
something transpires to stop the amount of
specie which is annually flowing to Europe to
meet the balance of trade the same results will
evidently follow.
If we desire to keep clear of the shoals and
auicksands which will be produced by such
reaction, let us steer safely round the causes
that produce them.
Big TREE ROAD FUND.-We are informed that
+I,o Trao Of fllo