The Findlay Jeffersonian. [volume] (Findlay, Hancock County, Ohio) 1870-1881, 1875-09-03
THE CALIFORNIA FAILURE.

The suspension of the renowned bank
of California, followed, as it most likely
will be. by many other California inSti-
tutionS, takes the public by a surprise as
great as that which followed the failure
of Duncan, Sherman Il 20. The bank
of California was considered, generally,
as impregnable, and as being so securely
founded as to defy assault. Yet it has
Welded to the first little run made upon
it.
California, our readers already know,
is n country which takes no stock in pa
per money. 1t believes, not i'll n paper
currency based upon specie, but upon AN
exclusively metallic currency. Gold Is
the only circulating medium. Green
backs are bought and sold by the bro
kers, and there are two or three national
gold banks which issue paper redeema
BILE in coin; but almost the entire bust
ness of the State is done in gold coin.
There could be no safer currency than
this, so far as the intrinsic value of the
money is concerned; every dollar in cir
euIation is absolutely worth its face, and
a. good the world over as upon CHlifor-
mia soil Yet the sOlidity Of the currency
and its worldwide adapatbility has not
saved the Pacific coast from hazardous
speeulatiOnS, from bad banking, from
commercial revulsiOn, or from any of the
financial disasters that have fallen upon
other portion of the country where IL pa
Der currency obtains The citizens of
that region have the consolation of
knowing that their medium Of exchange
is solid and sound: but so have we, who
never see a gold dollar except as a curl
oSity. Their condition is no better than
ours, in that respect; and now that
bank failures have Overtaken them. ehOr-
nous in their extent and crushing in
their effect, they have the opportunity
of learning therefrom the lesson that
while n sound currency, paper or coin, is
n national blessing which cannot be over
estimated, there is no guarantee to be
found in it against commercial indisere-
tions, fOllies and crimes.
Ard this California bank failure, we
are inclined to think, like that of Dun
can, Sherman & Co, will be more cor
rectIy elassed as a crime, when all the
facts are known, than any wilder catego-
ry. 1t has been doing business for years,
we venture to guess, upon confidence"
basis; its name was the synonym OF
strength. and men trusted it because
everybody else seemed to think it finan
cial blasphemy to suspect it. Taking
advantage of this corrupt estimate of its
stability, it has received deposits with
one hand from those who biindly trusted
it, and loaned them out with the other
upon risks as worthless as those which
carried down Clews & Co., and Duncan,
Sherman & Co. No kind of currency
could withstand this style of business,
and the Bank of California has failed
simply because it did business upon that
unsafe foundation which springs prima-
riIy from a lack of conscience, and crum-
bles away all the quicker from lack Of
skill to back it up.
q specie currency, then, Is moi pa
nacea for all financial ills. 1t is not Il
preventive, as we have seen, and it is not
a remedy. 4 safe and sound currency
is a large factor in financial safety and
success: bat it not IA security against ii
nancial fraud, nor a protection against
financial stupidity.
The failures Of 1873, ON the Atlantic
coast. came IN spite OF, and not ia con
sequence OF. our currency and precisely
as they haye nov overtakcn tine people
of the Pacific coast. They did not IN
voiVe any injury tn the circulating me
dium, either here or there, and we arr
just "a safe in our paper currency as the
CalifOrnians with their metallic curTen
cy. 1t has been the practice, NE know,
to point to California and her exemption
from trouble in 1871, rs proof Of the su-
periority and safety Of her currency toI
ours, but that will now have to be given
up. Her hour has come as inevitably ns
did ours, and from the same cauSrs.
metallic currency ws,s Fogerless 10 pre-
vent IfitsGHIg COHmeTcidi