Los Angeles daily herald., 1875-08-29
Sailing Without a Chart.


bank without correct guide is equal
ly exposed to danger, and as certain to
meet with disaster. Fortune may fa-
vor him for a time, but he must ulti-
mately meet the fate of the empyric.
The financiers of this Pacific coast
the men who have controlled the fab
ulous wealth of this favored land, and
held the destinies of the Common
wealth in their hands, have been reck-
lessly driving before the wind without
chart or compass, and that they have
at last reached dangerous sea should
not be matter of surprise. That dis
aster did not overtake them sooner is
indeed wonderful. The financial world
is governed by principles as unerring
as the law of gravity. The ebb and
flow of the financial tide is closely
watched by all experienced bankers,
and for this purpose aggregate bank
statements are published. The week.
ly statement of the associated banks
of New York is closely analysed by
thousands. The statements of the
banks of England, France, Prussia,
and other European countries, are
anxiously looked for, and become the
guide of financiers in their operations.
Do they see the coin going out, Lom-
bard street becomes cautious the Di-
rectors of the Bank of England ad-
vance the rate for money, and the de-
pletion is stopped. In California alone
does every banker steer independents
ly, and there is no guide to show
whether coin is flowing into the State
or flowing out of it; whether trading
is overdone, or whether money is ly-
ing idle. Whether there is ten or fif-
ty millions of coin in the bank vaults,
no one knows; whether the banks
have extended themselves too far cam
not be ascertained. There is no public
barometer to indicate an approaching
storm, and this because the law does
not compel the banks to publish sworn
statements. 1t may be found then
that the banks of San Francisco, in
stead of having the vast boards of
gold and silver, which they are sup
posed to possess, may have scarcely
any. To be on perfectly safe basis,
there should be about $30,000,000 in
coin in circulation on the Pacific coast.
This is allowing one million popula-
ton and $50 per capita, (which is
about double the average In the State
before the war; OF this sum $25, ,OO0,-
600 should be in the banks. 1t may
seem strange to those who have given
the subject no consideration, that
when the annual product of the pre-
cious metals has been $4,000, 900,
and the total product of the last
eighteen years over 100000, 900, SO
paltry sum as we have mention
ed has not accumulated. Yet we
doubt if the banks of San Francisco
hold over half that amount. The fact
that the Bank of California only had
$1,500,000 to meet about ten millions
of dollars deposits, does not warrant
the Inference that there is much coin
left near the Golden Gate. We know
it is commonly believed that the
banks in this State hold one hundred
millions of dollars specie and bullion,
but the absurdity of such PROPOSE
tion will readily appear from consid-
Grafton of the fact that the Bank of
England, which keeps the specie of all
the Kingdom, usually holds only G20,-
900, 900, and has now but e29,000,000,
an enormous surplus; and that this is
the coin reserve of the thirty-five
million people of Great Britain, whose
annual foreign commerce amounts to
three million of dollars. But where
has all this vast product of the pre-
cious metals gone to? We answer it
is now in Europe. 1t has gone out
through the Golden Gate and across
the Continent to be shipped to Lon
don. The foreign exports of specie
and bullion from the United States
nearly equals the annual product, land
where else than the Pacific coast does
| it come from?) the rest has been con-
sumed by the jewellers. The State
has been sending it abroad to pay for
what she consumed. The miner has
to be fed, clothed and provided with
tools and machinery, the public i'm
provements have absorbed many mill
ions. 1t is but recently that agricul-
ture has assumed large proportions in
this section, and even at the present
time not half the population is engag-
ed in cultivating the soil. 1t is labor
which gives the intrinsic value to the
| precious metals, so that for every dol
lar of specie there has been one dol
lars worth of labor bestowed. What
the miner has not spent for subsis-
tence is the profit, and alone remains
in the State. Prosperity has made
our people extravagant, and we have
been importing about as much as we
exported. During the six months end
ing July 1st, 1875, the treasure ship
ments from San Francisco have been