Weekly Trinity journal., 1879-08-16
CALIFORNIA BANKING.

CALIFORNIA BANKING.
The programme of the Bankers Con-
vention at Saratoga, says dispatch to the
Record Ul6on, closed with nm address on
"Calitornia Banking" by Gibson of CAL
iforna. Hesaid: Banking in California
is presumably like that everywhere. Its
history, like that of the State, is bret
and recent, dating from lS49. The argo-
nauts' most sanguine expectations were
more than realized, and the gold produe:
WAS so unprecedented, that economists
like Chevaler in France and Cobden in
England, predicted that it would be un.
fitted for use as money.
THE FIRST BANK
/ Was established January 8, 1910, by Ma.
glee & Sexton. Private banks and ex
change offices increased until the winter
of 1854 5, when an almost general col
| lapse occurred. Tho immediate cause of
this crash was the faiGre of the great
house Of Page, Bacon Il Co., OF St.
| Louis, whose San Francisco branch occu-
pied II prominen: position. One of the
| few houses which weathered the storm
was that of Lucas, Turner Il CO., man
| aged by General Sherman. The banking
business of California up to this time ex-
isted in an atmosphere anything but con-
ducive to the soundness and stability of
credit was unorgnnized the population
was excitable and unsettled, and by rea-
son o! the distance from the base Of sup
plies the market luctuated from "glut"
to perfect barrenness. During the fol-
lowing decade banking was systematized
aud freed from its many crudiies. Sew
eral private firms were converted into
corporate establishments, and consider
able amount of foreign capital was in
vested IN banking in the city. One of the
most notable events was the foundation
of
THE BANK OF CALIFORNIA,
Which was incorporated June Is. 1864 .
aud began business July lst with ID. O.
Mills ms President and w. G. Ralston as
| Cashier. Its capital, which at first was
81 coo, ,000, was increased July /. 1866 to
| 100000. Though California escaped
/ the panic Of 1878, which proved so disas-
| fr, IN, fl IL % . huI La
n disturbance of its own which testified
| the stability of its financial fabric. Dur
| ing the summer of 1873 the high price of
gold in the East induced many merchants
to buy largely for prospective trade, and
the shipments of gold we're so, 900 ,000
us against So 600, 600 during the same pc
riod Of the preceding wear. In addition.
the high price of wheat absorbed severn;
millions, ard douLtless, as was currently
reported, considerable coin was locked up
for speculative purposes by a clique hos
tile to the Bank of California. Money
wa close, and it was whispered about
that Rilslon, who was practically the
bank, had locked up several millions Of
its funds in unproductive renl estate and
manufacturing enterprises. 1t was also
known that great contest hnd been wag
ed between the Ralston party and Flood
and his associates for the control Of the
leading Comstock mir es. and the triumph
the Flood crowd created powerful rival
of The Rank of CaIifnrnin
THE CRISIS AND DISASTER.
Mr.. Gibson then described the ap,
pronching crisis and subsequent disaster,
aud devoted considerable time to the
scenes and incidents during Cnlilorna's
"Bnck Friday" III the memorable Aug
ust of 1873. He continued The follow
ing Monday was collection or "steamer
day." when all mercantile balances are to
be adjusted for the preceding fortnight
This custom originated before the Pacific
Railroad was built when The steamer
sailed monthly, ard is Objectionable by
reason of its producing periodic strn.
gency. The day came and went mutu-
al torbearnnce was exercised, and conf
dcnce was restored. In 1873 the nssoeia-
tinn Of New York banks and of those in
many Eastern cities, and the use of
Clearing house certificates, probably
nverted general suspicion in San Fran
cisco. There was, at that time, no Clear,
ing.house, no union OF resources, and
each bank stood on its own merits. On
the ID of October the Bank of California
was opened. Two days later the Ne
vada Bank of San francisco opened with
cash capital OF S5,OOO,OOO, increased
October 4, 1876, to Sl0,000,000. As we
cast retrospective glance at the effects,
we meet abundant evidence of the sound
ness Of the banking and financial system
OF the State. There was no general
panic, no tumble in prices, and no COM
mercial crash. With the exception of
this temporary backset, from which il
speedily recovered, the banking business
Of California has more thnn kept pace
with its splendid material developments.
Great men Of California have projected
aud quilt great system of railways,
opening up valleys richer than the Mis-
sissippi, and rendering tributary to Cab
forna the mineral wealth Of Arizona and
Nevada. 1t is to
THE MINING INDUSTRY,
However, that California is primarily in
dcbted lof its population and wealth. No
other Iegitim ate industry can show such