The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1881-08-13

Hhfvn .x ~ wn,ogr. or SAN FnASctsco.
NJ wHeht,s report on toe banking sys-
,..a - ~s,IfornIa was ose OF the interesting
s e.a ~ a. the Convention at Niagara yes
,erday. He said: LA I'D
Nev~sIa more silver than all the other Sts'cs
and TerrItories in the Union comDSe9.
WIrbout this output a the precious metsis
nc credit Of the Government coulu heseI
nae been sustained, as 1t has been ourius
,he mast twenty years OF unpreceueu,eeu
triaIs. The bullion produce OF the Eac,uS
coast is the superstruciure that mas eaIIlcu
the country safely through us terIlpie ". :
heal and placed the banking interest," on 'es
nreseut cafe and prospectus foundalion.
cai,fornta is one OF the very lew states
In vrhich the organic law prohibits the issu'
snce az paper money. Financls' inter
"o,,rse hoth domestic and foreign, mas al
.,"ys been carried forward on gold com
ras,s Tbe legal tender Of the Government
ooyor found favor here until II was made
redeemable in coin. so opposed have we
hoen 10 naper money not convertible d.
rectIv into coin that q special act OF Con.
oress was necessary 10 the introeuction oil
national banks in this State. They were
allowed to issue oniy 50 per cent. OF the
5ar value OF the bonds deposited to secure
circulation, and 10 redeem their notes IN
gold coin, while the national currency
banks OF the Atlantic States are per-
mitted to issue 90 per cent, and 10 redeem
their notes in coin or greenoseks. Inc
first bank organized here under tpts sptelai
,e, was the First National Gold Bank OF
San Francisco, which began business on
the LIST Of January, 1869, with capital OF
81. 900. 900, subsequently Increased TO w
600 900, and about year ago reduced 10
Al zoe. 600. Banks OF this kind multiplied
among us until we bad nine in thls Slate'
AT that time the number BID iair 10
steadily increase, and would have Deeh
considerably larger but for the iocai bo%u-
ciol manic OF August. 1875, incident 10
tho failure OF the Bank OF California,
" bicb carried down with It the National
Cold Rank and Trust Company. At that
time this last-namCd bank was considered to
mo in n very prosperous condition. It's
stock commanded a high premium, and the
dividends were liberal and regular. Ihe
notion bad somehow obtained that ma
tionaI cold bank was about the safest kind
Of An institution; so that the failure OF the
Trust Company, aud the refusal Of other
hanks 10 take its notes, though known 10
he amply secured, greatly weakened conf
dence in the natIona-bauk system and
practically put stop TO The further or
ganiz,tion OF gold-note banks IN this State
Upon the resumption OF specie payments
bv the Government in January, 1879, the
First National Gold Bank OF stockton, With
a capltal OF $500, 900, re6rganized IS ma
tional-currency bank. All the other gold
mole banks would have undoubtedly fol-
lowed the example OF the Stockton bank il
the managers bad considered the advantages
OF change full compensation for the trou-
bic involved. Recently two or three small
currency banks have been organized IN the
interior Of the State, but tue system has not
made as much progress as was expected.
California banking is peculiar. The sys-
tenn. such as it is, has no parallel in other
States. We have our private and our In
cornorated banks, both domestic and for
eign. We have national, State, and foreign
INCORPORATED banks. We have no banks OF
Issue. Our national banks are divided be
tween the currency and gold-note systems.
We have incorporated savings banks with
c9nit4l stock and without capital stock, but
most OF them have capital stock, and in that
feature they differ from most savings banks
in other States. All the State incorporated
hanks are under the supervision Of three
bank commissioners, appointed by the Gov
ernor. Just after the Board commence its
labors in 1878 several banks found it neces-
sarv TO 90 into liquidation, showing that
the creation of the Board was a long.felt
want. For the past two years there have
been no bank failures IN the State, and there
has been a great Improvement in the meth.
DDS of conducting bank business, and more
care in the selection OF securities for loans.
The commissioners are required by law to
conduct semi.anDual examinations OF all the
banks under their Jurisdiction, but practi-
caIly they do not examine much oftener
than once during the year, and even this
has become very mOnOtOnOus.
How long the present anomalous banking
system is TO prevail in this State it is diff
cult 10 saw. But for the introduction OF the
silver question in 1877 it is likely that more
of our State banks would have gone under
the national bank law, or given place TO
new organizations OF that character. There
is no reason why we should longer adhere
so closely to metallic currency. The same sys-
tenn OF banking that prevails in New York,
Massachusetts,, and Pennsylvania ought to
prevail here, and must ere long. We
struggled along for years without a Clear
ING. House. on account of supposed local
jealouSies and business riyalries. But that
institution has now become an indiSpensa-
BILE fixture. SO will new methods OF bank.
ing prevail when some prominent bank
concludes to take the lead, or some new
organization, with modern views, steps to
the front,