The herald., 1893-06-15
SOME FINANCIAL sPRc0LATIoNs.

scarcely be called panic, but which
certainly amounts to a considerable
monetary disturbance, is now unques-
tionably under way in the east. 1t has
not attained the dimensions of panic,
and 1t probably will not. 1t is the after
clap of the financial rottenness of the
kingdom of Great Britain and Ireland,
which has been trying to do business on
the single gold standard. 1t is the
swish OF the tail OF the Barring disaster.
| II England is not vieited with a little
common sense she will bankrupt the
nations which owe her that ten thous-
and million dollars of which Gladstone
boasted 80 proudly in speech in which
he ahowed that he knew very little of
/ finance. Some OF that ten Thousand
millions of dollars has already melted
into thin air, and the rest will follow, il
the same blind policy is pursued by
Great Britain.
Our object just now, however, is not
to discuss the causes that have led up to
the financial disquietude that prevails
at present in the east, but to consider
what effect, II any, such condition OF
things is likely TO have on California.
TO begin with, there is nothing go in
structive as precedents. The best way
of estimating the probable effects of
serious financial disturbance in the
eastern states on California is to 90 back
TO the last great panic in the east, that
of 1873, which followed fast upon the
failure of Jay Cooke & 90. The ordinary
judgment would be that such erious
disturbance aa that would have reacted
iniuriously on this coast. On the con-
trary, just the opposite result followed.
As TO Los Angeles, our first boom started
in that year. And the philosophy of the
matter is very simple.
In the face of really serious monetary
catastrophe multitudes of people find it
no longer possible to do business in
great commercial centers, where hun
dreds of thousands of dollars are the
stakes played for. These persons natur-
ally HE them to new and growing
country, where their reduced means will
leave them relatively as we'll off es they
were before, and will allow them to ex-
ert their business talents in, at the time,
more restricted field. This is exactly
what followed the great financial con-
vulsion Of 1873. The class we allude to
fiocked in multitudes to California, and
they formed one of the most useful ele.
ments of our population.
They were initiated by large numbers
of people in easy circumstances who.
foresaw that 1t would be years before the
eastern country would be the theater of
profitable real estate investments.
These persons came to the conclusion
that q new country, full of opportunities
for investment in real estate, offered an
infinitely better scene for the employ
ment of their means than an older one
would, disturbed by financial embar-
easements. Their judgment was an
accurate one. 1t was not till 1879 that
the east began to recover from the effects
of the panic of 1873. What was that
sections loss was our gain.
AS yet there has been nothing gigantic
in the bank and other failures of the
east. As the HERALD has heretofore
suggested, they are mainly referable to
the Mckinley bill and to the aftermath
of the Barring failure in England.
Fortunately for California there has
been no era Of speculation of any kind
in this state during the past five or ak
years. The course of our leading tinan-
ciers he's been conservative in the ex
treme. Our banks have never been 80
full OF money 40 now, both in San Fran
cisco and throughout the etate at large.
line OF over conservatism. This has not
been the case in Oregon and Washing
ton. A perfect saturnalia of speculation
has ragged in those states. Their prin-
cipal cities are overbuilt for five or ak
years to come. Magnificent as their
future is, it has been discounted for an
indefinite period. But even there the
situation is not sn unhealthy one.
There has not been failure in Los
Angeles bank since that of Temple &
Workman, nearly eighteen years ago
That was the outgrowth of peculiar
condition OF things, which will probably
never be repeated in this state. 1t fol
lowed upon the failure of the Bank o
California, which is supposed to hav,
been wrecked by the bonanza kings
through momentary embarrassment
resulting from the gigantic operations o
its president, W. O. Ralston. Tha
great financial genius found himsel
carrying too heavy weight in tn
building OF the Palace hotel, whose cos
was $5,500,0O0, and other venture
equally colossal. The catastrophe whicl
overlook him furnished our Californi
fnanciers with a lesson which the,
have never forgotten.
1t is q notable circumstance that ever
the collapse of the great Los Angelo
boom Of 1SS6-S7 was not followed by tn
failure of a single bank of this city o
county.
SOME GOSSIP ABOUT ORANGE GROWING