The record-union., 1895-12-21
BANKING OF PUBLIC MONEY.
Some Bankers VIII Dispute the Com
miSSionerS, Order.

(From the Stockton Mail.)

miSSionerS' Order.
(From the Stockton Mail)
1t seems that the banks incorporated
under State laws are disposed to chal-
lenge the right of the Bank Commits
sioners to control their action in the
matter of receiving public funds as de-
poSitS. Some of the managers are al
ready on record as declaring it to be
their policy to pay no attention to the
circular letter issued by the Commis-
sioners. A method by which the Gus
todians of public funds can relieve the
State banks from any controversy on
| the subject with the Commissioners has
also been indicated. 1t is to make the
National banks the repositories of the
money. Over these institutions the
Commissioners have no supervision
| and there is no doubt that the plan
would be successful, providing their
officers were willing to go on the bonds
of the Treasurers who were ready to do
their bidding.
| 1t is evident that the bankers do not
propose to surrender without a struggle
| the advantage they now enjoy in the
matter of employing as a large portion
of their banking capital the money paid
| by the people on account of taxation.
| They have enjoyed this advantage not
| only without any color of law, but act
ually in defiance of 1T. The State Con-
stitution declares that no citizen or
] class of citizens shall be granted privi-
legeS orimmunitieS which, upon the same
terms, shall not be granted to all citi-
ZenS To allow the banks to use as a
source of profit the money squeezed out
of the people by taxation is virtually
the grant of just such an exclusive
privilege as the organic law distinctly
forbids. The indirect methods by which
the privilege is secured are so well
known as to make it unnecessary to
dwell upon them. Those who are fa-
miliar with them understand very we'll
that, as the Mail has often before
shown, they introduce demoralizing
factor in our city and county politics.
The Office of the City and County Treas
urer in every community where the
banks are fortified by the public funds
becomes a mere fiction and the Treas
urer himself dummy. That the time
has come to end this farce, no matter
how earnestly the banks may work for
its continuance, is, we believe, matter
of serious public conviction. 1t is not
only for the better security of the pub
lie funds that they should be kept intact
by those who are selected to be their
lawful cuStodians, but it is in the in
terest of purer politics that the inf1u-
ence of the money changers should be
eliminated entirely, if possible, from our
local elections. combinations nave ire
quently been made upon the nomina-
tons for County or City Treasurer
which affected all the other county efti-
GERS.
Some sort of an outcry is being made
that any attempt to stop the practice Of
depositing public funds in banks will
produce contraction of the circulating
medium and thus raise the rate of inter
est. This is all fudge. The bank vaults
in California to-day are literally choked
with money. 1t is just piled up like so
much dead capital. The bankers are not
making any loans except upon gilt
edged securities and at almost usurious
rates of interest. There can be no panic
as a result Of the Bank Commissioners
order nor any financial disturbance
whatever. because there is to be no
shock Ample time is to be allowed to
the banks to return the public funds to
their lawful custodians, or to set them
aside as special deposits deliverable at
any time on call. A healthy public
opinion demands that money derived
from taxation shall not be used by any
individual or bank for personal profit.
The practice is dangerous, pernicious
and dishonest, and should cease for
those reasons.