Year: 1875

from the financial system OF the
States, California has suffered none
from the misfortunes east of the Rocky
Mountains. The causes of the present
financial difficulties here are wholly
local, and can be easily traced, though
they do not lie npon the surface. They
certainly do not depend upon the pet
ty quarrels, or rivalry of San Francis
co bankers. Nothing but absolute ig-
norance can impute such grave conse-
quences to so feeble an impulse. Ar
rogance may assume the role of the
fly upon the chariot wheel, and
the ignorant conclude that the float
ing straw directs the current. The
failure of JAY COOKE & Co. did not
cause the panic in New York. The
breaking up of that great house only
opened to view the rottenness of the
whole financial fabric, and in wild de.
spair the people tore it down without
moments hesitation. The downfall
of DUNCAN, SHERMAN & Co. has af-
forded an equally demoralizing view
of the commercial situation in the
States. The decay was already COM
plete, and only slight jar was neces-
sary to cause the entire structure 10
fall into ruins. Modern wisdom does
not build temples like that which
SAMPSON tore down by grasping its
central pillar. If the financial fabric
on this coast depends upon RALsToN or
FLOOD & O'BRIEN or BALDWIN, then
the sooner it is torn down and rebuilt
the better The leading cause of the
panic we confidently affirm has been
speculation. The banks have extend
ed themselves too far. They have fos-
tered overtrading and initiation OF
values. They have been blind to the
fact that wherever speculatcrs are al
lowed too much scope they will inev-
itably advance values to an abnormal
point, from which a reaction is abso-
lutely necessary for the welfare of the
State. When an unsafe limit is
reached, the laws of political economy
step in and restore the equilibrium.
The wave may go on rising higher and
higher, but it must finally break and
seek its natural level. And here lies
our consolation: We have a sound
currency, and the expansion has been
already checked. Now comes the
shrinkage, and that shrinkage will
but inure to the benefit of the people
at large. If mining stocks fall to their
actual value they become the object of
legitimate investment and cease to be
deadfals for the unwary. If lands de-
preciate, the incoming farmer will
have more money to develop the
country and his capital will serve to
till larger area, while the lands now
under culture will not yield any the
less of corn or wine or OIL. If the spec
ulator is hereafter Stunned and the
rate of interest falls to more healthy
figure because of the caution which
panic always engenders, then the le-
gitimate borrower will have a wider
field, and substantial increase in real
wealth will take the place of nominal
estimates. If some men lose what
they imagined they had made, values
will be more stable and permanent
investments more frequent. If some
improbable enterprises are abandoned
there will be saving of considerable
money that would otherwise have been
sunk in vain effort to float that
which never could have any buoy
ancy. If some too sanguine immi-
grants are prevented from seeking our
shores, there will be fewer croakers in
our midst; and if the tide of valuable
immigration is somewhat retarded,
the satisfactory settlement and en-
ployment of those who do come will
assure larger influx in the future. If
some mushrooms are swept out of
existence, they will give place to men
who have toiled slowly up and by
their labors and ability deserve lead.
ing positions; honesty and integrity
will take the place of chicanery and
empyricism, and true merit receive
some of the admiration that has been
bestowed upon mere success, while
Fortune will drag from their lofty
thrones many of those she has so ca
priciously elevated. There is good to
come out of the evil. The lightning
which has riven the edifice will purify
the atmosphere; the earthquake which
has shaken more than princely thrones
is letting out the gases which confined
and accumulated would tear asunder
the rocky ribs of the globe.


SoME person or persons who have
no fear of the punishment promised to