Year: 1875

the commercial world that has startled the business
community greatly that published in yesterdays
journals and confirmed by subsequent Dispatches
the failure OF the Bank of California and the
suspension OF business OF the mining boards OF that
city. Doubtless the latter course was the that
could be pursued under the circumstances for it is cal
culated to alay excitement and afford time to those
who are engaged in speculation look around them
make arrangements TO meet the liabilities of the hour
1t will be remembered that the business of California
has been upon regular gold basis; therefore, whatever
the effect of the failure may be will be confined 10 that
community. Thus far unable to ascertain that
any Of the banks in New York of the Eastern cities
are influenced by this misfortune, which has moral
rather than practical character, inasmuch adds
TO the already well founded feeling of dstrust and,
therefore, it has material effect upon local busi
nor interrupts in any way industrial enterprise
THE CAUSE


The cause of the failure is, doubtless over trading
The Bank of California fair representative Of the
ambition of that wonderful State. It's officers were
typical Cafornians. They made money rapidly they
expended generously The policy OF the institution
appears have been encourage Industries OF the
Pacific SLOPE trusting the chances that attach TO time
and successful work for reward Doubtless this was
comnendable, but certainly careful commercial
will wonder why moro not shown in the seec
tion of investments, and why the property chosen
not OF character less subject to speculative fluctuations
than the silver mines OF Nevada, young railroads,
hotels and other similar "Big Bonanzas."
How much the institution interested in the various
mines from which of late we have heard such extraor
dnary accounts of easily obtained wealth it is difficult
to say the present time, but we'll understand
/ how under such temptations have been afforded in
this direction, the Bank Of California like of
city banks that tempted in like manner with
railroad securities, has yielded to the
nf itv md nda fhasa
stances 1t not surprising that the failure in its ruin
has visited other institutions in the locality that
of a stronger and more serviceable character.


PROBABLE LIABILITIES


We have been unable to ascertain the probable
of liabilities of the Bank of California the failure
while Immediately caused by depositors' rum was d.
recty the outcome OF conflict between classes of
California specuators--one, the Bank of California
party headed by Mr. Rason and Mr.. Sharon and the
other headed by Messrs. Flood 0Brien and Heyden-
felt The latter party have established bank in San
Francisco, called the Bank of Nevada with a cash
capital of $4,000 OOo gold and a right to in
TO 500 100000. Incidental to this right have
been the mining properties known the Savage, the
Caledonia, the California, the Ophir and the Consol-
dated Virginia The three latter known the 'Big
! Bonanza" mines, and the Bank of California partly
obtained control of them.


In getting this control the of the California was
run up from go to 500 then multiplied by FIVE,
which would make the highest price 100; it has since
declined to So The ophr stock, while they get
ting control advanced from so to 700 was multiplied by
! FIVE making 700 represent 40 in stock; 1t has
since declined 49, The Consolidated Virginia. during
the process OF getting CONTROL from 7SO
yesterday 267 The losses these speculations
typical of other transactions and throw light the
causes of the impairment OF the credit of
| the bank and its breakdown The opera
tions of the bank in the hotel line too
well known to need mention That the bank has been
strained of late and pinched has been evident bank
ers here, who have Stunned their bills from the fact
that in the past sixty days most of the bills offered in
this market have been those OF other institutions in
dorsed by the Bank OF California The inference has
been that the Bank of California had hypohccated
curities with those who lent their bills and that this
borrowed exchange used obtain funds needed to
carry the large operations of the bank. In the
borrowed bills which have appeared those Of
the Bank of British Columbia and the Bank Of British
North America.


Comment has been made upon the probable course of
Messrs Laidaw & Co., the agents in this city of the
bank, and they became ouspoken during the day
that it necessary for the firm that they
had suspended although their Offices thronged
with anxious inquirers and a nervousness mani
tested by those who had credits the institution. 1t
is claimed that if time afforded the Bank of California
1t Will emerge from its difficulties without suffering
loss but all this is subject conjecture because it is
impossible at the present time to ascertain the amount
the present value of their securities. Messrs. Fisk
Hatch understood say that the bank had no in
terest investors in the Canadian and Pacific Railroad
This fact is also confirmed by the Secretary of the
pany.


STREET


Wall street is not excited by this great event. the
suspension Of several banks and the close OF speculative
business until the panic has passed. and does not mani
fest the apprehensons that might be anticipated under
the circumstances. The failure of Stirling Ahrens Il
Co was to great degree, regarded OF vastly inn
portance because Of its direct effect upon commercial
circles which the interest of Wall sur
roundings or less identified The misfortune
upon the Pacific slope is regarded rather local or
negative in character while the failure in Baltimore
looked upon direct and positive blow the active
resources Of trade and is likely affect and involve in
trouble other establishments 1t is said that the failure
is attributable large shrinkage in molasses
to attempt to transact business in Of the cap
tai of the firm


The firm have done enormous business in the i'm
portaon of moasses sugar and coffee, in refining and
in the expectation Of -four and provisions to the West
Indies They said to have imported not less than
hoghcads Of sugar and 4o oCo hogheads of moas
ses since the irst Of January They owned the Chesa-
Peake ana Merchants rehncres, and were agents for
the Calvert and Maryland Their Indebtedness to
Alexander Brown Sons Is reported at $500 600
The suicide last spring Of G. A. Ahrens, the junior
partner, is believed to have injured confidence in the
house


| WHAT MEssRs LAfDLAw SAY.


To determine what effect the failure Of the Bank of
California had upon the credit OF the firm Of Mes.rs
Ladlaw Co., reporter Of the HERALD called upon
the President OF the bank with whom that firm keep
their accounts. The President Of that bank stated in
conversation that the effect of the failure would
be felt first by the holders of bills OF exchange drawn
against the Bank of California


R.PoRrRR-How will the rejection Of those bills of
exchange affect the credit Of Messrs. Ladlaw 4 Co.
PREsIDENr-Not to their dishonor for they have in
variably signed such bills Of exchange agents Of