416 BANKS AND MONEY. 



cheating, the populace broke his benches, from which custom 

 we get the word bankrupt. In modern times the people allow 

 the fraudulent banker to retire to a palace erected out of the 

 profits of their earnings. 



In strict terms, the banker is dealing in money, and his profits 

 are perfectly legitimate, being the difference between the terms 

 on which he borrows and lends. The amount of his business 

 determines his gains. In this manner small sums, which would 

 be unproductive in the hands of individuals, are concentrated 

 for use in building up commerce, trade, and manufactures, and 

 are an incalculable blessing; but when the banks themselves 

 enter into competition with these industries, they at once create 

 monopolies, and become a curse. 



In California we have no bankers that is, no dealers in 

 money. Our banking system, or rather want of system, en 

 ables a few men with little or no capital to start a bank that 

 is, a place where those who are so disposed can deposit their 

 money; because the Constitution of the State prohibits the es 

 tablishment of banks, such as exist in every other State in the 

 American Union, and in every commercial town in Europe. 



The effect of our peculiar plan of banking is, that the banker 

 has everything to gain and nothing to lose . It is well known 

 that such is the potency of bank rings, that constitutional pro 

 visions for the protection of creditors are practically inadequate ; 

 that vast fortunes are amassed at the expense of depositors; 

 that stocks rise and fall irrespective of their values, while in 

 dustry suffers, and legitimate business is demoralized. The 

 farmers cannot guard their interests too carefully against these 

 evils. The Bank of California is not a dealer in money, but 

 deals. in stocks, mines, purchases coal mines, runs quartz and 

 lumber mills, contracts for and controls the supply of quicksil 

 ver, silver and gold coin, tonnage and grain, and is directly or 

 indirectly connected with every speculative . enterprise in the 

 State. 



The savings banks, which control $40,000,000, are not banks 

 at all, but establishments where people place their money on 

 deposit, subject to be withdrawn on specified notice, provided 

 the funds are on hand. Every depositor in a savings bank 

 signs a paper when making his deposit, to the effect that if the 

 bank has not got the money when he demands it, he is content 

 to wait till it obtains it. This provision is a good thing for the 



