The Lancaster ledger. [volume] (Lancaster, S.C.) 1852-1905, 1857-11-04
THE BANKS.

4
I Is looked forward TO with interest in view
of the course which that Body .may pursue
/ III reference to our Banks. 1t may be too
/ late 10 apply remedy for the present trou.
! blrs which atllict the country, but no, too
late to adopt measures for the prevention
Of recurrence of them. Although by the
mere act OF suspension, the Banks may net
have forfeited their Charters. yet, whether
under suspension or not, the Legislature has
n right to inquire how far they are respon.
siblc for the present monetary condition of
our State, and in just 50 far us they have
offended. 10 restrict their operations for the
future under severe penalties. II these re-
stictons amount TO IA virtual means of ter.
mnating their cXisiencc-if such length
should br required under the circumstances
-tSeE let it be done since the interests of
the people demand it, Banks were char
tered for their ac :ommodation--to assist the
needy who are solvent, save estates, and us
Il means of keeping property in the State
The majority of our Banks have failed to
answer this purpose not only have they
failed to benefit the people, but they have
inflicted upon them positive injuries. The
! ENchange feature Which enables the Banks
TO realize such heavy profits is an imposi-
! tlOn and loss TO the producers of cotton
without atlording them the slightest benefit
| in return. The large dividends which some
Of these Banks pay, come indirectly out of
the planters. a writer in the Charleston
! Mercury over the signature Of "Onc Of the
people" eNcmplies this in W nv that every
one can understand We make Rn cx-
tract:
Suppose the Banks, st any one com mcr.
cial point, wish TO make money bv Exchange
on New York or Liverpool. il will he to
their interest TO make Exchange cheap
This is easily done. Cotton purchasers do
| not pay down their money for cotton. and
! then wait for lis return, may b, six mOnths
! afterwards hv IT'S sale. They usually real
! lac their money bv drawing Bills of Ex-
| change on the person TO whom they snip it,
/ ia Ncw ork or in Liverpool. By this means
lncl can bay more COTTON ships it, and draw
gain; SO that, with twenty thousand dol.
lars on hand.lhcy MAY operate during the sea.
|
one hundred Thousand dollars. And this
would be pretty safe course Cf business,
30 Tar "s the purchasers creditors are con
cert, Il, III ordinary times for the cotton
Is there TO answer the drafts, whilst his
! twenty thousand dollars will meet any loss
on ih" cotton by a fail in price. Now when
the cotton purchaser comes into the market.
! lie has Two resources of credit with the
| Banks-hrst, 10y notes in the Bank ; and.
| second, by his Bills Jt Exchange. which, To
! sell HdNanlagcously. he must hive his time
lie prefers the former, because more i'm
medla;c!y under bis own control But if
The Banks want 10 purchase Exchange, To
shave notes III New York, or for any other
purpose. they will throw out the notes Of
merchants, who are purchasing cotton. and
drive them 10 the other alternative Of draw
ing Bills of Exchange. This throws n great
quantity OF these bills upon the marke and
OF course their value goes down. The Banks
| ihcn can come into the market and purchase
these bills ut their deprecated value Now,
as The cotton purchaser can get no accom-.
modahon III the Banks, and his bills of Ex-
change on cotton, if he purchases it, must
be sold at an under value, he takes all this
INT" consideration when he purchases the
! cotton and oilers SO much less for it. The
Factors also, perhaps, deprived of Bank
accommodation. must sell. Down goes the
price Oi cotion-why. or wherefore the
planter IN the country j. utterly al a loss 10
imagine Let me state n case, y hich ] am |
informed actually occurred. A Bank Dir .
ccl"r wanted "a lot of cotton. The Factor /.
refused the price he offered. and said 10 |
h'm, "Bcforc will sell n, such price, | /
VIII hold on and borrow money from the .
Bank. THAT yon won't do" replied tie /
Director. "fur the Bank wants Exchange"
Bv refusing To discount, the Bank forces
cotton 10 be- sold, that being sold, it might
be- shipped 10 thc North or Europe, and fur
nish the Exchange it desired The Bank
Director got the cotton at his price. Our
planters ought to understand that all EX-
change is based on our agricultural produc-
lions. IL is against them, either in Europe !
or ct the North, that all bills Cf Exchange |
are drawn, and all the expenses of forward !
ing them 10 their markets of consumption !
insurance, commissions, freight, exchange |
all come out OF the cotton, and are coin !
putcd in its price. The twenty per cent
dividend of the Bank of Hamburg came out
OF the planters.
That The business of dealing in Exchange
Is more profitable than loaning money at 6
per cent, may DC lnltrCu Irbm lNc TACT lllal
the last official return of the Bank of New.
berry, exhibits that while il had loaned on.
upon personal security the pliru sum of IL
bout twenty-four Thousand dollars, it had
invested in domestic ENrnnnge upwards of
Seven Hundred thousand dollars! And thus
they are enabled to declare handsome divi-
dcnds, and what is most CALLING, they DO it
at the expense of the people from whom
they derive their chartered privileges.
1t is said that this money panic originated
at the North and that our Banks are not re.
sponsible for the pressure felt here and yet,
it seems that if their system OF dealing in
Exchange had been restricted to its proper
limits, they would have been less dependant
upon the New York Banks, and of conse-
quence, less eflecteG by the conwulsion which
had It's origin in the North and West.
a correct and limited system of Banking,
we believe, may be of benefit nnd ia cer-