Edgefield advertiser. [volume] (Edgefield, S.C.) 1836-current, 1857-04-15
From the Charleston News.
THE BANKS and THE USURY LAWS.

The second head which was proposed for con
sideration, upon the late returns Of our Banks
was: The smallness of their convertible o
specie basis, in relation to their capitals, and t
their circulations respectively"
History, experience and reason have provel
that no system Of or practice in banking is SCUM,
or safe, which has not specie basis sufficient fo
every emergency which may occur from CONNER
| cial, monetary or other convulsion, or from any
cause which may produce sudden or large de-
mand for it. The greatest practical difficulty il
legislation upon the regulation Of paper cur
rency has been the contrivance of judicious
provision which would ever force the banks UP
to the standard Of complete specie liability
and to keeping supplies of coin proximate to it.
This was the great feature of Sir Robert PEEPS
bill, recognizing the Bank Of England, and
compelling it to maintain an amount Of bullion
equal to about third of its cash liabilities, be-
sides the guarantee of another third in the Sc
curities of the British Government.
A specie basis is not only necessary to safety
in banking, and to public confidence therein-the
only guarantee against monetary panic-but in
South Carolina it is specially necessary to en-
able the banks to furnish proper range Of home
accommodations.
Specie is the only portion of the means Of the
banks which is dead captal-a fund not paying
interest or direct profit. Their selfish policy
of course aims at keeping as little on hand US
possible. This may serve under propitious
times ;.but it is necessarily happening in our
midst, particularly with the city banks who are
made by the country banks to furnish their
specie, that current and essential operations are
most annoyingly suspended by sudden and un-
expected demands for coin. Such is the low range
of the specie basis maintained by our banks, that
very small demands produce these effects.
The larger portion Of the means Of the Banks
Of this State is, on account of the legal limita-
ton on the price of money, employed in New
York and the South Western States, where the
price is higher This diversion of their capital
to these fields, is also stimulated, as has been
shown. by the evasion of our usury laws, under
the pretext and in the form of exchange
Whenever the productions of the South and our
State sent forward, have turned q balance Of
credits in our favor as against Europe and the
North, and yet the demands for specie against
our banks still run through the bills with
which they flood the South West, reaction
takes place in the exchange business, exchange
on the North will not serve to meet those de-
mands, and instant pressure takes place, until
aopg Paopg Of ReSe saa Be on These sud
1t is thus evident that South Carolina, while
furnishing an annual proportion OF banking
means, does not have the full benefit of its use,
and is so low in currency, accommodations and
specie, that home property and enterprise are
deprecated and crippled.
1t would he we'll for stockholders to consider
the risks to which their capital is exposed by
the Directors keeping such large amounts Of
funds in the hands of mere agents in other States
It is iiduciary arrangement with but little
guarantee, and still less safcty-defaults on a
large scale could be made with inprnity. This
risk added to that of low range of specie, rem
ders precariouS what for the benefit of stock
holders and the public should be most secure
the capital and the circulation.
But to facts. BY the return for February
1857, the specie of all the banks was only ST.
237 ,456.S0, and the capitals Sl4, ,S31 ,642.25-a
proportion of onc-twefth. Tie total liabilities
were $4OO67 ,707.l4-to Which the specie is
even less than thirty-second part. These dis
proportions are as great as those which existed
in the general bank suspension Of 1887 and 49,
In June 1854, the specie was 81 ,62l ,973.OO, tue
capitals $l3,3S3, 1880, and the total liabilities
S34,G2l ,973.00.
As to the relation Of specie and circulation
(thc bank bills current,) the following table will
show the prpportions for February last.