Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1857-11-26
Report OF the Comptroller General.

provisions of the Act of December, 1910, to pro-
vide against the suspension of specie payments
There has been rs usual an extraordinary amount
Of speculation in domestic Exchange" and IN
fact use of their funds generally by the private
Banks in every way injurious, and that will ulti-
mately prove DISASTROUS in the extreme, to oil the
industrial pursuits and interests Of the State AT
the commencement Of the fiscal year all the Banks
in this State had an aggregate liability OF So.,-
9S9,23l Al. To meet this liability their assets in
specie was Sl,3S320 IS, with 81, SSd, oee22 50 in
Domestic Exchange, and $275,l76 46 in Foreign
Exchange, which the Banks claim to be the
equivalent of specie, but which can in no emcr-
gency be made available. At the same time the
amount Of deposits was So, 253, S44 80, nearly
three times the amount Of specie in their vaults,
and therefore liable ut any moment to be driven
into suspension by their dcpositors, were COM
.bination formed for that purpose. Onthe last day
of July the total liabilities of all the Banks was
S33,5le,lss 81. with specie only to the amount
of 81 .2o7, ,2S9,T, with circulation of SI,e2",-
527 81. and deposits 10 the amount Of S3,o4S,-
S31 IA. The amount of Domestic Exchange then
on hand was 0,370, SCI OF, with but S421, ,i9i
IL of Foreign Exchange.
Again at the close of the fiscal year (30th Sep
tember) their total liabilities amounts to S33 ,005,-
7S9 81, with only 1896, 800 Is in specie. They
then had on deposit So, $50, 2S4 2l, nearly treble
their amount of specie, whilst their circulation
was 81, los, 10 81 with Domestic Exchange to the
amount of $40, ,265, $50 9S and only 1921 ,553 l3
in Foreign Exchange. This showing is truly alarm
ing to the financial interests of the State. The
whole of our Banks are in the hands Of mere spec
ulators, who wantonly disregard the teachings Of
experience as to safe banking, and hence our
Banks are at any day at the mercy Of their de-
positors. The Comptroller has so often brought
in to tl,n ,tant Of
the Legislature to no purpose, that he has des-
paired of seeing any wholesome law made to re-
strain them. He will not, however, shrink from
faithful and fearless discharge of his duty, although
he has not succeeded heretofore in arresting the
attention of the Legislature. The remedy is in
your hands, and notwithstanding the arrogant
claim of the private Banks, that they have power
under their charters to do they please, and are
not nmenablc to the public for their acts, there Is
little doubt but the courts of the State would soon
bring them under the law of the land, and teach
them to know that they are public institutions
with certain private rights and that they arc at
least not omnipotent to do evil. Whatever RENE
dy you may, in your wisdom, apply to arrest their
abuses, in the judgment Of the Comptroller should
be prompt, sharp and severe. If the full measure
OF the punishment was nieted out to them that
they deserve, there is not one of the new batch OF
Banks chartered in 1852 but as richly deserves a
forfeiture of their charters for the course they
have pursued, as any political traitor ever merited
decaptation for treason to his country. They
have prostituted the former we'll tried and legit-
mate system Of Banking in this State to one of mere
speculation in exchanges; or in other words, they
have changed the legitimate system Of banking.
and their Banks into mere shaving shops; and at
their own counters, or through the agencies at
every point in or out of the State where their own,
or other citizens papers sight drafts or drafts on
time can be bought on speculation, until their op-
erations would shame the denzens OH Wall street
in New York, or the Bourse is Paris. There is no
citizen in South Carolina more familiar with all
the facts set forth in the petitions, memorials, ar
guments and entreates made TO the Legislature in
1852, to induce that body to grant the charters
for these institutions than the present Comptroller
General, who was an actor and active partcipator,
both as member of that body and as charged
with the interests of those desiring Bank and
it is now in his power to give a most minute and
detailed account, or history, of tho circumstances
and facts under which they obtained their char
ters, not one Of has performed the functions
for which they were created, or redeemed the
pledges made to obtain them. They are not, and
cannot be called Banks OF loans, deposits and dis
counts, but are mere huckSters for paper shaving
under cover and form Of dealing in exchanges
The words Domestic Exchange" should be
striken from the form of their monthly reports to
the Comptroller, and those Of "shaved paper"
substituted therefor. They should be compelled
to declare every dollar Of their profits in quarterly
or semi-annual dividends, and the words reserved
profits" by which they conceal from many of their
dupes the enormous profits they are making,
stricken from their statements. They should be
compelled to keep at least one dollar in specie for
every three dollars they have in circulation, and
no private Bank should be allowed to issue bills
under the denomination of twenty dollars. The
profits that some of these Banks are making by
their shaving operations are enormous. Take,
for instance, the Bank Of Hamburg. The report
from that Bank, for the month Of September,
shows that its last semi annual dividend was at
the rate of II per cent. per annum, and the a.
mount declared in dividend was $4,000, whilst
the amount of preserved profits" was Sl24,3G0
96. When the Bank Of Hamburg declared its last
trtra dividend is not known to the Comptroller,
but if the above sums are added together, and the
sum Of $50, 600 yields dividend at the rate of II
per cent. per anuum, the sum of Sl54, 800 SO will
yield at the rate of 6l per cent. perannum. Not
withstandng these enormous profits, there is not n
solitary Of them that could redeem in specie one
half fourth, one-eighth, one-tenth, twelfth
and some not over one sixteenth, of their bills in
circulation. and this by their own showing, if
any great or sudden crisis or emergency should
throw them upon their counters. 1t is true that
Exchange Sterling is regarded as specie. but no
we'll informed man or banker will claim the same
for domestic Exchange" or if So will assert that
it can at once be made available. The course Of
the new have driven (no doubt willingly many of
the old Banks since their re-charters were obtain
ed, into q, similar system Of speculation, whilst
others of them have only continued in au old and
beaten track that they have followed so long and
with so mu"h impunity they doubtless think they
have pres iptive right to do as they please
The old should, therefore, be made to share the
same fate and penalties Of the new Banks By
a close and critical examination of their monthly
reports to this Office it will be seen that an exag
gerated picture of their shaving operations could
not well be drawn by the most fertile imagination
What remedy the Legislature will supply to arrest
this great and growing evil, one destined at no
distant day to overwhelm the country with ruin
and disaster and which will inevitably involve us
in great monetary difficulties, the Comptroller can
neither foresee or determine. He feels that he
has faithfully performed his duty, and his whole
duty, in thus bringing it forcibly before your hon
orsbe body, as has long been hispurpose to do and
to leave to time and circumstances the wisdom of
the act. Heis aware that the severe structures he
has INDUCED in will CRATE harshly on the feelings of
individual members and Bank stockholders, but he
is not to be deferred from the full discharge of his
duties by that or any other consideration of favor
or of policy. That your honorable body may deal
with these offending institutions in no very mea
sured terms, and with an unspariug hand, so as to
arrest the wild, reckless and extravagant system
of speculation they have naugurated in our State,
is his earnest hope and desire.
NoTE.-Since the foregoing report was closed
at the end of the fiscal year, no less than twelve
out Of twenty Banks have suspended specie pay
ments. The evil is upon the country at even on