Edgefield advertiser. [volume] (Edgefield, S.C.) 1836-current, 1858-02-10
Gbe 8ank Questiol1,
REMARKS OF
HON. WILLIAM GREGG,
OF EDGEFIELD, ON THE
BANKING SYSTEM.
RESOLUTIONS OFFERED BY MIR. GREGG

OF monetary affairs, render it necessary tor tins
Legislature to pass some act to amend the Bank
Charters, which shall in future restrain Bank
issues
RESOLVED, That the money pressure every
where, and general want Of confidence, renuer
it necessary at present to remove all unnecessa-
ry restrictions upon the Banks, that they may
have freedom of action, and he able to so lar
expand as to give forward movement to the
produce Of the country now waiting to be sent
to market.
Re>oLrcd, That we have full confidence in the
sovcacy Of our Banks and in their disposition
to resume specie payments as speedily as CIR
cumstances will permit.
Resolcca, That committee OF seven Gc rails
ell to take into consideration the whole subject
Of Banking in the State, and report Bill ior
the action of this House.
ADDRESS
Mr. SPEAKER: One of the great objects oil
this Assembly is to correct the lmperfectlons o:
our laws.
If the great men of 1910 have made laws
that are found not to answer our purposes IN
1851. but are sources of serious embarrassment
to every interest in the country, Shall we, Tor
the sake of puuctiliouS consistency, refuse to
repcal them? Snail we attempt to cnastise
the banks, while every blow we strike ntilcts
a wound upon ourselves? DO you expect the
banks to loan money to relieve the country at
six per cent. and pay the State five out OF it (!
The proposition is absurd. The fact is, that the
cotton of this State cannot, and will not 20
forward without removal OF this restriction.
Every warehouse in the interior is full OF cot
ton. and thousands upon thousands Of bales will
, remain in the country. From this cause, the
warehouses in Hamburg and Augusta are piled
I'D to their roofs. The State may put few
thousands into her Golfers, but it will be at the
eypense of ten dollars bale to the planter.
First, the banks could not loan Tor fear OF
suspension, and, after suspension, you say they
shall not loan. l have bcen daily witness,
this Fall. of the difficulties with which every
planter has met who had to sell cotton, and |
have seen il sold at 10 cents, when the Liver
POOL adyices warranted l5 cents. 1t is nec;l-
less to talk here about things getting right Of
themselves; the banks must have relief, or the
country will be ruined They must be relieved
of the penalty, and from public advertisement
of their condition. Many good tinancier has
been ruined by exposing his affairs. If yoa
want the banks 20 get up again, speedily, lei;
them alone; place them in 4 situation that no
man can pry into their affairs; One bank shonld
not know what the other is doing. If they arc
lei alone they will expand it is the only hope
for them and the country. If money goes ont
to purchase cotton, every body will be able 10
pay their debts to the banks
In 1910. when the banks suspended, was a
director in Charleston. The bank in whic! !
was director had 100000 circulation, and
$4,000 specie All the banks knew it, and
were afraid of US. II was hopeless to think Of
ever resuming without an expansion. We 'ld
expand, as nearly as can recoect, about $500
0C0, principally upon cotton drafts. We loaned
freely to our mercantile customers, who were
soon able to pay us back thrcc-fold, and helped
greatly to reduce our liabilities.
Bat for the expansion OF the banks at that
time, many good merchant would have been
ruined had just carried into concern there,
100000. One Of my partners had Just retar:-
ed from Europe with Il large stock OF periShaole
goods. We borrowed from the banks Sljo,V0O,
to make good tue falling of OF our sales; 1t
was soon returned. Our weak bank, IN Il few
months, became strong paid its bank balances
in specie, and resumed, to the aStonlShment Of
all the other banks, who followed III quick sue
cession. Thus came about resumption from Il
quarter from which it was not expected, and
several months before anybody looked lor it.
The brokers deposited barrels of specie in the
banks that they could not sell, and nobody
wanted hard money. -,
repeat, Mr. Speaker, that our banks will
have to expand before the country can be re-
lieved, and hope ali unnecessary restrictions
may be removed. ,,
am surprised to see gentlemen still hanging
on to the idea that stocks and State securities
form a fit basis for y bank circulation. Lave
we not seen enough to satisfy Us that 1t Is all 4
falacy? Look at New York, with her great
system of stock sccurite;-stocks that were
worth Sl20 before suspension, reduced to SO.
Look back and see where Georgia vas in lStO.
Georgia. one oi the most entcrprisiny and solr-
ent States had TO stand by, and Src her per
cent. bonds. sold for Is cents il the dollar.
With public works on hand that are to cost
us debt OF S20000,00O, how are our State
bonds to be relied on fora basis! We had bet
t.r come to the reality at oncc ana provide for
a contracted paper Currency, with strong Spe-
Gle basis
.Aai am still more surprised, Mr.. Speaker,
to hear advocated the restriction OF banks to {
per cent. dividends; that is nothing short OF
Offering inducements to eXtrayagance. Ii the
banks earn ~ per cent. alter making gool thelr
surplus. they may Lr induced TO cXpcnd the
balance Ill cNtTaNdSaIll D'ii''iHS' .liu 20 "S''"
ries. What we want is a reduction OF the num-
Der of banks, and less banking capital then,
with proper restrictions on the issues we viii!
have as good banking system for Our purposes
as We want Let Us take time, and not do
things ls;shly.
What want to impress upon this House Is,
tlat the great secret Of restraining bank issues
has not yet been discovered. For the want OF
the proper restrictions, the country has lost ull'
told millions The whole bank capital Of the
Unitcl States, i'll 1897, would not pay half
which was lost by the SUSPENSIONS OF 1871 and
1910. And what may be said of this susp"n-
sion? Why, Mr.. Speaker, it is my candid
opinion, that if all tie bank capital in the whole
country was divided out among the sufferers, it
would fall short Of paying the loss.
The State of New York has $50 banks, with
q capital Of SSj, 100. 1t is said that the
city of New York herself has suffered losses
that Sl0O,0 600 will not cover; and how is
it with us? In all probability, this cotton crap
will sell for $50 bale less than it would lave
done but for the monetary convuls!on; $500, !
GOO bales. at $50 makes the round slim Of
SOS O0O0OO. The Ill banks in the cott IL
growing States rave SG7 100000 Of capital.
Many individuals estimate that cotton will be
sold at S25 bag less than it would have been,