Edgefield advertiser. [volume] (Edgefield, S.C.) 1836-current, 1858-08-18

for every s23 Of circulation and deposits, ess than
enc dollar in sl,ecio!
=, Were tho delinquent private Banks of this State
unable to pny the per crntagc due under the Act OF
, lslu! Far from it. us will appear by tho following
facts compiled from the monthly Bank statements oT
the Comptroller General. At the date Of their sus-
pension the delinquent Banks (excuding the Bsnk "t
the Star) had hund, nfer having declared hand
some dividends for years previously accumulated or
reserved profits amounting to 1888, 595 During tho
frst four months Of the present year the nett proh's
of those Banks were 500, ,262, equal to an interest
on their capital for that period at the rate OF more
than 9l per cent. ror aunum. They could have paid
the per cent upon their circulation and still have
had remaining Sl3?S0S Of nett profits, equal to nm
interest on their entire capital during that time, ut
the rute Of more than 6s per cent. per annum. One
of the suspending Banks the Bank Of Hamburg, has
for the last tLroe years declared seunnnual dividends
averaging m interest her capital at the rate of II
per cent per annum, besides an extra dividend equal
to semiannua dividend at tho rate of IS per cent.
per snnum On her capital and that BauE moreover
had On hand y, the date of her suspension Sl2l, 800
of reserved profits. The nett profits Of tho Dsnk Of
year wore s4O416, equal to ratio Of interest on her
capital during that tmo Of moro than "a pOr cent
per aunum. Out Of her nett profits during these four
mouths she could have paid the per cent on her
circulation, and hive had surplus OF S299Gs, equal
to rate Of interest her capital during that time,
| of moro than II per cent. per a"num.
Assuming thnt the suspended Banks (cxcludng the
| p,,l, ,r a., St,ta IF SutfI wuui huye
re.amcd specie payments at earlier date than they
sctuslly did, the per cent upon their circulation,
had it beou exactod, would have amounted to more
thun onu hundred and three thousand dollars. This
sum was aS justly due the State if it had been Sc
cured to her ty formal bond-auI this sum- by tho
Of the Legislature u December last, has boon, to
all intents and purposes, yiren drGy-ahd to whom
| Not to the poor? Not to those who had conferred
benefits Oh the community? Not to proper objects Of
CHARITY? But to tho orcr-fsd and wealthy Banks,
who, but few weeks previously, had brought Oh the
State arrangement OF the currency resulting in the
loss Of fifty times the donation thus strangely bestowed
upon hcm 1t was nero chd's play to pass al Act
in s4O and the moment that it about to 80 into
practical opcration to suspend it for year II any
private citizou Of South Carolina the State
ney, even though it DO ruinUus to him to pay, he is
not forgiven the dubt. On the contrary payment il
demanded and exaeted from him. Gun any reason
be suggested why the same rule should not have been
pursued with the offending Banks? Are the rich and
powerful banking corporations Of the State alone to
be rclouscd from paying their just debts the State
The measure il an evil aud mischievous precedent
and in my judgment cannot be justified.
Mr.. GRHG0 in his letter to Mr.. THORNTON COLEMAN,
insists that the per cent on tho circulation Of tho
suspenlug Bunk! would have boon "an intolsrubie
tar" What has bccn already said shows that tLs
position cannot 10 maintained. The delinquent pr-
vate Banks could have paid tho per centaso to tho
Suite out Of their accumulated reserved profits and
then have had surplus Of moro than S43O,0O0. But
Mr. GREGG forgets what he has already said upon the
.amo subject in his Bank speech. will refresh his
memory. At page of that speech, he says, Tho
penalty Of per cent is mere mockery, for the bills
in circulation have been put forth in many instances
on nm interest Of 10, and are paying the Banks ut
least per cent And at page 10 Of the speech,
referring to this "ntolersbe tax" Mr.: GREGG says:
Five per cent, per annum on the circulation during
tho poriod Of suspension is slight pHnshment.-The
Banks might many times be so circumstanced that it
would be greatly their Interests to suspend and pay
such forfeiture"
Mr.. GRRoc argues that if the S per cent had been
cxacted the Banks during the period Of suspension,
"would have forced crery dollar that could havo
hccn collected from the country" and would have
fused to lend their bs, and that the Cotton crop
could not hnro been sold
The answer Of Mr. MgNMiNGER to this argument is
conclusive: "So long the Bank Of the State is
der suspension, tho withdrawal Of the circulation of
the utIer Banks would be altogether harmless. Moth
ing would be easier than for the Bank of the State
to fill up the vacuum, and thus take tho profit Of the
whole circulation"
but would the suspending Banks have pursued the
course indicated by Mr.. GREGG, had the per cent.
been exscted2 1t is in my judgment demonstrablc
that they would not. The Bank bills, says Mr.. GREGG,
have been put forth in many instances at interest
of 10, and paying tho Banks at lenst per cent.
II this he 80, the bills Of the Dnnks earning for
them an average profit Of 8! per cent. And yet his
argument is that to avoid the tax Of pcr cent the
Banks will withdraw their bills from circuaon-that
H. that the Banks in order to per cent. will
consent to lose 81 per cent. Tho very statement of
tho proposition is its rofutation. Had the per cent
been e1acted, two courses would have been open to
the suspending Banks whereby to be relieved Of that
burden. The one to enforce rigidly tho collection Of
their debts and to decline all loans advances.
BY this means their issues would bo reduced and uti-
mately Withdrawn from circulation. But this looks
rather to final liquidation than to regular resumption
of business. This policy if carried out, would have
lost them the entire profits Of their circulation with
drawn, have ruined their best customers among the
mercantile class, and have brought down upon them
tue exocrations of the community-and ultimately
tho vengeance of the Legislature. courro fraught
with evil to the community and ruin to Themselves,
they would not have pursued. The other COURSE
would have been to extend all reasonable forbearnncc
to their Debtors and to adopt the policy of judcious
discounts and advances to further tho suo of greut
staple. This latter course tho suspending Banks
per cent on their circulation The practical workings
Of such policy may bo thus briefly summed up.
The dealer in cotton applies to Of the suspended
Banks for advance Of 900 to buy cotton-to be
consigned to mercantile house in New York-whoso
character and means known to be beyond all
question. The money is advanced, tho cotton bought
and shipped to New York, and draft upon tho Now
York house is delivered to the Bank payable in 30
days. The $4,000 advanced to the cotton buyer is
distributed among twenty planters, perhaps, moro,
who by this means are enabled to pay their dobs to
the merchants and hadesmen with whom they deal;
and these latter the ordinary customers of the Bank,