Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1858-06-03

counts, but are mere hucksters for paper shaving,
under cover and form of dealing in exchanges
The words domestic Exchange shouldb be strick-
en- from the form Of their monthly reports to the
Comptroller, and those of ''shaved paper" substi-
tuted therefor. They should be compelled to de-
clare every dollar of their profits in quarterly or
seni.annual dividends, and the words preserved
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 atleast 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 arc making oy
their shaving operations are Take, Tor
instance, the Bank of Hamburg. The report from
that Bank, for the month Of September, shows that
its Inst semi annual dividend was at. the rate OF
~ per cent. per annum, and the amount declared
in dividend was $4,000, whilst the amount OF
Preserved profits" was 1921, $50 96. When the
Bank of Hamburg declared its last extra dividend
is not known to the Comptroller, but if the above
sums are added together, and the sum of SSO,0OO
yields o dividend at the rate Of II per cent. per
annum, the sum of Sl54,3 $50 &c will yield at the
rate of 613 per cent. per annum. Notwithstanding
these enormous profits, there is not n solitary one
of them that could redeem in specie one-half, one.
fourth, one-eighth, one. tenth, one-twelfFb, ana
one-sixteenth, of their bills in circulation, and this
by their own showing. if any great or sudden eris-
is or emergency should throw them upon tLeir
counters. It is true that the Exchange Sterling
is regarded as specie, but no we'll informed man or
banker will claim the same for domestic Ex-
change" orif so, will assert that it can at once be
made available. The course Of the new have driy-
en- mo doubt willingly many Of the old Banks
since their re-charters were obtained, IN O similar
system of speculation, whilst others of them have
only continued in an old and beaten track that
they have followed so long and with 80 much i'm
punity they doubtless think they have o prescrip-
tive right to do as they please. The old should,
therefore, be made to share the same fate and
penalties of the new Banks. Bya close and criti-
cal examination of their. monthly reports to this
Office, it will be seen that an exaggerated 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 destinedsat no distant
day to overwhelm the country. with ruin and dis
aster, and which will i evitably involve us in great
monetary difficulties, the Comptroller Gun neither
foresee or determine. lie feels that no has faith
fully performed his duty, and his whole duty, in thus
bringing it forcibly before your honorable body,
as has long been his purpose to do, and to leave
to time and circumstances the wisdom Of the act.
He is aware that the severe structures he has in
dulged in will crate harshly on the feelings of in
dividual 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 those offending institutions in no very mea-
sured terms, and with an unsparing hand, SO as to
arrest the wild, reckless and eItravagant system
Of speculation they have inaugurated in our State,
is his earnest hope and desire. .
N~oTR.-Since tho foregoing report was closed
at the end Of tho fiscal year, no less than twelve
out of twenty Banks have suspended specie pay
ments. The evil is upon the country at even an
earlier period than the Comptroller anticipated,
although he apprehended serious financial embar-
rassments from the illegitimate course Of the
Banks in this State, and called the attention Of the
Legislature to their speculstions in his Annual
Report as early as the years 1864, '55, and '56.
It was his conviction that they would sustain
themselves until after the expiration of the ap-
preaching session, but the outside pressure from
other States and banking institutions was too great
to be resisted, and they have been driven into sus-
pension. Whatever diversity of opinion may pre-
vail as to the wisdom, and policy Of their suspend
ing, that great blame attaches to them for placing
themselves in the, condition that rendered suspen-
sion necessary, no one will question or doubt, and
they should be made to suffer the penalties there
for. The Comptroller General, as chief officer OF
the financial department Of the State, in view Of
the crisis which has been preoipitatsd uponus feels
it incumbent on him to present, with great defer
ence, his opinions as to the proper remedy to be
adopted to punish the delinquent Banks, and to
prevent in future a state of affairs which must lead
to O. similar result. The penalties imposed by the
second section of the Act of 1910, to provide a.
-....k 49, M ofnpr ~ cppnip Dnvmnnts 9h0ulh
be firmly md vigorously enforced. Should either
of the suspended Banks neglect or refuse to pay
the penalty already prescribed by law, q provision
Of law should be made by which legal proceedings
could OF once be instituted against such delinquent
Bank or Banks, for the purpose Of vacating or de-
claring void its charter, To prevent future specu-
lation, and secure o sufficient metallic currency for
the ordinary wants Of the people Of the State, no
Bank should be allowed to issue bills Of less de-
nomination than twenty dollars. The shaving Of
paper, now described as domestic Exchange"
should be prohibited. Any Bank which should,
for more than thirty days consecutively, have o
circulation of its bills greater than three dollars
for every one in specie In its vaults, should forfeit
ten per cent. per month for such excess, The e1-
listing law prohibiting any Bank from paying out
the bills of other Banks should be so modified as
to prohibit only their paying out the bills of the
Banks Of other States.
That some such wholesome laws or regulations
sho uld be made to correct the evils of the present
system, is clear and indisputable. Can any sys-
tenn which yields such an enormous profit on capt.
tai be just and wise, as is now enjoyed by the
Banks of South Carolina ? The citizen can only
realize 7 per cent, on his loans, and yet, when his
capital goes into O Bank, through its multltarious
and illegitimate operations, he realizes, by de-
clared dividends and reserved funds, which ID
merely dividend to be paid in future, the enor'
nous sum of 90, 80, and, in some instances, it is
believed even 40 per cent. This is the range Of
interest which the Bank capital of this State has
Welded for the last fiscal year. Are the profits in
agricultural, mercantile, or other capital, to be
compared with it? And can q charter merely,
Justly give such a decided advantage to Banks
over oil other capital? The Comptroller General
apprehends not.
1t is to be deeply regretted that the Bank Of the
State led the way in the recent suspensions, but
the most casual observer con easily detect the
cause. This Bank and its Branches at Columbia
and Camden, are the only Banking Institutions in
the State that have extended any reasonable aid to
the farmer and planter, or that has shielded the
property of that largest and most valuable class
of citizens from the greedy spirit of gain so rife
amongst the other Banks. At the close of the fs-
cal year it will be seen that this Bank and its
Branches had expanded themselves to the utmost
limits of prudence by accommodation loans in the
shape of 'Notes Discounted on personal security"
Bonds" Monies invested in estate Stocks" by
advances for the State, &C., &c. The loans dis
counted on personal security alone, the bulk Of
which is in the hands of planters, factors and
merchants, amounts to So, 1880, 1884, Ga, being near
" one-third of the whole of the sum thus invested
by the whole of the twenty Banks in the State
To shelter themselves, therefore, under the wings
of this Bank, it was doubtless thought to be good