Edgefield advertiser. [volume] (Edgefield, S.C.) 1836-current, 1858-08-18
For the Advertiser.
TO the Citizens of Edgefeld District

4V tAo SkI4AoAo u 6OS00VA0 0Aot@aSS .
ArrEE much hesitation, have conclxded thstit il
Incumbent upon mo to reply in this form to s"ie Vi
the matters contained u the several publications put
forth by Mr.. GRKaG. As to the topics merely Isrr-
suuxl between him and myself, turbear intr"lu-
cling them here. I propose TO conHne myself t" the
matters set forth in his Letter to Mr.. THORNTON COLE
MAN; and TO these will address myself with all the
brevity cun command.
differ widely with Mr. GREGG to the prorrlcty
Of his course at the last Session of Legislature in
respect TO such Of our Banks had failed to redeem
their notes in specie.
The proportion between tho currency and the resi-
due of the aggregate capital Of the community, says
Mr.. CALHOUN, may be set down rs one to thirty.
"With this assumption" he continues "let us sup
pose community whose aggregate capital s3l, ,Ooo,-
900: its cxrrency would be by supposition one mil
lion, and the residue Of i:s capital thirty millions
the currency 10 increased decreased the other por-
tion of the capital remaining the sanle according to
the wollknown laws uf currency, property would rise
or fall with the increase decrease; that is If the
currency be increased to two millions tho aggregate
value of property would rise to SGO,OO0,oos, and ii
gate value of property would be reduced to $1,000,
Q0O With this law well established, place the mon-
cy powcr in the hands OF single individual or u
combination Of individuals, aud they, by expanding
or contracting the currency may ralfe or FINK prices
at pleasure; and hy purchasing when at the greatest
depression md selling 1T the greatest elevation ma!
command tho whole property of the community
This power 50 fearful, and promo to he abused, is
vested in our Banks who furnish the currency, and
have heretofore Increased diminished it ut pleasure
It is matter of momcntuus interest to tho whole
community that stern restraints upon the Banks III
this regard, be imposed aud rigidy enforced The
direct interest and therefore the strong tendency VI
the Banks i. towards urer-tradins The profits Of II
Bank, says au eminent writer esscn'islly depend on
maintaining the largest possible circulation, with the
least possible amount Of their funds in the unprohta.
bis shape Of cash and bullion If Bank with capt.
tai Of $500 900 in coin gets into circulation its bilis
to tho amount Of million, its profit. swc up ut
once to thirty per cent-fur each one Of its bills Is
represented by nUte draft or other evidence Oi
debt hearing interest. Ii tho times arc prosperous
and confidence in tho soundness Of tho Bank prevails,
another temptation beses is directors There is no
demand upon the Bank for redemption Of its bills in
specie TIE 5000, 900 Of coin in its vaults appear to
be idle and unproductve. Why should not that coin
be turned to profit also? Accordingly it is done.
The great luk Of ts specie is taken from its vault
and i. invested in drafts on the Northern cities which
command premum-or else in tho purchase in New
York, of the notes Of Southern Merchants at heavy
discount, aud thus 10 Is per cent additional
upon its capital flows into the Golfers Of the Bank.
But such course on the part uf the Banks neces-
sarily leads to consequences most deplorabe BY and
by feeling rf disrust in the soundness Of tho Banks
springs up, inch soon grows into public panic their
bills in circulation rush back upon them like food
they cannot redeem them for their issues have been
excessive, and their coin has been abstractod from
their vaults md i, invested in drafts and promssory
notes for tho time wholly unavailable for payment Of
their bills Tho result is that the Banks suspend the
redemption Of their notes in specie, sud sudden and
stringent contraction of the currency, with all its at
tending calanitios, is at brought upon the co-
munity.
The refusal by Bank to pay its notes in coin ope
ratss as forfeiture Of its charter. After tho Bank
suspension of lSiO the Legislature Of south Caroli-
na exhibited towards the Banks lcnty but lido
served BY thc,.r. They might most justly have been
deprived of their charters. Instead Of thus proceed
ing against thcm tho Legislature by the Act Of 18th
December 1Sio offered them release from forfeiture
of their charters in of suspension, upon eond-
ton that they would accept Of two provisions as par
col Of their respective charters The first was that
Whenever they suspended specie ments they should
l;..t he Of thpir
note. in circulation, during the period Of such sls
pension an interest at the rate Of five per cent 1r
annam: and tho second was, that the Banks should
furnish the Comptroller General with monthly state
,nents of their true condition, to be by him coated
and published. Tho Act rsorrcd to was essentially
measure not Of yunishmen but of relief. In lieu Of
forfeiture of their chardrstLe nildor correctres o
the substituted After first refusing the Banks
accepted the provisions Of the Act of 1910, which
were thus Incorporated into their charters and there
by became part and parcel of formal contract and
agreement between them aud the State Of South
Carolins.
In October 1851, the Bank Of the State with nine
Of our private Banks suspended the payment Of their
notes in coin. Upon tho meeting Of the Legislature
delinquent Banks formed tho chief subject Of confid-
Grafton. A large and intelligent party in the Legs
laturs were for enforcing the contract between the
State and those Banks to the payment Of thee per
cent on their bills in circulation. still larger party
were in favor of releasing the Banks from that pay
meut. Mr. GREGG sided with the latter party, WARM
ly and actively and by their votes: the provision OF
the Act of $780, in that regard, suspended until
the rst January, 1859. Ought the delinquent Bauks
to have been released from their formal and solemn
obligation to pay to the State the prescribed per cent
ago upon their bills in eraulation' maintain that
they ought rot It could not be justly regarded AZ
penalty tv be enforced. 1t rather contract to
bo fu!fl!ed---s contract framod in their faror-ex-
pressly for their rclic-a substitute for the penalty
of m absolute forfeiture Of charter The sum which
would have boen payable to the State under the Act
referred to- would have been ut best but small COM
pensaton for the hoavy loss she sustained by rOnaon
Of the late Bank suspension. The amount Of that
loss TO the whole State has been estimated Mt five mil
lions of duurs and to tho cotton planter alone, is set
down as Icing from $40 to SIS per bale. Dir.
GREoe's estimate i. even higher: alt is my candid
opinion (ssys hey that if all tho Bank capital III the
whole country was divided out anSng the sufferers,
would fall short Of paying the oss In all probsbii-
ty this cotton crop will sell for $40 bale less than
would have done, but for the monetary convulsion.
But who are responsible for this disaster? Mon Of
all parties concur in ascribiDS it to the inordnate Gu
pidity Of tie Banks, lustinc after exorbitant gains,
@ s,,;, III rho channels of trade with an excessive