Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1913-02-07

years, the state was authorized to vail
, date the warehouse certificates. 1t II
proposed to build the greatest cottoI
warehouse In the world, but 1t Is to b'
from the sale Of bonds, which wer'
taken by the moneyed men OF New or
leans, and is not to cost the state
cent. The city has financed the scheme
from beginning to end. Not only this
but think of the efficient management
to be had from the experienced bank
ing and cotton experts Of that grea
city. I confess when think how alb
solutely essential expert management
Is to the success Of our plan, / grow
sick at heart.
I say to you, senators, that unless VIZ
can get men not only Of character, bu'
Of supreme business ability and wide
experience in finance. we are engaged
| in a costly and foolish experiment.
believe that this warehouse bill Is
scientific in principle, but 1t Is also
| fruitful In practical possibilities. for
either good or evil,
A Pig in q Bag.
If the men selected in my calm, hon
est Judgment are not fitted for the
place, I will vote against the bill and
suffer the evils we have, rather than
| those we know not Of. Senators, you
know the old saying-'Never buy a
| pig in a bag" and any man who votes
| for this bill without knowing who Is to
run 1t, is buying pig in q bag" and 1
| for one, do not wish to take such re-
| sponsibility. 1t was for this reason
that the bill was drawn with blanks TO
insert the names, so that they can De
supplied by amendment from the floor.
IL is dificult to get the kind Of man
we need for chairman, and we mlgnt
as well make up our minds that he Will
have to be paid what might seem a
large price, To be chairman or this
| board, requires unusual qualifications.
Men fitted for places on 1t are not men
who will come seeking 1t, they are men
/ of affairs, whose success in handing
their own business Is guarantee OF
being able to handle this proposition.
| You must seek them for they Will not
be found in these lobbies asking for
jobs. o..
Finance More Than Warehousins.
The more thought that have given
this subject the more firmly nave
been rooted in the opinion that the
problem confronting us Is more ques-
tion of finance than OF warehouslng.
| The opportunity Is peculiarly open to
the south. through its cotton crop Of
establishing a credit system Of Its own
entirely Independent of the rotten bank
| ing system that centers in New York.
| In 1907, we had q panic, which some
said came from the too great expansion
/ Of credits, because the country was too
prosperous, as though we could have
| too much demand for the products OF
labor, for that Is what makes prosperi-
| ty. Some ascribed the panic to Roose-
Welt, others claimed 1t was an attempt
of the money power to. discredit Roose-
| velt by the trusts.
| This Is all moonshine, the panic
came, as others are to come, from the
inherent weakness In the present bank
ing and currency system. Indeed 1t 1s
a misnomer to call 1t a system. We
merely charter any number Of either
state or national banks, and each unit
Is left to stand or fall, there being no
place where a perfectly solvent bank
can 20 II there is a run, with certain
ty Of securing aid. A panic can come
any day, with run on few New
York banks. The reason Is that banks
are required to carry q reserve fund or
fifteen per cent of their deposits. The
reserve banks never carry less than
| twenty-five per cent. Now bankers are
| In the business to make money out OF
It, not for their health. They do not
loan this fifteen per cent at home but
Il
blanks, and It Is shown in the local
bank statement as cash. AS matter
of fact 1t Is loaned, because they re-
ceive interest on the deposit. The gov
ernment allows this, and the enormous
sums shown on deposit In the big New
York banks are the reserve funds or
| the entire country, which should be
kept at home for the protection Of de-
positors. I am aware Of the fact that
since the panic Of 1907 the so-called
country banks are not depositing 80
heavily with New York, at least they
think they are not, but II they knew
what went with their money they would
| find that sooner or later every dollar OF
It finds its way to the vaults Of New
York. The New York bank pays the
South Carolina bank interest, hence 1t
must be expected that the money will
be used. These reserves constitute
what is known in New York as call
money" It Is loaned to spectators at
from five per cent up. Stocks or cotton
are bought or sold on margin. In the
place of constituting the reserve In
tended by law to protect depositors, 1t
Is at once transformed into the huge
gambling fund out Of which fortunes
are made and lost overnight on the ex-
changes. The banks as long as the
i
| York encourage this speculation, so as
to get interest, but suppose as in the
fall of 1907, the country banks begin
/ to withdraw their surplus funds? Price
Of stocks and bonds have been inflated,
the profits on margin account begins to
melt away, and there Is q rush to sell.
Frantic efforts are made to borrow
money and rates advance sometimes to
100 per cent. Stocks are dumped on
| the market and when three national
banks and four big trust companies
closed their doors in New York, 1t was
too late for South Carolina banks to
get their money back.
| The banks all over the country were
at once notified that they could not get
their money until the trouble was over.
Business interests entitled to protec-
| ton were sacrificed according to Dunn
and Bradstreet Of two billion Of dol
lars, all because Of an unsound bank
ing system centered In New York. 1t
Is rotten and dishonest, and the send
ing Of Morse to the penitentiary as the
''scape goat" was mean and coWardly.
The deposits of country banks In New
York today equal about one-third OF
all the money in these United states,
and let something occur that would In
a weeks time cause the withdrawal OF
| say one tenth of this one third, and
you would see the history Of 1907 re-
peated. believe bankers are more cas-
lily frightened than any class OF busi-
ness men in the United States, and 1t Is
because they alone fully comprehend
the weakness Of the present system un-
der which they handle trust funds.
Think of a scheme or plan that en-
courages the banks to enforce collec-
tions, when they should give exten-
sions; to hoard funds in stringent
times, when they should give credits,
thereby bringing about the very panic
they would avoid. The money from
the country banks goes to New York,
where it is given a set Of bankers, who
loan 1t to stock spectators at heavy
interest rates. In 1907 the New York
banks between Aug. 22nd and october
30th, reduced their loans about $780,
100000 with such an advance in inter-
est rates that a call Of less than one
hundred and forty million from the
country banks by October precipitated
a panic.
Stock gamblers were forced by the
terrific advance in interest rates to
throw the stocks held on margin upon
the market, and the knowing went