Knoxville weekly chronicle. [volume] (Knoxville, Tenn.) 1870-1875, 1873-10-15
PRESIDENT GRANT ON THE PANIC.
His Views 90 ResumptiOn---FaVOrs n
POstonice Banking System.

POstonice Banking System.
WIsHINGToN, d. c., Oct. 13.-President
Grant, yesterday, in an interview said lie
thought that the panic generally through
the country differed essentially both in
cause and effect from any similar event of
which he had knowledge. When such
events have heretofore taken place dis
trust has been occasioned az to the curren-
cy in circulation. Every one in possession
OF currency would rush to the banks with
it, or spend it in the most liberal manner.
But now currency, instead of being denTe-
cated is actually becoming daily more
valuable. He thought he saw in passing
events the first steps toward resumption,
for the reason pauics generally occur when
the country lacks prosperity, such as from
the failure of crops, purchases from
abroad, &c. In this instance the panic
has occurred in the midst of the greatest
general prosperity. He believed he was
correct in saying that our exports since
the beginning of the present fiscal year
have exceeded our imports, and that too
at time when comparatively no cotton,
the largest single item of exports, was
not moving. Every thing we produce is in
great abundance, and the demand for it
abroad is beyond the supply we have to
spare, our manufactures are prosperous
and many articles which have been inn
ported are to n large extent not only pro-
DUBBED at home but we are actually conlpe-
| tiog in the supply Of foreign markets.
The aid recently rendered in the pur-
chase of an unusually large number of
bonds, was not so much real as moral. The
fact is, the money corporations of the
country had become startled and in turn
startled the whole country. Had not the
Treasury seemed to aid them in some way,
the fright would have become more gener-
| i Il
fatal. AS it was he really believed the eff
feet was going to be beneficial in many
ways to the country at large, though the
cost to some individuals deserving of
better fate may be severe. A return to
specie basis can not be effected except by a
shrinkage of values. This always works
hard to large class of people who keep all
they are worth in margins. This shrink
age has now taken place. Disasters to in
dividuals have already overtakeD them,
and it is to be sincerely hoped the advant-
age may be retained in order to reach a SOL
i'd financial basis.
Already the currency has been appreci-
ated to about par with silver. He wondered
that silver is not now pouring out. When
this should take place, his theory is that the
country could absorb from two to three
hundred millions of it. This would prove
great benefit in several ways. 1t would
supply market for number of years, for
product of our mines now becoming q
drug. 1t would take the place of forty
millions of fractional currency, about the
the amount of change that experience has
proved to be necessary for the transaction
Of business, and will become the currency
which will be needed in small amounts.
He believed that silver once more in cir
culation would never be at a discount and
the fluctuations from that point would be
in appreciation of value of our paper
money.
AS to the Legislation, the President said
he thought much upon the subject, and if
he were now engaged in writing his an
nual message to Congress he should
recommend positive authority to reissue
the forty-fo millions of reserve, free
banking law, with the same protection to
bill-holders as now, a repeal of the clause
requiring a reserve for the protection of
depositors, a per centage of the other re-
serve to be in gold and that increased in O
regular ratio until the whole reserve would
be in gold. This could be solely effected
by requiring such institutions to save the
whole or large per centage OF the gold in-
terest paid to banks on their bonds held by
the Treasurer of the United States for the
protection of bill.holders. He also favored
an absolute prohibition to the pay ment of
interest on deposits. The President did not
contend that he would be right in these
recommendations, but they embodied the
views which his unarded reflections had
brought TO him. I".,
There was no question but that much
demOralizing and Injurious speculation and
gambling was caused by the accumulation
of capital in large centres, during por-
ton of the year, when money is not re-
CURED for the moving of products by the
payment of interest on deposits This
leads country bankers, merchants and 9TH
ers to deposit in city banks, principally in
New York, to make this money earn some
thing during the period, when they do no.
wish TO use it. Banks paying interest on
deposits cannot afford to hold the money
idle, hence gambling on fancy stocks,
millions Of which, as an Investment would !