The Donaldsonville chief. [volume] (Donaldsonville, La.) 1871-current, 1873-10-25
OUR WASHINGTON LETTER.

|
and unfavorable, upon the views of
/ President Grant on the financial sit
uation are now the order of the day.
They are mostly favorable. They
are quite generally of a friendly tone.
Indeed the Presidents reputation for
having some considerable acquain-
lance with economic laws is growing,
Notwithstanding the criticisms of few
rather able journalists.
The particular point touched upon
by the President which has received
the greatest amount of unfavorable
criticism is concerning what is termed
the " forty four millions reserve"
But this is attributable to the fact
that his critics do not understand him.
I have it on the most reliable author
ity that he did not mean to be under
stood as saying what has been at
tributed to him. He does not favor
an expansion of the volume of the
currency. Neither does he think it
wise to contract it. When he stated
that were he "now writing his annual
message to Congress he would re-
commend legislation clearly granting
the authority to Issue the forty. four
millions reserve he never once
thought of recommending that the
amount of currency to remain per-
manently in circulation should be
increased from 1856, 100000 to $780,
600, 900. His idea is that the forty
four millions should continue to be;a
reserve mot permanently a part of
the circulation,) in the Treasury to
meet the necessities of the country.
To those who are wilfully obtuse
it is difficult to explain just what
President Grant did mean. 1t is we'll
known, however, that he has all along
regarded this forty millions as
such reserve, and that, too, in ac-
cordance with the provisions of exist
ing laws. Only in cases of extreme
emergency would he advise resort
to the same, however clear the au-
thority of law for doing so might be.
But he finds that his opinion on this
point of law is questioned by many
persons, some of whom are persons
of ability aud considerable legal ex-
perience. He would therefore ask
Congress to make more clear the
provisions of that law which he now
believes to exist. He believes he
now has the authority to regard this
forty four millions as "money in the
Treasury ESQ he wrote couple of
weeks ago. but while there is the
least possible difference of opinion as
to his power in the premises he feels
that he would like to have the con-
troversy set at rest by a resolution of
Congress "clearly granting the au-
thority.o
His recommendations concerning
the establishment of a free banking
system are likely to meet with APP
proval throughout the West. His
plan is a simple one. 1t is merely
extending the privilege of instituting
national banks to any and all persons
who will furnish the same security to
bill holders that is furnished by the
national banks now in operation.
These national banks are required to
deposit in the Treasury United States
bonds and in return they receive their
circulating notes; ninety dollars in
notes for every hundred dollars in
bonds deposited. But under the pres
ent laws the amount of national bank
circulation is limited. He would SIM
ply remove all restriction as to the
amount and allow any body to engage
in banking who would deposit the
necessary bonds. The objection to
the proposition is that the amount
of currency thus put in circulation
might exceed the demands of bust
ness and that this would cause the
circulation to depreciate in value. It
is an objection well worthy of serious
reflection. | freely confess myself to
be of the number of those who believe
that this matter will naturally regu-
late itself, that the amount of the cir
suiation will naturally adjust itself