The New York herald., 1873-10-23
President Grants Views
Again Reviewed.
Bank Reform as Well as Currency Reform
Necessary to the Result
What Philadelphia Knows About
the Matter.
ON PO S S U M U S

the question, arguing the possibility OF immediate
resumption of specie payments, or advocating any
effort to bring about such result other than as the
consequence Of natural growth in national
productveness and progress in manniac-
turing industries. That SUCH a consumma-
ton is most devoutly TO be wished as a
means Of placing in better position with re-
gard to our foreign creditors all admit but that it
is question not for the government, not for Con.
gress, not ior the banks to determine is equally
recognized by those who have any clear under
standing in the matter, but belongs wholly to the
nation and the people, collectively and individu-
ally, in the exercise Of greater economy in ma
tional and individual expenditure. This is the
fundamental rule, the application Of which is
NECESSARY CONDITION PRECEDENT
to the attainment of the much desired haven OF
financial peace and rest; but 1t is in the difficulty
of enforcing this rule that we fnd the greatest
obstacle to early solution OF this much vexed
question. Attention has been drawn before in the
HERALD to President Grants recently expressed
views on this subject when it was pointed out how
carefully he had avoided committing himself to any
expression OF opinion concerning the possibility
OF immediate resumption, or the wisdom OF
any measures looking 10 precipitate action
In that direction. On The contrary, his
anticipated recommenda tions all contained
in them the element OF caution,
purpose to reach the desired goal by regular ap-
proaches, constitutional disposition TO flank the
present situation. 1t seems odd this serious dis
cussion OF specie resumption with $50, COX, 900
ABOUT the maximum figure which the government
the banks OF New YORK hesitate TO resume cur.
rency payments when there is over 1856 100000
legal tenders outstanding. Very properly the
President mas determined to
THROW UPON THE BANKS A LARGE SHARE OF THE
WORK OF PREPARATION
for future resumption, or rather recommend legis-
lation TO that effect. The national banks have
been the recipients of undue iavor on the part OF
the government and Congress- representing the
people, ever since their creation. in being permitted
to draw double interest upon their circulation
first, in the shape interest upon the governme mt
bonds deposited a security lor such circulate
and secondly, IN the loaning OF deposits-it beng
well known that many OF them make use of agents
IN the loan market 10 secure usurious rates. With
all these privileges and opportunities they have not
been satisfied TO connne their business within the
limits prescribed by law, but have permitted their
required reserve OF twenty-five per cent their liza
bilities I'm coin and greenbacks) TO run below that
ln and which largely increased the gravity OF that
crisis. Their subsequent action. wise and
rous" aoout through @ the instinct OF sslspreserTa
ton, ana acquiesced IN by their customers
from the g, necessity Of of tne occasion and
Is not yet forgotten. That such result was
avoided now was due. NOT TO any inherent strength
produced by careful or conservative management
or administration, but because OF the security
gwen blholders IN the provisions OF the National
Bank act. Had billholders been without this se-
curty and commenced ran on the banks, as they
would have done, but very few OF them would have
- '''' AS FIDUcIARY INSTITUTIONS
they had not been faithful to the trust reposed in
them; as agencies Tor the accommodation OF the
public they were almost powerless In the hour OF
greatest need. They are still continuing their
selfish course, and by so doing breathing dis.
trust upon newly acquired confidence and
checking the natural fow OF currency, so much
needed at this time. With such institutions
1t will be readily seen there must be some reform
before resumption OF specie payments can be hoped
for. The Presidents intended recommendation
that the present legal tender reserve be gradually
abolished and coin substituted therefor wise in
this connection. 1t woIld be virtual imitation 10
the extent OF the amount OF legal tenders held
as reserve In the national banks or the country,
while the increased strength Of the banks in the
substitution OF gold for these notes would prevent
any considerable depreciation as consequence OF
such imitation.
AS AN ADDESDUM
to this proposed recommendation OF the President
1t is suggested that with this change in the reserve
oil the banks gradual change be brought about In
the currency by the substitution OF a new govern
tender and nationai bank notes, such new note to
be secured as the present national bank notes are
by the deposit OF government bonds, and placed In
circulation through the banks. There is matter Tor
thought In this suggestion, as means 70 bring
about coin resumption, by relieving the govern
ment from the danger OF undue pressure In the
presentation OF legal tenders when such resump-
ton Is rst announced. Ii Is submitted Ior what it
u worth.
Philadelphia on Resumption.
The following views OF prominent bankers and
Others In Philadelphia concerning resumption viii
be found interesting at this time. They but echo
the opinions before expressed by many OF our lead
ing men here, and harmonic generally with the
thoughts expressed above. In approaching this
SUBJECT the writer has been careful to consult only
aS .nose whose experience has comprehended great
the soenn,,x anu whose present position before
weight Inc nrst gentleman addressed was
Mr.. ANTHONY DRHxFL
OF the well Known firm OF Drexel L Co and the
ionoWing conversation took place -
hEpokT&-Do you think the resumption OF specie
payments rs possible III the present condition OF
Mr. pRExEL-The late crisis has undoubtedly
Drought US nearer 10 1t than we have beer ior
years. but the resumption is Impossible az present
IL may be that resumption OF payments in silver
present attached to 1t but very little Superficial
value.
WE, AS A PEOPLE CAN CONDUCT ORR prs,xrss
UPON GOLD BASIS JUST AS SOON AS WE A
PEOPLE, LEARN TO BE ECONOMICAL.
The government is like an indlvidual II he con-
stanty spends d0re than his income he constant
ly, OF course, approaches more dangerous and
perpiexlng situation. One great means OF Keeping
our money at home at present exists In the manu-.
facture OF our own railroad iron, and another
means ls now rapidly beginning to assume great
proportions namely American shipbuilding. But
we are too extravaRant Our gold Is spent In too
great profus0n Tor fabrics which are solely the
production OF foreign industry. We nave no means
oi ascertalning the amount OF gold in the country
wnile we know that legal tender currency exists
10. 10 the extent OF millions. IL would not
0ny mnyt oe impractcabe to resume specie pay
. .nens ~, this time, but it would also be
impossible TO resume at any time upon
mi. M. bI0Wn, President OF the Fidelity Sale De-
pys., pvs,s anu rust Company, said d-Under existing
c,.c circumstances, by which mean the general con-
al.lon ~ business interests, / do not see how re-
made F"'AehsH S"ii P"oo'oiJ Dc
Until IN, 10 DUB H. GOVERNMENT Is PREPARED TO REDEEM
the neon,e az present In the banks and among
ra,nrn rvVpr. @ ANY movement in this direction OF a
tendnr vannot n oe thought Of This amount OF legal
circnatIue Ues performing an important part as o
sarva .meuium and as bank re-
se,e',. se.,ve' 80 that until the government IL
sbie tb,s supply substitute equally avail.
~ disastrous Al agree that resurnpton ouwha 10