Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1873-10-13
GRANT AND THE PANIC.
What the President Thinks VIII Be the
Effect of the Late Panie-Re-
sumption In Sight.
The Banks which Pay Interest ant
Wildcat Railroad Enterprises
the Cause Of It All.

WASHINGTON, October 1.-THE Pres.
ident, in a conversation yesterday, ex.
pressed his views on the financial
! question, which were in substance,
that he thought the panic generally
throughout the country differed essen
TALLY both in cause aud effect from any
similar event of which be had any
knowledge. When such events have
heretofore taken place, the distrust has
been occasiOned as to the amount OF
currency in circulation. Every one in
possession of currency would rush to the
banks with it, or spend it in a liberal
manner. But now, currency, instead OF
being deprecated in value, Is actu-
ally becoming daily more valuable.
In response to the inquiry, he said he
thought he saw in passing events the
first steps toward resumption, for the
reason that panics generally occur when
the country lacks prosperity, such as
from failure of crops, Over-purchases
from abroad, etc. In this instance the
panic has occurred in the midst Of the
greatest general prosperity. The aid re-
Gently rendered ia the purchase of an
unusually large number of bonds was
not so much real as unreal. The fact is,
the President said, the money corpora
tions of the country had become
stampeded, and in turn startled
and stampeded the whole country.
Had not the treasury seemed tn aid them
in some way the fright would have be-
come more general and the consequence
to the country more fatal. As it was he
rea ly believed the effect was going to
be beneficial in many ways to the coun-
try at large, though the cost to some in
dividuals deserving of better fate may
be serious. Return to a specie basis can
never be effected except by shrinkage
of values. This shTinkage has now
taken place, disastrous to individuals
which have already overtaken them, and
he sincerely hoped the advantage might
be retained in order to react the solid
oasis. Already currency has appreciated
60 about par with silver. He wondered
that silver is not pouring out. His the
Ory was that the country could absorb
rom two hundred to three hundred
millions of it. This would prove great
benefit in several ways. 1t would sup
oily market for number of years, for
the product of eur mines is now becom-
ing drug. 1t would take the place of
orty millions of fractional currency,
about the amount of change that ex-
Oerience has proven to be necessary for
the transaction of business, and will be-
come the currency which will be
handled in small amounts. He
believed that if specie was once
more in circulation greenbacks would
never be at a discount for silver. All
fluctuations from that point would be in
sppreciation of the value of our paper
money. As to legislation, the President
aid he had thought much upon the
subject, and if he were now engaged in
writing his annual message to congress
ne should recommend positive authority
TO reissue the fOrty-five million dollars
in reserve; free-bsnking law, with the
same protection to bilI-holders as now;
a repeal of the clause requiring a reserve
for the protection of depositors; 8 per-
centage of other reserve to be in gold,
and that increased in 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
interest paid to banks on their bonds
held by the treasurer of the United
States for protection of bill-holdeTs. He
also favored an absolute prohibition to
payment Of interest on deposits. The
President did not contend that he would
be right in these recommendations, but
they embodied views which unaided
reflection had brought to him. There was
no question but that much demOralizing
and injurious speculation and gambling
was caused by the accumulation of cap
ital in the large centers by the payment
of interest on deposits during portion
of the year when money is not required
for moving the products. This leads
the country bankers, merchants and
others to deposit in the city banks, prin-
cipally in New York, to make this
money earn something during the pc
riOd when they do not wish to use it.
The banks paying interest on deposits
cannot afford to hold money idle, hence
gambling in fancy stocks, millions of
which ss an investment would not
support q family, even in the most
economical manner, the building of rail-
roads that are not wanted, and which
cannot for years pay running expenses,
and all such gambling and speculation
had, he trusted, received a blow from
which he hoped they would never re-
cover. The President said that unless
his mind should undergo a change he
would recommend the establishment of
q postoffice bank. This would give an
institution in which everybody would
have confidence, and which would,
without doubt, reach every one
who can approach it. AS money-order
postoffices, he would recommend the
payment Of four per cent. to depositOrs,
and the conversion of the deposits either
into outstanding United States bonds or
into new four-and- -a-half- percent bonds,
and the taking up of corresponding
amount of those outstanding. The
President, having been asked 3 question
in relation to the chief justiceship, re-
piled that he had consulted with no one
as to the selection, and repeated what
he had heretofore said-namely, that in
the choice he would look to the
interest of the country at large, and
endeavor to make a choice which would
be generally acceptable.