New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-10-13
WASHINGTON.
PRESIDENT GRANTS VIEWS ON THR RECENT
PANIC,

|
PANIC.
| THE FIRST STEPS TOWARD REsUMPTIoN-TIIE PANIC
STAMPEDE OF CORPoRAr1oNs-THE PURCHASE
or BONDS A MORAL RATHER THAN ACTUAL HELP
IMPORTANT FINANCIAL LEGISLATION SUGGESTED
| a PosToFFTCE BAEK PROPOSED.
GENERAL PRBss DIsPArCHl
WASHINGTON Oct. 12.-The views Of President
GRAFT on current financial questions were expressed,
IN substance, yesterday, during conversation be-
tween him and the agent Of the New-YOrk Asso-
GATED Press. In tho first place. the President
Thought that the panic generally through the
try differed essentially, both in cause and effect,
from any similar event of which he had knowledge.
When such events have heretofore taken place. dis
trnst has been occasoned as to tho currency
IN circulation. Every one IN possession
OF currency would rush to tho banks with
III OF spend it in tho most liberal manner.
But now. currency, instead of being deprecated, is
actually becoming daily more valuable. He thought
he saw in passing events the first steps toward
sumption, for the that panics generally
when the country lacks prosperity, as from the fail
ure of crops or overpurchases from abroad whereas
In this instance the panic occurred in the midst OF the
greatest general prosperity He believed he was cor
rect In saying that exports since the beginning
OF the present fiscal year, have exceeded
our imports that, too, at time when comparatively
no cotton, the largest single item Of exports
was moving, Everything we produce is in great
abundance, and the demand for it abroad is beyond
the supply VIC have to spare. Our manufactures
are prosperous, and many articles which have been
imported are, to a large extent not only being pro-
duced at home but we are actual competing in the
supply Of foreign markets.
The aid recently rendered in tho purchase
of an unusually large number of bonds was
not so much real moral The fact is
the President said, the money corporations
of the country had become stampeded, and in
turn startled and stampeded the whole country
Had not the Treasury seemed to aid them in some
way the fright would have become more general,
and the consequence to the country more fatal. As
it was, he really believed the effect was going to be
beneficial in many ways to tho country at large,
though the cost 70 some individuals deserving of a
better fate, may be severe. Return TO specie
basis never be effected except by n shrinkage
of values. This always works hard" to a
large class of people who keep all they
are worth in margins This shrnkage has now
taken place. Disasters TO individuals have already
overtaken them. and he sincerely hoped the
advantage might be retained, in order to reach a
solid financial basis Already the currency has APP
precated to about par with silver He wondered
that silver is not now pouring ont. When this
should take place, his theory was that the country
could absorb from S9OOOOOOO to S3OO,OOOCOO of it.
This would prove a great benefit in several ways.
1t would supply a market, for number Of years for
product Of our mines now becoming n drug.
II would take the place of SDOOOOOO Of
fractional curreDcy-abOut the amount of change
that experience has proven to be necessary for the
transaction Of business-and will become the cur
rency which will be boarded in small amounts. He
ell, in
backs would never be at discount for silver. All
fluctuations from that point would be in apprecia-
ton of the value of our paper money.
As to legislation, the President said he had thought
much upon the subject and if he were now engaged
in writing his annual message to Congress, he
should recommend positive authority TO reissue
the fOrty-four millions Of reserve, free banknglaw
with the same protection TO bill-hOlders as now,
repeal of the clause requiring reserve for the pro-
lection of depoStOTs, percentage OF the other re-
serve TO be in gold and that increased in regular
ratio until the whole reserve would be IN gold
This would be solely effected by requiring such in
sttutions to save the whole or large per
centaee of the gold interest paid to banks on
their bonds held by the Treasurer of the United
States for the prOtectioe OF blll-hoiders'
he also favored absolute prohibition TO the pay
ment Of interest on deposits. The President did not
contend tlat nc WOuu De IlsHl III iucSC iS'oiiiVh-
dations; but they embodied the views which his
unaided reflection had brought to him. There was no
question but that much dem0ralizing and Injurious
speculation and gambling wascaused by theaccumu-
lation of capital in large centers during portion OF
the year when money is not required for the moving
of products by the payment of interest on deposits
This leads country bankers merchants. and others,
TO deposit in city banks principally IN New-fork, 10
make this money earn something during the period
when they do notwish tousei Banks paying interest
on deposits cannot afford to hold the money idle hence
gambling in fancy stocks millions of which as an
investment would not support family even In the
most economical manner; and the building OF rail-
roads that are not wanted, and which cannot
for years paw running expenses. Such gambling
and speculation had, he trusted, received blow
from which he hoped they never would recover
The President said that unless his mind should
undergo change he would recommend post-of-
flee bank. THIS would give an institution in which
everybody would have great confidence within the
reach of every one who can approach money
order post-ofice He should recommend the pay
ment of four per cent to deposors, and the CONVEX
sion of deposits either into outstanding United
States bonds or into new four and a half per cent
bonds, and the taking up of corresponding amount
Of those outstanding.
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