The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1873-10-16
The Financial Situation.

The Financial Situation.
Nssos ofthe President on the Panic, Re.
sumption, Specie Payments, Free Bank
ing, Stock Gambling, Post Office Bank
dc.
WASHINGTON, October 12.-Tho views Of
President Grant on the financial question
were expressed, in substance, as follows yes
terday during conversation between him
and the agent of tho New York Associated
Press: M
In the first place, he thought the panic
generally through the country diff red es-
sentially, both in cause and effect. from any
similar event Of which he had knowledge.
When such events have heretofore taken place
distrust has been occasioned as to the cur
rency in circulation. Every one il posses
sion Of currency would rush TO the banks
with it or spend it in the most liberal man
ner. But now currency instead of being de-
preciated is actually becoming daily more
valuable.
In response to question, he said he
thought he saw in passing events the first
steps toward resumption; for the reason
panies generally occur wher the country
lacks prosperity, such as from the failure 81
crops, overpurchases from abroad. sc. In
this instance the panic has occurred in the
midst Of the greatest general prosperity. He
believed he was correct in saying that our ex-
ports, since the beginning of the present ifs
cal year have exceeded our imports that,
too, at time when comparatively no cotton,
the largest single item Of export, was moving.
Every thing we produce is in great abud
dance, aud the demand for it abroad is be-
yond the supply We have to spare. Our
manufactures are prosperous, and many ar
ticles which have been imported are, to a
large extent, not only being produced at
home, but we are actually competing in the
supply Of foreign markets.
The aid recently rendered in the purchase
of an unusually large number Of bonds was
not so much real as moral The fact is, the
President said, the money corporations Of
the country had become stampeded, and in
turn started and stampeded the whole eoun-
try Had not the treasury seemed to aid
them in some way the fright would have be-
cone more general and the consequence to
the country more fatal AS it was, he real
ly believed the effect was going to be benef-
cial in many ways to the country at large,
though the cost to some Individuals deserv-
ing of better fate may be severe. A return
to specie basis can never be affected except
by bhrinkase Of values. This always works
hard to large class of people who keep all
they are worth in margins. This shrinkage
has now taken place.
Disasters to individuals have already over
taken them. and he sincerely hoped the adj
vantage might be retained, in order to reach
a solid financial basis. Already the curren-
cy has appreciated to about par with silver,
and he wondered that silver is not now pour
ing out When this should take place his
theory was that the country could absorb
from two to three hundred millions Of It,
This would prove great benefit IN several
ways. 1t would supply a market for num-
Der Of years for a product OF our mines, now
becoming drug It wonld take the place
Ct forty millions Of fractional currency, a
bout the amount of change that experience
has proven to be necessary for the transac-
ton of business, aud will become the curren-
cy which will be boarded in small amounts.
He believed that with silver once more in
circulation, greenbacks would never be at
discount for silver. Ali fluctuations from
that point would be in appreciation Of 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
massage to Congress, he should recommend
positive authority to reissue tie forty.four
millions of reserve, free banking law with
the same protection to bill holders as now, a
repeal Of the clause, requiring reserve for
the protection Of depositors, percentage OF
the other reserve to be in gold, and that in
creased in regular rate until the whole re-
serve would be in gold. This could be sole
ly effected BY requiring such institutions to
save the whole or large percentage of the
gold interest 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 bis I'M
aided reflections had brought to him. There
was no question but that much demoralizing
and injurious speculation and gambling was
caused by the accumulation 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, mer-
chants and others to deposit 10 city banks,
principally in New York, to make this mon
ey earn something during the period when
they do not wish to use it. 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 eco
nomical manner; the building of railroads
that are not wanted and which cannot for
years pay running expenses, &c. Such gamb
ling and speculation had, he trusted, received
a blow from which he hoped they never
could recover.
The President said that unless his mind
should undergo change he would recon-
mend post Office bank. This would give
an Institution in which everybody would
have great confidence, within reach OF every
one who can approach money order post
office. He should recommend the payment
of four per cent to depositors and the con,
version Of deposits either into outstanding
United States bonds, or into new four end
a-half per cent. bonds, and the taking up Ct
a corresponding amount of those outstand--
ing,