Year: 1873

President Grants Views OF thI


Situation.


He Thinks That Now Is the Time Il


Work Down 10 Specie Basis.


Fayors the Idea of PoStoffices Doinl


q Banking Business.


WASHINGTON, Oct. 12.-The views o
President Grant on the financial question
were expressed in substance yesterday
during q conversation. In the first plact
he thought the panic generally through
the country, differed essentially in caust
and effect from any similar event OF which
he had any knowledge. When such event:
have heretofore taken place, distrust had
been occasioned as to the currency IN cir
culation. Every ono in possession Of cur
rency would rush to the banks with 1t OF
spend It in the most liberal manner; bul
now currency, instead Of being depreci-
ated, Is actually becoming daily more val
liable. h.H


In response to the question, he said he
thought he saw in passing events the
first steps towards resumption, for the
reason that psnics generally occur wher
the country lacks prosperity, such al
from a failure Of crops, over.purchases
from abroad, etc. In this instance the
panic has occurred in the midst Of the
greatest prosperity. The aid recently
rendered in the purchase Of an unusually
large number oil bonds was not so much
real as moral. The fact is, the Presiden,
said, the money corporations had become
stampeded, and In turn startled and stam'
peded the whole country. Had not tht
treasury aided them in some way the figh,
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
the country at large, though costly to
some individuals deserving Of better fate
A return to specie basis can never be ef
lected except by shrinkagc ol values.
This shrinkage has now taken place.
The disasters TO individuals have already
overtalen them, and he sincerely hoped
the advantage might be retained in order
to reach solid financial basis. AlIeady
currency has appreciated to about par
with silver. He wondered that silver Is
not now paid out. When this should
take place his theory was that the country
could absorb from two to three hundred
millions Of It, and this would prove a
great benefit in several ways. 1t would
supply a market for number oi years ior
The product OF our mines now becoming a
drug, 1t would take the place oi forty
millions fractional currency, about the
amount Of change that experience has
proven TO be necessary for the transaction
Of business, and will become the currency
which will be boarded in small amounts.
He believed that silver once more In cir
culation grecnbacks would never be at a
discount Tor silver. All fluctuations
from that point would be in ap'
probation Of the value OF our
paper money. As 10 legislation, the Pres.
ident said he had thought much upon the
subject and II he were now engaged In
writing his annual message to Congress
he should recommend positive authority
to reissue the $44,OOO.O00 reserve; also
free banking law, with the same protec'
tion to bill.holders as now; o repeal OF
the clause requiring reserve for the pro-
lection OF depositors; percentage OF ths
other reserve to be in gold, and that In.
creased In q regular ratio until the whole
reserve would be. in gold. This could be
effected by requiring such Institutions to
save the whole or large percentage o!
the gold interest paid to banks on their
bonds held by tho Treasurer OF tho United
States, for the protection Of bill holders.
He also favored an absolute prohibition
Of tho payment Of interest on deposi,s'
Tho President did not contend that be
would he right in these recommendations
but they embodied views which unaided
reflection had brought TO him. There
was no question but that much demoraliZ
Ing and injurious speculation and gam
bling was cansed by the accumulation Of
capital in large centres. By thepaymeni
Of interest on deposits during a portion ol
the year, when money is not required, lor
moving products. This leads the country
bankers, merchants, and Others to deposit
in tho city banks, principally in New
York, to make this money earn some
thing during period when they do not
wish to use it. Banks paying interest OF
deposits cannot afford to hold money idle
Hence gambling in fancy stocks, millions
Of which, as Investments, would not sup
port family, even in the most ccouom-
ical manner. The building oil railroads
that are not wanted and which cannot for
years pay their running expenses, etc
Such gambling and speculation had, he
trusted. received a blow from which hi
hoped they never would recover. The
President said that unless his mine
should undergo q change he would
recommend postofElce bank. Thii
would give an institution in which every
body would have great confidence, within
the reach Of every one who can approach
a money order postoftlce. He should re
commend the payment of 4 per cent to de
positors and tho conversion Of deposits
either into outstanding United State
bonds or into Al per cent bonds, and th
taking up of corresponding amount o
those outstanding. The President havinl
been asked a question in relation to th'
Chiei Jusliceship, replied that he had con
suited with no one as 10 0 selection, anC
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