FINANCES OF THE UNITED STATES. 



285 



manufactures which were previously articles of im- 

 port. Orders will come for large amounts of coin. 

 It will be all in silver, while payments are not neces- 

 sarily so. We become the manufacturer of this cur- 

 rency, with a profit, and will probably secure a por- 

 tion of our pay in the more precious metal. 1 have 

 thought much about the recommendations I should 

 make to Congress, and have changed my mind slight- 

 ly in regard; to banking laws since I last had the 

 pleasure of a personal interview with you. It is not 

 necessary to state what those changes are, because 

 they may undergo further modification. I shall give 

 to the subject, however, my sincerest thoughts, and 

 will court the views of others. 



I have written this hastily, but, if it calls forth any 

 views you would like to express, I would be glad to 

 hear them. Yours truly, TJ. 8. GRANT. 



The great excitement and distress of the 

 panic were chiefly limited to a period of ten 

 days. Its most prominent features were an 

 immense decline in the value of securities, 

 especially railroad and miscellaneous stocks; 

 an entire lack of confidence in every thing ex- 

 cept United States bonds, inducing many per- 

 sons to withdraw deposits from banks and 

 lock up the currency ; and the stoppage in 

 foreign exchange from the impossibility of 

 negotiating exchange, which for a time almost 

 suspended the movements of all produce. 



The chief remedies used in New York dur- 

 ing the existence of the panic, to prevent its 

 spread, were: 1. "An immediate meeting of 

 bank-managers, at which it was resolved to 

 issue $10,000,000 loan certificates, and still 

 later a further amount of $10,000,000, which 

 was afterward followed by a decision to issue 

 a further amount if needed. 2. A general 

 movement on the part of the banks to make 

 large payments in checks only, certified as 

 'good through the Clearing-House.' In ex- 

 treme instances, and where small demands 

 were made, greenbacks were allowed. 3. Pur- 

 chases of bonds by the Treasury, amounting to 

 about $13,500,000, which operation released 



an equal amount of legal tenders. 4. The ad- 

 vantage taken by the savings-banks of the 

 thirty days' notice of withdrawals by deposit- 

 ors. 5. The closing of the Stock Exchange 

 from the 20th to the 30th of the month. The 

 certificates referred to were given out at par 

 on Government bonds, or other good securi- 

 ties, including commercial paper. The banks 

 thus ' pooled ' their greenbacks, and strength- 

 ened those who were weak. The above course 

 was followed by similar action on the part of 

 banks in all the leading cities. The Treasury 

 refused all solicitations to trench on its so- 

 called reserve of $44,000,000." 



It was generally regarded as the immediate 

 cause of the crisis, that the money market had 

 become overloaded with debt. The cost of 

 railroad construction for five years previous 

 was estimated as having amounted to $1,700,- 

 000,000, or about $340,000,000 annually ; while 

 debt based on almost every species of property, 

 State, city, town, manufacturing corporations, 

 and mining companies, had been sold in the 

 market. Such bonds and stocks had been dis- 

 posed of to a considerable extent in foreign 

 markets, and, as long as this continued, the 

 sale of similar securities was stimulated, and 

 additional amounts offered. "When the sales 

 of such securities could no longer be effected 

 abroad, the bonds of railroads and other enter- 

 prises of like nature which were in process of 

 construction were thus forced upon the home 

 market, until their negotiation became almost 

 impossible. The bankers of the city of New 

 York, who were burdened with the load, could 

 not respond to the demands of their creditors, 

 the numerous holders of similar securities be- 

 came alarmed, and the panic soon extended 

 throughout the country. The sales of United 

 States bonds in New York during this excite- 

 ment are shown by the following table : 



The range in prices since January 1st, and the amount of each class of bonds outstanding 

 October 1, 1873, were as follows: 



Stock Exchange closed Sept 22 to 29, Inclusive 



t Tbla is the price bid ; no sale was made at the Board. 



