I have often stated that 35mm film should be developed to print on
(about) grade 3 rather than grade 2.

Here is the explanation, from Kodak, in 'Kodak Films for
Black-and-White Photography', 1960.:

"....a low gradient in the negative material and a correspondingly
high gradient in the paper is more favorable than the alternative
combination."


Here's the context:

"Graininess.
When a negative is viewed at a sufficiently high magnification, it is
seen to possess a grainy or granular structure. This impression of
non-uniformity in the image is called graininess. It is caused by the
irregular distribution of the silver grains, rather than by the
individual grains themselves which are visible only under
magnifications much greater than are used in making ordinary
enlargements.

For emulsions of a given general type, graininess tends to increase
with the emulsion speed. When development is carried to the same
gradient, the common developers of normal and high activity (e.g.,
Kodak Developers DK-50, D-72, and Dektol) produce approximately equal
graininess with a given film. Some fine-grain developers (e.g., Kodak
Developers DK-20 and Microdol) produce noticeably less graininess but
at the expense of some loss of speed.
Graininess of the print increases with the density of the negative,
..so overexposure or overdevelopment of the latter should be avoided.

The graininess of both negatives and prints increases with increasing
gradient of the material on which they are made. When the gradient of
the negative material is low, prints are normally made on a paper
which has a high gradient and vice versa, so what may be gained by
holding one gradient down would be largely lost by the high gradient
of the other. It is usually true, however, that a low gradient in the
negative material and a correspondingly high gradient in the paper is
more favorable than the alternative combination.

The graininess reproduced in the print is most apparent in the lighter
middle tones, especially in large, uniform areas.

It is possible to conceal graininess somewhat by softening the focus
in enlarging, or by using a paper with a rough surface, but only at
some sacrifice in sharpness."