The London market was in a state of tension at the beginning of the year. The bullion in the Bank of England was £17,782,774 and the minimum rate of discount was 6 per cent. The highest official figure for the year was 3 per cent., April 17. The amount in the bank November 7, when the rate was again advanced to 6 per cent., was £19,137,451, and by reason of borrowings from the Bank of France and from St. Petersburg the bullion was increased to £24,895,849, December 3. The bank rate was then reduced to 5 per cent., and it remained at that figure at the end of the year. During the year there were intervals of buoyancy at the London Exchange, succeeded by depression. The principal feature was the fall in Argentine securities, of which there were enormous holdings by prominent banking houses, and this decline induced selling of American securities to such an extent as seriously to embarrass leading speculators, as was shown at the bi-weekly settlements during October and November. On the 10th of the last named month the announcement was made that the house of Baring Brothers, of London, had been compelled to ask the assistance of the Bank of England and of the Rothschilds and other large bankers, the catastrophe being brought about by the enormous commitments of this house to the Argentine Republic, which had just passed through a severe crisis, and was financially stranded. The shock of this practical suspension was felt in every prominent centre, but confidence was partially restored because of the measures taken to avert further disaster.

The principal events in this country affecting the financial situation were the passage of the McKinley tariff and the silver bills, the former having a depressing effect because of the fear that money would be made stringent by withdrawals for duties, and the silver bill temporarily advancing prices. The Secretary of the Treasury at intervals during the year bought $81,694,850 4 and 1% per cents., and anticipated interest on the 4s for a year, in order to aid in relieving the monetary stringency. The crops of cereals were small, but it was intimated that the money value of wheat, corn and oats was $1,298,140,000 against $1,117,013,000 in 1889, when the yield was large. In December a bill was introduced in the Senate having for its object the relief of the financial situation by providing for the purchase of 13,000,000 ounces of silver during the year 1891, and provision was also made in the bill for the issue of a 2 per cent. interconvertible bond as a basis for bank circulation. Steps were taken in December for the organization of an association of Western railroads for the purpose of reducing expenses and regulating tariffs. Towards the close of the year there were frequent failures of financial and commercial houses almost directly traceable to the prolonged stringency in money.

Money on call loaned at the extremes of 186 and 2 per cent. during the year, and from August until early in December there were spasms of activity which had more or less of a disturbing influence upon speculation and mercantile affairs. During the greater part of this period time loans on stock collateral could be obtained only with great difficulty and at high rates, and there was little or no sale for commercial paper in the fall months.

Exchange was to a greater or less extent affected during the entire year by the financial situation in London and New York, rising toward the end of July and in August to a point which permitted the export of gold to London in liberal amounts, and falling early in December to figures which enabled bankers to draw gold from London and the continent.

With very few exceptions the highest prices of stocks were recorded during the first half of the year and the lowest in November and December. The market was generally strong in January. In the following month the feature was a sharp

rise in Reading, followed by a decline in Rock Island and in the grangers. There was an upward reaction in March, led by Reading, which was manipulated for the purpose of squeezing the shorts, and followed by Chicago, Burlington, Quincy, Atchison, Topeka and Santa Fe and sugar trust. In April the market was favorably affected by the progress made with the silver bill in Congress. One feature in May was the absorption by the Atchison, Topeka and Santa Fe of the St. Louis and San Francisco. In the early part of June the unsatisfactory condition of railroad affairs in the West had a depressing effect upon the market and then came the decision of the Court of Appeals declaring the sugar trust illegal, which caused a sharp fall in that property, influencing the whole market. The tone was generally strong in July, mainly in consequence of purchases of bonds by the Secretary of the Treasury. Early in August the market was unfavorably affected by a movement of gold to London which made money active, but the purchase of bonds and of silver by the Treasury Department turned prices upward toward the close of the month. In September the tendency was downward by reason of stringency in money, persistent attacks by the bears and an unfavorable construction put upon the new tariff bill, which, it was claimed, would operate so as to make money still more stringent. The treasury again came to the relief of the market by the purchase of bonds, but when money eased up bearish demonstrations were renewed, and the tendency was downward for the remainder of the month. Early in October the unsettled condition of affairs in London directly affected our market. One feature was a fall in sugar trust on the issue of an injunction order restraining the reorganization, and another feature was a decline in silver bullion certificates caused by lower prices for the metal in London. The bears freely sold all the leading stocks and the fall in them was aided by active money and by reports that houses identified with the Villard properties were in trouble. In November there was a panicky drop in values, and heavy liquidation in the Villards, caused by the failure of Decker, Howell & Co., which in turn compelled the Bank of North America to ask the assistance of the Clearing House. Then followed the practical suspension of the Barings, of London, which threw our market into a state of panic, but after the 20th there was a recovery and the tone was generally stronger to the close of the month. One incident was the retirement of Mr. Charles F. Adams from the Presidency of the Union Pacific, Mr. Gould obtaining control. The tendency was downward early in December, in consequence of bearish demonstrations Money was stringent on the 10th, but relief came from the purchase of $8,000,000 bonds by the treasury, and then followed an upward reaction, succeeded by a dull market, which continued until the 29th, when there was a manipulated advance and the tone was generally stronger to the close of the year. Lackawanna, Lake Shore, the grangers and Atchison being pushed sharply upward on the 31st by a demand to cover short contracts. Coin and currency 1889.

1890

in U. S...... .$1,671,160,220 $1,710,807,899

dise, 11 months Exports, merchandise, 11 months.. Net export gold, 11 months.

Business failures....

148,784,337

189,856,964

Imports, merchan

5.200 490,560,000

Corn raised, bush.. 2,112,892,000
Cotton raised, bales
Anthracite coal, t'ns

7,313,726 35,467,710

Immigration, 11 months....

407,937,