and finance. But though the popular loan was successful beyond expectation, and though the relations with England were no longer marred by forebodings of an outbreak of mutual animosity, the tone of business was very little improved at the end of the quarter. In the beginning of the year a great improvement in business was generally held to be inevitable. Dealers, it was reasoned, were nearing the end of their stocks. Jobbers had bought very little during the last quarter of 1895. Orders must come in now, and that in large volume. But, after the war clouds had disappeared and the financial strength of the country had been demonstrated, the commercial depression seemed only deepened. Dun's and Bradstreet's reported an increase both in the number of suspensions and failures, and in the amount involved. For the first week of February the amount involved in failures was, according to Dun's, $4,079,680, against $2,909,890 for the corresponding week of February, 1895. And the liabilities of the manufacturing establishments that failed in the first week of February this year amounted to $2,372,252, against $729,348 in the corresponding week in 1895, and $1,594,072 in 1894. In the beginning of March the expected improvement in business was still awaited, but hope was still disappointed. The prices of all agricultural products were unchanged. Northern spinners took 113,538 bales of cotton in February against 155,511 in the same month the previous year. The price of cotton cloths was declining because of accumulated stocks unsold. Woolen goods, too, were selling slowly, and several large mills were running on half-time or shut down. On the other hand, the imports of dry goods in February were larger than in February, 1894, and more than twice as large as in February, 1893. Shipments of boots and shoes from Boston in February were 18.2 per cent less than in February, 1895. At the end of the quarter the same conditions existed. The returns of railroad earnings for March were on the whole a little less encouraging than those for February. Failures were considered to increase in number and in amount of liabilities. A slight improvement was noticed in the boot and shoe trade, but the complaint was made that the prices were unremunerative and that orders were chiefly for the cheapest qualities of goods. The shipments of such goods from the East were the smallest for March in five years. The iron industry had some encouragement in better orders, but the average of prices was still low. Cotton prints were selling at a price close to the lowest on record. Less than Vol. 6.-9. half of the woolen goods machinery was at work, yet the supply more than met the demand, and prices remained depressed. The Atlantic export of wheat, flour included, was smaller than in March of the previous year. The Bond Sale.-On January 6 Secretary Carlisle issued a notice calling for sealed proposals for the purchase of $100,000,000 of United States four per cent coupon or registered bonds. The bonds were to be dated February 1, 1896. They will be payable in coin thirty years after that date," said the secretary, "and will bear interest at four per cent per annum, payable quarterly in coin; but all coupons maturing on and before February 1, 1896, will be detached, and purchasers will be required to pay in United States gold coin or gold certificates for the bonds awarded to them, and all interest accrued thereon after February 1, 1896, up to the time of application for delivery, *** 'Payments may be made by instalments, as follows: Twenty per cent upon receipt of notice of acceptance of bids, and twenty per cent at the end of each ten days thereafter; but all accepted bidders may pay the whole amount at the date of the first instalment, and those who have paid all instalments previously maturing may pay the whole amount of their bids at any time not later than the maturity of the last instalment." On January 15 the secretary of the treasury issued a supplementary circular modifying the terms of payment for the bonds. This change was made in response to requests from bankers and others, who foresaw the likelihood of great stringency in money if the bonds had to be paid. for in the instalments and at the intervals fixed in the first circular. By having smaller instalments and longer time in which to pay for the bonds, purchasers could make much better arrangements for procuring gold. The conditions of sale laid down in the second circular were as follows: "Treasury circular (No. 3, 1896) dated January 6, 1896, inviting proposals for the purchase of one hundred million dollars ($100,000,000) of United States four per cent bonds, is hereby so modified that, after the payment of the first instalment of twenty per cent with accrued interest, as required in said circular, the remainder of the amounts bid may be paid in instalments of ten per cent each and accrued interest at the end of each fifteen days thereafter; but all accepted bidders may pay the whole amount of their bids at the time of the first instalment, and all accepted bidders who have paid all instalments previously maturing may pay the whole amount of their bids at any time not later than the maturity of the last instalment. "Accepted bidders who pay the whole amount at the time of the first instalment, or at any date thereafter, as above provided, will be entitled to receive, at the date of the payment, the whole amount of bonds awarded to them; and accepted bidders who pay by instalments will be entitled to receive at the dates of such payments the amount of bonds paid for." When the bids were opened, February 5, at the treasury department, their total number was found to be 4,640, offering to take $568,259,850 of bonds. The Morgan syndicate bid was for the whole issue of bonds at 110.6877. The bid nearest to that for any large amount was that of the United States Trust Company of New York, for $77,000,000 at 110.075. There were 780 bids for smaller amounts at prices higher than those of the syndicate's bid: these smaller bids covered $66,788,650 of the loan; the remainder was taken by the syndicate $33,211,350. Geographically the bonds were distributed as follows: New York, $78,000,000; New England, $9,000,000; Eastern states (other than New York), $5,500,000; Western states, $3,250,000; Central states, $3,000,000; Southern states, $1,250,000. The effect of the large oversubscription to the loan was a surprise to the country and to the officials of the treasury. The original purpose of the secretary of the treasury was to dispose of the bonds to the Morgan syndicate on the same terms as those of the previous loan. The opinion at Washington of members of congress who were in sympathy with the treasury department, was that the call for bids would awaken no interest among the people, and that the whole of the bonds would go to the Morgan syndicate. Friends of the popular loan scheme charged that the conditions had been prepared so as to bring about just that result. The success of the loan demonstrated the financial strength of the nation. The resolution of the New York Chamber of Commerce was fully justified, recognizing "with grateful pride the confidence of the people in the financial strength of the country, as expressed by the large subscriptions to the government loan," and declaring its belief that "the extraordinary success of this loan should dispel every doubt as to the ability and intention of the United States government to redeem all its obligations in the best money of the world." It also demonstrated that it is not necessary for the treasury, in order to obtain a loan, to enter into a private contract with a syndicate of bankers. The Morgan syndicate, which by private contract would have got the bonds at 104.75, had to pay 110.6877 when it was in competition with all the people and all the banks of the country. For the whole issue the government obtained about $8,000,000 in excess of what it would have got by private contract with the syndicate. Tariff and Reciprocity.-The committee of ways and means of the house of representatives, March 21, gave a hearing to a delegation of manufacturers who advocated a return to the policy of reciprocity which was adopted by congress in the McKinley act of 1890, but abrogated in 1894 (Vol. 4, pp. 48, 286, 555, 778). Because of this reversal of policy the export of flour to Brazil fell from 930,000 barrels in the year ended June 30, 1894 (which was an increase of 258,000 barrels over 1890), to 842,000 in 1895: within the last few months the trade has almost ceased. Exporters of provisions to Brazil have had a similar experience. A communication from the New York manager of the Consolidated Wire and Steel Company in New York was read, telling of the ruin of a highly profitable trade with South American countries. The first paragraph of this communication was as follows: "Referring to the question of advantages to American manufacturers under the reciprocity treaties, we could say that from the time these treaties were put in effect with the Latin-American countries, and until their termination, our trade in barb wire with those countries increased rapidly and uniformly; and in addition we were able for the first time in the history of our company-which covers more than eighteen years-to introduce to a certain extent plain wire and wire nails, and everything indicated a continued expansion of the volame of our business had the conditions remained the same. As soon, however, as these treaties were abrogated by the adoption by the United States of another tariff law, our trade with the countries which it affected became practically nothing. As an illustration of the workings of these treaties, or rather the hardships entailed by their abrogation, we would cite the instance of Cuba. This country provides three different rates of duty on each and every article imported into it. These various rates are designated as the first, second, and third columns, the first column being the highest and the third the lowest, and on our goods, at least, there is a wide difference between each of these columns. The third column is an especially low rate, and is granted only to certain favored countries under certain conditions. These conditions were met by our reciprocity treaty with them; therefore American manufacturers had the benefit of the very lowest duty given to any one on goods going into that country. No sooner was the reciprocity arrangement terminated than the Spanish authorities for the island advanced the United States rate of duty from the third column to the first, that is, to the highest possible limit; and, as we have no 'favored nation' treaty with Spain, we of course had no redress. Our principal European competitors, that is, the manufacturers of England, Germany, and Belgium, were enabled to ship their goods to Cuba under the second column of duties; and this, together with the fact that there were rapid regular lines of steamers from Europe to the West Indies, and with the low rates of freight which are always quoted from European ports, made any exportations from the United States to Cuba, at least in our line of goods, absolutely out of the question." PUBLIC ACCOUNTS. The Public Debt.-On March 31 the total public debt of the United States, less $271,641,748.36 cash balance in the treasury, was $942,342,253.54, against $947,298,262 on January 1, a decrease during the quarter of $4,956,009. The official figures of the debt, treasury assets, and liabilities, March 31, are as follows: PUBLIC DEBT OF THE UNITED STATES, MARCH 31, 1896. Debt on which interest has ceased since maturity. $837.404,140.00 1,659,510.26 374,920,351.64 .$1,213,984,001.90 271,641,748.36 $942,342,253.54 29,054,663.17- $171,885,709.86 371,497,164.00 ing reimbursement. 40,388.17 1,148,966.89 Deposits in nat'l bank depositaries- gen'l acc't.. On February 21 the gold reserve stood at $103,439,646 -the first time since September 7, 1895, that it stood above $100,000,000. Receipts and Expenditures.-The expenditures of the government during the nine months ended March 31 -or three quarters of the current fiscal year-exceeded receipts by $18,750,702. The following are the figures: |