FINANCIAL REVIEW OF 1888. 



321 



F 



mAXClAL REVIEW OF 1888. This year was 

 a remarkable one in very many respects. Two 

 Emperors of Germany died within an interval 

 of but little more than three months: yet these 

 events and the succession of the youthful 

 Emperor William III resulted in no politi- 

 cal friction and in no financial disturbance. 

 At all the great European monetary centers 

 there was a demand for gold with which to 

 supply the requirements of the Argentine Re- 

 public and of Russia, but with such care was 

 this conducted that no legitimate business in- 

 terests directly suffered. At home there was 

 an unusually excited presidential canvass which 

 resulted in a radical change in the administra- 

 tion ; yet while the campaign was most hotly 

 conducted there was no interruption to busi- 

 ness, and although the question of the tariff 

 was directly involved, manufacturing of goods 

 likely to be affected was only partially checked. 

 A fall in the market value of silver to the low- 

 est price on record did not arouse apprehen- 

 sions in the public mind concerning the stabil- 

 ity of our currency, although the vaults of the 

 Treasury were full to overflowing of the coined 

 dollars, and the only effect produced by the de- 

 cline in silver was temporarily to limit the out- 

 put at the mines. While gold was at intervals 

 exported to Europe none went forward as an 

 exchange operation, the shipments being whol- 

 ly made on special order. Speculators manipu- 

 lated the cotton market in August and forced 

 the price so high that the staple was imported 

 from Liverpool at a profit, and, in October 

 wheat was advanced to figures which, could 

 the grain have been obtained abroad, would 

 have justified its importation. The country 

 had a fairly good crop of winter wheat and 

 there was a partial failure of spring sowed 

 grain, the former maturing i:nder very favora- 

 ble conditions, while the latter was blighted 

 by unprecedentedly early frosts, yet the corn- 

 crop escaped injury. Early in the spring the 

 East was visited by the most severe storm 

 of snow experienced in many years, while at 

 the same time mild weather prevailed in the 

 extreme Northwest, and when the wheat in 

 that section was being blasted by frost the 

 temperature was genial at all other points in 

 the country. While the great transportation 

 lines were so crowded with business that the 

 rolling stock was insufficient for the traffic a 

 war of rates was inaugurated by one of the 

 most conservatively managed roads in the East, 

 resulting not only in demoralization of tariffs 

 but in unsettling confidence in the market value 

 of our stocks at home and abroad. Executive 

 officers of railroad corporations, responsible for 

 millions of share and bond property, permitted 

 their subordinates to aid in depreciating its 

 value by frequently and persistently cutting 

 VOL. xxviu. 21 A 



passenger and freight rates, and mismanage- 

 ment of these roads finally became so atrocious 

 that bankers representing large interests here 

 and abroad were called upon to interfere and 

 demand a reformation. The country was gen- 

 erally prosperous ; farmers received good prices 

 for their crops ; manufacturers realized fair 

 profits while labor was suitably rewarded ; 

 merchants in almost every section had reason 

 to be satisfied with the results of the year's 

 business, and losses through failures in trade 

 were comparatively limited. But while the 

 industrial and mercantile classes enjoyed a good 

 degree of prosperity many of those who depend 

 upon the proceeds of investments for support 

 were harrassed by the fear of loss if they did not 

 actually suffer from reduction of revenue caused 

 by smaller dividends from share properties. 



At the opening of the year the Bank of Eng- 

 land had A stock of 20,164*214 bullion, 38 per 

 cent, of reserve to liabilities, and a 4 per cent, 

 minimum rate of discount. The highest stock 

 of bullion during the year was 23,460.624, 

 March 21, and then the proportion of reserve 

 was 44f, and the bank-rate 2 per cent. By 

 December 6 the bullion had been drawn down 

 to 18,303,473, the bank minimum had ruled 

 at 5 per cent, since October 3, although for 

 several weeks the open market discount rate 

 was only 2f per cent., and the bank had ad- 

 vanced the price of gold bars to the highest fig- 

 ures. 77 shillings 10 pence, in order to check 

 withdrawals of bullion for export. When the 

 year opened the Bank of France had 44,033,- 

 104 gold. The highest for the year was 45,- 

 438,652, and the lowest 40.663,432, Novem- 

 ber 29. On January 7 the estimated amount 

 of gold in the Bank of Germany was 25,986,- 

 000. The greatest sum was 33.732,000, June 

 23, but by the beginning of November this 

 had dwindled to 2^,563.000. Comparing the 

 highest and the lowest amounts of bullion in 

 each of the three banks, it is seen that there was 

 a loss of 5,157,151 by the Bank of England, 

 4.775.220 by that of 'France, and 5,169.000 

 by that of Germany. The shipments from this 

 countrv to Great Britain were about 2.250.- 

 000, and to Germany 2,900,000, and all this 

 gold was drawn for indirect shipment to South 

 America. The bankers in London and Berlin 

 who had contracted to supply the Argentine 

 Republic kept the open markets of the princi- 

 pal European centers bare of gold during the 

 greater part of the year, but how much was 

 thus obtained it is impossible to say. The 

 movement to South America was doubtless 

 nearly equal to three fourths the aggregate of 

 all the withdrawals from the European banks 

 and from New York, or not far from 14.000,- 

 000, the remainder goin<r to Russia, which took 

 5,000,000, and Holland, 1,000,000. The Ar- 



