FINANCIAL REVIEW OF 1888. 



mand was not very urgent until toward the 

 close when there was a good inquiry for loans 

 for sixty days at 4 per cent. Rates early in 

 the month were 3 to 3 per cent for sixty 

 days, 3J to 4 for sixty days to four months, 

 and 4-^ to 5 for four to six months. After the 

 middle of the month bank reserves fell off, 

 three of the largest city institutions held 

 nearly the whole of the surplus reported by 

 all the banks, call-money ruled at an average 

 of about 5 per cent., and the supply came 

 chiefly from bankers having balances and a 

 few trust companies. 



Early in the year mercantile paper was in 

 abundant supply. Rates were 5 to 5-J- per 

 cent, for sixty to ninety day indorsed bills re- 

 ceivable in the beginning of January, grad- 

 ually falling, under the influence of a better 

 demand, to 4f to 5 by the end of the month. 

 In February the range was from 4| to 5, and 

 in March paper sold less freely with rates up 

 to 5 to 5^ per cent, by the close. In April the 

 supply was small, but the demand was -good, 

 and rates were 4f to 5J- per cent. In May 

 quotations fell off to 4 to 4, and in June, in- 

 fluenced by more urgency in the inquiry, rates 

 declined to 3 to 4 per cent., recovering in the 

 next month to 4 to 4$, and in August to 4 to 

 5. In September paper was abundant, but 

 none of the banks were buying, and conse- 

 quently rates advanced to 5J to 6 ; but in Oc- 

 tober the demand improved, and quotations 

 fell to 4| to 5, dropping the next month to 4 

 per cent. In December the inquiry grew light 

 toward the close, and the quotation was 5^ 

 per cent. 



It will be seen by the above that at no time 

 during the year was there any real scarcity of 

 money, and borrowers on call, on time, and on 

 commercial paper found a comparatively lib- 

 eral supply offering. The New York associ- 

 ated banks held at the beginning of the year 

 $103,653,200 gold and legal-tender notes, con- 

 sisting of $75,235,400 of the former and $28,- 

 417,800 of the latter. By the end of March 

 the gold had been reduced to $71,351,300, but 

 under the influence of bond purchases and 

 other accumulations from Treasury operations, 

 this item was carried to $93,694,200 by July 14, 

 and then, by reason of the demand for the in- 

 terior for crop purposes, it fell to $78,862,400 

 by September 8, rising to $94,281,300, the 

 maximum of the year, by October 20, showing 

 the effect of large bond purchases and the re- 

 turn movement from the interior. The legal- 

 tender maximum for the year was recorded 

 August 4. Then the drain to the West and 

 South caused a decline to the minimum of 

 $26,700,900 by November 10. Deposits 



were $371,305,900, the minimum of the year, 

 January 7, and the maximum, $421,884,300, 

 was reached October 20, meanwhile falling 

 from $418,234,000, July 14, to $406,309,100, 

 September 22. Loans and discounts were at 

 the minimum, $354,767,900, January 21, and 

 at the maximum, $397,243,200, October 13. 

 The surplus reserve was $10,826,725 at the 

 opening of the year, rising to $23,258,825 by 

 January 28, falling to $8,620,875 April 7, re- 

 covering to $28,463,700, the maximum, July 

 16, declining to $10,314,550 October 13, sharp- 

 ly reacting to $16,901,025 October 20, and then 

 gradually falling to $6,281,350 December 29. 



The Secretary of the Treasury, with a view 

 to the relief of the money market, and in order 

 to distribute the Treasury holdings of cash, 

 decided early in the year further to increase 

 the number of designated depositories, and, in 

 pursuance of this policy, the amount of money 

 on deposit with national banks throughout the 

 country was increased from $52,109,918, Janu- 

 ary 1, to $61,921,294 by May 1. Then fol- 

 lowed a gradual reduction to $59,091,239 by 

 September 1, and afterward, in consequence 

 of the surrender of bonds for the security of 

 deposits, the amount was reduced to $51,925,- 

 078, December 1, and at the end of the year 

 the public money held by the designated de- 

 positories was $52,390,154. Under the author- 

 ity of the act of October, 1882, reaffirmed 

 April 17, the Secretary of the Treasury on April 

 23 commenced purchasing 4 and 4J per cent. 

 United States bonds, continuing to do so to 

 the end of the year, with the exception that 

 on October 10, after taking $51,394,200, pur- 

 chases of the 4-per-cents. were suspended, 

 and thereafter buying was confined to the 4s. 

 The bond-purchases at the end of the year 

 amounted to $101,715,500, and the sum paid 

 therefor, including premiums, was $120,254,- 

 940. The bonds came chiefly from New York 

 and vicinity, and payments for the same were 

 made through the banks in this section of the 

 country, thus largely accounting for the in- 

 crease of cash and of reserves in our banks. 

 But to the extent that these bonds were held 

 by the Treasury as security for circulation, the 

 amount distributed to the banks was only 10 

 per cent, of the par value and the premiums. 

 The high price which the bonds commanded 

 in the market by reason of the Treasury pur- 

 chases induced liberal surrenders of circula- 

 tion after the beginning of September, but 

 these were confined by law to $3,000,000 per 

 month. 



Appended is the New York Clearing-House 

 statement of totals at the beginning of each 

 quarter of 1888 and at the end of the year: 



