FINANCIAL REVIEW OF 1888. 



325 



The condition of the New York Clearing-IIouse banks, the rates for money, exchange, and 

 silver, and prices for United States bonds on or about Jan. 1, 1889, compared with the preced- 

 ing two years, are shown in the following summary: 



Foreign Exchange. The imports of merchan- 

 dise for 1888 were $16,405,675 above those for 

 1887, and the exports of domestic and foreign 

 merchandise for the same time were $23,534,- 

 582 less. The excess of merchandise imports 

 over exports for the year was $33,457,691, 

 against *0. 48-2. 566 exports over imports in 



1887. There was an excess of $37,199,619 ex- 

 ports over imports of specie and bullion in 



1888, against $24,872,499 imports over exports 

 in 1887. The excess of exports over imports 

 of merchandise and specie in 1888 was $3,741,- 

 928, against $18,389,933 imports over exports 

 in 1887. 



Foreign exchange was strong early in Janu- 

 ary in consequence of a scarcity of commer- 

 cial bills, aud the low rates for discounts in 

 London encouraged purchases of long sterling. 

 Toward the middle of the month offerings of 

 maturing drafts and a reduction in the Bank 

 of England minimum to three per cent, from 

 four caused a decline in sight bills, and the 

 tone of the market was heavy at the close of 

 the month. At the beginning of February 

 there was a fall of one cent per pound ster- 

 ling, mainly due to the offerings of bills against 

 new securities placed abroad, and it was esti- 

 mated that over $30,000,000 railroad bonds 

 had been so disposed of since the commence- 

 ment of the year, money in Europe being 

 cheap If to li in London for sixty days' to 

 three months' bank bills, 2i to 2| in the open 

 market at Paris, and If to If at Berlin. By 

 the middle of the month, however, the tone 

 grew firmer in consequence of a scarcity of 

 bills, although there was a reduction in the 

 Bank of England minimum to 2| per cent., and 

 in the rate of the Bank of France to the same 

 figure. Toward the end of the month and 

 early in March there was a further advance in 

 sterling, due to a limited supply of commercial 

 bills and to a demand to remit for stocks sold 

 for European account, confidence abroad in 

 American securities being unsettled by the 

 strike on the Chicago, Burlington and Quincy, 



and by the unfavorable traffic returns of the 

 Erie and of the Reading. About the middle 

 of March the Bank of England minimum was 

 reduced to 2 per cent., but this had no particu- 

 lar effect upon exchange, which became easier, 

 mainly because of offerings of bills drawn 

 against purchases of stocks for European ac- 

 count. The first shipment of gold, $300,000, 

 was made March 29, but this went out on 

 special order, and not as the result of an ex- 

 change operation. Early in April the rates 

 fell off because of continued offerings of bank- 

 ers' bills, although commercial sterling con- 

 tinued scarce, but before the close of the month 

 there was an upward reaction, partly due to 

 dearer money in London, which early in May 

 caused an advance in the Bank of England 

 minimum to 3 per cent. There were other 

 shipments of gold May 9. May 12, and dur- 

 ing the week ending May 26, but these were 

 also sent on special order, and indirectly to 

 the Argentine Republic. London bankers then 

 being engaged in supplying demands for that 

 country, which gradually grew urgent. At 

 no time during the month were the rates of 

 sterling high enough to justify gold exports 

 as an exchange operation. The Bank of Eng- 

 land reduced its minimum rate to 2| per cent. 

 June 6. The bills drawn against the negotia- 

 tion of the Baltimore and Ohio, the Reading, 

 and a Canadian loan gradually came upon the 

 market in June, but additional shipments of 

 gold were made, also on special order. The 

 rates fell off in July, but gold continued to go 

 forward in response to an apparent determi- 

 nation by the managers of the Imperial Bank 

 of Germany still further to augment its sup- 

 plies of the metal. Toward tbe close of the 

 month exports of grain were liberal, and these 

 furnished a better supply of commercial bills, 

 and there were also offerings of drafts in an- 

 ticipation of the movement of cotton. The 

 pressure of this exchange caused a further de- 

 cline in rates early in August, but the tone 

 soon grew firmer under the influence of dearer 



