FINANCIAL REVIEW OF 1901. 



May panic, and 1 per cent., to which the rate 

 momentarily fell in July. At the beginning of 

 January loans were made at 6 per cent., but, 

 influenced by the distribution of interest and divi- 

 dends, by liberal disbursements by the Treasury, 

 and by *a return movement of money from the 

 interior, the rate fell to If per cent, in the last 

 week. In February easy monetary conditions pre- 

 vailed, and loans were made at 2 and at 1 

 per cent. In March money was more active in 

 consequence of Stock-Exchange requirements, and 

 after loaning at 2 per cent, early in the month 

 there was a rise to 7 per cent., due to the low 

 bank reserves. In April an improvement in bank 

 conditions caused a fall in the rate from 7 per 

 cent, at the beginning to 2J per cent, by the end 

 of the month. In May, after the panicky rise to 

 75 per cent, on the 9th, due to the development 

 of the Northern Pacific corner, there was a grad- 

 ual fall to 2 per cent. In June bank reserves 

 were again low; there was consequently a calling 

 in of loans by these institutions, and after open- 

 ing at 2 per cent, the rate advanced to 5 per 

 cent, by the 17th. The suspension of the Seventh 

 National Bank on the 27th caused a temporary 

 rise in the rate to 15 per cent. At the beginning 

 of July unfavorable bank conditions, disquieting 

 crop reports, threatened railroad complications, 

 growing out of the Northern Pacific controversy, 

 and industrial troubles had a disturbing effect 

 upon the situation. The Stock Exchange had 

 been ordered closed from the 3d until the follow- 

 ing Monday, and some of the large lenders were 

 unwilling to make call contracts extending over 

 that period. Consequently rates rose to 25 per 

 cent, on the 3d, and on the 8th loans were made at 

 8 per cent. The market was then relieved, how- 

 ever, through liberal offerings of money by private 

 bankers, and, influenced by a liquidation in loans 

 and large supplies of money from the interior and 

 also from the Treasury, the situation improved, 

 rates on call fell by July 16 to 1 per cent., 

 and the average for the remainder of the month 

 !J per cent. In August bank reserves were 

 cened by absorptions of money by the Treas- 

 ury through fiscal operations, and the market 

 i* active with loans at 4 per cent, and at 2 per 

 In September the tone was comparatively 

 ith transactions at 4* per cent, and at 3 

 per cent., until the week immediately succeeding 

 the shooting of President McKinley. The effect 

 upon the money market of that event was how- 

 ever, greatly minimized through the prompt and 

 effective action which was taken bv the Clearins- 

 House Committee. The Stock Exchange was, 

 early on the day following the tragedy, ordered 



closed, and business on the London Stock Ex- 

 change was immediately suspended. Thus was 

 the possibly disturbing* factor of stock transac- 

 tions eliminated from the situation. Those of 

 the Clearing-House Committee who were in the 

 city assembled at an early hour, and, after a brief 

 conference with the presidents of the larger banks 

 and with J. Pierpont Morgan, it was decided to 

 unite all the resources of the banks, even to the 

 extent of issuing clearing-house certificates, 

 should such a course be necessary, for the pur- 

 pose of sustaining the market through liberal 

 loans of money, thereby averting a crisis. So en- 

 tirely effective was this course that on the follow- 

 ing Monday, when the Stock Exchange opened, no 

 further action, beyond the formal securing of 

 pledges from the banks of $30,000,000 for use in 

 the loan market, was necessary, and confidence 

 was restored without the use of any of the money 

 so pledged. At the request of the Clearing-House 

 Committee the Secretary of the Treasury con- 

 tributed to the relief of the money market by 

 offering to buy any part of $20,000,000 unmatured 

 bonds, including the 4s of 1925, which had hith- 

 erto not been included in such purchases, and he 

 also directed that the deposits of public money in 

 the depository banks be increased to an amount 

 equal to the par value of the bonds held as secu- 

 rity for such deposits. The above-noted measures, 

 which were taken by the Clearing-House Com- 

 mittee for meeting any emergency that might 

 arise, continued in effect, and no additional meas- 

 ures were made necessary on the news of the 

 death of the President. The highest recorded rate 

 for money during the week was 10 per cent. In- 

 fluenced by liberal offerings of bonds to the Treas- 

 ury, money declined in the following week to 

 14 per cent., and the average for the remainder of 

 the month was 3f per cent. Normal monetary 

 conditions prevailed in October, and loans were 

 at 4J and at 2 per cent., the average falling from 

 3| per cent, in the first week to 3 per. cent, by 

 the close. In November, though the tone was 

 firmer, rates for money on call did not rise above 

 5 per cent., and the average was about 4 per cent. 

 Time contracts were in good demand during the 

 first four months of the year at from 3 per cent, 

 for sixty days to 3 and 4| per cent, for four to 

 six months. In May there was some urgency in 

 the inquiry, which resulted in an advance to 4 

 to 6 per cent, for short time, while four to six 

 months' contracts were obtainable at 4 to 5 per 

 cent. In June rates were 3 to 3J per cent, for 

 thirty to ninety days, and from 4 to 4J per cent, 

 for four to six months. For the remainder of the 

 year the demand was moderate, and rates were 4 



