FINANCIAL REVIEW OF 1901. 



229 



to 5 per cent, for all periods from sixty days to 

 six months. Many of the larger borrowers of 

 money on time, it may be noted, obtained foreign- 

 exchange loans with which their requirements 

 were satisfied without negotiating loans in the 

 domestic market. Commercial paper was 3| to 

 4J per cent, for indorsements, and 4 to 4 per 

 cent, for four to six months' single names until 

 June, when 3| per cent, was the lowest rate, and 

 thereafter quotations were from 4 to 5 per cent. 

 for indorsements, and 5 to 5 per cent, for four 

 to six months' single names. Banks at the West 

 were among the largest buyers of paper in this 

 market until September. 



The clearings of the New York associated banks 

 during the clearing-house year ending Sept. 30 

 were the largest on record, amounting to $77,- 

 020,672,493.65. For eleven months ending Nov. 

 30 the clearings were $73,112,212,005, against $46,- 

 687,067,789 for the same time in 1900. Clearings 

 of all banks in the United States for eleven 

 months this year were $108,245,078,115, against 

 $76,720,199,255 for the same time in 1900. 



The following is a statement of the average 

 loans, specie, circulation, deposits, and legal ten- 

 ders of the New York associated banks at the be- 

 ginning of each quarter and at the end of No- 

 vember, 1901: 



was a recovery in the steel properties. ;iml toward 

 the end of the month the market -_M .- strong 

 again, influenced by large purchase.- ol -tor ks of 

 the Gould system of roads and of other South- 

 western lines. On Feb. 1 it wa.s anrioune.^i that 

 the Southern Railway Company had otl'eird to 

 exchange its securities for the stock ami bon<K of 

 the Mobile and Ohio Railroad Company. It WUH 

 simultaneously announced that Union Pacific in- 

 terests had secured control of the Southern Pa- 

 cific, through purchases of the Huntington-Speyer 

 holdings, and. that the negotiation would be 

 financed by the issue of $40,000,000 Union Pacific 

 first-lien 4-per-cent. convertible bonds. Thus were 

 harmonious relations established between the 

 Union Pacific and the Southern Pacific systems, 

 and also the Central Pacific. Another event, early 

 in February, was the purchase by E. H. Harriman 

 of a controlling interest in the stock of the 

 Chicago Terminal Transfer Railroad. Rumors 

 were later current of an intended consolidation of 

 the principal steel manufacturing plants, which 

 rumors were confirmed on Feb. 26 by the an- 

 nouncement by J. P. Morgan & Co. of the organi- 

 zation of the United States Steel Corporation, 

 with a capital of $1,100,000,000. This corporation 

 was projected to take over and control the Car- 

 negie Company and seven other steel companies, 



Stocks. The stock market was buoyant at 

 the beginning of the year, influenced largely by 

 rumors of impending combinations of important 

 industrial and railroad interests, with the object 

 of harmonizing existing differences and of secur- 

 ing uniformity of tariffs. The purchase in De- 

 cember of the previous year by J. P. Morgan & 

 Co. of the Pennsylvania Coal Company, through 

 which purchase the threatened construction by 

 independent coal operators of a new line of rail- 

 roads to tide-water was prevented, seemed to 

 foreshadow a movement having for its object the 

 practical control of the anthracite coal-mining 

 and transportation companies. On Jan. 5 it was 

 announced that the above-named firm had secured 

 control, through purchase of a majority of the 

 stock, of the Central Railroad of New Jersey, 

 which control had been tendered to and accepted 

 by the Reading Railroad Company, thus uniting 

 these two important systems. This announce- 

 ment stimulated an exceedingly active specula- 

 tion in the stocks of all the coal-producing and 

 carrying roads. Rumors were current of intended 

 combinations of the Great Northern, the Northern 

 Pacific, and the Chicago, Milwaukee and St. Paul 

 systems, which rumors were readily believed, caus- 

 ing rapid advances in the market value of the 

 stocks of these roads, and also in railroad prop- 

 erties generally. The volume of business on the 

 Stock Exchange was enormous and altogether 

 unprecedented during the greater part of the first 

 half of the month. Then followed a recession in 

 prices due to realizing sales, which were encour- 

 aged by the absence of confirmation of reports of 

 contemplated deals, and also by the development 

 of weakness in the iron and steel properties. This 

 weakness was caused by the announcement that 

 the Carnegie ' Company intended to erect a steel 

 plant at Conneaut, on Lake Erie, for the manu- 

 facture of merchant pipe, in opposition to. the 

 National Tube Company. Subsequently there 



including the Federal, the Steel and Wire, the 

 National Tube, the National Steel, the American 

 Tin-Plate, the Steel Hoop, and the Sheet Steel 

 plants. The announcement was accompanied by 

 a statement of the terms for the exchange of 

 stocks of the constituent companies for the shares 

 of the steel corporation, which statement caused 

 a decline in the market value of the stocks of the 

 seven companies above named, the terms being 

 regarded as unsatisfactory. The tone of the 

 market at the close of the month was irregular, 

 with the steel stocks heavy and the railroad list 

 and the anthracite-coal properties strong. At the 

 beginning of March there was quite confident buy- 

 ing of investment stocks, and also of Union Pa- 

 cific, Chicago, Burlington and Quincy, Baltimore 

 and Ohio, and Atchison. The proposal by the 

 Pennsylvania Railroad directors to increase the 

 capital stock to $100,000,000, the increase of divi- 

 dends on Chicago, Milwaukee and St. Paul com- 

 mon stock, and evidence of improvement in the 

 anthracite-coal situation, had a stimulating effect 

 upon these properties. The stock of the United 

 States Steel Corporation was traded in on the 

 " curb " at rising prices, and March 20 it was 

 announced that the organization had been suc- 

 cessfully completed by the deposit of 98 per cent, 

 of the stocks of the constituent companies; also 

 that the Lake Superior iron-mines w r ould be ab- 

 sorbed by the steel corporation. Rumors, which, 

 however, were not at that time confirmed, were 

 current that the Chicago, Burlington and Quincy 

 would be absorbed by the Great Northern, and 

 some color was given these rumors by the pro- 

 posed increase of the capital of the last-named 

 company. Toward the end of the month the 

 market grew irregular, though it closed generally 

 strong, with the coal shares higher on the failure 

 of an attempt to cause a strike of miners. There 

 was some selling of stocks based upon an advance 

 in foreign exchange to the gold-export point, and 



