FINANCIAL REVIEW OF 1901. 



derangement, due to the unsettled industrial 

 situation and to somewhat important failures of 

 banks. In July the market was affected early in 

 the month by high rates for money in New York, 

 and later by an insufficiency of commercial bills 

 resulting from a light movement of commodities. 

 There was a good demand to cover, or rebuy, ex- 

 change which had been previously sold for de- 

 livery in this month, and there was also a steady 

 inquiry for sight sterling with w r hich to pay 

 maturing exchange loans which had been nego- 

 tiated in May. Sixty-day bills opened at $4.85 

 to $4.85, falling to $4.84 to $4.84f by the 12th, 

 and reacting to $4.85 to $4.85 at the end of the 

 month. Sight bills opened at $4.87 to $4.87f, 

 and after declining to $4.87 to $4.87i on the 12th 

 .they advanced to and closed at the opening rates. 

 Gold exports were $1,353,241, entirely to Ger- 

 many. The market was strong during the first 

 half of August, influenced to some extent by 

 easier money in New York, but after the 14th the 

 tone grew weak in consequence of a better supply 

 of commercial bills, the shortage in the corn crop 

 stimulating an export demand for grain, and at 

 the same time there w r as a lighter demand for re- 

 mittance. Sixty-day bills opened at $4.85J to 

 $4.85|, and after rising to $4.85i to $4.85| by the 

 14th they fell to and closed at $4.84 to $4.84^. 

 Sight sterling opened at $4.87 f to $4.88, advanced 

 to $4.88 to $4.88| on the 7th, and then gradually 

 declined, closing at $4.86 to $4.86. In September 

 the lowest rates of the year were recorded. After 

 opening at $4.83| to $4.84 for sixty-day bills, there 

 was a decline, influenced by dearer money, a better 

 supply of commercial drafts, and a light inquiry, 

 to $4.82J to $4.82| by the 18th, after which there 

 came a recovery to $4.82| to $4.83 at the close. 

 Sight exchange opened at $4.85| to $4.86, and it 

 fell by the 16th to $4.84| to $4.85 by the 20th, 

 when $1,250,000 gold was bought in Europe for 

 shipment hither. There was a reaction to $4.85| 

 to $4.85| by the end of the month, due to a de- 

 mand to pay maturing exchange loans and for 

 remittance. In October the market was affected 

 by a dearth of commercial bills against cotton, 

 planters withholding the staple for higher prices, 

 and by the light export movement of corn, due to 

 the limited supply, and though wheat moved 

 freely the resulting bills were small. Bankers' 

 drafts were absorbed by an inquiry for remittance, 

 and also to cover contracts, and there was a spe- 

 cial demand toward the end of the month for the 

 November instalment, payable by American sub- 

 scribers to the British consol loan, which was 

 issued in April. Sixty-day bills opened at $4.83 

 to $4.83, and they advanced by the 22d to $4.84 

 to $4.84|, closing, however, at $4.83| to $4.83|. 

 Sight exchange opened at $4.85i to $4.85 1, and 

 it steadily advanced to and closed at $4.86| to 

 $4.87. An important influence was exerted upon 

 the market at the end of the month by monetary 

 derangements at Paris and at London. Owing to 

 large sales of Paris exchange on London, caused 

 by an unsettling fall in copper stocks at the 

 French capital, the rates for such exchange had 

 fallen so low as to draw gold from London to 

 Paris, and, concurrently, there was a movement of 

 the metal from London to Berlin. Discount rates 

 rose, and the Bank of England minimum was ad- 

 vanced on the 31st to 4 per cent. While New 

 York exchange on London would not permit ship- 

 ments of gold to that center, sight bills being 

 below the gold export point, there was a profit in 

 exporting gold to Paris. Accordingly, $2,851,586 

 gold was forwarded to Paris on the 31st. The 

 bills for the reimbursement of the shippers were 

 drawn on London, and the money with which to 



meet these bills, \vlu>n they sli ;< -cnted, 



was obtained by the sale,' by ih,, , ,,,. ', ..,,,.,. H o f 

 the gold, of Paris exchange' on Lmi , ( '| | )( . cx . 

 change market was generally strong ! iriuy No- 

 vember in consequence of a denmnd i ,, , f,, r 

 the settlement of maturing loans. Tl. <, ,, ;in 

 insufficient supply of bankers' drail-, umi though 

 commercial bills were offered in t'iiiily lil,'f;i.I 

 amounts, they were in such urgent, n-qi'n-1 that. 

 the offerings were promptly absorbed. On i in; 

 19th there was some evidence of a corner in ni^ht. 

 bills, and, owing to the inability of bankers to 

 procure exchange for remittance, the largest single 

 export of gold ever made to Europe, amounting 

 to $7,329,583, went forward. In the following 

 week the market grew easier, partly because the 

 urgent demand had been satisfied by the export* 

 of gold, but chiefly because of the renewal by 

 borrowers of their maturing exchange loans. By 

 the end of the month, however, the market again 

 became strong. The gold exports in November 

 were $15,420,804, making $47,907,629 since the be- 

 ginning of the year. Rates for exchange were 

 $4.83| to $4.84 for sixty days at the opening of 

 the month, and the highest rates were $4.84?- to 

 $4.85 on the 18th; the closing quotations were 

 $4.84| to $4.84|. Sight exchange opened at $4.87 

 to $4.871, and after sales at $4.86| to $4.87 rates 

 rose to $4.88 to $4.88 J by the 18th. They fell to 

 $4.87 to $4.87 & on the 25th and recovered to $4.87f 

 to $4.88 by the close of the month. 



Railroads. The acquisition, elsewhere referred 

 to, by J. P. Morgan of a controlling interest in the 

 Central Railroad of New Jersey, and its transfer 

 to the Reading, was one of the most important 

 events early in the year. The object of the move- 

 ment, the harmonizing of conflicting interests 

 among the coal-carrying roads, was not only at- 

 tained, but the earnings of these roads showed 

 marked improvement during the greater part of 

 the year. This event was followed by the absorp- 

 tion of the Mobile and Ohio by the Southern Rail- 

 way Company, and the purchase by the Union 

 Pacific of control of the Southern Pacific, and 

 also by the further development of the commu- 

 nity of interest policy through the purchase by 

 E. H. Harriman and associates of control of the 

 Chicago Terminal Transfer Company, and of a 

 large block of the stock of the Illinois Central. 

 The announcement was made in April of arrange- 

 ments for the absorption by the Great Northern 

 and the Northern Pacific of the Chicago, Burling- 

 ton and Quincy. The resulting crisis in the stock 

 market, due to efforts by the Harriman-Kuhn 

 Loeb syndicate to protect their interests through 

 the purchase of larger amounts of the Northern 

 Pacific stock than they then held, seemed to cause 

 a suspension of movements having for their ob- 

 ject further acquisitions of railroad properties by 

 combinations of capitalists. In November the 

 announcement was made ,of the organization of 

 the Northern Securities Company, with a capital 

 of $400,000,000, to hold the stocks of the Great 

 Northern, the Northern Pacific, and the Chicago, 

 Burlington and Quincy companies. This arrange- 

 ment was designed to provide for the joint owner- 

 ship by the Harriman and the Morgan-Hill syndi- 

 cates of these properties. The Harriman syndi- 

 cate was given three representatives on the board 

 of directors of the Northern Securities Company, 

 and the Northern Pacific Railroad Company was 

 represented by six directors. James J. Hill, presi- 

 dent of the Great Northern, was made president 

 of the Securities Company, and his interests and 

 those of J. P. Morgan were represented by six 

 directors. . It was mutually agreed that the 

 Northern Pacific preferred stock should be retired 



