FINANCIAL REVIEW OF 1890. 



303 



expectations of a drain of gold to Germany for 

 the new conversion loan of 235,000,000 marks, 

 and the Imperial Bank of Germany advanced 

 its rate to 5| per cent, but no gold was sent to 

 Berlin. The feeling on the London Exchange 

 continued to grow worse, and there were fears of 

 a panic, but it was averted although there was 

 a sharp fall in all securities, particularly Ameri- 

 can. Toward the close of the month less anxiety 

 was felt for the reason that a syndicate of bank- 

 ers had undertaken to carry over a block of about 

 $25,000,000 par value of American stocks, thus 

 relieving a prominent house which was embar- 

 rassed. But other houses were the subjects of 

 disquieting rumors, and the steady fall in prices 

 on the New York Exchange made speculators in 

 London uneasy as the last settlement day of the 

 month approached. Trouble was again prevented 

 by extending relief; but the tension increased 

 early in November, and a further fall in the New 

 York market seemed to aggravate the situation. 

 The Bank of England rate was unexpectedly ad- 

 vanced on Friday, the 7th, and the effect upon 

 London and New York was depressing, for the 

 reason that it was felt that it foreshadowed some 

 grave emergency, as indeed it did. On the 15th 

 the announcement was made that the Barings 

 had been compelled to call upon the Bank of 

 England, the Rothschilds, and other great finan- 

 cial houses to relieve them. The shock of this 

 revelation was startling, but the full effect was 

 in great measure counteracted by the statement 

 that between the 7th when the Bank of Eng- 

 land was advised by the Barings of their critical 

 condition and the date of the public announce- 

 ment a syndicate had been formed which had 

 undertaken to liquidate the affairs of the house, 

 and that a guarantee fund of 15,000,000 had 

 been subscribed for the purpose. The liabilities 

 of the Barings were at first stated at 15,000,000, 

 and subsequently at 20,000,000, while the assets, 

 at the then depreciated value, showed a surplus 

 of 4,000,000. It was reported that the Bank 

 of England had borrowed from the Bank of 

 France 3,000,000 at 3 percent, for three months, 

 and that about 1,750.000 had been obtained 

 from St. Petersburg. The London market was 

 very feverish until the 20th, when the fact that 

 the Bank of England had not raised its discount 

 rate, and that it had gained 3,420,395 bullion 

 during the week, had a reassuring effect, and the 

 market sharply recovered. The fact that 1,- 

 500,000 gold was on the way from Brazil and 

 Australia imparted a very confident feeling to 

 the markets by the end of the month, and on 

 Dec. 4 the bank rate was reduced to 5 per cent., 

 the stock of bullion then amounting to 24.- 

 895,849. the highest of the year. Discounts in 

 the open market fell and the outlook was good 

 for a continuance of cheap money, but toward 

 the middle of the month the demand for gold 

 for Germany became urgent in consequence of 

 the marketing in London of large amounts of 



Argentine securities, and by the 20th nearly 2,- 

 200,000 was sent to Berlin. At the same time 

 there was a demand for gold for shipment to 

 New York ; but as the Bank of England refused 

 to part with bars, American double eagles had 

 to be taken, and shipments of about 1,000,000 

 from London to New York consisted wholly of 

 coin. The open market discount rate advanced 

 under the influence of these shipments, but by 

 the close of the month it fell off again-. It was 

 then expected that early in 1891 there would be 

 a movement of gold to Paris in consequence of 

 the issue of the new French loan on the 12th of 

 January. 



The price of bar silver fluctuated in London 

 between 44 and 43feZ. per ounce until April, 

 when there was an advance to 48d., stimulated 

 by the prospect of early action on the Silver bill 

 by our Congress, but there was a reaction to 46d. 

 in May, and then came a recovery which carried 

 the price to 54fd. early in August, when pur- 

 chases of silver under the new law began. The 

 price fell to 50d. in September, to 48| in Octo- 

 ber, and to 45 in November, it being affected in 

 the last two months by the unsettled condition 

 of the London market, and it closed Dec. 31 at 

 4Sd. The purchases of silver bullion by the 

 Treasury Department between Aug. 13 and Dec. 

 1 aggregated 16,778,185 fine ounces, costing an 

 average of $1.1128 per ounce, arid, as a rule, the 

 department paid a price considerably in excess 

 of the parity of the London market value. The 

 amount bought in December was 4,500,000 

 ounces, costing from $1.028 to $1.09 per ounce. 



The following tabular survey of the economi- 

 cal conditions and results of 1890, contrasted 

 with those of the preceding year, is from the 

 " Commercial and Financial Chronicle " : 



The prices of leading staples on or about the 

 1st of January, 1891, compared with prices at 

 the same date 'in 1890 and 1889 were as follow : 



