FINANCIAL REVIEW OP 1890. 



305 



plied with balances and there were also liberal 

 offerings by foreign houses. 



Until August time loans on stock collateral 

 and rates for commercial paper were compara- 

 tively easy. Short-time contracts were as high 

 as 6 per cent, in January and as low as 4J- in 

 February, April, May, and July, and during 

 these periods four to six months' time loans were 

 from 4 to 6 per cent. After July the rate for 

 time contracts was nominally 6 per cent., and 

 during November and December no money was 

 offered on time, although the demand was urgent, 

 and in some cases, in December, as high as 8 per 

 cent, was bid for the accommodation without 

 inducing offerings. The reason was that lenders 

 looked for an active demand for money toward 

 the close of the year and in January, and they 

 were unwilling to make engagements on time, 

 preferring to loan upon call, but in many cases 

 loans by banks subject to call from day to day 

 were permitted to stand, thus making them prac- 

 tically short-time contracts. The better supply 

 of money which resulted from bond purchases and 

 gold imports, together with some assurance that 

 the inquiry in January would not be urgent, as 

 it was regarded as probable that Congress would 

 extend the time from Feb. 1 to July 1, 1891, for 

 the payment of duties on goods in bond, induced 

 offerings of money on time contracts at 6 per 

 cent, for four to six months, and later in Decem- 

 ber lenders were even more liberal ; but then the 

 demand was light and the rate remained to the 

 close of the year at 6 per cent, for all dates. 



Commercial paper was readily sold until Au- 

 gust at fair rates, ruling from 4f to 5| per cent, 

 for sixty to ninety day indorsed bills receivable ; 

 5 @ 6 for four months' acceptances, and 5 @ 7 

 for good single names having from four to six 

 months to run. But after the end of July the 

 rates were only nominal, and in November and 

 early in December commercial paper was almost 

 unsalable, except at high rates, and many mer- 

 chants were embarrassed by reason of their in- 

 ability to dispose of their paper. After the mid- 

 dle of December, out-of-town buying of com- 

 mercial paper led to transactions at 7 per cent, 

 for sixty to ninety day indorsed bills receivable, 

 7 @ 7 for four months' acceptances, and 8 @ 

 8^ for good single names having from four to 

 six months to run, and the merchants gener- 

 ally found good accommodation at their banks, 

 some of the institutions taking out Clearing- 



House certificates in order to extend aid to mer- 

 chants. 



The Clearing-House banks had the largest 

 amount of loans on Feb. 21, $414,574,000, and 

 the smallest, Nov. 29, $884,548,100. The depos- 

 its were at the maximum, $431,599,600, Feb. 8, 

 and at the minimum, $376,924,200, Dec. 6. The 

 highest amount of specie held was $93,798,300, 

 Oct. 4, and the smallest $67,838,200, Dec. 6. The 

 legal tenders were at the maximum, $32,726,100, 

 July 26, and at the minimum, $20,137,400, Oct. 

 18. The bond operations of the Treasury Depart- 

 ment, intended for the relief of the banks, were 

 as follow : Redemptions of 4 and 4 per cents, 

 under the circular of July 19, $17,324,850, par 

 value, for which there were paid $21,225,989.46 ; 

 4|-per-cent. bonds redeemed with interest to May 

 31, 1891, $560,050, costing $581,138.12; redemp- 

 tion of 4^s with interest to Aug. 31, 1891, $38,- 

 738,800, for which were paid $40,483,045.25 ; in- 

 terest prepaid for one year on 4 per cents, and 

 currency 6s, $12,009,951.50; and purchases of 

 4-per-cent. bonds Sept. 17, $17,071,150, for which 

 there were paid $21,617,673.77. This makes a 

 total of $96,917,798.10 disbursed by the Treas- 

 ury from July 19 to Sept. 17. In October $3,203,- 

 100 4| per cents, were purchased for redemption, 

 and Dec. 9 $7,995,850 4s, costing $9,500,000, 

 making the total payments on account of bonds 

 $109,620,898. In addition to this the Treasury 

 notes issued on purchases of silver bullion from 

 Aug. 13 to Nov. 23 were $18,807,000. The prin- 

 cipal reason why this large distribution of money 

 from the Treasury did not make a more perma- 

 nent impression upon the bank reserves was that 

 the interior demand for currency was unusually 

 large because of the high prices ruling for all 

 cereals, the result of the short crops ; the heavy 

 yield of cotton and its early movement ; the gen- 

 erally properous condition of trade at the inte- 

 rior ; the large importations of goods in antici- 

 pation of the new tariff, payments of duties on 

 which drained the banks through the custom 

 house ; and the export of gold to Europe in re- 

 sponse to the urgent demand for the relief of the 

 London market during the Argentine crisis, and 

 later to settle trade balances and to pay for im- 

 portations of silver. The condition of the New 

 York Clearing-House banks, the rates for money, 

 exchange, and silver, and prices for United 

 States bonds on or about Jan. 1, 1891, compared 

 with the preceding two years, are as follows : 



VOL. xxx 20 A 



