COMMERCE AND FINANCE, AMERICAN, IN 1882. 



117 



It thus appears that the people increased 

 their hoardings of gold between November 1, 

 1881, and November 1, 1882, about forty mill- 

 ions, and decreased their hoardings of silver 

 about two millions and their hoardings of cur- 

 rency about nineteen millions. 



A new kind of currency was introduced in 

 October. Gold certificates were issued on the 

 deposit of gold in the Treasury at Washington 

 or the sub-Treasury at New York. Bankers 

 hastened to make the Government vaults the 

 repository for their gold. The Bank of Amer- 

 ica, however, still kept the reserves of the 

 Clearing-House banks. Within a month, nearly 

 $30,000,000 of the gold certificates were in cir- 

 culation. The greater part of the customs dues 

 were paid with this more convenient medium. 

 This threatened to cut off the source from 

 which the Treasury reserve held against the 

 greenback circulation was kept, as the law 

 contained no provision for the cancellation of 

 certificates received by the Treasury, and only 

 imperfectly guarded against the danger by 

 directing the Secretary to cease issuing new 

 ones after the reserve has sunk below $100,- 

 000,000. 



The increase in the circulation of standard 

 silver dollars between November 1, 1881, and 

 November 1, 1882, was less than a million and 

 a half of dollars, although $27,772,075 had 

 been coined in the mean while. Of the $128,- 

 329,880 coined since the passage of the act of 

 February 28, 1878, only $35,383,786 were in 

 circulation. There were silver certificates out- 

 standing for $65,620,450, leaving $26,794,527 

 belonging to the Treasury. The amount of sil- 

 ver certificates in circulation had decreased dur- 

 ing the year to about the same amount that 

 the circulation of silver dollars had increased. 

 The new gold certificates are expected by the 

 Secretary of the Treasury to expel the silver 

 certificates. The state of India exchanges had 

 caused an accumulation of India Council bills, 

 leaving three fifths of the 15,000,000 annually 

 drawn by the English Government to be dis- 

 posed of between the 1st of January and the 

 31st of March, 1883. The price of silver de- 

 clined from 52^<Z. per ounce, to 50cZ., so that 

 the bullion value of the silver dollar stood at 

 only 84 cents at the close of the year. 



The Kiernan interest law, abolishing the 

 penalties for usury as far as call loans are con- 

 cerned in New York, had the desired effect of 

 putting an end to the fractional commissions 

 charged in stock transactions in times of active 

 speculation and a tight money market. These 

 daily commissions raised the rate of interest 

 in sudden leaps to 11, 16, 28, 51, and sometimes 

 96 per cent per annum, and therefore greatly 

 favored manipulators of the money market. 

 Only on one occasion since the passage of the 

 bill in May was there an attempt made to re- 

 vive the commission system. It was in the 

 last week of September, and was the result of 

 the locking up of loanable funds by speculators 

 for a fall in stocks. The stringency was re- 



lieved by the redemption of bonds at the order 

 of the Secretary of the Treasury. One effect 

 of the new interest law was to attract loanable 

 capital to some extent from Canada when 

 scarce in New York. Toward the end of the 

 calendar year there was a tendency to higher 

 rates for money. At the close of November, 

 prime commercial paper was discounted at the 

 rates of 7 or 8 per cent, with an easier market 

 in December, and rates ranging from 5-J- to 6 

 per cent. 



The average rate of interest in New York 

 for each year since 1874 has been as follows: 



The exchanges in New York aggregated 

 about $47,000,000,000 during 1882, against 

 $49,376,882,883 in 1881. They were less 

 swelled by stock speculations. The estimated 

 portion belonging to legitimate trade is esti- 

 mated in the "Public" at $31,500,000,000, 

 against $31,483,517,189 in 1881. The aggre- 

 gate exchanges of twenty-five cities besides 

 New York amounted to about $14,600,000,000 

 in 1882, against $14,900,000,000 in 1881. The 

 exchanges of the minor cities and those of New 

 York also were more affected than ever before 

 by speculation in produce. 



THE STOCK MARKET. A remarkable change 

 was noticed in the sentiments of the public 

 toward railroad enterprises in 1882, contrast- 

 ing curiously with the buoyant and adventur- 

 ous eagerness with which business-men specu- 

 lated on the prospects of railroad lines a year 

 or two before. The diminished traffic of 1881 

 and the trunk-line war naturally depressed 

 values. There was a partial recovery at the 

 close of the rate war from the very low market 

 of February, but in March the market threat- 

 ened to break down. The two leading oper- 

 ators sought to inspire confidence, the one by 

 displaying his own enormous holdings of securi- 

 ties, the other by hopeful predictions. It after- 

 ward transpired that they had parted with 

 some of their property at the better prices 

 which their own assurances had obtained. It 

 was suspected that the railroad war and the 

 one which followed on the Northwestern roads 

 were contrived by directors who had sold their 

 shares and wished to regain them cheaply. It 

 was suspected after a sudden fall of prices in 

 April that the market had been artificially sus- 

 tained and then depressed with a preconceived 

 purpose. The reports of railroad officers were 

 more enigmatic than ever before, and the affairs 

 of the corporations elaborately confused. The 

 new railroads constructed within three years at 

 a cost of some $700,000,000, and represented 



