FINANCIAL REVIEW OF 1885. 



353 



cotton was checked by speculation, thus com- 

 pelling the covering of bills sold in advance, 

 and, although during October and November 

 the offerings by the arbitrage houses of drafts 

 made against outgoing securities, bought for 

 speculation and investment, were large, the de- 

 mand was sufficiently urgent to keep rates 

 comparatively firm, and this condition of the 

 market was stimulated by an advance in the 

 Bank of England minimum to 3 per cent., 

 and by a rise in the open market rate in Lon- 

 don caused by withdrawals of gold for Ger- 

 many, and by the outbreak of war in the Bal- 

 kan Peninsula. On Dec. IT the bank mini- 

 mum was further advanced to 4 per cent., the 

 demand for sterling for speculation, invest- 

 ment, and remittance, absorbed all the offer- 

 ings, rates moved up to the gold-exporting 

 point on the 21st, and $600,000 of that metal 

 was shipped to London. The high prices for 

 sterling, however, soon brought out a better 

 supply of bills, and rates fell off to points which 

 prevented further exports of gold, but the mar- 

 ket was steady at the decline to the close of 

 the year. 



Manufacturing Industries. The feeling among 

 manufacturers was rather more hopeful at the 

 beginning of 1885 than it had been at any time 

 since the depression commenced. Prices of al- 

 most all raw and manufactured staples were at 

 about the lowest points, and it was regarded as 

 almost certain that there would not be any 

 further material decline. Production had been 

 restricted, so that the country was almost bare 

 of goods, and consumption was steadily reduc- 

 ing stocks. The auction-sales of dry goods 

 early in the spring were so conducted as to 

 make a wide distribution of staple articles, and 

 the buyers were assured that they could not 

 expect to duplicate the fabrics at the auction 

 pi-ices. The purchases were promptly disposed 

 of, the demand was stimulated, and a healthy 

 impulse was imparted to the fall trade, causing 

 it to be the most active of any season for a 

 number of years. This, however, had com- 

 paratively little effect upon the manufacturers, 

 for cotton was too high and goods too low to 

 make production very profitable, and the out- 

 put of the mills was mostly confined to stand- 

 ard fabrics. Speculation in cotton, after the 

 new crop year opened, caused high prices for 

 the staple to be maintained, and therefore con- 

 tinued to restrict manufacturing. The iron 

 market was dull and depressed until June, and 

 about the only feature was an increased de- 

 mand for structural and other kinds of manu- 

 factured iron. The steel-rail interests decided, 

 in the above-named month, to limit their out- 

 put to what then seemed likely to equal the 

 wants of the railroads for 1886, and they fixed 

 upon a production of 775,000 tons. The suc- 

 cessful result of the negotiations for the set- 

 tlement of the railroad troubles gave an un- 

 expected impetus to this branch of the trade, 

 the demand increased, prices advanced, stocks 

 were steadily absorbed, and the output of steel 

 VOL. xxv. 23 A 



rails for 1886 was increased to 1,000,000 tons. 

 As the year closes there appears a fair prospect 

 that this improvement will continue. The an- 

 thracite-coal combination, which went into 

 effect early in the year, proved generally satis- 

 factory, although the refusal of the Pennsylva- 

 nia Railroad Company to join the other compa- 

 nies threatened to derange the plans. In the 

 summer there was some friction caused by 

 the desire on the part of some of the operators 

 to restrict the output, but there soon arose a 

 better demand, which restored harmony. For 

 the calendar year ended Dec. 31, 1885, the 

 output of anthracite coal was 31,623,529 tons, 

 against 30,756,995 for 1884. The production 

 of pig-iron for the year was 4,529,869 tons, 

 against 4,589,613 for 1884 both coal andiron 

 being partly estimated. The new railroad 

 mileage was 3,113 miles, against 3,813 in 1884. 

 The Crops. Injury to winter wheat by freez- 

 ing and drought reduced the yield of this staple 

 to 217,000,000 bushels. The crop of spring 

 wheat matured and was gathered under fa- 

 vorable conditions, and the output was report- 

 ed at about 140,000,000 bushels, making the 

 yield of both 357,112,000. Were it not for 

 the fact that there were left over at the end 

 of the last crop-year an estimated amount of 

 nearly 110,000,000 bushels, there would have 

 been a serious shortage in the supply. Owing 

 to various causes, chiefly speculative, the ex- 

 port demand for breadstuffs has been limit- 

 ed, the shipments of wheat and flour to Nov. 

 30 being only 88,047,566 bushels, and there- 

 fore it seems probable that the stocks remain- 

 ing in the country will be ample for all re- 

 quirements, at least until the new crop is gath- 

 ered. The yield of corn is claimed to have 

 been unprecedented, being reported at 1,936,- 

 176,000 bushels ; that of oats is said to have 

 exceeded 600,000,000 bushels; flax was more 

 extensively cultivated in the extreme North- 

 west than ever before ; hay yielded about 47,- 

 000,000 tons, and until September cotton prom- 

 ised the largest crop on record, but floods and 

 heavy rains in Texas during that month caused 

 a reduction, so that the crop is now estimated 

 at about 6,669,000 bales. The European cereal 

 crops were generally below the average, and this 

 fact, together with the short yield of our win- 

 ter wheat, and the unsettled political situation 

 in Europe early in the year, stimulated a specu- 

 lative movement which kept prices here rela- 

 tively higher than those in Liverpool, and thus 

 prevented our profiting by the requirements of 

 foreign countries. While prices abroad were 

 not high, they were sufficiently so to permit 

 wheat to be imported from India, and this 

 movement was augmented by the fall in silver, 

 which, by depreciating the gold value of the 

 rupee, enabled the Indian producer to obtain 

 more of these coins for his grain than when sil- 

 ver was higher. It seems probable, therefore, 

 that European requirements for wheat, until 

 the new crop bcomes available, will be largely 

 met by importations from the British colonies. 



