338 



FINANCIAL REVIEW OF 1886. 



French loan of 1,466,000,000 francs, and during 

 the third week in March there was an export 

 of about $5,200,000 directly to that country. 

 By the end of the month this movement 

 ceased, the pressure of commercial bills again 

 had a decided influence on the market, the in- 

 vestment inquiry subsided, mercantile require- 

 ments were light, and the arbitrage houses 

 were liberal drawers of sterling against pur- 

 chasers of securities. After a brief interval the 

 movement of gold to France was renewed, and 

 during April over $3,500,000 was sent to Paris. 

 Shipments to London and France continued 

 throughout May, but after the 15th of that 

 month the inquiry for Paris was less urgent, 

 the new loan having been negotiated. Moder- 

 ate amounts of gold went to London during 

 June, and toward the close of that month there 

 was a movement to Berlin in response to the 

 special demand above noted. This inquiry was 

 satisfied by the end of June, and no more gold 

 was sent to Europe. Our contributions of this 

 metal to Great Britain for the first six months 

 of the year were $12,453,044, to France $11,- 

 571,801, and to Germany $5,469,265, making a 

 total of $29,494,110. The movement to London 

 may be regarded as mainly for the settlement 

 of trade balances, while that to Paris and Ber- 

 lin was in response to the exceptional require- 

 ments above referred to. The tendency of the 

 market for sterling was downward in July, in 

 consequence of large offerings of bills drawn 

 against securities bought for European account, 

 and toward the close of the month there was a 

 sharp fall in the rates, due to a pressure of 

 commercial drafts. In August the market was 

 unsettled in consequence of active money and 

 continued offerings of bankers' and other bills, 

 and during the third week in the month gold 

 commenced to move from France to New York 

 in liberal amounts, and to a moderate extent 

 from London. The Bank of France sought to 

 retard this movement by advancing the pre- 

 mium on gold, and the Bank of England de- 

 manded fractionally higher rates for her gold 

 than the market price, uut these measures 

 simply resulted in compelling shippers to ob- 

 tain their supplies in the open markets, and 

 the profits of importations were limited, be- 

 cause only coin of light weight was procurable. 

 Gold imports continued uninterruptedly to the 

 end of the year, although after October the re- 

 ceipts were almost wholly from France, the 

 Bank of England advancing its minimum rate 

 of discount" for the purpose of checking the 

 flow to America. The imports of gold from 

 Europe for the last half of the year were, as 

 above stated, $34,723,067. That the move- 

 ment was not in response to trade conditions, 

 is shown by the fact that at the end of De- 

 cember the merchandise balance was only 

 $49,872,456 in favor of this country. The low 

 rates for exchange which enabled gold to be 

 brought out, resulted mainly from our active 

 money market, large purchases of securities 

 for investment and speculation on European 



account, and a light demand from importers 

 of goods. December 15 the exchange mar- 

 ket was so greatly unsettled by active money 

 and an insignificant demand that the nominal 

 rates fell to the lowest points recorded since 

 November, 1884, and gold was again ordered 

 out from London. This caused an advance in 

 the Bank of England minimum to 5 per cent., 

 but exchange was only temporarily affected, 

 and it was dull and steady to the end of the 

 year. 



Manufacturing Industries. With the exception 

 of iron, steel, and a few other branches of in- 

 dustries, manufacturing was not profitable dur 

 ing the year to the extent that was expect 

 at the close of 1885. Influenced by low prices 

 for raw material and by light stocks through- 

 out the country, manufacturers made prepara- 

 tions early in the year for a largely increased 

 output. Until March the feeling was very 

 hopeful, and the prospects we:*e regarded as 

 excellent for a prosperous season. Then came 

 the labor-strike on the Missouri Pacific, whicl 

 during that entire month practically isolated 

 large portion of the Southwest by preventing 

 the distribution of goods. This was followed 

 by the demand for increased wages and shorter 

 hours on the part of workmen in manufacto- 

 ries, and in some cases the employers resolved 

 to shut down rather than yield to the exaction. 

 Others combined to resist the requirements of 

 their operatives, and in some branches of trade 

 the lock-out continued throughout the remain- 

 der of the year. The failure in May of the 

 eight-hour movement only partially stimulated 

 manufacturing, for the members of the labor 

 organizations were manifestly restive in con- 

 sequence of their defeat, and their employers 

 were therefore apprehensive of a renewal of 

 their demands, so that production of goods 

 was to a great extent reduced and confined 

 almost wholly to current needs. The distri- 

 bution of goods was, of course, affected by the 

 embarrassments of the manufacturers, profits 

 were materially lessened by the enhanced cost 

 of production, consumption was restricted by 

 the loss of wages resulting from the strikes 

 and the efforts of labor to coerce capital ; and 

 instead of the year's business in manufacturing 

 and general trade being highly profitable, as 

 was confidently expected, it was greatly disap- 

 pointing. The principal exception was in the 

 iron business. The demand for railroad and 

 structural purposes was good and at times ur- 

 gent ; prices advanced steadily in response to 

 the inquiry; the fact that the employes were 

 members of an organization distinct from that 

 of the Knights of Labor, and that the relations 

 between them and their employers were har- 

 monious, contributed to make the operations 

 of the manufacturers profitable and enabled 

 them to reasonably advance wages. The year 

 was therefore a very properous one for the 

 iron and steel interests, and the outlook at the 

 close was highly encouraging. The anthracite- 

 coal combination, which was reorganized early 



