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FINANCIAL REVIEW OF 1887. 



of a foreign syndicate who had obtained con- 

 trol of the product. Few, outside the cliques, 

 made money in stocks, and the majority of the 

 non- professional speculators were unfortunate 

 in their ventures. 



The following tabular survey of the econom- 

 ical conditions and results of 1887 contrasted 

 with those of the preceding year, is from of- 

 ficial returns, and also from the " Commercial 

 and Financial Chronicle " : 



The prices of leading staples on or about 

 Jan. 1, 1888, compared with prices at the same 

 date in 1887 and 1886, were as follow : 



6 per cent., and very little could be done in 

 commercial paper; and late in September 

 merchants were unable to obtain discounts 

 except at high rates, and in some cases 9 and 

 even 15 per cent, were paid for the accommo- 

 dation. For the last quarter of the year the 

 tendency was toward ease for commercial 

 paper, and time-loans were renewed at 5 @ 6 

 per cent, for 30 days to four and five months, 

 but chiefly by out-of-town institutions, our 

 city banks, during the month of December, 

 preferring to loan on call, thus keeping bank- 

 ers' balances unusually low for the season. 

 The Comptroller of the Currency, under the 

 act of March 30, 1887, on the application of 

 banks at Chicago and St. Louis, early in the 

 year made those cities central reserve centers, 

 requiring the banks to keep 25 per cent, of 

 their reserve at home. This, to some extent, 

 assisted in the withdrawal of balances held in 

 _New York to the credit of institutions in these 

 new reserve cities, and the money thus sent to 

 Chicago and St. Louis was retained. Specula- 

 tion in farm-lands and real- estate mortgages, 

 extensions of railroads in the Western country, 

 and active business throughout that section 

 and in the South, altogether contributed to 

 drain the banks of New York of the balances 

 owing to interior institutions, and fears that 



The Money Market. The range for the year 

 for money on call, represented by bankers' 

 balances, wias from 67 per cent., June 30, to 

 1 per cent., August 18. The highest rate 

 was in part due to manipulation, but mainly to 

 the disturbance resulting from the collapse of 

 the wheat-corner at Chicago and the subse- 

 quent failure of the Fidelity National Bank at 

 Cincinnati. The lowest rate simply reflected 

 a temporary absence of demand toward the 

 close of the day's business. During the first 

 quarter of the year the range for bankers' bal- 

 ances was from 8 to 1^ per cent., averaging 

 about 4. For the next quarter the range was 

 from 20 to 2| per cent, averaging 6. During 

 the third quarter there was a range of from 

 67 to 1 per cent., the average falling from 10 

 to 5. Thereafter, for the remainder of the 

 year, bankers' balances ranged from 10 to 2 

 per cent., averaging 4$. Commercial paper of 

 60 to 90 days' date, and first class, was com- 

 paratively easy during the first quarter at 

 from 4^ to 6 per cent., and at this period time- 

 loans on stock collateral, running from four 

 to five months, gradually became in good re- 

 quest, borrowers anticipating active money and 

 desiring to make early provision. This in- 

 quiry for time-loans was so urgent during the 

 next six months that rates advanced from 4 to 



the wild speculation in wheat and in other 

 staples and in mortgages upon farms of uncer- 

 tain value would some day suddenly collapse, 

 induced our bankers to pursue a very conserva- 

 tive course, which, in many cases, resulted in 

 injury to mercantile interests, especially in the 

 city. The break in Ihe wheat and coffee 

 corners, June 14 and 15, and the disas- 

 trous results which followed seemed to justify 

 bank-managers in continuing their conserva- 

 tive course, and appeals were made to the 

 Secretary of the Treasury to relieve, by pur- 

 chases of bonds, the monetary stringency 

 which threatened all commercial interests. 

 The Secretary had, up to and including May 



20, called in $63,612,250 3-per-cent. bonds 

 for redemption, the last call on the above- 

 named date being for $19,717,500 on all the 

 outstanding bonds of this issue, and this call 

 matured July 1. After consideration of the 

 urgent needs of the country, the Secretary, on 

 August 4, directed that the interest due at 

 various dates, to and including January 1, be 

 paid with a rebate of 2 per cent, per annum, 

 and also that 4^-per-cent. bonds be purchased 

 for the sinking-fund each week. After $11,- 

 565,300 had been so bought up to September 



21, the supply became so limited that further 

 purchases could not be made with profit to the 



