FINANCIAL REVIEW OF 188T. 



269 



gotiations of railroad loans, and by the middle 

 of the month the fall in the price of wheat re- 

 sulted in such free sales of commercial drafts 

 that the market became very weak. Later, 

 active money, due to the feverish condition of 

 the stock market, the break in wheat and 

 coffee, and the failure of the Fidelity Bank at 

 Cincinnati, assisted in unsettling exchange, and 

 in the last few days of the month sterling fell 

 to points which justified gold imports, and 

 about $1,350,000 of the metal was ordered out 

 from London. At the same time Germany 

 dre\v gold from the British metropolis to assist 

 in floating her new loan of 100,000,000 marks. 

 In July the tone of exchange was heavy, but 

 rates were fractionally above the gold-import- 

 ing point. Early in August the Bank of Eng- 

 land minimum rate of discount was advanced 

 to 3 per cent., partly in consequence of a drain 

 of gold to the Argentine Republic, but this only 

 temporarily affected exchange, and by the 

 middle of the month rates fell so as to justify 

 a renewal of gold imports, the decline being as- 

 sisted by the negotiation of a railroad loan, and 

 the metal moved hither from London and the 

 Continent in comparatively liberal amounts 

 during the remainder of this month until the 

 middle of September when a rise in sterling 

 checked imports from London, but the move- 

 ment from Paris was only partially interrupted, 

 although the Bank of France advanced the 

 premium on gold to 8 francs per 1,000, the 

 highest point recorded in many years. Toward 

 the close of the month a fall in sterling again 

 started gold from London, but it was checked 

 in October, and exchange was strong during 

 this month in response to a demand to remit 

 for stocks sold for European account and in 

 settlement of borrowed capital which was then 

 being returned. Thereafter during the re- 

 mainder of the year commercial bills were 

 scarce, bankers' 1 sterling in limited supply, and 

 the market gradually advanced so that at the 

 end of December it stood midway between the 

 gold importing and the exporting points. 



Manufacturing Industries. The labor troubles 

 had less influence upon manufacturing enter- 

 prises in 1887 than they did in the previous 

 year. The employers seemed to feel more con- 

 fidence in their ability to resist unjust demands, 

 and the various organizations of the Knights of 

 Labor, probably profiting by the ill-success 

 which attended their efforts in 1886, were less 

 exacting in their requirements. The strike of 

 the coal-handlers in January temporarily un- 

 settled the market for coal, but it only partial- 

 ly checked the operations of the iron-works in 

 Pennsylvania, and after the failure of the strike 

 manufacturing of iron and steel increased, and, 

 under the stimulus of a demand for railroad 

 and structural purposes, the mills were kept at 

 their full capacity for the greater part of the 

 year. The production of these articles was the 

 largest on record, exceeding that of 1886, and 

 the output of pig-iron is estimated at 6,250,000 

 gross tons against 5,683,329 in the previous 



year. The Bessemer steel-rail production was 

 1,950,000 tons against 1,574,703 in 1886. Iron- 

 ore was produced to the extent of 11,000,000 

 gross tons. Prices for rails were maintained 

 until after the middle of the year, when they 

 yielded, partly in consequence of the com- 

 petition of imported rails, but mainly because 

 of the conviction that the phenomenal demand 

 for new railroads could not continue. New 

 iron-mines were developed, principally in the 

 Gogebic region and in Alabama. The indus- 

 trial growth of the South during the year was 

 most remarkable, covering almost the entire 

 range of manufacturing. Of the fourteen South- 

 ern States there were only four in which the 

 capital invested in new enterprises was not 

 double the amount of the previous year. Wool- 

 en-goods manufacturers, particularly at the 

 North, probably made less money than they did 

 in 1886, but they worked principally on orders, 

 and, therefore, did not accumulate large stocks 

 to be slaughtered in the auction-rooms. Pro- 

 ducers of worsted goods, such as cloths and 

 coatings, turned their attention to cassimeres, 

 chiefly because they could not compete with 

 the foreign fabrics of the same class of mate- 

 rial, and, in consequence of the change, they had 

 a prosperous year. The manufacturers of knit- 

 goods were full of orders during the whole of 

 the twelvemonth, the consumption was marvel- 

 ous, sales were prompt, and prices fair. In cot- 

 ton and print goods the business of the mills 

 was profitable, with some notable exceptions. 

 New railroad mileage was about 12,724 miles. 

 principally in Kansas, Texas, Nebraska, Michi- 

 gan, Alabama, Colorado, Montana, Dakota, 

 Georgia, and California. Coal production was 

 vigorously pushed, the demand was good, and 

 prices generally uniform. The total output 

 for the year was 34,641,017 tons against 32,- 

 136,362'in 1886. 



Railroads. The most important event of the 

 year affecting the railroad interests of the 

 country was the passage by Congress of the 

 interstate commerce act, which went into 

 operation April 5. While the bill was under 

 discussion, opinions were expressed by promi- 

 nent railroad-managers that its rigid enforce- 

 ment would prove injurious, if not disastrous 

 to the transportation interests of the country, 

 and the most objectionable feature of the law, 

 in their estimation, was the fourth section de- 

 claring it to be unlawful for any common car- 

 rier, subject to the provisions of the act, to 

 charge or receive any greater compensation, in 

 the aggregate, for the transportation of passen- 

 gers or of like kind of property, under sub- 

 stantially similar conditions, for a shorter than 

 for a longer distance over the same line, in the 

 same direction, the shorter being included 

 within the longer distance. Immediately upon 

 the measure taking effect the commissioners 

 appointed under it, acting by authority of the 

 law giving them the power, suspended, for 

 ninety days, the operation of this section on 

 the application of Southern and other roads 



