288 



FINANCIAL REVIEW OF 1891. 



fear that the finances of the country would be 

 affected by a redundancy of silver currency. The 

 drain of gold to Europe and of money to the in- 

 terior for crop purposes brought about a reduc- 

 tion in the specie holdings of the New York banks 

 from $90,268,900 at the end of January to $58,- 

 769,000 by the first week in September, but the 

 legal-tender notes were increased from $26,571,- 

 700 on Jan. 3 to $54,145,800 by Aug. 1. Subse- 

 quently the volume of these notes was reduced, 

 by shipments to the interior, to $29,238,700 by 

 Nov. 7, but at the same time the specie in the 

 banks was increased, through imports from 'Eu- 

 rope and Treasury disbursements for matured 

 4-per-cent. bonds, from $58,769,000 on Sept. 5 

 to $96,392,500 on Dec. 26. The surplus reserve 

 of the New York banks was at the maximum, 

 $24,089,775, Jan. 24. There was a fall to $4,319,- 

 850 by April 18, a recovery to $19,710,325 by 

 July 25, and a reduction to the minimum of the 

 year, $3,102,750, Oct. 3, after which there was a 

 gradual improvement to $19,480,025 by Dec. 26. 

 Money on call loaned at 9 per cent, early in 

 January, but soon after there was a gradual fall, 

 influenced by the accumulation of funds in the 

 banks, and the rate fell to H per cent, by the close. 

 Time contracts for thirty to ninety days declined 

 from 6 per cent, at the beginning, to 4f by the 

 end of the month, and commercial paper was 5 

 to 5 per cent, for prime indorsed bills receiv- 

 able. Money was easy early in February, but 

 more active toward the close by reason of a re- 

 duction in the bank reserves, and also because of 

 the movement of gold to Europe, which then 

 began ; but the rate on call advanced only from 1 

 to 4 per cent, and thirty to sixty day contracts 

 on time were made at 4 to 4 per cent. One 

 feature during the month was the suspension of 

 the American Loan and Trust Company, due to 

 a run upon the institution caused by disclosures 

 of bad management ; but this had no effect upon 

 the money market. In March the bank 

 reserves were still further reduced by gold ex- 

 ports to Europe, but the supply of bankers' 

 balances was ample for all requirements, and the 

 range for the month was from 1 to 4 per cent. 

 Time loans for thirty to ninety days were made 

 at 4 to 4J per cent., and short commercial paper 

 sold at 5|. The Washington National Bank sus- 

 pended during the month, in consequence of im- 

 prudent loans made by the president. In April 

 over $13,000,000 gold was shipped to Europe, and, 

 although the supply of money on call was gener- 

 ally abundant, there were occasions when be- 

 lated borrowers were required to pay 6 per cent. 

 The lowest for the month was 1-J- per cent. Time 

 contracts were freely offered at 4 to 4^ per cent, 

 for thirty to ninety days, and prime short-date 

 commercial paper sold at 5 to 5| per cent. On 

 the 25th the Treasury Department ordered that 

 further redemptions of 4^-per-cents., under the 

 circular in force since the previous year, should 

 cease. In May loans on call were made at 6 and at 

 2 per cent., and although the movement of gold 

 to Europe was large, almost $26,000,000 being 

 sent forward, the bankers seemed to be well sup- 

 plied with unused balances, while the foreign 

 nouses who were not shipping gold were liberal 

 lenders. There was a good demand for time 

 contracts, which were quoted at 5 to 5| per cent, 

 for thirty to ninety days, and at 5^- to 6 per cent. 



for four to six months, and in some instances 

 lenders stipulated for repayment in gold. In 

 June the range for money on call was 5 to 1 per 

 cent. Short-time loans were offered at 4 to 4| 

 per cent., but they were difficult to place, and 

 the demand was chiefly for periods from four 

 to six months, but lenders were unwilling to 

 make engagements for these dates. Commer- 

 cial paper was quiet and the demand was small 

 because of failures of leather houses in Boston 

 and also for the reason that the disclosures re- 

 garding the affairs of the Keystone Bank in 

 Philadelphia kept buyers from 'that city out of 

 the market. Kates for short double-name paper 

 were 5| to 5f per cent. The gold shipments 

 fell off to about $16,000,000 during this month. 

 In July there was a liberal offering of money on 

 call, and those who could not lend on time on 

 satisfactory terms employed their funds from 

 day to day. The range for the month was 4 to 

 1 per cent. Time contracts were offered at 4 to 

 4| per cent, for thirty to ninety days. Commer- 

 cial paper was in good supply, but the city 

 banks were entirely out of the market as buy- 

 ers. Early in August money on call loaned at 

 1 to 4 per cent., but later the increased business 

 on the Stock Exchange led to a better demand, 

 and rates rose to 6 per cent. The offer of the 

 Secretary of the Treasury to extend the 4|-per- 

 cents. at 2 per cent, resulted in the presentation 

 of $22,621,650, leaving nearly $27,000,000 to be 

 redeemed at maturity on Sept. 2. Time con- 

 tracts were quoted at 4 per cent, for thirty to 

 ninety days and commercial paper was dull at 

 5f to 6 per cent, for short-double names. In Sep- 

 tember money on call loaned at 25 and at H per 

 cent. The higher rate was due to a flurry which 

 followed the news of the suspension of S. V. White 

 & Co. on the 22d. The lowest rate was recorded 

 early in the month, and the average was not 

 above 4 per cent, until after the 15th, when low 

 bank reserves and a good demand resulting from 

 the activity on the Stock Exchange caused the 

 average to move up to 5-J per cent. Time loans 

 were in a little better demand, and the rate for 

 thirty to ninety days was 4| to 6 per cent. Com- 

 mercial paper was slow of sale at 5| to 6 per cent, 

 for short double names. In October money on 

 call loaned at 6 and at 3 per cent. There was only 

 a light demand for time loans until toward the 

 close, and rates early in the month were 5| per 

 cent, for thirty to sixty days and 6 per cent, for 

 three to six months ; but ai'ter the 15th the offer- 

 ings were more abundant and loans were made at 



4 to 4^ per cent, for thirty to sixty days, and 4J to 



5 per cent, for four to six months. Commercial 

 paper was dull and without feature until the 22d, 

 when the city banks came into the market as buy- 

 ers, and rates at the close were 5 per cent, for 

 short bills receivable. During the early part of 

 November the drain of money to Boston to meet 

 the requirements of banks at that center caused 

 a rise in the rate on call to 15 per cent., but be- 

 fore the middle of the month there was a fall to 

 3 per cent., and by the close to 2 per cent. Time 

 contracts were 5 per cent, for thirty to sixty days 

 until the call money market grew easier, and then 

 .offerings were liberal at 4 to 4i per cent, for these 

 periods. The disturbance in Boston caused by 

 the failure of the Maverick National Bank kept 

 Eastern buyers out of the market for commercial 





