302 



FINANCIAL REVIEW OF 1893. 



covered by the shipment of staples, tended to 

 absorb offerings as fast as they were made, and 

 thus the market for exchange was kept generally 

 firm. The opening rates were $4.83 to $4.83-J 

 for sixty-day and $4.86! to $4.87! for sight, and 

 there was no particular change until the third 

 week, when in consequence of a demand for 

 mercantile settlements there was an advance to 

 $4.87 for the former and $4.89 for the latter, 

 but by the end of the month rates declined to 

 $4.84| to $4.85 for sixty-day and $4.87! to $4.88 

 for sight. The Bank of England rate of dis- 

 count was reduced during the month from 5 to 

 3! per cent. Gold to the amount of $3,712,449 

 came from Europe, chiefly in the first week. The 

 market was lower in October, influenced by a 

 liberal supply of cotton bills, and by a lighter 

 demand for remittance. The rates at the open- 

 ing were $4.86 for sixty-day and $4.88 for sight. 

 There was a decline to $4.83! for the former 

 and $4.85! for the latter by the 10th, when there 

 came a reaction due to the delay of the Senate 

 in acting upon the repeal bill, but soon after 

 rates declined, and by the 27th $4.81 for long 

 and $4.84 for short were recorded, and then 

 $500,000 gold was ordered out from London, 

 followed by the engagement of $1.000,000 more. 

 An advance in open market discount rates in 

 London and selling of stock for European ac- 

 count caused a reaction in the rates to $4.82 for 

 sixty-day and $4.85 for sight by the close of the 

 month. In November the market gradually 

 grew stronger, influenced by very cheap money 

 in New York, which induced purchases of long 

 sterling for investment, and bankers refrained 

 from drawing except for current needs. The 

 export movement of cotton was comparatively 

 light, and consequently the market was kept 

 bare of bills and exceedingly narrow and sensi- 

 tive. Toward the end of the month a demand 

 for mercantile remittances and for bankers' set- 

 tlements carried rates up to $4.84 for sixty-day 

 and $4.87i for sight. Gold arrivals were $3,400,- 

 000, but these came early in the month. Influ- 

 enced by a demand for investment, induced by 

 the extremely low rates for money, and also by 

 purchases to anticipate maturing settlements, 

 the market grew stronger early in December, and 

 sterling advanced to $4.86 for sixty-day, and 

 $4.88^ f r sight. As rates for the latter showed a 

 slight profit for exports of gold, foreign bankers 

 shipped $2,200,000 of the metal to Germany, 

 where discounts were high, but this movement 

 ceased after the middle of the month. When 

 the- inquiry for remittance for January interest 

 was satisfied, the exchange market grew easier, 

 and rates closed at $4.85 to $4.85! for sixty-day 

 and $4.87i to $4.88 for sight. 



Manufacturing Industries. The consump- 

 tion of cotton in the United States for the year 

 ending Aug. 31 was estimated by the "Chroni- 

 cle " at 2,683,701 bales, against 2,706,471 for the 

 previous year. Cotton spinning was mainly af- 

 fected by the financial depression during the last 

 half of the year. The Fall River companies, on 

 a capital of $21,458,000, paid average dividends 

 of 7-95 per cent, for the calendar year 1893, 

 against 7'52 per cent, in 1892, but in the last six 

 months of 1893 many mills were closed for part of 

 the time and dividends were probably not paid 

 from earnings. The wool and woolen trade gave 



promise of good business at the beginning of the 

 year, but the financial crisis had a depressing 

 effect, and in the summer many mills were shut 

 down, while in the fall proposed tariff changes 

 had an unsettling influence, and the trade in 

 goods and raw material was discouraging and 

 prices were near the lowest point. Production 

 of iron in the first six months of 1893 was very 

 near the large total of 1892, and the output of 

 pig iron for the first half of the year was 5,110,- 

 468 net tons, against 5,342,045 in the same period 

 of 1892. But in the remaining six months the 

 iron industry suffered extraordinary depression, 

 the number of furnaces in blast decreasing from 

 251, May 1, with a weekly capacity of 181,551 

 tons, to 114, Oct. 1, with a capacity of 73,895 tons. 

 After this date there was some improvement, and 

 on Dec. 1 the active furnaces increased to 120, 

 with a weekly capacity of 99.379 tons. There 

 was a good business in anthracite coal, but the 

 petroleum product decreased. 



The record of business failures shows that the 

 year 1893 was the most disastrous ever experi- 

 enced, especially to the industries of the country. 

 The total does not include bank or railroad fail- 

 ures, embracing only mercantile suspensions. 

 These were 16,115. involving $346,779,889 lia- 

 bilities, against 10,344, involving $114,044,167, in 

 1892. The average of losses was $23,320, against 

 $22,369 in 1878, when the 10,478 failures in- 

 volved an aggregate of $234,383,132. Even in 

 the first quarter of the year the liabilities and 

 the average exceeded the figures for every quarter 

 of 1892, and the second quarter of 1893 was the 

 most disastrous. The number of national, State, 

 and savings banks and private bankers failed 

 was 613, and the Comptroller of the Currency 

 reports that 158 national banks suspended, of 

 which, however, 86 subsequently resumed. Of 

 the 200 State banks which failed, only 48 re- 

 sumed ; and of 202 private bankers who sus- 

 pended, only 30 had resumed at the end of the 

 year. 



Money. The extremes for money on call at 

 the New York Stock Exchange during 1893 were 

 72 and of 1 per cent. The highest rate was 

 recorded June 27, partly the result of manipu- 

 lation aided by the strained financial situation. 

 Concurrently with the action of the New York 

 savings banks in requiring notice from depos- 

 itors of an intention to withdraw their deposits, 

 there arose a premium upon all kinds of cur- 

 rency, gold and silver as well as paper, which 

 amounted for a short time to as much as 2 per 

 cent. The premium on gold in currency greatly 

 facilitated the import of the metal from Europe 

 during August, and the bankers were aided by 

 the issue of Clearing House loan certificates by 

 the associated banks, securities being deposited 

 by the bankers with their respective banks, 

 which took out certificates against the collateral 

 and loaned the money for a fixed period at an 

 agreed-upon rate. On the arrival of the gold 

 the loans were repaid. The first issue of these 

 Clearing House loan certificates was made June 

 17, when $2.550,000 were issued. The largest 

 amount issued was $41,490,000, and the greatest 

 outstanding at any time was $38,280,000, Aug. 

 29. After Sept. 6 there came a gradual reduc- 

 tion to $24,745,000 by Sept. 30. and cancellations 

 grew rapid during October. The last certificate 



