274 



FINANCIAL REVIEW OF 1894. 



of furnaces in blast being 162,600 tons, the largest 

 since June, 1893, and at the same time stocks 

 of iron were reduced. The result of the Novem- 

 ber elections tended to aid the growth of confi- 

 dence in a marked degree, particularly in those 

 sections which had suffered from Populist and 

 free-silver theories, arid the bond issue also had 

 a good effect ; but in December the renewal of 

 gold exports, the gradual reduction of the gold 

 reserve in the Treasury, and the introduction 

 into Congress of plans for currency reform had 

 a disturbing effect, and the situation was un- 

 settled at the close of the year. Then it was 

 evident that consumption of goods had not kept 

 pace with production, and had not sustained 

 prices. In iron and steel the figures were the 

 lowest on record, the demand calling for less 

 than half the usual quantity of rails, though the 

 use of structural forms was larger than ever be- 

 fore. The woolen industry showed a production 

 of about one quarter less than the normal. The 

 cotton industry, with the material near the low- 

 est point ever known, kept most of the mills at 

 work, but the goods sold at almost unprece- 

 dentedly low figures. The manufacture of boots 

 and shoes was the largest on record, but prices 

 were extremely low. 



Business failures for 1894 numbered 13,885, 

 involving $172,992,856, against 16,115, involving 

 $346,779,889, in 1893. In Vermont and Rhode 

 Island larger failures in manufacturing and 

 trading were reported than in 1893, though in 

 New England the decrease in liabilities was 27| 

 per cent. New York reported more failures in 

 trading concerns, and Pennsylvania more in 

 trade and manufactures, but both showed smaller 

 liabilities. In the Middle States the decrease in 

 number was less than 1 per cent., but in liabili- 

 ties it was 02-4 per cent. In Delaware there 

 was a large increase in failures of manufactur- 

 ing concerns. In the Central States liabilities 

 were 60 per cent, less, mainly in manufacturing. 

 In the Western States there was a decrease of 20 

 per cent, in number and 60 per cent, in liabili- 

 ties. The Southeast showed a decrease of 16 per 

 cent, in liabilities, nearly all manufacturing con- 

 cerns. 



Money. The extreme rates for money on call, 

 representing bankers' balances, at the New York 

 Stock Exchange during 1894, were 3 and - of 1 

 per cent. The market was in more or less of a 

 congested condition from the beginning to near 

 the end of the year. On the 3d of February the 

 specie in the associated banks was $129.558.900, 

 while the legal tenders were $120,016,200. mak- 

 ing the unprecedented amount of $249,575.100 

 cash, and the surplus reserve was $111,623,000 

 the highest ever recorded. The low cash re- 

 serves of the Treasury, and the reduction of the 

 net gold, which stood at $65,650,175, Jan. 81, 

 brought about through redemptions of national 

 bank notes and expenditures of the Government 

 in excess of receipts, made it imperative that the 

 Treasury Department should take measures to 

 augment the supply of gold ; and, failing to ob- 

 tain authority from Congress for raising money 

 in any other way, the Secretary of the Treasury 

 on Jan. 16 decided to issue $50,000,000 of 5-per- 

 cent, bonds under the Resumption act of 1875. 

 A syndicate of New York bankers and officers of 

 trust companies was organized, at the instance 



of President Stewart, of the United States Trust 

 Co., on the 30th, and subscriptions to the amount 

 of $58,002,250 were obtained for the bonds, New 

 York institutions alone subscribing for $45,833,- 

 750. After settlements for these bonds were 

 completed the surplus reserve of the banks was 

 reduced to $74,536,825, Feb. 17, and the specie 

 then stood at $98,587,000, and legal tenders 

 $108,447,900, showing an actual loss of $42,540,- 

 200 cash by the transaction, while the surplus 

 reserve was reduced $37,086,175. Gradually 

 the cash holdings of the banks increased, influ- 

 enced by the payments by the Government in 

 excess of receipts, and also by a movement of cur- 

 rency from the interior, and though the shipments 

 of gold to Europe were large the specie in the 

 banks stood at $100,607,600, May 19. Thereafter, 

 influenced by further gold withdrawals for ex- 

 port to Europe, this item was reduced to $90,- 

 546,900, Aug. 4. But on July 14 the legal ten- 

 ders reached the maximum, $130,487,500. Loans 

 and discounts were at the minimum, $418,185,- 

 400, Jan. 13. There was a gradual increase to 

 $500,882,000 by Nov. 3, and then the deposits 

 were $595,104,900, against $518,524,600 at the 

 beginning of the year. After the bond issue in 

 February the net gold in the Treasury increased 

 to $107,390,842, March 10, but gradually it fell 

 off, mainly through gold exports, to $52,189,- 

 500, Aug. 8. subsequently recovering to $61,361,- 

 827 by Nov. 1. It was then evident that an- 

 other issue of bonds would be necessary, and on 

 Nov. 13 the Secretary of the Treasury announced 

 an issue of $50,000.000 more 5-per-cent. bonds 

 under the Resumption act of 1875. The bids 

 were opened Nov. 26, and they amounted to 

 $178,341,150, and the award was made to the 

 Stewart syndicate at 117'077, this combination 

 agreeing to supply the gold without drawing 

 upon the Treasury. Payments began at once, 

 and by the end of the month $47,771,517 had 

 been paid into the New York Sub-Treasury, and 

 the net gold was increased to $111,142,020 by 

 Dec. 6. The bank statement of Dec. 1 showed 

 a surplus reserve of $52,220,800, and the specie 

 was $76,527,600. The returns of the following 

 week exhibited a surplus of $32,902,650 a re- 

 duction of $33,124,950 compared with Nov. 24 

 while the cash was $174,415,200, or $39.705,200 

 lower, and the reduction in specie was $36,889,- 

 500, it then standing at $59;170,000. Some of 

 the gold paid for the bonds was borrowed on 

 these securities as collateral, thus augmenting 

 bank loans in the two weeks by $12,730,100, and 

 on Dec. 8 they stood at $507,733.500. Gradu- 

 ally the return of gold borrowed from the banks 

 for the purpose of paying for the bonds and the 

 exchange of legal tenders for gold brought about 

 an increase in the specie holdings of the banks 

 to $73,760,600 by the end of the year. At the 

 same time the legal tenders were reduced to $98.- 

 831,100, while, mainly through the reduction in 

 loans to $492,647,000, caused by liquidation of 

 loans on the new bonds, deposits fell to $549,- 

 291,400. The surplus reserve at the end of the 

 year was $35.268.850, while the net gold in the 

 Treasury then stood at $86,244,445, against $80.- 

 891,600 "Dec. 31, 1893, though in this interval 

 $100,000.000 5-per-cent. bonds had been issued 

 for the purpose of replenishing this reserve. 

 In January, loans of money on call were made 



