224 



FINANCIAL REVIEW OF 1900. 



the Bank of England on the 9th of its offer to 

 make advances at the rate of 2J per cent, on gold 

 while it was in transit from New York, which 

 offer had stimulated the export of gold hence to 

 London in the previous month. The tone of the 

 market was generally strong at the gold export 

 point for sight sterling during the first week, and 

 then $3,900,000 gold was shipped to London. In 

 the following week, however, rates gradually fell 

 off, to react in the succeeding week. Then the 

 Hank of England further reduced its rate of dis- 

 count to 4* per cent., and again, a week subse- 

 quently, to "4 per cent., when the Bank of France 

 lowered its rate to 3J per cent. The supply of 

 bankers' and also of commercial bills was limited, 

 and there was a good demand to remit for stocks 

 sold for European account and some inquiry for 

 mercantile remittances, which kept the market 

 firm. In the last days of the month, influenced 

 by the derangement in London caused by the news 

 of the British disaster at Spion Kop, South Africa, 

 rates for sight sterling advanced to the gold ex- 

 porting point, though none of the metal was 

 shipped. Rates for exchange at the opening of the 

 month were $4.82$ to $4.82i for sixty-day and 

 $4.87} to $4.87J for sight, while at the close of 

 the month they were $4.84 to $4.84} for the former 

 and $4.87 \ to $4.873 for the latter, the difference 

 in the quotations for sixty-day reflecting the re- 

 duced rates for discounts in London. The market 

 was dull and the tone easier, especially for long 

 sterling, in February, influenced by a better sup- 

 ply of commercial bills chiefly drawn against cot- 

 ton, which was then bought freely by English 

 spinners who had deferred purchases earlier in 

 the cotton season because of erroneous estimates 

 of the volume of the crop. Short sterling, how- 

 ever, was generally firm until after the middle of 

 the month, affected by a demand for remittance, 

 buo toward the close this class of bills yielded 

 to free offerings of drafts against securities and 

 the market was weak. Rates for exchange at the 

 beginning of the month were $4.84 to $4.84} for 

 sixty-day and $4.87i to $4.87| for sight, while at 

 the end of the month they were $4.83^ to $4.83f 

 for the former and $4.86| to $4.87 for the latter. 

 The tone of the market continued easy in March 

 until after the third week, influenced by an in- 

 creasing supply of drafts against cotton, the ex- 

 ports of which were large. After the 22d, how- 

 ever, the market grew firmer, affected by a scarcity 

 of bankers' bills, notwithstanding the fact that, 

 stimulated by the enactment of the gold standard 

 law, there were large purchases in our market of 

 securities for European account. It appeared, 

 however, that the stocks so bought by foreigners 

 were not sent forward, but they were temporarily 

 hypothecated with the New York banking houses 

 in order to take advantage of the lower rates for 

 money ruling in our market compared with the 

 discount rates abroad. Had the stocks been 

 promptly forwarded, as is usually the case when 

 such purchases are made, the resulting supply of 

 drafts against the securities would have been 

 abundant, and lower rates for exchange would 

 have ruled. Concurrently with this scarcity of 

 bills there was a demand for exchange to transfer 

 bankers' balances to London for employment at 

 that center at more profitable rates of interest 

 than could be obtained in New York, and hence 

 exchange gradually advanced and the tone was 

 strong to the end of the month. The opening 

 rates were $4.83 to $4.83} for sixty-day and $4.80} 

 to $4.86J for sight. After falling by the 22d to 

 ! to $4.82} for the former and to $4.85} to 

 $4.85 $ for the latter, there was a reaction by the 

 close to $4.82J to $4.82| for sixty-day and '$4.86 



to $4.86} for sight. The tendency of the market 

 was almost continuously upward during April, in- 

 fluenced by the scarcity of bills resulting from the 

 above-noted retention of securities bought for for- 

 eign account, by the demand to transfer balances 

 to London, and also by an investment inquiry for 

 long sterling. Two consignments of gold of $500,- 

 000 each were shipped hence to Buenos Avres on 

 London account, and on the 26th $500,OuO gold 

 was sent to Paris in consequence of the inducement 

 of an offer by the Bank of France of interest on 

 the consignment while it was in transit. The rates 

 for exchange at the opening of the month were 

 $4.822 to $4.83 for sixty-day and $4.86} to $4.86} 

 for sight, while the closing rates were $4.84A to 

 $4.84| for the former and $4.88} to $4.88i for" the 

 latter. The influences operating during April con- 

 tinued to affect the exchange market in May, and 

 for the greater part of the month sight sterling 

 ruled very near to the gold exporting point, though 

 no gold was shipped to London. The Bank of 

 England early in the month raised its bid price 

 for American eagles from 76s. 3d. to 76s. 4rf. per 

 ounce, but this movement failed to attract gold 

 to London. Shipments of the metal hence to Paris 

 continued, however, in response to the above-noted 

 inducement of interest while in transit, and by the 

 24th $10,022,375 had been shipped. The receipt 

 by the Bank of England of 1,000,000 gold from 

 Russia with which to meet interest payments had 

 the effect of so far relieving the monetary tension 

 at London as to cause a reduction by the Bank 

 on -the 24th of its minimum rate of discount from 

 4 per cent, to 3 per cent. On the following day 

 the Bank of France reduced its rate of discount 

 from 3J per cent, to 3 per cent., and at the end 

 of the month open market rates were easy at all 

 the chief European centers, and the relaxation in 

 the monetary tension abroad was reflected by 

 lower rates in the foreign exchange market. Quo- 

 tations at the opening of the month were $4.84 } 

 to $4.84| for sixty-day and $4.88} to $4.88J for 

 sight. The former advanced to $4.84| to $4.85 by 

 the 14th, but at the end of the month rates were 

 $4.84 J to $4.84| for sixty-day, while those for sight 

 were $4.87 to $4.87}. The export movement of 

 gold to Paris was resumed about the middle of 

 the month of June, and some of the metal was 

 sent to Berlin, there being a good demand for gold 

 from Continental centers, the Bank of France con- 

 tinuing to offer inducements to shippers and the 

 Bank of Berlin likewise seeking to attract the 

 metal. The shipments to these points amounted 

 to $7,626,413. The rates for exchange at the open- 

 ing of the month were $4.84 to $4.842 for sixty- 

 day and $4.87 to $4.87} for sight. There was 'a 

 gradual advance in the former to $4.85 to $4.85} 

 and in the latter to $4.87} to $4.87i, but at the 

 close of the month rates were $4.83| to $4.84 for 

 the former and $4.86} to $4.86J for the latter. 

 Exports of gold were temporarily checked after 

 the 23d, but they were resumed in July, and on' 

 the 19th $2,029,543 was sent to Paris. The ex- 

 tremely low reserve of the Bank of England early 

 in the month seemed to indicate a movement of 

 the metal hence to London, but none was shipped. 

 The bank on the 19th advanced its rate of dis- 

 count from 3 per cent, to 4 per cent, in consequence 

 of the new phase of the Chinese situation, which 

 had then developed, and open market discounts in 

 London were thereafter firm because of the an- 

 nouncement of the supplementary Treasury r-ti- 

 mates of 11,500,000 due to the prolongation of 

 the war in South Africa. Influenced by the mon- 

 etary tension in London, and also to some extent 

 by the Chinese situation, which tended to check 

 the supply of commercial bills against exports of 



