FINANCIAL REVIEW OF 1900. 



225 





cotton goods to the Orient, the foreign exchange 

 market was strong in July and rates opened at 

 $4.834 to $4.832 for sixty-day and $4.86| to $4.864 

 for sight. The former advanced to $4.84 to $4.84| 

 and closed at $4.83j to $4.84, while the latter rose 

 to $4.87| to $4.88 and closed at $4.874 to $4.87|. 

 On Aug. 7 subscriptions for a British Exchequer 

 loan for 10,000,000 at 3 per cent, were simultane- 

 ously opened at the Bank of England and at the 

 banking offices of J. P. Morgan & Co. and of Baring, 

 Magoun & Co., in this city, and the books were 

 closed on the same day after more than $55,000,000 

 had been subscribed in New York. On the follow- 

 ing day it was announced that $28,000,000 of the 

 loan had been awarded to American subscribers by 

 the advice of the Bank of England, the governors 

 of which pointed out to the Chancellor of the Ex- 

 chequer that this large award was an easy and 

 a natural way of attracting gold to London ; other- 

 wise the bank might have to raise its rate of dis- 

 count to 5 or 6 per cent., and to take extraordinary 

 measures to bring gold to England. It was stipu- 

 lated in making the award to American subscrib- 

 ers that $10,000,000 of the $28,000,000 should be 

 immediately remitted to the bank. This institu- 

 tion offered the inducement of interest on addi- 

 tional consignments of gold while in transit, and 

 at the same time the bank advanced the bid price 

 of American eagles to 76s. 5d. and of gold loans 

 to 77s. lOd. per ounce. Stimulated by these in- 

 ducements, $17,386,227 gold was shipped to Lon- 

 don during the month, and the Bank of France 

 attracted $2,008,907 through the offer of interest 

 on the consignments while in transit. The foreign 

 exchange market was strong prior to the announce- 

 ment of the award of the Exchequer loan. Then 

 under the influence of offerings of bills against 

 gold exports, and also of a decline in open market 

 discount rates abroad, rates receded, but later the 

 tone again became firm. Quotations opened at 

 $4.83| to $4.84 for sixty-day and at _$4.874 to $4.872 

 for sight. There was an advance in the latter to 

 $4.88| to $4.884, but the market closed with sixty- 

 day at $4.84^ to $4.84 and sight at $4.874 to 

 $4.S7f. It may be noted that the shipments of 

 gold to London were almost wholly covered with 

 cable transfers, which at the beginning of the 

 movement were $4.88| to $4.89, later declining to 

 $4.88 to $4.88J. In September the placing in this 

 country, through the National City Bank and 

 Kuhn, Loeb & Co., of an issue of 80,000,000 marks 

 4-per-cent. treasury notes of the German Empire 

 and of a portion of $10,000,000 4- to 34-per-cent. 

 Swedish Government bonds had more or less in- 

 fluence upon the foreign exchange market early 

 in the month, though no gold was remitted for 

 these subscriptions, settlements being made with 

 exchange drawn against credits at Berlin. After 

 the announcement of the German loan exchange 

 fell off sharply, influenced by a liberal supply of 

 cotton and grain bills. The Galveston disaster on 

 the 8th was followed by the report on the 10th 

 by the Department of Agriculture, which showed 

 a decline in the general average condition of the 

 staple during August. As the result of this report 

 and also of the hindrance to the movement of 

 cotton in Texas, by reason of the disaster at Gal- 

 veston, the price of the staple sharply advanced 

 from 9| to 11 cents per pound, and in Liverpool 

 a corner developed, but this corner was broken by 

 an agreement by Manchester spinners to refrain 

 from buying American cotton during the month. 

 European purchases of the staple were, however, 

 large, and the resulting drafts continuously af- 

 fected exchange. Rates opened at $4.84} to $4.844 

 for sixty-day and $4.874 to $4.87| for sight, and 

 they closed at $4.82^ to $4.824 for the former and 

 VOL. XL. 15 A 



at $4.85| to $4.86 for the latter. The liberal offer- 

 ings of cotton and grain drafts, together with 

 activity in money at this center, caused by the 

 withdrawals of funds for the handling of cotton 

 at the South, resulted in a gradual decline in rates 

 for exchange to the gold importing point toward 

 the middle of October. The engagements of gold 

 for import from Europe began on the 9th, and 

 before the close of the month nearly $9,000,000 

 had been engaged from London, Paris, and Ber- 

 lin, and it is noteworthy that one consignment of 

 $2,500,000 in American gold loans, which had been 

 shipped from India for the Bank of England, was 

 intercepted at London and transshipped to New 

 York. At the opening of the month the rates for 

 exchange were $4.8 1| to $4.82 for sixty-day and 

 $4.85i to $4.854 for sight. The rates at the close 

 were $4.80J to $4.804 for the former and $4.84 to' 

 $4.84^ for the latter. The lowest rates for the 

 month were $4.80 to $4.80^ for sixty-day and 

 $4.834 to $4.83| for sight. Active money and an 

 indisposition on the part of foreign bankers to 

 operate in view of the pendency of the presidential 

 election made the exchange market weak during 

 the first few days of November, and on the 5th 

 sales of sixty-day bankers' bills were made at 

 $4.79| and of sight at $4.83, the lowest rates for 

 the year. On the day following the election there 

 was an urgent demand for exchange to remit for 

 stocks which had been bought in London for New 

 York account, and, influenced by a continued in- 

 quiry for this purpose, the market was strong to 

 the end of the month. It was then estimated that 

 since the election about $50,000,000 of stocks which 

 had been bought in London or sold in the New 

 York market through arbitrage houses for Euro- 

 pean account had been remitted for, and almost 

 every incoming steamer during November brought 

 American securities from Europe. Though the 

 tone of the market was weak early in December, 

 influenced by comparatively firm rates for money, 

 there was a recovery after the middle of the month 

 caused by more or less of an urgent demand to 

 remit for stocks imported and those which were 

 sold in this market for European account. The 

 increasing tension in the monetary situation at 

 London, foreshadowing an advance in the Bank 

 of England rate of discount, induced a covering 

 of short contracts in sterling toward the close of 

 the month, when the tone was quite strong. Rates 

 for sixty-day sterling opened at $4.813 to $4.82, 

 fell by the 17th to $4.804 to $4.80|, and reacted 

 by the end of the month to $4.814 to $4.81|. The 

 rates for sight sterling opened at $4.85i to $4.85|, 

 declined to $4.84 to $4.844 by the 17th, and re- 

 covered to the opening figures by the close of the 

 month. 



Railroads. Earnings of the principal lines of 

 railroad showed general gains throughout the year, 

 and rates were well maintained with few excep- 

 tions. One of the most important events early in 

 the year, affecting the chief transportation lines, 

 was the advance in freight rates, through changes 

 in classification, which advance went into effect 

 in January. Subsequently there was an agree- 

 ment to abolish commissions on passenger business 

 beginning with February. The Lake Shore ac- 

 quired control of the Lake Erie and Western in 

 January; the Great Northern announced an addi- 

 tional issue of stock; the Chesapeake and Ohio 

 passed under the joint control of Pennsylvania and 

 Vanderbilt interests; and the State of Massachu- 

 setts sold its holdings of 50,000 shares of Fitch- 

 burg common stock for $5,000,000 in 3-per-cent. 

 bonds of the Boston and Maine road. In February 

 the Cleveland, Cincinnati, Chicago and St. Louis 

 resumed dividends on the common stock, the Cen- 



