FINANCIAL REVIEW OF 1898. 



certainty which existed regarding the effect of the 

 stamp tax upon bills under the new internal-rev- 

 enue law. Kates opened at $4.85 for sixty-day and 

 $4.88 for sight, advanced to $4.85$, falling to $4.84 

 for the former, and closed at $4.85 for sixty-day 

 and $4.86$ for sight. The business in exchange was 

 deranged "early in July, first by the inability of 

 bankers to obtain a supply of stamps, and also by a 

 mimndentanding of the" requirements of the in- 

 ternal-revenue law. One drawer of exchange, act- 

 ing under i he ad\iee of counsel, affixed a two-cent 

 stamp to demand drafts instead of a four-cent ad- 

 valortm -tamp, and Canadian bankers claimed that 

 drafts drawn in Canada and payable abroad were 

 not taxable in this country. The Commissioner of 

 Internal lievenue on the' 7th ruled that demand 

 d rafts were taxable as bills of exchange and not 

 as cheeks, ami thereafter all drawers conformed 

 to this ruling, but trading in these bills was greatly 

 restricted. The market opened at $4.85 for sixty- 

 day and $4.86$ for sight, rose to $4'.85 for the for- 

 mer and $487 for the latter, fell to $4.84* for sixty- 

 day and $4.86 for sight, and closed only fractionally 

 higher at $4.85 for the former and $4.86$ for the 

 latter. A small engagement of gold was made in 

 London for shipment to New York at the end of the 

 month. Karly in August the Commissioner of In- 

 ternal Revenue reversed his ruling of the previous 

 month in the matter of stamps on demand exchange, 

 holding that they required only a two-cent stamp, 

 t he same as domestic checks. The effect of this de- 

 cision was shown in the revival of trading in de- 

 mand bills and in a broader market for exchange. 

 Rates opened at $4.84i for sixty-day and $4.86 for 

 sight, advanced to $4.85 for the former and $4.86 

 for the latter, fell to $4.84 for sixty-day and $4.86 

 for sight by the middle of the month, and closed 

 at these figures. Engagements of gold in Europe 

 for shipment hither were small, amounting to 

 $2,855,000. The exchange market was influ- 

 enced in September by dearer rates for money 

 and also by an advance in the Bank of Eng- 

 land rate of discount, which was made in order to 

 cheek the movement of gold from London to 

 .Mnerica and to the Continent of Europe. The 

 tendency was downward throughout the month. 

 Kates opened at $4.84J for sixty-day and $4.86 

 for sight, fell to $4.82 for the former and $4.84 

 for the latter, closing at these rates. Gold im- 

 ports during the month were $11,738,242, but part 

 of this gold was in transit for Cuba. Buying of 

 long sterling for investment was resumed early in 

 October, though the purchases were somewhat lim- 

 ited, but there was a profit in the operation, dis- 

 counts in London advancing in consequence of 

 financial leu-ion at Merlin. The tone of the market 

 was easy, there being a liberal supply of cotton and 

 grain bilk After the middle of the month the 

 market grew firmer, purchases of long sterling for 

 investment were light, and gold imports fell off, the 

 total for the month amounting to $8,3 13,000 from 

 Europe and $3,750,000 from Australia. Rates 

 opened at fl.H'.'i f,,r sixty-day and $4.85 for sight, 

 and advanced by the 21st to $4.83 for the former 

 and ^$4.86* for the latter, closing at these figures. 

 In November the business in cable transfers was 

 unwilled by the fact that some bankers, contend- 

 ing that these drafts were clearly taxable as chocks, 

 affixed a two-cent -stamp instead of a four-cent ad 

 valorem stamp. The attention of the Commissioner 

 of Internal Revenue was called to the matter, and 

 Into in the month he ruled that the law wns clear 

 and that four-cent <nl rnlnri'ir stamps were rc- 

 <i u i red. Thereupon the use of two-cent stamps was 

 discont inned by all drawers. Kates opened at $4.83 

 to $4.N3A for sixty-day and $4.86 to $4.87 for si.-ht 

 fell to $4.s-J f or the former and $4.85 for the latter, 



in consequence of a pressure of commercial bills 

 and also because of dearer rates for money here and 

 easier discounts in London, and the market closed 

 heavy at $4.82 to $4.82 for sixty-day and $4.85 to 

 $4.86 for sight. The lower rates for exchange and 

 more or less financial tension at Berlin caused a 

 renewal of purchases of long sterling for investment 

 early in December, and by the middle of the month 

 it was estimated that about $50,000,000 had been 

 so bought and that it was hypothecated with New 

 York banks and other institutions. The offerings 

 of commercial bills were liberal, but these were 

 promptly absorbed and the tone of the market re- 

 mained firm, so continuing to near the end of the 

 month, when it grew dull and barely steady. Rates 

 were $4.82 to $4.82^ for sixty-day until after the 

 middle of December, when the latter were uni- 

 formly quoted at $4.82|. Rates for sight were 

 $4.85i to $4.86 during the entire month. Though 

 rates for actual business in sight were slightly above 

 the gold-importing point, gold continued to move 

 in moderate amounts from London to New York and 

 from Australia to San Francisco, and there were 

 comparatively large sums shipped from Paris to this 

 city in transit for Cuba. 



Railroads. The revenues of the railroads of the 

 country gradually improved after the beginning of 

 the war with Spain and the improvement was rapid 

 in the last half of the year. Reports of gross earn- 

 ings of 200 roads show a total of $1,117,615,550. 

 against $1,039,298,831 in 1897, a gain of $76,316,710 

 on an increase of 1,506 in mileage. The gain in 

 earnings was largely due to the increase in the vol- 

 ume of agricultural products moved, to the general 

 revival of trade which followed the ending of the 

 war with Spain, to the prosperity of the farming 

 sections of the country, to the wide distribution of 

 merchandise, and to the movement of iron ore from 

 the lake regions. There were no general labor 

 troubles and the floods in the Mississippi valley, 

 which were so disastrous in the previous year, proved 

 comparatively unimportant in 1898. The Southern 

 roads greatly benefited by the transportation of 

 troops, and there was an enlarged passenger traffic 

 over Western lines. The rate situation was dis- 

 couraging, especially between Chicago and the sea- 

 board, and in the latter part of the year grain was 

 carried as low as ten cents per hundred pounds. 

 One important event was the decision in October by 

 the United States Supreme Court against the legal- 

 ity of the Joint Traffic Association. In March tin- 

 decision of the court of last resort against the Ne- 

 braska maximum freight-rate law was announced. 

 Among the other important events of the year were 

 the consolidation of the Lake Shore and the New 

 York Central; the purchase by the Northern Pacific 

 of the Seattle, Lake Shore and Eastern ; the acquire- 

 ment of the New York, Susquehanna and Western 

 by the Erie: the promulgation of the reorgani/a- 

 tion plan of the Baltimore and Ohio, followed by tin- 

 obtaining by the President of the Great Northern 

 of a large interest in the company; the acquire- 

 ment by the Atchison of the San Francisco and 

 San Joaqnin Valley road; the absorption by the 

 Union Pacific of the Oregon Short Line; and the 

 announcement of increased dividends by ninny 

 of the principal roads of the country, while the 

 Atchison and the Northern Pacific began paying 

 dividends. The reorganization operations during 

 the year were chiefly in the direction of complet- 

 ing plans previously 'initiated, and at the end of the 

 year nearly all these reorganization plans had been 

 carried into execution. The railroad refunding 

 operations of the year caused the listing on the 

 Stock Kxchange of more than $91,000,000 of bonds 

 by the Lake Shore, Northern Pacific. New York 

 Central, Rock Island, and the Chicago and North- 



