FINANCIAL REVIEW OF 1899. 



2T3 



political condition of France was unsettled be- 

 cause of the Dreyfus affair, and a sentiment 

 widely prevailed throughout Europe that a mili- 

 tary coup might be precipitated. This feeling 

 was so intense in France that depositors largely 

 withdrew money from banks, and some of them 

 remitted it to London, indicating want of con- 

 fidence in the Government. The political and 

 financial conditions here noted tended to check 

 business throughout Europe at the beginning of 

 the year. Fortunately, however, more cordial 

 relations were established between Great Britain 

 and France by the end of January through the 

 pacific declarations of the French ambassador 

 to London, and also through assurances by Mr. 

 Chamberlain, of the British Cabinet. The situa- 

 tion rapidly improved, business revived, and the 

 outlook grew quite hopeful. Though the Dreyfus 

 affair began in February to be more or less of 

 a disturbing factor in France, its influence was 

 entirely local, and prosperous business conditions 

 generally prevailed, and especially throughout 

 Great Britain. The sudden death of President 

 Faure, of France, on the 16th was followed by 

 the election of M. Loubet on the 18th, and, though 

 the demonstrations of the revolutionists against 

 the new President were disturbing, nothing seri- 

 ous resulted therefrom. General trade contin- 

 ued to expand in England, though speculation 

 languished in London. Money, however, was in 

 active demand, reflecting the improvement in 

 business, and there seemed to be an impetus given 

 the latter by the British agreement with France, 

 toward the end of March, settling the respective 

 spheres of influence in Africa of both countries. 

 Until the middle of April there was not an event 

 of importance to cause the least apprehension. 

 Then the petition of the Uitlanders to the British 

 Government for its intervention with the Trans- 

 vaal Government for the redress of grievances 

 resulted in some political friction between the 

 two governments, which was intensified early in 

 May by the refusal of President Kriiger to make 

 the least concession either to the Uitlanders or 

 to the mining industry. Gradually the political 

 situation grew more tense, and toward the end 

 of June war seemed unavoidable. There was, 

 however, little interruption to trade, though 

 speculation in London was held in check. In 

 July political conditions grew more hopeful, and 

 they so continued until near the end of Septem- 

 ber, with a growing conviction that President 

 Kriiger would finally recede from his position 

 of opposition to British demands. Then the in- 

 sistence of the English Colonial Secretary that 

 President Kriiger should promptly accede to the 

 British requirements brought about an acute po- 

 litical crisis, which was followed, Oct. 10, by an 

 ultimatum by the Transvaal President demand- 

 ing that " all troops on the borders of the re- 

 public shall be instantly withdrawn, that re-en- 

 forcements of troops which have arrived in South 

 Africa shall be removed within a reasonable time, 

 and that her Majesty's troops which are on the 

 high seas shall not be landed at any port of 

 South Africa." No reply was made by the Brit- 

 ish Government to this ultimatum, and on Oct. 

 11 a movement of troops of the Orange Free 

 State, which had formed an alliance with the 

 Boers, began, and a state of war was inaugurated. 

 While British military preparations then became 

 active, the financial preparations by the Bank 

 of England had already begun, and on Oct. 3 

 the bank rate was raised from 3J to 4 per cent., 

 and on the 5th from 4J to 5 per cent., the man- 

 agers of the bank foreseeing that, as the country 

 would soon have its supplies of gold from the 

 VOL. xxxix. 18 A 



Transvaal (amounting to at least 1,500,000 per 

 month) cut off, measures must be taken to at- 

 tract gold from the Continent. The double raise 

 in one week in the bank rate, it may be noted, 

 was precipitated by an advance by the Imperial 

 Bank of Germany on the 3d to 6 per cent. There- 

 after financial tension prevailed throughout Eu- 

 rope, and on Nov. 30 the Bank of England rate 

 was raised to 6 per cent. Troops were hurried 

 from England to South Africa; fast transports 

 were secured from the transatlantic lines, more 

 or less crippling ocean traffic, and international 

 commerce was to some extent disturbed. The 

 first important battle in Natal resulted in dis- 

 aster to the British, Gen. White being defeated 

 at Ladysmith on Oct. 30, and being thereafter 

 besieged by a superior force. A column under 

 Gen. Gatacre, moving to the relief of Kimberley, 

 which was in a state of siege, was defeated at 

 Stormberg, Dec. 10; another column, under Gen. 

 Methuen, was entrapped at Magersfontein on the 

 llth; and Gen. Buller, moving to the relief of 

 Ladysmith, was defeated at Chieveley, Tugela 

 river, on the 15th. These successive disasters 

 caused consternation in England. Field-Marshal 

 Roberts was directed to supersede Gen. Buller in 

 command of the- forces in South Africa, and ad- 

 ditional re-enforcements were sent to the seat of 

 war. The Imperial Bank of Germany on the 19th 

 advanced its rate to 7 per cent., and the Bank of 

 France, which had raised its rate to 3J per cent, 

 on the 8th, further advanced it to 4 per cent, 

 on the 21st. Thus prevented from obtaining 

 greatly needed supplies of gold from the Conti- 

 nent, the Bank of England, while maintaining a 

 6-per-cent. discount rate, adopted the expedient 

 of raising the price of gold in order to attract 

 the metal from New York. There was an ab- 

 sence of news from the seat of war after the de- 

 feat of Gen. Buller, and military operations were 

 apparently unimportant for the remainder of the 

 year. 



More or less tension began to develop at Manila 

 early in February between the United States mili- 

 tary authorities and the Filipinos under Aguinal- 

 do, and Feb. 6 the latter attacked the United 

 States troops, inaugurating an insurrectionary 

 movement, which continued almost uninterrupt- 

 edly throughout the year. In November the in- 

 surgents were driven into the interior of Luzon, 

 and the Filipinos thereafter conducted a harassing 

 guerrilla warfare. Admiral Dewey, it may be 

 noted, returned to the United States at the end 

 of September, and was enthusiastically welcomed 

 by the citizens of New York, Sept. 29 and 30. 



By far the most important feature of the year 

 was the rapid progress which was made in the 

 organization of industrial and other combina- 

 tions of capital, which were known as trusts. 

 Such concerns as were organized in 1898, it may 

 be noted, though having a total capitalization 

 of $873,263,000, then attracted comparatively little 

 attention, simply exciting surprise at their mag- 

 nitude. Early in 1899, however, facilities were 

 offered by New Jersey and other States for the 

 organization of these corporations, and they 

 began to grow with marvelous rapidity, while 

 the aggregate capitalization reached enormous 

 amounts month by month. The apparent reck- 

 lessness with which these organizations were cre- 

 ated attracted the notice of conservative bankers, 

 and in April, at the suggestion of Secretary Gage, 

 the officers of the New York banks began to take 

 measures for self-protection to guard against the 

 threatened danger to the market of the great 

 mass of overcapitalized properties, which were 

 even then regarded as a serious menace to the 



