276 



FINANCIAL REVIEW OF 1899. 



$736,830,1)00, the minimum of the year, Nov. 18. 

 The amount of deposits at the close of the year 

 was $740,04(5.900. The surplus reserves of the 

 banks were $23,530.375 at the beginning of the 

 year. There was an increase to $39,232,025, Jan. 

 28, followed by a reduction to $15.018,825 by 

 April 8, and then came a rise to $43.933.725, the 

 maximum of the year. May 27. There was a 

 rapid reduction to $5,0(52,475 by July 8, suc- 

 ceeded by a recovery to $15.082,350 by Aug. 19; 

 but thereafter there' was an irregular decrease to 

 $<U)52.2(>() deficiency, the minimum of the year, 

 Nov. 25. This deficiency in the reserve, it may 

 be noted, was the first recorded since Aug. 12, 

 1S!)3. The surplus reserve at the end of the year 

 was $11,1(58.075. 



The condition of the New York Clearing House 

 banks, the rates of interest, exchange, and silver, 

 and the prices of United States bonds on Jan. 2, 

 IJIOO, compared with the same items for the pre- 

 ceding two years, are given in the following table: 



cent, and in July at 7 per cent., while the lowest 

 rate each month was 1 per cent. The bank re- 

 serves partially recovered again in August, re- 

 sulting in more normal conditions for money, 

 and loans were made at 5 per cent, and at 2 per 

 cent. In September and thereafter until the end 

 of the year the monetary situation was entirely 

 unique. At every important center of the coun- 

 try except this city, and even in other branches 

 of the money market at this center, money was 

 apparently in good supply. Indeed, in some of 

 the Western centers the offerings of money were 

 so greatly in excess of the local demand that 

 investments were made thereat in New York com- 

 mercial paper, and much money belonging to 

 Western banks was loaned in this city on time 

 on pledge of stock collateral. Moreover, the 

 stringency at this center was chiefly observable 

 in call money, of which, because of the low bank 

 reserves, there w r as an insufficient supply. It 

 was during October and November that the rate 



* Paid off. 



Money on call loaned at the Stock Exchange 

 during the year at 1 per cent, in March and at 

 180 per cent, in December, the higher rate re- 

 sulting from a sudden panic in the money market 

 on Dec. 18, the culmination of influences which 

 had gradually increased the monetary tension 

 since October. Though the January settlements 

 were almost unprecedentedly large, there was 

 comparatively slight disturbance to the money 

 market, in consequence of preparations therefor. 

 This was due to the fact that such preparations 

 were completed early in the previous week, and 

 the resulting accumulations of money were freely 

 loaned after the middle of the first week in Jan- 

 uary, causing a fall in the rates for money on 

 call at the Stock Exchange to 2 per cent, from 

 fi per cent, early in the week. For the remainder 

 of the month the money market was easy, and 

 rates on call averaged 3 per cent. This easy 

 tone continued throughout the month of Febru- 

 ary and in March until toward the close, and 

 the lowest rate of the year (1 per cent.) was 

 recorded after the middle of this month. Toward 

 the close, however, money on call grew more 

 active, because of rapidly decreasing bank re- 

 serves, and loans were made at 9 per cent. In 

 April and in May, though bank reserves recov- 

 ered, money was more or less active, loaning as 

 high as 8 per cent, in the first-named month and 

 at 7 per cent, in April, and as low as 2 per cent, 

 each month. The activity continued throughout 

 June and July, again influenced by low bank 

 reserves, with loans in June as high as 15 per 



t Extended at 2 per cent. 



for money on call was recorded at 35 per cent., 

 and even then money on time was obtainable 

 from banks and from trust companies on good 

 Stock Exchange security at not exceeding 6 per 

 cent, for from sixty days to six months. It is 

 noteworthy that mercantile borrowers were not 

 in the least embarrassed by this condition of the 

 money market, and at no time did first-class 

 single-name paper rule above 6 per cent., w^hile 

 choice notes almost daily "sold until December as 

 low as 5^ per cent., and exceptionally good in- 

 dorsements were until the above-named month 

 in demand at 5 per cent. This remarkable de- 

 rangement of equilibrium of money w r as due to 

 the fact that concurrently with the usual autumn 

 movement of money from this center to the in- 

 terior for crop purposes there was a continuous 

 drain of money from the New York banks into 

 the Treasury for customs and internal revenue, 

 while the Treasury disbursements gradually .di- 

 minished. It would seem, therefore-* that the 

 prosperous conditions of the country, as reflected 

 in the increased importations and in the aug- 

 mented manufacturing interests, which were sub- 

 ject to internal taxation, were largely responsible 

 for the noteworthy low condition "of the bank 

 reserves at this center. The constantly decreas- 

 ing reserves compelled banks to call in loans, 

 while the daily requirements of Stock Exchange 

 borrowers, though somewhat diminished through 

 liquidation, were still large and, indeed, so great 

 as at times to be extremely urgent. Hence the 

 excessively high rates above recorded in Octo- 



