282 



FINANCIAL REVIEW OF 1899. 



to $4 88| for cables, suddenly developed weak- 

 ness, and rates fell by the 10th to $4.84f to $4.85 

 for long, $4.86 to $4.87 for short, and $4.875 

 to $4.87i for cables. There was a gradual re- 

 covery however, followed by an irregular move- 

 ment,' and the tone closed firm at $4.85f to $4.86 

 for Ion", $4.88 to $4.88} for short, and $4.88| 

 to $4.81) for cables. These rates clearly fore- 

 shadowed gold exports, and early in June there 

 was a demand to remit for securities sold for 

 European account, and during the month $17,050,- 

 000 gold was shipped. The opening rates for ex- 

 change were the same as those at the close of 

 May. The offerings of sterling against gold ex- 

 ports caused an irregular recession in rates until 

 after the middle of the month, when there was a 

 more decided decline, and the market closed easy 

 at $4.85} to $4.85i for sixty-day, $4.87} to 

 $4.874 for sight, and $4.88 to $4.88} for cables, 

 these rates being the lowest of the month. Gold 

 exports ceased after the shipment of $2,250,000 

 early in July. The exchange market opened at 

 the 'figures ruling at the end of June, and there 

 was a steady decline, influenced by dearer rates 

 for money, until the 13th, when an advance in 

 the Bank* of England minimum to 3$ per cent, 

 caused a temporary recovery. Later, however, 

 the market grew easier, and it closed weak at 

 $4.83} to $4.835 for long, $4.86$ to $4.86| for 

 short, and $4.87$ to $4.872 for cables. Liberal 

 offerings of long sterling, in the expectation of 

 covering with grain and cotton bills later in the 

 season, made exchange weak during the early 

 part of August, and, after opening at $4.83 to 

 $4.83} for long, $4.86} to $4.86$ for short, and 

 $4.8(>2 to $4.87 for cables, there was a decline 

 by the 10th to $4.82} to $4.82$ for sixty-day, 

 $4.86 to $4.86} for sight, and $4.86$ to $4.86| 

 for cables. Then the Imperial Bank of Germany 

 advanced its rate of discount to 5 per cent., in 

 consequence of increasing tension at Berlin, and 

 there was some expectation that the Bank of 

 England would likewise advance its rate. Sterling 

 grew firmer, so continuing until the 17th, when, 

 there being no change in the Bank of England 

 rate, the tone grew easier. Though irregular 

 thereafter, the market closed heavy, with rates 

 for sight sterling $4.86 to $4.86}, while those 

 for long sterling and for cables were unchanged 

 compared with the rates at the opening of the 

 month. Higher rates for money dominated the 

 foreign-exchange market in September, and the 

 tendency was almost uninterruptedly downward. 

 After opening at $4.83 to $4.83} for long, $4.86 

 to $4.86} for short, and $4.86| to $4.87 for 

 cables, the market advanced one quarter of a cent 

 and then gradually declined to $4.81} to $4.81$ 

 for sixty-day, $4.84| to $4.85 for sight, and 

 $4.85^ to $4.852 for cables by the close of the 

 month. Gold to the amount of $2,350,000 was 

 shipped hither from London, the open market 

 discount rates at that center advanced, and by 

 the end of the month it was expected that the 

 Bank of England would be forced to raise its 

 rate because of the increasing tension in dis- 

 counts in London. One feature of our exchange 

 market was the negotiation of sterling loans as 

 a measure of relief to the money market. On 

 Oct. 3 the Bank of England advanced its rate of 

 discount from 3J to 4^ per cent., immediately fol- 

 lowing a rise by the Imperial Bank of Germany 

 from 5 per cent, to fi per cent., and on the 5th 

 the Bank of England further advanced its rate 

 to 5 per cent. The almost unprecedented occur- 

 rence of two advances in the rate of discount in 

 one week by the Bank of England indicated ex- 

 treme tension, which was clearly due to the rap- 



idly developing acuteness in the relations between 

 England and the Transvaal Government. The 

 above-noted action by the Bank of England had 

 a direct influence upon the exchange market, 

 causing a fall in long and a rise in short sterling, 

 rates being adjusted to conform to the higher 

 discounts in London. After opening at $4.81 to 

 $4.81} for long, $4.85} to $4.85$ for short, and 

 $4.86 to $4.86} for cables, rates for long de- 

 clined to $4.80| to $4.81, while those for short 

 advanced to $4.85| to $4.86, and those for cables 

 to $4.86| to $4.87. From these figures the whole 

 market rose, and by the 19th rates had advanced 

 to $4.834 to $4.83| for long, $4.87$ to $4.87 f 

 for short, and $4.88$ to $4.88| for cables. The 

 rise, it may be noted, was directly due to the 

 invasion of Natal by the Boers on the llth. This 

 ,news caused a sharp demand for exchange to 

 cover bills previously sold. Moreover, the market 

 was reported to be largely overdrawn, and hence 

 the urgency of the inquiry for bills. After this 

 demand subsided rates gradually fell off to the 

 close of the month, when they were $4.82| to 

 $4.83 for long, $4.86$ to $4.86| for short, and 

 $4.87$ to $4.87| for cables. The exchange mar- 

 ket was influenced at the beginning of November 

 by high rates for money, and later by the pros- 

 pect of a less strained monetary situation through 

 relief by the Treasury, and also by some relaxa- 

 tion in the tension of the discount market in 

 London. Rates opened at $4.83 to $4.83} for 

 sixty-day, $4.86| to $4.87 for, sight, and $4.87f 

 to $4.88 for cables. Then there was a rapid fall 

 until the 13th, due to dear money in this market, 

 and rates on that date were $4.80| to $4.81 

 for long, $4.84| to $4.85 for short, and $4.86 

 to $4.86} for cables. The market was further 

 influenced by liberal offerings of commercial bills 

 against cotton and breadstuffs, and also by drafts 

 against sterling loans. After the announcement 

 by the Treasury Department of the offer to buy 

 $25,000,000 bonds the exchange market sharply 

 recovered, rates rising by the 17th to $4.81 f to 

 $4.82 for long, $4.86 to $4.86} for short, and 

 $4.87 to $4.87} for cables. A noteworthy fea- 

 ture was the movement in one week from rates 

 almost low enough to permit gold imports to those 

 which were almost high enough to justify gold 

 exports. The market gradually grew weaker 

 after the above-named date, affected by contin- 

 ued activity in money and by offerings of bills 

 against purchases of stocks for European ac- 

 count, but it closed with a slight recovery at 

 $4.81 to $4.81} for long, $4.86 to $4.86} for 

 short, and $4.87 to $4.87} for cables, influenced 

 by the advance on the 30th of the Bank of Eng- 

 land rate to 6 per cent. The tone was firm at 

 the opening in December, with long unchanged 

 at the above-noted figures, while short was higher 

 at $4.86} to $4.86$, and cables were advanced 

 to $4.87} to $4.87$. The Bank of France moved 

 its rate of discount up to 3$ per cent, on the 

 7th, and the open-market rate at London grew 

 firmer, more or less influencing our exchange mar- 

 ket, which advanced with a firm tone. The news 

 of the disastrous repulse of Gen. Buller by the 

 Boers at Tugela river, near Chieveley, on the 

 15th, following the defeat of Gen. Gatacre at 

 Stormberg on the 10th and of Gen. Methuen 

 at Magersfontein on the 12th, caused consterna- 

 tion in England, and there was a security panic 

 in London. The open-market discount rate con- 

 sequently rose sharply, the Bank of England ad- 

 vanced the bid price for bar gold and for Ameri- 

 can eagles, and also offered to make advances 

 on gold while in transit from New York. Influ- 

 enced by these inducements, $2,450,000 gold was 



