334 



FINANCIAL KEVIEW OF 1883. 



can stocks and bonds to and fro between New 

 York and European financial centers. This 

 movement has attained large dimensions of 

 late years ; but there is no record of such ship- 

 ments, or means of estimating their amounts. 

 Bankers' bills on London sold at stiff rates in 

 May, June, and July. It was therefore be- 

 lieved that large amounts of securities were 

 sent home from abroad. After July, rates 

 weakened. An import movement in gold, of 

 moderate dimensions, continued for a brief pe- 

 riod and then fell otf. The rate of sterling ex- 

 change for sixty-day drafts was $4.81 at the 

 beginning of January, rising to $4.83 in the 

 middle of the month, and $4.83 m_the begin- 

 ning of February. Lower and variable rates 

 obtained in the next two months, falling to 

 $4*81 in the latter part of March, after which 

 the rate quickly rose to $4.84 in April, and, 

 after falling cent, advanced to $4.85 \ in the 

 middle of May and $4.86 in the first part of 

 June; $4.85 ruled for the next month, and 

 after the middle of July $4.84; $4.83 in the 

 latter part of August; $4.82 in the begin- 

 ning, and a cent higher at the close of Septem- 

 ber; $4.82 and down to $4.81 in October; 

 and from $4.82 to $4.83 through November 

 and December. 



Manufacturing Industries. Industrial enterprise 

 flagged, and manufactures, confronted with a 

 failing demand, experienced the most unprofit- 

 able and discouraging year since the crisis of 

 1873 and the following period of despondency. 

 Distributing merchants, under the influence of 

 descending prices, took no more goods than 

 were necessary to supply immediate demands. 

 Manufacturers were therefore obliged to carry 

 heavy and constantly accumulating stocks, or 

 reduce production. The more expanded and 

 venturesome concerns broke down under the 

 strain, and made up the bulk of the mercantile 

 failures. A downward movement in prices be- 

 gan in 1881. In 1883 competition became so 

 sharp that profits nearly vanished in many 

 branches of trade. Yet so great was the 

 faith in the inherent strength of the situation, 

 and the expectation of a speedy recovery so 

 general, that manufacturers continued to pro- 

 duce to their full capacity. While goods were 

 being turned out in undiminished and often on 

 an increased scale, and pressed upon the falling 

 market, or stocks accumulated for the expected 

 upward turn, there were evidences everywhere 

 of dwindling consumption. The failure of the 

 harvests in 1881, the lessened demand for Amer- 

 ican staples in Europe, in consequence of bet- 

 ter crops there and of a depression which was 

 in a large measure the reaction of American 

 agricultural competition, the prostration of the 

 iron trade, the crises in the speculative mar- 

 kets and their train of mercantile disasters, 

 were some of the depressing influences which 

 caused a diminution in the consumptive ca- 

 pasity of the country. A far-reaching and per- 

 sistent cause was contributed by the manufac- 

 turers and traders themselves, who, in order 



to keep up their productive activity and carry 

 their accumulated stocks, cut down their wages 

 accounts and practiced the sharpest economies. 

 The reports of railroad receipts and traffic fur- 

 nish conclusive evidence that the volume of 

 business was as great as in the most prosper- 

 ous years. 



The decline of railroad construction was one 

 of the chief elements of disturbance. The un- 

 due expansion of the iron industry to supply 

 this temporary demand was followed by a re- 

 action in this trade which led off, and to a 

 considerable extent helped produce, the gen- 

 eral industrial depression. The reduction of 

 railroad construction from 11,591 miles in 1882 

 to 6,600 miles in 1883 decreased the distribu- 

 tion of money for this purpose among manu- 

 facturers, transportation companies, contract- 

 ors, storekeepers, laborers, etc., from $347,- 

 730.000 to $198,000,000. If construction falls 

 off to 3,000 miles in 1884 it makes a further dif- 

 ference of $108,000,000 in the disbursements. 

 Steel rails were worth $71 a ton in January, 

 1880; in December, 1883, large contracts were 

 taken at $33 and $35 a ton. American pig- 

 iron fell from $35 to $20 a ton. On the 1st 

 of January, 1883, there were 417 furnaces in 

 blast, and 270 out of blast, in the United States. 

 By the 1st of July 83 more were blown out; 

 but between that date and November 1st the 

 number in operation was reduced by only three. 

 The stock on hand on January 1st was 383,655 

 gross tons, increasing to 528,590 tons on July 

 1st, after which it was reduced until only 232,- 

 354 tons remained unsold on November 1st. 

 The reduction in production was so great that 

 consumption required more than the new sup- 

 ply, and prices showed an upward tendency in 

 the latter part of the year. 



New mining districts, opened up in various 

 parts of the country with the extension of 

 railroads, begin to affect the supremacy of the 

 old center of iron production. The furnaces of 

 Western Pennsylvania work mostly Lake Su- 

 perior and imported ores. In the Clearfield 

 district in Pennsylvania iron, coal, and lime- 

 stone are found together. Another new field 

 is in Southwestern Virginia, where the rich 

 mineral deposits have attracted a large amount 

 of capital, American and English. The pig- 

 iron industry of the Southern States has devel- 

 oped even more remarkably than other branch- 

 es of trade. The production increased in one 

 year 25 per cent. The cost of negro labor is 

 lower than that of labor at the North, while 

 the quality of the product can bear comparison 

 with the best grades of English Cleveland iron. 



The anthracite-coal trade showed a develop- 

 ment in 1883 which made it an exception to 

 other industries. The mining and transporta- 

 tion companies, led by Philadelphia and Read- 

 ing, pushed their productions to the utmost, 

 sending to market about 31, 200,000 tons in 

 1883, against 29,239,919 tons in 1882. A much 

 larger tonnage than usual was shipped west- 

 ward, necessarily competing with the soft coal 



