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FINANCIAL REVIEW OF THE YEAR 1901.

the

The financial record of 1901 presents many spectacular features that are not only of interest to the committee of prominent banking officials raised The panic was short lived, as the following day the student of finance but also to the man of business and of affairs. Speculatively it was exa fund to relieve the money market, which on May tremely active, with the New York Stock Ex9 had ruled at 40a70 per cent. for call funds, and change making many new high records for the the two fighting financial parties came to an agree largest total of transactions in a single session, ment by which all shorts were permitted to settle in Northern Pacific at a basis of 150. In spite of as compared with former years. Price fluctuations for the year were also extremely wide apart and the severe losses made by the speculative comwere extremely violent at times. munity the recovery from the low level of prices The year is also memorable for the sharpest panic of the financial Stock Exchange house reported any difficulty. on the panic day was so great that not a single history of the country. This occurred on May 9, and the movement was also remarkable for the ular and professional. Early in June the market became dull, irregcauses that brought it about as well as the short with prices showing a duration of the panic and its rapid recovery from general sagging tendency. A feature of this the extreme point of depression in security values. firm month was the failure of the Stock Exchange With the close of the year security values as a of of Marquand & Co. and the suspension whole show favorable comparison with those that Seventh National Bank. Money rates prevailed at the beginning of the year. In nearly inary to the half year interest and dividend disalso rallied to 15 per cent. in June, prelimall high class investment issues, and particularly bursements. bonds and railroad stocks, values are even higher steel strike was inaugurated and also the shorter About the middle of July the big than a year ago, and the return to the investor, lived coal strike, which were destined to have so measured by the dividends and interest payment,long continued an adverse effect upon the market. averages closer to 3a31⁄2 per cent. than ever before in the country's history. Transactions on the Stock Adverse reports of a poor corn crop also had a Exchange averaged during the early months of depressing effect and induced liquidation in securthe year well over 1,500,000 shares per day, and on itles. These conditions practically prevailed all January 7, for the first time in the history of the through July and Aug. Early in Sept. there was Stock Exchange, the recorded sales on the ticker some revival of activity, but this was again checked passed to 2,000,000 share mark and amounted to by the shooting of President McKinley. This unfor 2,164,500 shares. This result tinate and greatly deplored event caused initial was obtained with fractional trades cut off from the record on the violent reactions in values, and during the period ticker by orders of the authorities, and on acof uncertainty as to the result, speculation was count of the pressure of the big speculation. On marked by heaviness and depression. This was April 4 the two million share day was again exaccentuated by the Government monthly стор ceeded, the total record by the ticker being report, indicating a corn crop of 1,300,000,000 bush2,094,000, and again on April 19 the recorded sales els, as against last year's crop of 2,200,000,000 were 2,226,700. Again on April 22, 24, 25, 29 and 30, bushels. All the Exchanges closed on the day foland also on May 1, 2, 3, 4 and 9 the two million lowing the death of the President and also on the mark was exceeded. For the week ending May 4 day of the public funeral, the total sales amounted to 15,626,892 shares, a high record for this period. In this period two of the sessions mentioned yielded records of transactions exceeding in one day the three million share mark. The first of these was on Tuesday, April 30, when the total recorded by the ticker was 3,335,400 shares. This is the high record so far as officially known, as the second three million share day was during the panic of May 9, when the official record was 3,300,800 shares. Still another record was contributed to financial history during this period in the shape of the largest transactions in a single stock in one day, this occurring on April 24, when 660,900 shares of Union Pacific were dealt in.

Prices at the end of April were higher in the majority of issues than ever before and there is no telling how long the bull campaign would have been continued had it not been for the fact that the bubble was pricked and public confidence so rudely shattered that it was never fully restored during the remainder of the year by the panic of May 9. It grew out of the fight between eading railroad and banking interests for control of the Northern Pacific and Burlington R. R. systems. On one hand were arrayed such powerul interests as J. J. Hill of the Great Northern and assisted by the powerful banking house of J. Morgan & Co., with all the influence it comnands. On the other hand were arrayed the big financiers who control the Union Pacific system and their allies and who were commonly known as the Harriman, Gould and Kuhn-Loeb party. When the battle was acute Northern Pacific stock in a week advanced from a little above par to 1,000; sales at that level being made in the open market. The big rally naturally tempted short sales and both sides had deliveries due them of stock that would give each side control. As this Amount of stock was not in existence the shorts were in a quandary of great seriousness and many of them, in order to settle, were forced to sell out other issues. The evidences that the big financial interests, whom it was generally believed by the public were acting in harmony in order to bring about stability of railroad rates, came as a shock to the public, which hastened to throw over its holdings. Everybody was mad to sell and there; were few buying orders. In consequence prices fel with a crash on the day of the panic, the lesses ranging from 10 to 60 points in the promiment stocks.

President Roosevelt's first statement that he would carry out the policy of the late President also had much to do with return of confidence, of the Northern Pacific controversy. The ending of this fight for control of a big property caused a general rally in values. The settlement was a victory for the Harriman party as, instead of the original one-third interest in the Burlington asked for, they secured one-half interest in the new Northern Securities Company, capitalized at $400.000.000, to take over the securities of the Northern Pacific and the Great Northern systems. Speculative markets during the last two months of the year were marked by decided irregularity. In the main prices showed steadiness and even firmness for the railroads which were sustained by continued earnings that were record breaking in size. In fact, so great was commercial activity that the railroads complained of inability to handle freight on account of the scarcity of cars. Gross and net earnings for the year of the prominent railroad systems show increases ranging from 5 to 15 per cent. over those of last year.

In Nov. was announced the formal settlement

The feature of the closing month of the year was the break in Amalgamated Copper and the demoralization of the copper trade, with a sharp_cu in the prevailing high price in that metal. This stock, which sold last June at 130, was early in Dec. lowered to less than half that figure, and the losses sustained by so severe a drop, as well as the adverse effect upon the general market, had much to do with holding the general list in check. Another important feature of the final months of the year was the stringent monetary market. Interior shipments began early in August and slowly the reserves of the banks were depleted so that by the first part of December they had only $5,000,000 above legal requirements. eign exchange market during the fall also preThe forsented the unusual spectacle of heavy gold exports, which amounted to nearly $23,000,000 after October 30, due This departure from the normal was to several unusual tighter money markets abroad, due to the heavy causes. One was the expenditures by the British government on account of the Boer war and the industrial and commercial depression in Germany, influenced heavy sel ing during the year of AmeriBoth these causes als can securities held abroad, and, according to exi perts in this line, resulted in a large reduction in

Open-
ing,
1901.

FINANCIAL REVIEW OF THE YEAR 1901-Continued. the estimated sum of $2,000,000,000 of American securities held abroad at the first of the year.

Another cause for the gold exports was the fact that during the May fight over Northern Pacific both barking houses conspicuous in that controversy sold heavily of long time sterling and used the funds to pursue their fight. As these fell due in the Fall it became necessary to send gold in payment, as foreign bankers refused to extend the toans. An interesting exhibit in the monetary situation of the year was shown in the Treasury settlement of Dec. 1. According to these official figures the to.al circulation in the country on that date was $2.250,256,230, as compared to a circulation the year previous of $2,246,300,542.

Another statistical exhibit of the government that is worthy of thought is the statement showing the condition of our foreign trade. This is causing some natural alarm in some quarters, as it indicates a reaction from the commanding position taken by this country during the past five years. The financial and industrial depression abroad has partly been responsible for the decline noted in our foreign business, but it is also held to be due to a more active and modern competition for the world's trade, together with a more general adoption of A.nerican methods, on the part of our foreign competitors. For the eleven months of the calendar year our total exports were $1,328,103,184, as against $1,332,056.242. This is a small loss in total exports of only approximately $3,500,000. But our imports tell another tale, as the total for the same eleven months are $800,424,837, as against $760,452.507 last year, or an increase of approximately $40,000,000. The excess of exports over imports for the eleven months was $528.068,764 and as against an excess last year of $571.603.735. It is also significant to note that most of this loss has been made in the latter half of the year, $7,000,000 alone being made in Nov. This decline in our foreign trade, combined with the year's serious failure of the corn crop, is the first sign of any deterioration from the high pressure of national prosperity that has ruled for the past five years. Otherwise, every indication points to continued national prosperity during the coming

year.

The following table shows the course of the stock market, beginning of the year 1901 to Dec. 17, 1901.

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Canada Southern

Canadian Pacific..

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Ch. & Alt..
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Chesapeake & Ohio....
Chicago, Bur. & Quincy.
Chicago & E. Illinois com..
Chicago & Great Western..
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Chicago, Ind. & Louis....
Chicago, Ind. & Louis. pref.
Chicago, Mil. & St. Paul...
Chicago, Mil. & St. P. pref.
Chicago & Northwest.
Chicago & Northwest pref.
Chicago, R. I. & Pacific.
Cleveland. C., C. & St. L...
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C. & H. C. & I...
Col. & Southern...
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Col. & Southern 2d pref...
Con. Gas...

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