representing a wide variety of talent and experience, consisted of Horace White, author and financial editor, Chairman; John B. Clark, economist; Willard V. King, banker; Edward H. Page, wholesale dealer; Clark Williams, State Superintendent of Banking; Ex-justice David Leventritt; Chas. A. Schieren, merchant; Samuel H. Ordway, lawyer; and Chas. S. Smith, director of the People's Institute. The committee determined upon a policy of secrecy with reference to results of its inquiries until its report was ready for submission to the Governor. NEW CORPORATIONS. The new incorporations during the year were fewer than in 1907. The aggregate par value of the authorized capital of new concerns, with at least $1,000,000 authorized capital, in the Eastern and New England States was $1,251,197,000. This was 14 per cent. less than in 1907 and not much more than half the total for 1906. The incorporations of large concerns in all other States totaled $310,955,000 authorized capital, or 40 per cent. less than in 1907; and the total capital of concerns in all states with more than $100,000 and less than $1,000,000 authorized capital was $497,931,000. During the early part of the year there was great hesitation about forming new companies, but as the confidence of investors returned and business increased, the number and amount of new incorporations increased, reaching 50 per cent. of normal for the past eight years by August and 5 per cent. of normal by the end of the year.

The leading concerns chartered during the year and their authorized capital were as follows: The International Smelting and Refining Company, $50,000,000; the Independent Fertilizer Company, $50,000,000; the Phelps and Dodge Company, $50,000,000; the United States Light and Heating Company, $17,500,000; the American Piano Company, $12,000,000; the National Silk Dyeing Company, $10,000,000; the Tennessee Chemical and Fertilizer Company, $10,000,000; the Corn Products Refining Company, a consolidation of the Corn Products Company and the old Corn Products Refining Company, $80,000,000; the American Steel Foundry Company, a new incorporation of an old concern, $17,184,000; the Atlantic, Gulf and West Indies Steamship Lines, the successor to the Consolidated Steamship Company, $40,000,000; the Cerro De Pasco Copper Company, $60,000,000; the American Railways Company, incorporated at Pierre, S. D., $150,000,000, its object being to build a road from Chicago to Winnipeg.

The incorporations were distributed among principal states as follows: New Jersey, $475,330,000; Maine, $339,325,000; Delaware, $226,420,000; New York, $149,882,000; and Illinois, $89,605,000.

FAILURES. (a) Commercial. The number of business failures in the United States in 1908 as reported by Bradstreet's was 14,066, as compared with 10,258 in 1907 and 9,384 in 1906. Only in 1893 and 1896 has this number been exceeded. The total assets of failures in 1908 were $167,807,000 and total liabilities $296,486,000, as compared with $287,814,000 and $384,057,000 respectively in 1907. Thus the total of liabilities of failures was much smaller in 1908 than in 1907, but the ratio of assets to liabilities was also smaller, 56 per cent. in 1908 and 75 per cent. in 1907. While the majority of the failures in 1908 were small ones, there were 320 with liabilities of $100,

000 or more, as compared with 327 in 1907, the aggregate liabilities of such failures being 60 per cent. of the total in 1908, and 75 per cent. in 1907. This large percentage in 1907 was due to the fact that fully $125,000,000 of liabilities included in the total for that year were those of large firms which suspended in October and later resumed business without becoming insolvent. This fact also accounts for the high ratio of assets to liabilities in 1907, a ratio probably never before equalled; this ratio in 1908 (56 per cent.) exceeded that of every other year since 1896. By groups of States the number of failures and the total liabilities were as follows: New England, 1,333, $18,076,000; Middle, 4,806, $150,395,000; Western, 2,456, $52,574,000; Northwestern, 768, $16,190, 000; Southern, 3,467, $43,250,000; Far-Western, 1,197, $15,532,000; Territories, 39, $467,000. This grouping of States is peculiar: Middle includes New York, New Jersey, Pennsylvania, and Delaware; Southern includes the 13 Southern States, Oklahoma, and the District of Columbia; Western includes Ohio, Indiana, Illinois, Michigan, Kentucky, Missouri, Kansas, and Colorado; Northwestern includes eight, and the Far-Western six States. Every division showed an increase in the number of failures in 1908 over 1907, while all but the Western and Northwestern States showed decreases in total liabilities. This decrease in New England was 57.5 per cent. and in the Middle States 26.2 per cent. The number of failures in New York City in 1908 was 2,071 and the liabilities, $97,747,0000, an increase of 46.6 per cent. in the number but a decrease of 23.4 per cent. in the liabilities as compared with 1907.

The distribution of failures by industries, for the year ending Nov. 30, according to Dun's Review was as follows, with liabilities in each case: Manufacturing, 3,852, $111,723,000; trading, 11,328, $91,684,000; brokers and transporters, 609, $41,065,000; banking, 207, $152,493,000. The greatest amounts of liabilities were charged against manufacturers of machinery and tools, and lumber, and millers; and against general stores and dealers in meat and groceries.

(b) Financial. The record published by Bradstreet's showed that there were 132 failures or suspensions of national, State, and private banks, and loan and trust companies, with aggregate assets of $66,735,000 and aggregate liabilities of $93,525,000. Though bank failures were less than 1 per cent. of the year's total number, they furnished 31 per cent. of the total liabilities. In 1907 failures and suspensions numbered 89, assets were $188,464,000 and liabilities $206,266,000. Many of these banks later resumed payments, but the effect of a bank suspension on business is comparable to the effect of a failure. This fact is of special significance owing to the fact that financial failures and suspensions of 1907, most of them occurring in the later months, accounted for 54 per cent. of all liabilities of failing concerns in that year. Thus it appears that the break in prosperity late in 1907 was distinctly a financial collapse. The number of bank failures in 1908 greatly exceeded the number in 1907, and was only exceeded in 1893, 1895 and 1896. The liabilities, however, were less than half those of 1907, and little more than half those of 1893, though greater than those of any year between those two. Private banks furnished 41 per cent. of the number and 29 per cent. of the liabilities

FINANCIAL REVIEW

of banking failures. Trust companies, which furnished 57 per cent. of the liabilities of bank failures in 1907, furnished only 13 per cent. in 1908. National banks furnished 19 per cent. of the liabilities in 1907 and 24 per cent. in 1908; and state banks furnished 9 per cent. in 1907 and 30 per cent. in 1908. The numbers of various kinds of banks failing or suspending were: National, 18; State, 35; savings, 9; private, 55; loan and trust companies, 15. With reference to national banks liquidating in the year end ing Oct. 31, 1908, the report of the Comptroller of the Currency stated that 7 were wrecked by the cashier, 1 by defalcation of officers, and 3 by fraudulent management; 6 failed because of excessive loans followed by depreciation of securities, 2 because of excessive loans to officers, 1 because of the failure of large debtors, and I because of general money stringency.

CANADA. The commercial failures in Canada in 1908 numbered 1,714, with total liabilities of $17,586,000 and assets of $7,844,000. Compared with 1907 the number of failures increased 25.5 per cent., the liabilities 50.2 per cent., and the assets 30.5 per cent. This comparison seems to indicate that the financial panic and business depression did not produce their effect in Canada until after the close of 1907, a condition the reverse of that in the United States.

GREAT BRITAIN. As in other principal financial centres, London experienced a marked change in the condition of the money market from stringency at the close of 1907 to abundance after the middle of 1908. There was a decrease in the demand for loans; a decrease in the retail trade and of necessary circulation; and a decrease in prices, which, however, recovered steadily during the later months of the year. Unlike bankers in New York, Berlin, and Paris, who accumulated unusual gold reserves, London bankers showed great confidence in making investments, the amount of English capital placed abroad probably exceeding that of any previous year. The Bank of England reserve did not for this reason increase materially during the year, nevertheless its discount rate fell from 7 per cent., the abnormally high in Nov., 1907, to the abnormally low, 21⁄2 per cent., a year later. The dullness in the stock market showed itself in a decline of $800,000,000 in bank clearings on stock exchanges in 1908 as compared with 1907. Nevertheless, there was an average advance of 5 per cent. in the value of 387 selected securities dealt in on the London exchange, showing an aggregate advance of $950,000,000 in value. It should be stated that more than half of this advance was credited to 33 American railway stocks. In international trade Great Britain suffered greater losses than the United States, Germany or France. Her total loss exceeded $500,000,000, about equally divided between decreased imports and decreased exports. The year was notable for the severe depression in the iron and steel and ship-building industries, while textile mills experienced a quite marked decline in business. As a result unemployment (q. v.) reached an unprecedented extent, a condition giving a gloomy aspect to the industrial and trade situation at the close

of the year. FRANCE. France is the creditor of almost all nations. One effect of this condition was the accumulation of an enormous gold reserve by

FINANCIAL REVIEW

the Bank of France, this reserve increasing by $150,000,000 from Jan. 16 to Dec. 11, when it amounted to $700,000,000, an amount never before equalled. The reason for this calling in of balances from all nations was stated to be the lack of confidence in the existing industrial and financial condition in England, Germany, and America, but was also closely connected with the political situation in Europe. The American crisis affected France less than did the depression in Germany. The German industries have secured capital from France, and will need more; the Balkan crisis and the Moroccan affair introduced a note of trepidation into international financing; Russia made preparations for borrowing $250,000,000. All these facts caused French gold to remain temporarily idle. The demand in the home retail trade was about up to the normal level, but there was a noticeable decline in the production for export.

The

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GERMANY. The year in Germany was one of moderate decline, but not of crisis. There was an unusual amount of unemployment (q. v.), as a result of slackness in various industries. But the general conservatism of bankers and business men prevented any collapse of business. This is shown by the fact that total railway receipts were only 1 per cent. less than in 1907, freight receipts being 32 per cent. less. foreign trade of the first ten months showed imports 9 per cent. less and exports 2 per cent. greater than during the same period in 1907. The later months showed improvement in tone. The coal output was greater by 9,000,000 tons than that of 1907. The iron and steel trade however, showed considerable falling off, dividends of fourteen large companies being reduced from an average of 16 per cent. in 1907 to 12 per cent. in 1908. One of the causes of a bad year in smaller industries was the maintenance of high prices by the Steel Works Union (comparable to the United States Steel Corporation), and by the syndicate of coal companies. sharp reduction in steel prices near the close of the year gave a decided stimulus to that and allied industries. As in the United States, the slackened trade and industrial conditions resulted in a considerable accumulation of cash capital which tended to stimulate business revival. The cash holdings of the Reichsbank were $100,000,000 larger in Nov., 1908, than a year earlier. There was an advance also in the values of securities. This was due in part to the fact that in spite of the prosperity of 1907, financiers and investors had forced values down to the lowest possible point, so that no marked recession in values followed the Wall Street crisis in October. All bonds were quoted higher in Nov., 1908, than one year earlier. The stocks of the eight leading Berlin banks averaged 154.25 in Nov., 1908, as compared with 148.50 in Nov. 1907. Shares of iron and steel companies were one or two points less in 1908 than in 1907, and those of coal companies considerably less. There were slight decreases in the stocks of the Transatlantic Steamship Companies, of the large chemical concerns, and of textile companies, but slight advances in those of machinery, street railway, and electrical companies. With favorable price reductions in steel, and abundance of ready capital, German industries were awaiting the more complete revival of business in the United States before returning to fully normal conditions. One of

FINLAND. A Grand Duchy, forming a part of the Russian Empire. Area, 144,255 square miles. Population on Dec. 31, 1906, 2,933,856. The movement of population in 1906 was as follows: 19,937 marriages, 91,401 births (excluding 2,317 still-births), 50,857 deaths, and 17,287 emigrants. The population of the principal cities in 1908 was: Helsingfors, (1907) the capital, 130,526; Abo, 45,102; Tammerfors, 42,577; Viborg, 32,648; Nikolaistad, 19,040; Uleaborg, 18,227; Björnborg, 16,521; Kuopio, 14,491. Including the Russian garrison and a floating population of 10,000, Helsingfors had 140,000 inhabitants at the end of 1906.

PRODUCTION. The principal crops are rye, barley, oats, and potatoes. Some wheat, flax, and hemp are also grown. At the end of 1905 there were 323,514 horses, 1,480,692 horned cattle, 937,565 sheen, 6,276 goats, 220,357 pigs, and 141,811 reindeer. The butter export in 1906 was 15,056 tons. The Crown forests covered in 1905 13,129,376 hectares (1 hectare 2.47 acres). Timber is the largest item in the list of export values. In 1905 there were 189 sawmills with water power and 400 with steam power, employing 21,640 workers, and turning out 2,864,222 cubic meters of timber. The production of iron ore in 1905 was 48,404 tons; pig iron, 22,407 tons; bar iron, 19,897 tons. Exclusive of flour mills, there were in 1905, 9,054 manufacturing establishments, employing 107,828 workers, and turning out a product valued at 392,544,700 marks (mark=franc=19.3 cents). 1ne industries with the largest output are wood, iron and mechanical works, textiles, paper, leather, and chemicals.

The

COMMERCE AND COMMUNICATIONS. imports and exports in 1907 amounted to 379,100,000 and 267,200,000 marks respectively, against 313,900,000 and 281,400,000 in 1906. The principal imports in 1907 were, in millions of marks: Cereals, 83.7; machinery, 25.6; iron and manufactures thereof, 22.1; minerals, 18.4; cotton, 14.6; coffee, 14.5; sugar, 12.8; chemicals and dyes, 11.9. The principal exports in 1907 were, in millions of marks: Timber, 139.5; paper and wood-pulp, 43.4; butter, 31.5; hides and skins, 7.3; fish, 5.3; iron, 4.8; wood manufactures, 3.5; cotton tissues, 2.4. The trade with the principal countries of origin and destination in 1907 was as follows, in millions of marks:

vessels, of 304,660 tons. The length of railway in Jan., 1908, was 2,072 miles, over nine-tenths being owned by the State. In April, 1907, the Swedish Parliament granted the money for a railway to the Finnish frontier, to be completed in three or four years. In Nov., 1908, the Finnish Senate assigned 2.500,000 rubles (1 ruble= 51.5 cents) for connecting the Russian and Finnish Railway systems.

were

GOVERNMENT. The Emperor of Russia is Grand Duke of Finland. The old national Parliament, consisting of representatives of the nobles, clergy, burghers, and peasants, was abolThe new unicameral Diet conished in 1907. sists of 200 members, elected by direct and uniEvery versal suffrage, without distinction of sex. citizen entitled to vote is eligible to the Diet. At the first election, in 1907, 22 women elected as members of the Diet. Proportional representation is provided for. The Diet lasts for three years, unless sooner dissolved by the Grand Duke. The executive, at the head of which are the Russian Secretary of State for Finland and the Governor-General, is responsible to the Grand Duke as well as to the Diet. The Diet cannot change the fundamental laws, nor may it legislate in regard to land and sea defense. Finland is included in the St. Peters

burg military district. The Governor-General in 1908 was Gen. W. A. Boeckmann.

FINANCE. In 1907 the revenue amounted to 134,382,249 marks, and the expenditure to 130,340,191 marks. The principal sources of revenue were: State lands and forests, 11,151,124 marks; railways, 39,594,833; direct taxes, 6,151,256; customs, 49,212,609; excise, 8,195,395; posts, 5,897,467. The principal items of expenditure were: Civil list, 375,900 marks; justice and prisons, 4,266,663; worship and public instruction, 12,267,922; communications, 40,733,484; military The affairs, 180,501; public debt, 6,259,412. public debt stood on Jan. 1, 1908, at 137,516,878 marks. For history during 1908, RUSSIA.

FIRE INSURANCE. See INSURANCE.

see

FIRE PROTECTION, MUNICIPAL. The construction, extension, and test of high-pressure independent or auxiliary systems of water mains for fire protection was a striking feature of the year, 1908, as by many the completion of New York's high-pressure systems for the business district of Brooklyn and the downtown portion of Manhattan was considered to have marked an epoch in fire-fighting, and the increased use of the central high power pumping station to supplant or as auxiliary to the mobile fire engines furnished to the city much needed protection. So successful has the highpressure system of Philadelphia, the first large system of auxiliary mains for fire purposes exclusively, proved, that during the year bonds to the amount of $500,000 were issued for its extension in the northeast part of the city. In San Francisco the very complete scheme for a system of elevated storage reservoirs, distributing reservoirs, and a high-pressure distribution system developed in 1907 was duly approved, and bonds were issued to enable the work to be commenced.

In a number of other American cities highpressure systems of greater or less size and capacity were either in operation or were contemplated and where such systems of independent mains are supplied by fire boats, there