FINANCIAL REVIEW OF 1901, 



there were some apprehensions of dearer money. 



These fears were, however, partly allayed by the 



i.-sue of an order by the Secretary of the Treasury 

 directing the purchase of bonds for the sinking- 

 fund. In April the market was generally buoyant, 

 and the volume of business for the month was 

 unprecedented, amounting to 41,719,086 shares of 

 .stock and $1 15.S02.SOO par value of bonds, mak- 

 ing since the beginning of the year 120,967,931 

 shares of stock and $448,341,000 bonds. During 

 the first week of the month the tendency of the 

 market was irregularly downward, influenced by 

 active monev, by rumors of a strike on the Cen- 

 tral Ne\v Jersey! and by speculative selling. Sub- 

 sequent I v. however, there was a rally, and with 

 the exception of the steel stocks, which were 

 heavy on realizing sales, the buying appeared very 

 confident. Amalgamated copper rose on news of 

 arrangements for consolidation with the Boston 

 and Montana and the Butte and Boston Com- 

 panies: Chicago. Burlington and Quincy advanced 

 on reports of its intended absorption by the Great 

 Northern and the Northern Pacific; the stocks of 

 the Southwestern roads improved on rumors that 

 these properties would be consolidated with the 

 Gould system, and Atchison rose on reports that 

 the Pennsylvania was seeking control. All the 

 high-priced stocks were in demand, and at the 

 end of the month the market was very strong. In 

 May occurred one of the most noteworthy crises 

 in the history of Wall Street, and though the 

 market closed strong, at almost an entire recov- 

 ery, the effects of the panic were observable for 

 many months in less confident buying and in oc- 

 casional sharp declines in prices. The panic was 

 caused by the sudden development of a close 

 corner in Northern Pacific common stock. In 

 order to accumulate the stock for the purpose of 

 carrying out the above-noted plan of absorption 

 of the Chicago, Burlington and Quincy by the 

 Great Northern and Northern Pacific interests, 

 which were represented by J. P. Morgan and 

 James J. Hill, president of the Great Northern, a 

 majority of Northern Pacific common had been 

 bought by this combination. The Union Pacific 

 interests, represented by E. H. Harriman, Kuhn 

 Loeb & Co., and their associates, who held a 

 majority of Northern Pacific preferred stock, 

 feeling apprehensive that their interests in the 

 Southwest would be placed in jeopardy by the 

 absorption of the Chicago, Burlington and Quincy, 

 bought largely of Northern Pacific common stock 

 in the hope that thereby they would secure, with 

 their holdings of the preferred stock, sufficient 

 representation in the company to defeat the plans 

 of their opponents. These purchases of the com- 

 mon stock, which were made in the local market 

 and also in Europe, caused a sharp advance in the 

 price. On May 6 the execution of an order for 



D0,000 shares of the stock resulted in a rise 

 from 114 to 133, owing to the scarcity of the 

 share certificates in this market, and by May 8 

 the price was 180. Then the corner rapidly de- 

 veloped, and on May 9 $1,000 cash per share was 

 paid, while sales for delivery on the following 

 day were $700 per share, indicating that 300 per 

 cent, was demanded for the use of the stock for 

 one day. The panic which ensued was directly 

 paused by an advance in the rate for money to 



5 per cent, per annum, which advance was ac- 



ompanied by demoralization on the stock mar- 

 it, during which declines were general, and some 

 11 almost as sharply as they did in the 

 1873. Atchison dropped from 78J to 

 Paul common from 165 to 134, and Rock 



sland from 158 to 125. Among the other promi- 

 nent stocks Delaware and Hudson fell 60 points, 



Louisville and Nashville 27|, Manhattan 37, Mis- 

 souri Pacific 31, Union Pacific common 37, and 

 Southern Pacific 20. Early in the day arrange- 

 ments were made, through Frederick D. Tappen, 

 president of the Gallatin National Bank and 

 chairman of the Clearing-House Committee, to 

 loan $19,500,000, which sum was contributed for 

 that purpose by fourteen banks, and the prompt 

 loaning of this money, together with $6,000,000 

 by J. P. Morgan & Co., caused a fall in the rate 

 for money to 6 per cent. Confidence was almost 

 immediately restored, and the acute stage of the 

 crisis speedily ended. Concurrently J. P. Morgan 

 & Co. and Kuhn Loeb & Co. announced that 

 they had agreed not to enforce immediate de- 

 liveries of Northern Pacific stock, naming $150 

 per share as the basis of settlement. Prices of 

 stocks thereupon almost as rapidly recovered as 

 they had declined. Though feverish, owing to 

 enforced liquidation of speculative accounts, 

 which .were insufficiently margined, the market 

 was generally strong to the close of the month. 

 The volume of business, however, was greatly 

 reduced. One feature in the last week was an 

 advance in Delaware, Lackawanna and Western 

 to 244, a rise of 50 points since March. It was 

 reported at the end of the month that an agree- 

 ment had been reached by which control of the 

 Northern Pacific would remain with the Morgan- 

 Hill combination. The sales of stocks at the Ex- 

 change during May were 35,292,203 shares, mak- 

 ing 156,260,134 since Jan. 1. In the following 

 month stock transactions fell off to 19,795,612 

 shares, clearly indicating the effects of the panic 

 upon the volume of business. The market was, 

 however, generally strong until toward the end 

 of June. Among the features was a rise in 

 Chicago, Milwaukee and St. Paul, due to reports 

 that the road was to be acquired in the interest 

 of the Union Pacific. Other important advances 

 were in Iow r a Central, Minneapolis and St. Louis, 

 Illinois Central, Chicago and Great Western, St. 

 Louis and San Francisco common, and New York 

 Central. Rumors that the United States Steel 

 Corporation intended to absorb the Colorado Fuel 

 and Iron and the Tennessee Coal and Iron Com- 

 panies caused buying of those stocks. In the last 

 week of the month the failure, June 27, of the 

 Seventh National Bank of New York, the un- 

 settled financial situation in Germany, and low 

 reserves of the New York Clearing-House banks 

 had a depressing effect upon the market, though 

 there was an irregular recovery by the close of the 

 month. 



The intense heat early in July tended to re- 

 strict business on the Stock Exchange. The 

 prevalence, during almost the entire month, of 

 dry and hot weather in the West, which caused 

 disastrous damage to corn and seriously affected 

 other agricultural products, unfavorably influ- 

 enced the speculation in the stocks of the grain- 

 carrying roads. On July 1 a strike of the Amal- 

 gamated Association of Iron and Steel Workers 

 was inaugurated for the purpose of compelling 

 the recognition of the association by the managers 

 of the United States Steel Corporation. A strike 

 of the machinists of the United States for a nine- 

 hour day, which strike began in May, was then in 

 progress, but this industrial trouble came to an 

 end early in the month, as also did a strike of 

 stationary firemen at the anthracite-coal mines, 

 which was intended to assist the steel strike. At 

 the close of the month a settlement of the Amal- 

 gamated Iron and Steel Workers' differences 

 seemed probable, but assent to the terms of ad- 

 justment was withheld by the president of that 

 association. On the opening of the market after 



