FINANCIAL REVIEW OF 1890. 



309 



upon general trade. The bears appeared to be 

 well organized and aggressive during the greater 

 part of the month, and events seemed to favor 

 them until the third week, when the market was 

 turned upward by the purchase by the Secretary 

 of the Treasury of $17,071,150 4-per-cent. bonds, 

 which at once relieved the stringency in the 

 money market. After the short contracts had 

 been closed out, and when money grew easier, 

 bearish demonstrations were renewed, and the 

 market was generally lower to the close of the 

 month, with the Grangers and Union Pacific 

 weakest, the former being influenced by the short 

 crops of cereals, and particularly of corn. In 

 October the disquieting condition of financial 

 affairs in London directly affected our market 

 early in the month. It was reported that some 

 large houses had become embarrassed, by reason 

 of heavy losses in Argentine securities and in 

 American railroad stocks, to such an extent that 

 they had to be assisted over at the semi-monthly 

 settlements. Just previous to the last adjust- 

 ment a syndicate of capitalists assumed about 

 $25,000,000, par value, of American stocks, in 

 order to relieve houses who were unable to carry 

 them unaided, and news of this action tempo- 

 rarily restored confidence, so far as London was 

 concerned, but the tendency of our market was 

 generally downward. One feature was a fall in 

 Sugar Trust, caused by an injunction order re- 

 straining the proposed reorganization, and this 

 litigation resulted in the appointment of receivers 

 for the property. Another feature was a steady 

 decline in the price of silver-bullion certificates, 

 caused by a fall in the market value of the metal 

 in London. The bears freely sold Rock Island, 

 the other Grangers and Louisville and Nashville 

 and the arbitrage houses liberally offered stocks 

 for European account, as the market in London 

 fell off on disquieting rumors immediately pre- 

 vious to each settlement. Active money also 

 contributed to the depression in the market, and 

 there were reports that houses identified with 

 the Villard specialties were embarrassed, which 

 made these properties weak. There were occa- 

 sional reactions, due to rebuying to cover short 

 contracts, but these were followed by renewed 

 selling, and the market showed a general decline 

 at the end of the month compared with the 

 opening prices. In November there was a panicky 

 fall in values, until about the 20th, when there 

 came a sharp recovery. Almost daily the cable 

 reported an unsettled feeling in London, and the 

 advance in the Bank of England rate on the 7th 

 was regarded as an indication that the situation 

 there was very grave, although it was stated that 

 the bank rate was changed for the purpose of 

 checking a movement of gold to Spain. The 

 statement of the New York associated banks, 

 made public on the 8th, showed a large loss of 

 reserve, and during the following week our mar- 

 ket was panicky from local causes. On Tuesday 

 the failure of Decker, Ho well & Co. brought 

 about a rapid fall in the Villard securities, with 

 which this house was largely identified. The 

 Bank of North America became embarrassed, and 

 late in the afternoon a meeting of the Clearing- 

 House Association was held, at which it was de- 

 cided to issue Clearing-House certificates for the 

 relief of this bank v and also of others which 

 misrht be in need of assistance. The news of 



this action had a reassuring effect on Wednes- 

 day, although there was continued liquidation 

 in the Villard stocks, and on the following day 

 there was a panicky fall in the shares of the North 

 American Company, on a report that it was in- 

 solvent. On Friday afternoon the market was 

 unsettled by news of a semi-panic in London, 

 and on Saturday, the 15th, the cause of this was 

 revealed by the announcement of the suspension 

 of the Barings, and that the Bank of England 

 and strong financial houses had formed a syndi- 

 cate for the purpose of liquidating the affairs of 

 this house. The shock threw our market into a 

 state of panic, which continued until near the 

 close, when there was an irregular recovery. On 

 Monday the failures of three houses were an- 

 nounced, one caused by forgeries of stock certifi- 

 cates by the junior partner, and there was a rise 

 in the rate for money to 186 per cent. In the 

 afternoon the market grew stronger, but on the 

 following day and on Wednesday it was unset- 

 tled and lower at the opening, subsequently re- 

 covering. The decision of the governors of the 

 Bank of England to make no change in the mini- 

 mum rate of discount encouraged a reaction in 

 London which was reflected in our market, and 

 the tendency was generally upward for the re- 

 mainder of that week, reports from London indi- 

 cating that the situation there was improving, 

 and that confidence was rapidly being restored. 

 Manipulation for the purpose of compelling a 

 covering of short contracts carried the market 

 more or less rapidly upward during the following 

 week, and the tone was generally strong to the 

 close of the month. Mr. Charles F. Adams re- 

 signed from the presidency of the Union Pacific 

 on the 26th, and Mr. Sidney Dillon was elected 

 to fill the vacancy, and the Gould interest again 

 came into control of this property. During the 

 first week in December the market was at inter- 

 vals vigorously raided by the bears, and one feat- 

 ure was a sharp fall in Union Pacific on a re- 

 port that the financial condition of the property 

 was much worse than had been represented. 

 The arbitrage houses were free sellers of the 

 Grangers, and there was more or less pressure 

 upon the Villard stocks. The bears were aided 

 in their demonstrations by disquieting rumors 

 regarding mercantile houses and also by the bad 

 bank statement at the close of the week. On 

 the following Monday the advance in the rate of 

 money to 186 per cent, caused a break in the whole 

 market, and about the lowest prices of the month 

 and, in some cases, of the year, were then re- 

 corded. Under the influence of easier money, 

 present and prospective, there was a prompt 

 recovery, followed by a dull speculation. The 

 Grangers were favorably influenced by prepara- 

 tions for an important conference of bankers 

 and presidents of Western roads having for its 

 object the formation of an association for the 

 regulation of rates and the reduction of ex- 

 penses. This meeting was held in this city on 

 the 15th, and it resulted in a preliminary agree- 

 ment, the details of which were to be arranged 

 at a conference early in the following month. 

 At the same time there was an understanding 

 between the Vanderbilt lines and the Pennsyl- 

 vania looking to more harmonious relations be- 

 tween these two systems. Before the close of 

 the month the boards of directors of nearly all 



