FINANCIAL KEVIEW OF 1884. 



329 



ward the close of the month a syndicate of 

 leading operators was formed for the purpose 

 of making a loan to the Oregon and Transcon- 

 tinental, on its pledge of stock assets held by it, 

 embracing the Northern Pacific and Oregon 

 Railway and Navigation shares. This aided 

 in sharply turning upward the properties above 

 named, the bears covered their short contracts, 

 and a firm tone was imparted to the market, 

 which continued through February until the 

 close of that month, when the market began 

 to feel the influence of the large and continued 

 withdrawals of gold for hoarding and ship- 

 ment caused by what is known as the " silver 

 scare" elsewhere referred to. The reaction 

 from this cause was, however, not important, 

 and the bears were not permitted to take ad- 

 vantage of it, for a combination in Delaware, 

 Lackawanna, and Western partially cornered 

 that stock on the first of March and compelled 

 a covering of short contracts at heavy losses. 

 This was followed by a squeeze in New York 

 Central about the middle of the month, and 

 the bears were so greatly .demoralized by these 

 events that their adversaries succeeded in dis- 

 posing of a very large amount of the stock 

 which they had bought during the period of 

 depression early in January. The inclination 

 of the market in April was downward with 

 occasional reactions, the natural results of the 

 closing out of the short interest, and of the 

 timidity of the bears, who were slow to take 

 advantage of the apparent indifference of the 

 bulls as to the course of prices. There was 

 not the least indication during the first few 

 days of May that a crisis was impending. 

 Even the suspension of the Marine National 

 Bank, and the failure of Grant & Ward, 

 which occurred on the 5th, caused little more 

 than a slight shock in the market, for it was 

 quickly ascertained that the bank had none 

 and the banking firm only a slight interest in 

 stocks. The full details of the close relations 

 existing between the bank and Grant & Ward 

 were gradually made public, and then the Erie 

 stocks and bonds were chiefly influenced be- 

 cause of the disclosure that the railroad com- 

 pany had collateral with the bank and the 

 firm which would be temporarily tied up by 

 the disaster. The market was irregularly re- 

 covering from this shock, when a rumor came 

 on the afternoon of the 13th that there had 

 been a large defalcation in one of the up-town 

 banks. This was accompanied by free selling 

 of stocks by a house not regarded as prominent 

 in the market, and in the closing moments of 

 the business day the excitement became intense 

 because of the news that the Continental Bank 

 had, for its own protection, refused to certify 

 checks of the house referred to. Later in the 

 afternoon the rumor of defalcation was con- 

 firmed by the statement that John C. Eno, 

 President of the Second National Bank, was a 

 defaulter to the amount of over $3,000,000, a 

 greater part of which had been lost in Wall 

 Street speculations. The bank examiner made 



an investigation, reported the amount required 

 to be made good to save the bank from insolv- 

 ency, the directors of the institution promptly 

 came to its relief, and the bank resumed busi- 

 ness the next morning. The shock of this enor- 

 mous defalcation precipitated the panic. The 

 stock market opened on May 14 intensely ex- 

 cited, although it was then known that the 

 Second National Bank had resumed business, 

 and that the embarrassments of Mr. Eno's bro- 

 kers would not involve other firms. Within an 

 hour a run commenced on the Metropolitan 

 National Bank, which compelled the closing of 

 its doors before noon. Some of the deposits 

 in this institution belonging to interior banks 

 had previously been withdrawn because of dis- 

 trust excited by the failure of the Marine Bank, 

 and also for the reason that the president, Mr. 

 George I. Seney, was known to be largely inter- 

 ested in unprofitable railroad operations, and it 

 was suspected that the affairs of the bank were 

 more or less involved by his individual trans- 

 actions. The run on the morning of the fail- 

 ure was directly caused by the embarrassments 

 of the stock firm of Nelson, Robinson & Co., 

 in which Mr. Seney had an interest, and the 

 suspension of this house so intensified the ex- 

 citement that the bank was compelled to suc- 

 cumb. Then followed in quick succession fail- 

 ures of other stock firms, and a wild panic en- 

 sued. Rumors of trouble in other houses and 

 banks had the usual paralyzing effect, and in- 

 duced bankers energetically to pursue such a 

 course as would insure their own safety. In 

 this emergency the Clearing-House Association 

 was convened and measures taken for the re- 

 lief of the banks which are referred to else- 

 where. As the result of this action, the Metro- 

 politan was enabled to resume business the 

 next morning, but confidence in it was so far 

 shaken that, notwithstanding a change of 

 president, the bank gradually lost its business, 

 and it went into liquidation six months later. 

 The measures taken by the Clearing-House 

 were effective, and the fact that the institu- 

 tions of this city were thereby united as one 

 materially aided in restoring confidence, and 

 the panic, so far as the banks were concerned, 

 speedily ended. The stock houses that were 

 involved by the inability of their customers to 

 respond to the demands for margin were 

 forced to suspend, and bankers carrying de- 

 posits, who could not meet the demands of 

 their creditors, made assignments. These fail- 

 ures, and those of banks and houses in the in- 

 terior, continued to be reported almost daily 

 for more than a week, and then less frequently 

 for about a month, having more or less of an 

 unsettling influence upon the market. The 

 extremely low prices to which stocks fell dur- 

 ing the week of the panic encouraged pur- 

 chases for investment, but these were made 

 cautiously, and they were not important 

 enough in amount to do more than tempora- 

 rily steady prices of the dividend-paying spe- 

 cialties. Stocks held by banks as collateral 



