FINANCIAL EEVIEW OF 1885. 



355 



turbing influence upon the coal properties, for 

 it was supposed that this would, at least par- 

 tially, derange the plans of the combination ; 

 but the other anthracite producers decided to 

 carry out the agreement without reference to 

 the Pennsylvania. Disquieting rumors regard- 

 ing the standing of prominent financial con- 

 cerns, heavy defalcations by bank officers in 

 Norwich, a cut to one dollar in emigrant rates 

 by the Pennsylvania Railroad, and the unfa- 

 vorable decision of the Court of Appeals in 

 the Western Union tax case, altogether contrib- 

 uted to keep the market feverish and general- 

 ly weak until near the close of the month of 

 January, when the clique in Lackawanna took 

 advantage of its oversold condition and sharply 

 advanced the price, and this movement stimu- 

 lated a rise in some of the other oversold stocks, 

 and the market was strong for the remainder 

 of the month. An improvement in the indus- 

 trial and business situation encouraged a fur- 

 ther advance in stocks during the first half of 

 February ; but then came an irregular decline, 

 caused by the closing out or settlement of short 

 contracts in those properties which had been 

 most rapidly advanced. This was followed by 

 an upward reaction, which continued until the 

 last week, when the failure of the plan to pro- 

 cure a suspension of the coinage of the stand- 

 ard silver dollar encouraged the bears to attack 

 the market, and it was more or less unsettled 

 to the close of the month. The fact that an 

 extra session of Congress was made unneces- 

 s iry, and the feeling of confidence inspired by 

 the advent of the new Administration, caused 

 March to open rather auspiciously. The an- 

 nouncement of a reduction of 2 per cent, per 

 annum in the New York Central dividend had 

 only a temporary influence, for the depressing 

 effect was counteracted by a renewal of the 

 manipulation in Lackawanna. Pacific Mail ad- 

 vanced on the news that Congress had granted 

 a subsidy, equal to about 2 per cent, upon the 

 capital of the company, for carrying the mails, 

 and the bears seemed indisposed to indulge in 

 liberal speculative sales, having recently suf- 

 fered such severe losses. The disturbing events 

 in Europe, resulting from the advance of the 

 Russians upon the Afghan frontier, aided to 

 some extent an advance in prices, and the tone 

 was strong until the third week in the month, 

 when the increased embarrassments of the 

 Reading, the apparent withdrawal of bull sup- 

 1 port, and a sharp fall in Union Pacific, Central 

 Pacific, and Pacific Mail, growing out of a rup- 

 ture of the transcontinental pooling association, 

 had an unsettling effect ; but by the close 

 of the month the market rallied under the in- 

 ' fluence of exciting news from Europe, which 

 indicated a speedy collision between Russia 

 1, and England. The stocks of the Pacific roads 

 < and of Pacific Mail recovered on the prospect 

 | of a new pooling contract, and the trunk-line 

 shares advanced on news of the extension of 

 5 the east-bound pool until May 1st; but Lake 

 i Shore was subsequently unfavorably affected 



by the passing of the dividend, and St. Paul 

 common by the reduction of its quarterly divi- 

 dend to 1 per cent. Early in April the New 

 York, Chicago, and St. Louis was placed in the 

 hands of a receiver. Central Pacific fell, on the 

 report that $10,000,000 bonds would be issued 

 to secure the floating debt ; but it subsequently 

 recovered, on the news that the road had been 

 leased to the Southern Pacific Company. Cen- 

 tral New Jersey declined in consequence of 

 default being made in the interest on the 

 first mortgage. Pacific Mail dropped, on a 

 report, afterward denied, that the steamship 

 " Colon " had been burned by the insurgents at 

 Aspinwall, and more peaceful news from Eu- 

 rope contributed to make the market heavy. 

 There was a recovery during the second week 

 in the month, caused by more exciting Euro- 

 pean war reports, and by a renewal of manipu- 

 lation ; but although the foreign markets were 

 excited toward the close of the month by the 

 discussion of the Penjdeh incident, preparations 

 for a conflict, and the demand of the British 

 ministry for a war credit of 11,000,000, the 

 influence of these events was to a great extent 

 counteracted by an advance in sterling and 

 troubles in Western railroad pools, which en- 

 couraged free selling of the granger stocks. 

 Peace negotiations between England and Rus- 

 sia, the decision of the trunk-line presidents to 

 abandon the pool, decreased earnings of the 

 Vanderbilt roads and Erie, and cutting of rates 

 by the Eastern and Western roads, induced the 

 bears to attack the market early in May ; but 

 by the middle of the month the Western rail- 

 road troubles were settled, and the bulls took 

 advantage of the large short interest in the 

 leading stocks to advance prices. After the 

 short contracts were covered, the tone became 

 heavy, the unfavorable reports regarding the 

 winter - wheat crop had a depressing effect 

 upon the speculation, and the market was more 

 or less unsettled to the close of the month. 

 In June there was a more substantial recovery 

 than had at any time previously been recorded. 

 The upward movement up to this time had 

 been mainly the result of manipulation directed 

 against the bear speculators, and aided by in- 

 fluences more or less of a temporary character. 

 Early in the month exchange fell so near to the 

 gold-importing point as to make it probable 

 that we would ere long receive some of that 

 metal from Europe, or at least that there was 

 no danger that we would be called to part with 

 any of our accumulations of it, and this tended 

 to improve the financial situation. It was an- 

 nounced that some of the most radical advo- 

 cates of a continuation of silver coinage had 

 changed their views, and that the South was 

 almost a unit in favor of repealing the coinage 

 law. The European political situation was 

 peaceful, the Anglo -Russian trouble having 

 been adjusted, and this was accepted as a guar- 

 antee of more settled financial aflfairs abroad. 

 The United States Treasury policy had thus 

 far proved successful, the gradual retirement of 



