340 



FINANCIAL REVIEW OF 1886. 



The Stock Market. There were three promi- 

 nent movements in the stock market during 

 the year 1886. The first was downward, in- 

 fluenced by the transcontinental war of rates, 

 the unfavorable outlook for the coal properties, 

 and the outbreak of the labor troubles on the 

 Missouri Pacific road. This movement culmi- 

 nated early in May, when a recovery com- 

 menced stimulated by the practical collapse of 

 the railroad-strikes and of the eight-hour agi- 

 tation ; by favorable crop reports, and subse- 

 quently by a fall in exchange to the gold-im- 

 porting point ; increased railroad earnings, and 

 large purchases of stocks by European traders 

 and investors. Before this movement, which 

 embraced a period of nearly seven months, 

 ended, speculative manipulation had rapidly 

 forced some of the fancy stocks to the highest 

 points, and a panicky fall in December marked 

 the third movement of the year, but the recov- 

 ery was prompt, and the feeling at the close 

 was more assuring. Out of sixty-four leading 

 stocks, forty-six exhibited gains, comparing the 

 closing with the opening sales of the year, of 

 from -f to 72J- per cent., the latter Richmond 

 and Danville and the next greatest improve- 

 ment was in Chattanooga. Manhattan Elevated, 

 Richmond and West Point Terminal, Canada 

 Southern, Erie preferred, Louisville and Nash- 

 ville, Memphis and CharL'ston, Michigan Cen- 

 tral, New York and New England, and St. 

 Louis and San Francisco first and second pre- 

 ferred. The declines were greatest in Pacific 

 Mail, Indiana, Bloomington, and Western, and 

 Minneapolis and St. Louis preferred. 



After the investment demand for first-class 

 stocks and bonds had been satisfied, early in 

 January, the speculation became dull. Un- 

 seasonably mild weather, and reports of a 

 disagreement regarding the output for the 

 first, quarter of the year, unfavorably influ- 

 enced the coal-shares, and a cut in passenger- 

 rates by the Baltimore and Ohio affected the 

 trunk-line stocks. Soon after the middle of 

 the month, advantage was taken by a few 

 speculators of the largely oversold condition 

 of the market, it was sharply turned upward 

 under the lead of Lackawanna, and the tone 

 was strong for the remainder of the month, 

 the movement in the coal -shares being as- 

 sisted, by rumors subsequently confirmed, of 

 the organization of a syndicate of bankers, 



having for their object the reorganization of 

 the Reading and the formation of a new 

 combination. Early in February, Lackawanna 

 was further advanced, and the confirmation of 

 the above-mentioned reports aided in giving 

 an additional impetus to the upward move- 

 ment in the coal-shares. Subsequently, the 

 outbreak of a war of rates between the 

 transcontinental lines of railroad and the Pa- 

 cific Mail Steamship Company, and the cut- 

 ting of the tariff to Council Bluffs by the St. 

 Paul, tended to unsettle the stocks of the Pa- 

 cific roads and of the grangers, and reports 

 of the purchase by Mr. Go wen of the Read- 

 ing stock owned by the Vanderbilts, encour- 

 aged the bears to raid that property, and the 

 market was more or less feverish to the close 

 of the month. The successful strike of the car- 

 drivers in New York and Brooklyn, at the 

 opening of March, attracted attention to the 

 Knights of Labor organization, but the stock 

 market was not unfavorably influenced, and 

 during the first week in the month the tone 

 was generally strong, Reading being affected 

 by news that Mr. Austin Corbin had joined 

 the syndicate. Soon afterward Western Union 

 was broken down by the declaration of a scrip 

 in place of a cash dividend ; the strike on the 

 Missouri Pacific, which commenced on the Oth, 

 and the fear that the troubles would extend to 

 other roads, encouraged the bears to make fre- 

 quent raids upon leading properties, and for 

 the remainder of the month the market was 

 unsettled, and at times panicky, by reason of 

 disquieting rumors and selling of stocks by 

 some of the bull cliques. The cutting of rates 

 by the transcontinental roads was very vigor- 

 ous, tickets being sold as low as five dollars, by 

 the Union Pacific, from the Missouri river to 

 San Francisco; but concessions on the part of 

 the Atchison, Topeka, and Sante Fe led to a 

 partial compromise of the differences, and, al- 

 though there was no settlement of the rate 

 war, the contest thereafter was less damaging 

 to the interests involved. The indications at 

 the opening of April pointed to a harmonious 

 adjustment of the labor troubles on the Mis- 

 souri Pacific, but the refusal of Mr. Hoxie, 

 the general manager of the road, to recognize 

 the Knights of Labor, induced aggressive action 

 on the part of some of the members of the or- 

 ganization, and there was more or less rioting 







