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FINANCIAL EEVIEW OF 1887. 



sary, and the news that Mr. Robert Garrett had 

 offered the sale of a controlling interest in the 

 Baltimore and Ohio to a speculator who, it was 

 supposed, would, if he were successful, use it to 

 the advantage of the Richmond Terminal and 

 the Western Union. During the second week 

 the news that the publication of the Baltimore 

 and Ohio scheme was premature started a free- 

 selling movement in Richmond Terminal, West- 

 ern Union, Central New Jersey, and Reading, 

 which made the whole market unsettled until 

 the last week in the month, when purchases 

 of stocks for European account, manipulation 

 by the bulls in the Grangers and Southwest- 

 erns, and a sharp advance in some of the so- 

 called fancy stocks carried prices upward, and 

 the market closed strong. On the 5th of April 

 the interstate law went into effect, but the com- 

 missioners immediately suspended for ninety 

 days the operation of the 4th section, relating 

 to the long and short haul, so far as it affect- 

 ed Southern roads in competition with water- 

 routes, and subsequently ordered a suspension 

 on all roads of the country making application. 

 As this section was regarded by the railroads 

 as the most unjust feature of the measure, the 

 action of the commissioners had a favorable ef- 

 fect on the market. One feature early in April 

 was a rise in Central New Jersey on a report 

 that the parties in control were negotiating for 

 an alliance with the Lehigh Valley. The ad- 

 vance in this stock stimulated an improvement 

 in Reading and subsequently in the other coal- 

 shares. Later came good buying of the trunk- 

 line properties, Manhattan Elevated, Richmond 

 Terminal, Union Pacific, Western Union, and 

 the Grangers, and the tendency of the market 

 was generally upward to the close. In May 

 only six of the sixty-six active stocks showed 

 declines, comparing the opening with the close 

 of the month, and some of the advances were 

 important, especially those in the San Fran- 

 cisco's, Dnluth, Manitoba, Pullman, and the 

 Grangers. An attack upon New York and 

 New England was one of the features early in 

 the month, but the bulls seemed to combine to 

 resist the assault and the market was advanced 

 more or less rapidly during the next fortnight, 

 the rise being assisted by favorable news, a 

 manipulation of the short interest, and decided 

 increases in railroad earnings, which were re- 

 garded as important in view of the fact that 

 these, in some degree, reflected the operation 

 of the interstate commerce law. Toward the 

 close of the month raiding by the bears and 

 realizing sales by many speculators, who had a 

 profit on their holdings, made the market more 

 or less unsettled, but the tone was generally 

 better at the close. Early in June the indica- 

 tions pointed to a further rise in prices of lead- 

 ing stocks, but comparisons at the end of the 

 month showed that, out of fifty-eight stocks, 

 only four had advanced. Reading opened at a 

 price representing the first installment of the 

 assessment, and a few days thereafter the bears 

 commenced to hammer it. The next stock at- 



tacked was St. Paul on the news that the direct- 

 ors had decided upon an issue of 100,000 shares 

 of additional stock. Then came on the 14th and 

 the 1 6th the collapse of the bull movement in cof- 

 fee and wheat, but after this there was a partial 

 recovery. During the third week rumors of a 

 disquieting character regarding the stability of 

 banks in Chicago, Philadelphia, and Boston, 

 resulting from the failure on the 20th of the 

 Fidelity Bank at Cincinnati, assisted the bearish 

 demonstrations, and then followed a fall of 41$ 

 points in Manhattan Elevated on June 24, 

 which made the market panicky. In the last 

 week of the month Pacific Mail was broken 

 down, money became active, and persistent at- 

 tacks by the bears kept the market in a more 

 or less feverish condition to near the close, 

 when there was a sharp upward turn imparting 

 a better feeling. One of the most important 

 events in July was the decision of Judge Deady, 

 sitting in United States Circuit at Portland, 

 Oregon, in the case of the California and Ore- 

 gon road, whose receiver asked for instructions 

 as to what rates should be established in view 

 of the competition of the water-routes between 

 Portland and San Francisco. The court de- 

 cided that the road might charge a greater 

 price for a short than for a long haul because 

 of this competition, and then laid down the 

 broad principle that the interstate law was not 

 intended to ruin railroad properties but to 

 foster interstate communication. This was the 

 first judicial decision under the law, and it was, 

 to some extent, subsequently taken advantage 

 of by the transcontinental roads in competition 

 with the Pacific Mail. Another event was the 

 failure of the so-called Baltimore and Ohio 

 deal, the negotiations being declared by Mr. 

 Garrett at an end, because of the inability of the 

 parties proposing to purchase the property to 

 meet their engagements. The course of the 

 stock market was generally downward during 

 July, it being subjected to frequent raids. 

 Western Union was, in the early part of the 

 month, feverishly strong in consequence of 

 rumors of favorable progress toward a 

 consummation of the Baltimore and Ohio 

 deal, which it was expected would result in 

 the transfer of the telegraph line to the West- 

 ern Union, but on the 13th the announce- 

 ment that the negotiations were off, and 

 that Mr. Gould did not consider it advisable 

 to buy the Baltimore and Ohio Telegraph 

 property, had an unsettling effect, and one 

 feature was a fall in Cincinnati, Hamilton, and 

 Dayton stock, which was largely held as col- 

 lateral for a loan to the parties negotiating 

 with Mr. Garrett. The market was feverish 

 during the last week in the month, when 

 Western Union, New England, Richmond Ter- 

 minal, Reading, St. Paul, and, indeed, nearly 

 all the active stocks were, in turn, attacked, 

 and comparisons of prices at the close with 

 those at the opening of the month showed a 

 fall in every stock on the list with the excep- 

 tion of Northern Pacific common, and the ad- 



