FINANCIAL REVIEW OF 1887. 



273 



vance in this was only | of 1 per cent. The 

 market was unsettled during the greater part 

 of August. The bear campaign temporarily 

 culminated in the first week, the short con- 

 tracts being partially covered, and an advance 

 was encouraged on the 4th by the announce- 

 ment that the Secretary of the Treasury would 

 buy 4-per-cent. bonds for the Sinking Fund, 

 and would also anticipate interest for the pur- 

 pose of relieving the stringency in the money 

 market. During the next week the Northern 

 Pacifies and the Grangers were freely soltl, but 

 there was a recovery toward the close on the 

 news of gold imports from London. In the 

 early part of the next week the tendency was 

 slightly upward, but later New England, the 

 other active stocks, and Manhattan were freely 

 sold with an unsettling effect. The raiding was 

 continued early in the last week, when Mis- 

 souri Pacific fell heavily, and the circulation 

 of reports of a disquieting character caused 

 the market to close feverish. One feature 

 was the failure of a house which had borrowed 

 upon unsalable bond collaterals, and this in- 

 duced lenders to discriminate against securi- 

 ties fur which a ready market could not be 

 found. There was a better feeling at the 

 opening of September. The announcement 

 was made that a syndicate of responsible 

 bankers had undertaken to relieve the embar- 

 rassments of the Baltimore and Ohio Railroad 

 Company by advancing money with which to 

 pay off the floating debt on condition that the 

 entire property should be managed in harmony 

 with competing lines. One feature was the 

 sale by the Oregon and Transcontinental of 

 about $5,000,000 of its treasury stock, thus giv- 

 ing that company financial relief. On the first 

 day of the month the announcement was made 

 that the Baltimore and Ohio express line had 

 been sold, and, as this was regarded as pre- 

 liminary to the sale of the telegraph lines, 

 "Western Union sharply advanced. The im- 

 provement was not sustained, however, and 

 the market was unfavorably affected on the 

 7th by the refusal of the Acting Secretary of 

 the Treasury to buy bonds at the price at 

 which they were offered. Considering the 

 strained condition of the money market this 

 was regarded as unfortunate, and the bears 

 took advantage of the fear that serious trouble 

 would follow. The market was kept in a 

 feverish state for the remainder of that week 

 and in the next, and it was only temporarily 

 strengthened on the 14th by the purchase of 

 $4,000,000 bonds by the Treasury. Toward 

 the close of that week the discussion of a new 

 policy of financial relief had somewhat of an 

 assuring influence, but the failure of the Secre- 

 tary to promptly act upon the suggestions 

 made by leading bankers caused a panicky fall 

 in stocks on the 20th, which was checked be- 

 fore the close of the day by supporting orders 

 and by purchases for European account. On 

 the following day the announcement was made 

 that the Secretary had decided to purchase 4 

 VOL. xxvii. 18 A 



and 4| per cents, to the extent of $14,000,000, 

 and also to pay the October interest, amount- 

 ing to $6,500,000, without rebate. This caused 

 a recovery, and, although feverish, the market 

 was generally strong for the remainder of the 

 week and to the close of the month. Pacific 

 Mail rose sharply on news that Mr. Gould had 

 obtained control, and there was also a rapid 

 rise in Central New Jersey on an intimation 

 that the floating stock was very small. One 

 feature early in October was the purchase on 

 the 7th by Mr. Gould, for the Western Union, 

 of the Baltimore and Ohio Telegraph line for 

 50,000 shares of the stock of the first- named 

 company, and on the 28th it was announced 

 that the Postal and United lines had agreed to 

 an advance in rates to the Western Union 

 tariff, thus settling the telegraph war. An- 

 other feature was easier money, the result of 

 the Treasury bond purchases, gold imports, 

 and liberal deposits of public funds in the 

 designated depositories. The bear party de- 

 voted their attention early in the month to 

 raids upon Richmond Terminal, New England, 

 and the Grangers, and the fall in the latter 

 was assisted by news of cutting of rates. Dur- 

 ing the second week Reading, Western Union, 

 the Grangers, Erie, and Missouri Pacific were 

 attacked -in turn, and the passing of the quar- 

 terly dividend by the Baltimore and Ohio had 

 a disturbing effect, as also did the report of an 

 interview in a St. Louis paper with Mr. Chaun- 

 cey M. Depew, in which that gentleman was 

 represented as predicting serious disasters as 

 the result of excessive construction cf rail- 

 roads and speculation in Western and Southern 

 lands. This statement caused free selling of 

 the Vanderbilt properties, and the fall in these 

 had a demoralizing effect upon the whole list. 

 During the third week the explanation given 

 by Mr. Depew of his statements to the repor- 

 ter, good support of the Vanderbilts, buying of 

 stocks for European account, and covering of 

 short contracts by the smaller bears, caused a 

 more or less decided recovery, and the tone 

 was generally stronger until toward the close 

 when the bears renewed their demonstrations, 

 forcing important declines in Missouri, Kansas, 

 and Texas bonds, by the aid of a rumor, subse- 

 quently shown to be false, and the market was 

 unsettled at the end of the month. Only ten 

 of the active stocks showed an improvement 

 compared with the opening, and Rock Island 

 fell 11 points. Mr. Gould left for Europe on 

 the 29th, intending to be absent for several 

 months. The bears were apparently content 

 with attacking Missouri Pacific after Mr. G ould's 

 departure, but soon after the opening of No- 

 vember good buying of the coal-shares and of 

 Western Union had a stimulating influence, and 

 subsequently there was an important rise in 

 the trunk-lines and in the Grangers. During 

 the second week the Gould specialties took the 

 lead, followed by Reading, the Vanderbilt prop- 

 erties, and Union Pacific, and the tone was 

 strong for the next fortnight, the impression 



