292 



FINANCIAL REVIEW OP 1891. 



by a favorable decision in the suit brought by 

 St. Louis and San Francisco first preferred stock- 

 holders. Chicago Gas advanced on news of a 

 settlement of the differences between the com- 

 pany and the city of Chicago, and later the 

 Grangers improved on favorable reports of the 

 condition of the grain crops and confirmation of 

 the statement of a large deficiency in the Euro- 

 pean crops. One feature after the middle of the 

 month was an advance in silver-bullion certifi- 

 cates, caused by heavy purchases by the director 

 of the mint at prices above the parity of the Lon- 

 don quotation. Large withdrawals of gold for 

 export to Europe had more or less of a disturbing 

 effect upon the stock market for the remainder 

 of the month, although the crop news continued 

 good and the harvesting of winter wheat, then in 

 progress, showed excellent results. The course 

 of prices was generally downward in July. An 

 injunction to restrain the payment of the divi- 

 dend on Sugar Refiners' had a temporarily dis- 

 turbing effect upon that stock. A report, which 

 was not confirmed, that the Chicago, Burlington 

 and Quincy would issue more bonds caused a 

 fall in that stock. One feature was a rise in Ed- 

 ison Electric shares on the announcement of the 

 decision of the United States Circuit Court in the 

 Edison lamp case sustaining the patent. On 

 the 18th the news of the failure of the English 

 Bank of the Rio Plate had an unsettling influ- 

 ence in London, which was reflected here, and 

 the movement was irregularly downward for the 

 remainder of the month, with the Gould special- 

 ties, the Grangers, Louisville and Nashville, and 

 Atchison, Topeka and Santa Fe about _the weak- 

 est, and the market was more or less influenced 

 by rumors affecting the standing of prominent 

 financial houses in this city. Early in August 

 the reports of a large deficiency in all the Euro- 

 pean grain crops were fully confirmed, and the 

 Russian Government issued' an order prohibiting 

 the export of rye. The weather here was very 

 favorable for the crops, harvesting of spring 

 wheat was making rapid progress, and the con- 

 ditions were good for corn. This excellent crop 

 situation stimulated buying of American securi- 

 ties in London, and the denial of the disquiet- 

 ing rumors current at the close of July caused 

 our market to open very strong in August. Soon 

 after there was free selling of Union Pacific, due 

 to reports, subsequently confirmed, that the float- 

 ing debt had become embarrassing by reason of 

 an inability longer to borrow on time, and the 

 decline in this specialty had an unfavorable in- 

 fluence upon the whole market ; but the an- 

 nouncement that a syndicate would be formed 

 to carry over this debt later brought about a re- 

 covery, under the effect of which the whole list 

 advanced. In the third week of the month there 

 was a wild speculation in grain at all the dis- 

 tributing centers, which checked export buying 

 and caused a rise in exchange and a fall in 

 stocks; but in the fourth week repurchases to 

 cover short contracts and a demand for stocks 

 for European account carried prices steadily 

 upward, and the market was active and higher 

 for the remainder of the month. In September 

 the speculation was active 'and the tone gener-- 

 ally strong, influenced by European purchases 

 through the arbitrage houses, by a return .flow 

 of gold from Europej and by the very favorable 



crop reports and increased railroad earnings. 

 Early in the month Umon Pacific was freely 

 bought by the arbitrage houses and by the local 

 traders on a report that the Vanderbilts were 

 seeking control. But on the positive denial of 

 this rumor Europeans freely sold it, and this 

 was followed by a sharp decline on news that a 

 loan by an impatient lender had been called and 

 that the company was embarrassed for funds 

 with which to meet this and other demands, 

 This led to renewed efforts on the part of the 

 managers to secure the assent of creditors to the 

 plan for extending the floating debt, but these 

 efforts were not immediately successful, and 

 Union Pacific was more or less of a disturbing 

 factor until after the middle of the month. On 

 the news of gold shipments hither from the Con- 

 tinent during the first week in the month the 

 Vanderbilts took the lead and the Grangers 

 closely followed, stimulating a covering of short 

 contracts in nearly all the active stocks except 

 the Gould specialties and Richmond Terminal, 

 the latter being affected by reports that the 

 floating debt of this company had become em- 

 barrassing. After the middle of the month the 

 market was very active and strong, with good 

 buying of Atchison, Topeka and Santa Fe and 

 the Grangers as the feature, and, although the 

 Rock Island directors declared only $ of 1 per 

 cent, dividend for the current quarter, the stock 

 promptly recovered, and even the Gould proper- 

 ties participated in the upward movement. The 

 suspension of S. V. White & Co. checked the ris- 

 ing tendency on the 22d, but the market was re- 

 covering on the news that this firm had little or 

 no interest in stocks, when the failure of the Mis- 

 souri Pacific directors to declare the usual quar- 

 terly dividend gave color to reports that it would 

 be passed. A few days later these reports were 

 confirmed, and this news encouraged a bearish 

 demonstration upon the whole list, which was 

 followed by a reaction led by the Vanderbilts. 

 Then came an attack upon Union Pacific on a re- 

 port that the syndicate would abandon efforts to 

 extend the floating debt, and Missouri Pacific 

 was broken down on the publication of the state- 

 ment showing that unearned dividends had been 

 paid for some time. Rock Island was subse- 

 quently raided, causing an important decline in 

 the Grangers, and the market was more or less 

 unsettled by bear attacks, accompanied by dis- 

 quieting reports of the condition of Mr. Jay 

 Gould's health, for the remainder of the month. 

 The tone was feverish at the opening of October, 

 with the Gould stocks and the Grangers weakest ; 

 but there was a sharp rally soon after, followed 

 by an irregular movement, during which the 

 bears sought to cover their short contracts, and 

 gradually the market grew firmer under the 

 influence of estimates of the cereal crops, based 

 upon the reports of the Department of Agri- 

 culture, showing an unprecedented yield of all 

 grains and more especially of corn, which had 

 rapidly matured during the warm weather which 

 prevailed in the latter part of September. In 

 the last week of the month pressure by the bears, 

 accompanied by disquieting reports from Boston, 

 caused by the suicide of Mr. Irving A. Evans, of 

 that city, made the market irregular and lower 

 for the remainder of the month, although dur- 

 ing the last few days there were occasional re- 



