298 



FINANCIAL REVIEW OF 1893. 



New England by a statement that Mr. McLeod 

 had control, and the general market by the re- 

 duction in the Treasury gold reserve, through 

 shipments to Europe, and by the demand by 

 banks in the interior for part of their New York 

 balances, indicating a disturbed feeling, par- 

 ticularly at the West regarding the currency 

 situation. The unsettled movement in the stock 

 market increased during the second week in con- 

 sequence of a manipulated advance in the rate 

 for money, and the most important declines were 

 in the Industrial stocks and in General Electric. 

 There was a partial recovery in the third week, 

 due more to rebuying to close short contracts 

 than to any improvement in the situation, al- 

 though exchange was below the gold-exporting 

 point, but this was because of activity in money. 

 In the closing days of the month the Treasury 

 showed an accumulation of gold, the result of 

 the check to the European drain, and this in part 

 aided in a recovery in stocks, and in some of the 

 specialties the upward reaction was quite de- 

 cided, the demand for rebuying developing a 

 scarcity of stock. The action of the managers 

 of the Toledo, Ann Arbor and North Michi- 

 gan in appealing to the United States Court 

 for relief from the striking engineers and 

 switchmen had a good effect upon the market 

 for Western stocks, because it seemed to prepare 

 the way for a resort to the courts by corporations 

 who might be embarrassed by the aggressive 

 course of dissatisfied employees. Although ir- 

 regular, the market was generally stronger for 

 the remainder of the month. The leading fea- 

 tures in April were a. fall on the 3d of 10 

 points in Manhattan, due to a decision by the 

 Rapid-Transit Commission to consider plans for 

 an underground road ; the resignation on the 

 5th of Mr. McLeod as President of the Reading ; 

 and a recovery in Manhattan on the 12th because 

 of the abandonment by the Rapid-Transit Com- 

 mission of the underground scheme. The tone 

 of the market was generally strong until the 

 middle of the month, when there was a panicky 

 fall, caused by the rumor that gold payments of 

 Treasury notes would be suspended ; but when 

 this was denied the excitement subsided, and 

 the stock market reacted. Prominent features 

 in the last week in the month were a fall of 17 

 points in Toledo, Ann Arbor and North Michi- 

 gan, followed by the appointment of a receiver ; 

 a decline in Whisky on the passing of the divi- 

 dend; and an advance in Reading on the report 

 of a, reorganization scheme. The market was ir- 

 regular and generally lower at the close of the 

 month, and it was unsettled and weak during 

 the greater part of May. One feature was the 

 placing of the National Cordage Company in 

 the hands of a receiver. The stock fell sharply 

 on the news that the company would issue 

 $2,500,000 preferred stock for the purpose of 

 carrying on the operations of the concern. The 

 selling of Cordage stock caused the failure of 

 several brokerage firms, and precipitated a re- 

 ceivership. There was free selling of General 

 Electric on news of the sale by the company of 

 its holdings of Edison Illuminating stock, and 

 the fall in this property and in Cordage more or 

 less affected the other Industrials. Richmond 

 Terminal and Reading securities fell off on news 

 of the failure of the reorganization schemes. 



There was a gradual decline in nearly all the 

 active stocks, due to the deranged financial 

 situation, as shown by the failure of the Chem- 

 ical and Columbia Banks in Chicago ; the suspen* 

 sion of several institutions in Illinois, Indiana, 

 Ohio, and Michigan, which were organized on 

 an insecure basis; the inability of merchants 

 freely to borrow even at comparatively high 

 rates ; and there was a feeling that the situation 

 would not be relieved while the silver-purchase 

 act of 1890 remained in force. The unsettled 

 movement in stocks continued until the third 

 week of the month, when rebuying to cover 

 short contracts and a manipulated advance in 

 some of the specialties brought about an irregu- 

 lar recovery, but in the closing days large ship- 

 ments of gold and mercantile failures through- 

 out the country induced a renewal of the selling 

 movement, and the tendency was generally down- 

 ward to the end of the month, with the most 

 important declines in General Electric, Cordage, 

 Sugar, the Grangers, Reading, the other coal 

 shares, and New England. One feature was a 

 fall in some of the leading investment proper- 

 ties, which had a disturbing effect upon the 

 whole market. Although the short interest was 

 large at the beginning of June, the bears did 

 not hesitate to attack prices, and one feature 

 was a sharp fall in Whisky, followed by General 

 Electric. The whole market was influenced by 

 a large movement of gold to Europe, caused by 

 the Australian crisis, and although there were 

 occasional reactions the tendency was down- 

 ward during the entire month. One minor dis- 

 turbing factor was news of a defalcation in the 

 Irving Savings Bank. The growing stringency 

 in money was another factor, and even the deci- 

 sion of the New York Clearing House to issue 

 loan certificates for the purpose of relieving the 

 situation as far as possible was regarded as in- 

 dicating a strained condition of some of the 

 banks. Everybody was looking for some action 

 by the President ; and when, on the 26th, it was 

 semiofficially stated that no extra session of 

 Congress would be called before September, 

 there was a panicky plunge downward in stocks 

 and still greater activity in money, which induced 

 the Clearing House Loan Committee to take out 

 for their respective banks $6,300,000 certificates, 

 which action temporarily averted a crisis. On 

 the following day, however, news that the In- 

 dian Government had suspended public coinage 

 of silver brought about the acute stage of the 

 panic ; the fall in some of the specialties was 

 rapid, and the excitement was intense, with an 

 urgent demand for money at 72 per cent, as one 

 feature. Silver certificates representing bullion 

 sold at 62. The panicky feeling was increased 

 by the extreme urgency in the inquiry for 

 money from all quarters, more particularly from 

 the main distributing points, and also by news 

 of a decline in wheat at Chicago to 61f cents. 

 On the following day the market feverishly 

 rallied on a rumor, later confirmed, that a special 

 session of Congress had been called for Aug. 7. 

 Activity in money, failures of Colorado banks, 

 unfounded rumors of trouble in New York in- 

 stitutions, which were solely based upon applica- 

 tions for Clearing House loan certificates, and 

 free selling of stocks, by the arbitrage houses for 

 European account caused the market to grow 



