The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-10-21

Government securities opened steady at the de-
cline of yesterday, but after the first call there
heavy pressure to sell sshort'' account which in
turn induced weak holders to realize and the result
was sharp decline IN prices. These "short
sales were apparently based upon information OF a
movement which is going forward to make the
money market articlaly stringent, and they furnish
basis for fresh upward movement Moreover,
United States stocks are the only really cheap ones
in the country, all the speculative railway shares
being comparatively dear. The present reaction has
been sharper than was generally expected
owing to the monetary activity which has
set in and fears OF strngency; but it
cannot fail to be followed by quick recovery in
the present state of the public mind with respect to
our national securities, the Investment demand for
which is steadily increasing. On the Stock Ex-
change there has been weak and unsettled market
all day, and late in the afternoon it fell into state
OF panic. Northwestern preferred selling down to 49,
Cleveland and Pittsburg to S. New York Central to
125n and Erie to 46H. The pressure to sell
was very great, but Rock Island, Pacific Mail
and Mariposa preferred were firmly held
and showed much stubborness in yielding. There
were large sales Of Erie made under the belief that
the company has recently issued and converted into
stock large amount Of convertible bonds in the
capitalization Of leases and that this stock is
about to be thrown upon the market for the purpose
which caused the decline in governments were at
work elsewhere, and fears Of tight money market
stimulated sales to realize and emboldened
the bears to sell 'short" Railway shares were par
tcularly vulnerable to attack owing to their recent
rapid advance and the fact that they were and sti
are selling at prices far above their real value.
Northwestern preferred fell more than six per cent
during the day, and Milwaukee and st. Paul more
than seven the stock having been offered at par about
five O'Clock and from this it Is easy to see with
what suddenness nearly all the other speculative
stocks may decline and the greater the fall the
greater the Generalization Of the market; for as
margins are swept away the pressure to sell in
creases, until the work Of ruin is completed. We
have often cautioned the public to avoid buying
railway shares at their present highly inflated prices
and the danger Of acting otherwise is now apparent
The money market displayed increased activity
in tho forenoon, and as the day advanced
the demand for loans at seven per cent
became very active, and towards the close
stockholders is at work to produce strngency for
the purpose Of creating panic in stocks, and in this
there Is unfortunately, to believe that they
are assisted by number OF bank managers and
Others Four OF the city banks, including the Re-
public, the Commonwealth and the Union,
have been creditors to large amount at the
Clearing House yesterday and to-day while the Bank
Of New York was debtor for about million and
hail. and these changes reflect the operations of the
consprators. 1t Is estimated that between seven
and eight millions have been already Withdrawn
from circulation, and it is understood that several
millions more will be Withdrawn tomorrow, while
large amounts Of Erie and New York Central at
present held on the street. win be thrown
upon the market for cash simultaneously with
the money squeeze" The prevailing dIstrust
was increased by q despatch from Washing
ton to the eject that the currency balance
in tho Treasury amounts TO little more than
six millions, and that consequently the department
will be compelled to increase its gold sales; but this
seems hardly credible, and we warn Wall street
against blindly relying upon such unauthenticated
statements Seven per cent and small CON-
mission added were paid for loans in not
few instances this afternoon and the banks
as q rule had no money to lend, all
their surplus funds being employed 1t
has therefore, been suggested-and we give our
unqualified support to the recommendation-that
the banks relax their rule OF not encroaching upon
their legal reserve, and Illustrate the efforts OF the
unscrupulous combination now at work. The Ma
tional Currency act by requiring this reserve to be
kept, evidently meant 1t for use i'm periods
OF exceptional pressure and the banks have
ample power to employ any portion Of it
as they may see fit. The Comptroller OF the
Currency, may, 1t ~ truc notify banks Win q DC
clent reserve OF their shortcomings, but they have
thirty days afterwards In which TO make 1t good,
and public opinion would support the banks In any
effort to break up such combination rs this which
s likely TO work much mischief If not overpowered
The banks by leaning only small part OF their
reserve could keep the money market well supplied
We do not speak with reference to the interests OF
Wall street, for II Is nmateral how prices go on the
- IN the interest Of the whole
stock Exchange, Du1 a. ---s----A - 49,
business community. -x~-s = - :
At the COMMENCEMENT Of business the stock mar
ket was weak and at the early session OF the open
board an unsettled FEELING prevailed, while prices
were about the same as OF the close last evening"
Erie selling at 47A, Reading 90 and Rock Island
1861. AT the first regular board there was consider
able pressure to sell, and the cali New York Gen.
trail closed lower than at the same time yesterday,
Erie y, Reading IL, Michigan Southern 2, Cleve-
land and Pittsburg II, Cleveland and Toledo Ia Rock
Island l,s Fort Wayne q, Milwaukee and st. Paul AZ,
Ohio and Mississippi /, Pacific Mall x, Canton l,
Mariposa preferred n, Tennessee skies Tex coupon)