The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-04-17
FINANCIAL AND CONNER CiAL
THURSDAY, April 1s-sP.M.

IDENTIFY near at hand. These INSCRIPTIONS combina-
ttons to win money from the public by promoting
artsdcia fluctuations will be efrectualy broken up,
and further heavy decline in prices will bring
the latter nearer to their legitimate value There
margin for q fall Of from ten to
orty per cent in nearly all the speculative railway
shares before reaching the point at which their real
Vaue might be fixed. Moreover, the railway system
esthis country is rotten, and railway property under
s present management is about to pass through the
same ordeal that it did in England and France after
the reaction from the imitation indirectly produced
BY the war in this country set in and ultimately rail
way stocks will be likely to 60 tempo
raTily even below their real value. Then
investors will come in and buy them up,
and reforms in railway management will
be the result These reforms will not only lead to
appreciation Of the value OF this class OF securities
but increase the safety of travel by causing the lines
70 be kept in better condition Reforms in railway
management are needed, but until they are an
accomplished fact railway property must suffer,
for the bubble Of speculation which sustained rail-
way stocks at an artificial height, never warranted
by material considerations, has been pricked. The
high prices at which the speculative stocks have
been selling were all the more remarkable when we
consider that some of them have been watered from
o hundred per cent downwards within O re-
cent period, Hudson River and Rock Island
being notable instances in point while among
the miscellaneous shares Pacific Mail is q con-
spicuous example. II include express shares
there are thirty-1ve millions more speculative stocks
in Wall street to-day than there were year ago. and
at the same time there is much less currency to
carry them with. The watering, system has I'M
dermined the prosperity Of all the companies that
have resorted to it, and they have created burdens
which will hang about them like millstoncs.
Whnf oy1 ,ersA,
ing the panic Of 1860 as regards specula-
tive stocks we are about to experience in
perhaps modified, but possibly an equal degree,
and 1t will be well If all those who have loaned large
~ upon them succeeded in escaping the fate OF Over
end Quincy Co. in London and the Credit Mobier
In France The storm has not yet burst but it is
fast brewing and the wise will take in sail without
further warming There need be no apprehensons,
however, with regard to government and other
sound interest bearing securities, for these will re-
main firm throughout, and capital will flow into
them all the because Of the Gisrust Of specua
tive stocks
The gold market was dull and steady all day, and
the fluctuations were from 1873 to 1884, with the
closing transactions at 1881. Loans were made at
rates varying from to II per cent per annum
md 1872 1-16 per cent per diem for carrying. The
gross clearings amounted to $46,193,00O, the gold
balances to $143 500 and the currency balances to
So, 04, 332. The high rates paid for carrying gold
neced the strngcncy in the loan market which
caused Is a 4 per cent commission for money to be
paid in some instances, 1t being almost impossible to
borrow at the legal rate Of interest. In some in
stances brokers were unable to make up their bank
accounts, although just before the close there
material abatement of the previous pressure owing
to the disbursements Of the ubTreasury in the pur
chase OF seven-thirty notes. The natural activity Of
the market Is aggravated by the cautious policy Of
the banks in declining to lend on most of the nom
dividend aging railway shares; and considering
their present expanded condition stock loans this
course is dictated by prudence and proper regard
1or the safety of depostors. There is no difficulty in
borrowing governments and other stocks
or unquestioned value which not selling
ut prices above it, and the distrust OF the
highly inflated speculative shares leaves more
money for employment upon the former The real
condition of the banks of this city with respect to
stock loans not known to the public and not gene
xay even to the directors. The duty of the latter is,
however, to make themselves clearly informed upon
all matters connected Herewith, and to personally
inspect the securities under hypothecation These
are almost invariably enclosed in envelopes on
which the contents are described; but who knows
whether in every case the latter
respond with the description The bank officers
concerned have the power to permit the borrowers
on one set Of colaterals TO exchange them for
anotherto allow, for instance, the substitution Of
Erie for Illinois Central-and otherwise Obge their
friends, without any official notification Of the fact
being made. OF course such conduct would be
gross abuse Of trust, and there are not few bank
presidents and cashiers who would not in any way
eountenance anything Of the kind but 1t s doubtful
whether they all equally honest and honorable,
and we therefore think it well to make this sucges-
~ tiv Tho liz and M han
and 1t is matter of no small importance at the
present critical time.
Government securities have been firm all day, not
outstanding the steady and rapid decline OF prices
on the Stock Exchange, and in the afternoon they
experienced fractional advance, the demand for
investment having been largely quickened by the
feeling Of dstrust which prevails with regard to the
speculative railway, steamship and express stocks
The ub-Treasury bought more than half million
Of seven-thirty notes from the principal dealers
ut Jog, ana there were afterwards sales at an
eighth above this price. At the close the market
was firm at the subjoined quotations:-Regis-
tered, 1881, 112 112k; coupon, 1884, liz 112A;
S2O's, registered, 1862, 1o4 1o4H; 52O's, coupon,
7se2 11oX Ill; do, 1864, 100 1885,; do, 1865,
1908 1895; do, 1885, January and July, 1879 q
1o7S; do 1857, 1o7A los; 104o's, registered,
1o1A 1919; 10-40s, coupon, 10lA n 1917;
June 7.3o's, 100 10eh; July 1905, LOG a 1861;
May compounds, 1864, l1s1l; August do, HIS Sep
tember do, III; october do, 116Jl.
At the commencement Of business the stock mar
net was weak and excited, and the pressure to sell
noticeable earlier in the week was intensified. At
che early session Of the open board semipanic pre-
vailed and Erie sold at 6os 667s; New York Central,
MS 112h; Hudson River, 1913 a 124, and Rock
Island, s4'l At the first regular board prices con-
tinued to decline and the pressure to sell '1ong"
xvtii Vrrl,
tlre weakest stock on the list. New York Central
closed Az lower than at the same time yesterday,
Erie ~, preferred l. Hudson River II, Reading a,
Michigan Southern q, Cleveland and Pfttsburg 2,
Cleveland and Toledo g. Rock Island TX, Northwest
ern preferred 2%, Fort Wayne ~ Milwaukee and st.
Paul -, Ohio and Mississippi y and western Union
Telegraph Il. Government securities were duh but