The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1879-08-18
FINANCIAL and COMMERCIAL.
Retrospect Of an Excit-
ing Week.
HISTORY OF THE BREAK"
WALL STREET. Sunday. l
Annrrat ~ 1870


The warning conveyed in this column on Monday
fast relation to the top-heavy character of the
market has been justified by the events of the week.
Lake Shore stock sold Tuesday last at 93 and
looked as strong if there parties willing to
take the whole capital stock at that figure. On Fri
day it sold at s3H-a drop of nearly 10 per cent
The whole market fell off with this stock. which
had been the leader in steady advance of the mar
ket. 1t is significant that Lake shore toppled over
on reaching precisely the same figure to which 1t
rose just before the panic of 1873. The 'break in
the marke. has bankrupted one broker
Mr.. W. f. Livermore--and brought others
70 the verge of ruin. Not many words
are needed to tell the story of the week. On
Monday morning Lake Shore opened at s7% and
steadily advanced 1t current ON the street and
in the of the daily papers that the Wander
bilt party-which had been loaded with the stock
Tor the purpose of keeping control of the road-was
anxious to release ana invest in new enterprises tho
900 lock ell up in it, In order to do this and
still retain of the said that they
were going lease it to the New York Central. thus
retaining sthe control. On this report the Lake
Shore stock had been advancing for week. 1t
weakened for time when somebody spoke of q State
law forbidding snch merger of two railways, but
went I'D again the explanation being made that
there would be no actual lease but that Lake Shore
stock would be retired and replaced with bonds guar
snteed by the Central. Mr.. Vanderbilt did not con-
tradict these STORIES and it is said that his friends
circulated them very industriously. Operators buy
ing for fall certainly helped to put tho price
higher but there was back of them powerful party
which lifted the stock steadily despite tho attacks OF
the bears. On Tuesday morning % was reached.
Then enormous lots of tho stock came out, and it
whispered that the clique unloading. The
bears jumped into the arena. and the stock fell "a
per cent before the close Wednesday morning it was
circulated upon the street that there ground
for the rumors Of lease and that the directors Of
the two roads who to meet at Saratoga the next
day. would take no action looking to such con-
tract Certain parties, however. asserted more
loudly than that the lease would be contracted
and ostentatious bids made to keep up the
price. but Notwithstanding it dropped from 81 to 49,
The greatest excitement prevailed the whole street
was in fever and when the market opened on
Thursday it was generally believed that there
to be no lease and that the story had been coined
for stock jobbng purposes. The Exchange was
pandemonium for an hour or two and the stock fell
TO s4% amid the widest excitement.
On Friday there still further decline 1915.
and it has since been gradually hardening, selling
yesterday high s57S and closing little below
that figure. 1t is firmly believed the street that
the Vanderbilt party began to sell when the price
before it got down to SO. The dealings yesterday
were light, for, although there is q general impress
sion that the stock will be put up again to permit
those OF the clique who did not get rid of all their
load to do so. there is well grounded belief that
1t will first be put lower so as to wipe out the small
fry who buying slender margins in tho
expectation of q recovery.
This account of the doings in Lake Shore is the
history of the whole market for the week. fnctua-
tons in that stock being reflected with greater or
less intensity in all the Others The fall naturally
greatest in St Paul. Northwestern and Michigan Gen.
trial. which have closer sympathy with Lake Shore.
Coal stocks feeble and declined on lower prices
at the coal sale of the Delaware and Lackawanna
Company. but have since recovered on the putting
up of the prices by the coal company.
It has been suggested that q strong reason for
making lease of the Lake Shore to the Central is
that it would enable holders of the latter stock to
receive more than per cent without attracting
public attention to that fact 1t is thought that il
New York Central should begin to pay 10 per cent
on its present stock there would be a protest from
the public and the effect at Albany next year might
be disagreeable while the surplus earnings could
used in paying dividends on Lake Shore stock in the
hands of the persons without attracting aten-
ton The Rock Island road now pays 10 per cent by
q somewhat similar trick.
An idea of the activity of the stock speculation
may be formed from the fact that the sales during
the week aggregated more than 800, 900 shares On
Wednesday los 900 shares Of Lake Shore alone were
sold. or moro than onefth Of the entire amount of
stock For the week the sales of Lake Shore were
404. 900 shares; of Northwestern. $4,000; St. Paul
$4,000; Delaware. LackawaLna and Western 1877 OOO
great deal of influence in producing the ..break'
in the market is attributable to the tightening of
money which on Monday was easy at 3 per cent.
but hardened on Tuesday. and Wednesday was
firm at per cent. In many q commission Of
lilo per day has been paid in addition to the
highest legal rate of interest Even on govern
ment bonds loans could not be obtained under
6 TO per cent. This demand for money naturally
led to large sales of governments by parties who
profitable ways of using their capital, and
consequently there decline of y per cent in
the four per cent bonds. Toward the close of the
week. as money became easier. governments hard
encd, and closed yesterday firm at the figures
printed below. The principal of the hardness
of money the payment into the Treasury by the
banks of the amount due for the four per cent
bonds. On one day much s4.s0O.OO0 was
taken out OF circulation in this way. and the
total amount for the week was s, 100000
Large amounts have also been shipped to
the south and West to move the crops. The surplus
Of the city banks. shown by the statement
yesterday has been reduced to less than 500 900
very little above the legal requirement. Notwith-
standing the oft repeated statements of Treasury
officials. that little money would be taken from
circulation in connection with the four per cent
Transactions the banks continue to pay legal
into the sub-Treasury. while they unable TO
supply the demands for funds to be shipped for the
purpose of moving the crops The sub-Treas-
ury holds about s25.0oo000 currency bal
ance exclusive Of the amount held against
Clearing House certificates. aud IL this can
be put into circulation the money market will work
much more easily. although 1t is perhaps. too much
TO look for a per cent rate again. Yesterday the
rate for demand loans Stock Exchange coliateras
declined TO per cent and closed at per cent.
There was an abundance at that figure. and a hope.