New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1880-05-22

of S42O, 900 yesterday, caused the suspension
of tbe Companv, and also of the Philadelphia
md Reading Coal and Iron Company. There was
great excitement in Philadelphia, and the stock
of the railroad declined to 13. There is much
uncertainty as to the future OF the two COM
panies. The news of the suspension OF the two
companies caused great stir in financial circles
In this city. Stocks fell sharply at the Stock
Exchange amid much excitement, but there
was 10 panic, and most Of the shares except
Reading recovered the greater part OF tier
losses. 1t Is not believed that any of the
New-YOrk banks are seriously affected.
CAUSES OF THE SUSPENSIONS.
AIIEGED UNEXPECTED DRMAND-THE FLOATING
INDEBTEDNESS MOSTLY IN PHILADBLPHIA-MR.
GowEN'S MISTAKES.
fBY TELEGRAPH TO THE rRIBUNE.l
PHILADELPHIA, May 21.-Ihe Pmladelpn'a anu
Reading Railroad Company and the Philadelphia
and Reading Coal and Iron Company suspended
payment this morning. Although the crash was
expected and has been prophesied for three years
past, it produced profound sensation Phlladei-
p1a has not been so much excited over iallure
slnce the Jay Cooke affair.
All particulars in regard to the event, except tne
mere fact of the suspension, were during the morn
ing and afternoon, a matter of speculation. Inc
widest rumors we're In circulation, but with the
cool of evening the excitement has somewhat sub
sided and the facts are becoming better known.
As to the cause of the suspension, 1t
Is stated that the Philadelphia and Read
Ing Railroad and tho Philadelphia and Read
ing Coal and Iron Company have for some
time past paid for all purchases OF supplies
ETC., with interest notes at ninety days. Such notes
have been taken up by sight drafts on the goth of
every month Yesterday the usual sight drafts
were issued and the amount of these, with some
other indebtedness, preclpitated matters. This
morning the Clearing House presented to the
Farmers and Mechanics Bank drafts Of the COM
pany for $42O 900 the bank had not the necessary
funds to meet them. and refused payment. Notice
was Immediately sent to Mr.. Gowen, who,
up to that time, O'clock this morn
Ing "bad not the slightest idea that
there would not be the necessary money
to meet the monthly demands" at least such is his
statement of the case.
President Gowen was given until o'clock by the
Clearing House to make good his paper few
minutes before IL he announced payment stopped
of the $420,000. The large aud unexpected por-
ton of the amount was one note of 100000, sent
for collection by New-York parties. Tho rest is
held here. The total floating Indebtedness is about
$5.OOO.OOO.
A meeting of the Coal and Iron Company was at
once called. and the company formally suspended
payment. The Reading Railroad Company having
guaranteed the debts of the Coal and Iron Company,
had now to meet the storm, and at the conclu-
SION of two hours conference the directors. who
are the same both companies issued the follow
ing official notice: 80.
The Philadelphia and Reading Railroad Company and
the Philadelphia and Reading Coal and Iron Company
have been compelled to suspend payments Tue man
property Of both companies and continue the business
For purpose the daily revenues will be applied so
p.ira IN 4 fha ma mi N
~ ''N'' v FRAyKLIX B. GowEN, President
The bad news spread rapidly, reaching the bank
ers and brokers first and the Stock Exchange shorty
after noon. at the close of the first board
The stock opened in the morning at %, dropped
during the first session. owing to uncertain rumors
of coming trouble, to 225s Then it fuctuated at
%, 227s, %, 22l4, 21l4 under pressure of bear
movement. Reports of the embarrassment sent
it to 20 and their confirmation precpitated sharp
panic, which lasted till late into the afternoon,
when the stock reached 19. By 6 o'clock 1t had
touched 12l2 on the street, and by half-past 9 1t
rallied among the weary bulls and bears to 49,
Many of the brokers were in their Offices until near
midnight, and the closing price can be said to be
13. Tomorrow It is expected the stock will open
at 11lo to 12 and 1t is predicted that 1t will touch
10 during the day. No fears of panic enter
tained tomorrow. as all sales to-day were based
upon the chances of the confirmation Of rumOrs.
Sales tomorrow will be made upon known facts.
The transactions to-day aggregated, as near as
known. 143, 600 shares.
A prominent broker said to TUE TRIBUNE cor.
respondent: II am glad 1t happened, / ex-
perience great relief. Everybody said the company
was rotten, and everybody expected q collapse,
though to-day was not named rs the date. Now we
cannot go much lower, there will be no moro panic,
and the stock will have a chance to mend"
Of courSa manV nprsOD9 are losers bV the an
nouncCmcut, mostly outsiders, however. Some OF
the brokers who held Reading largely Wnloaded
yesterday and to-day before the failure was known.
As TO the effect, the losses widely distributed,
and pretty generally among the friends of the road.
Tho banks did not hold much of the paper. The
bulls among tho brokers naturally came In for
share Of tho trouble. First among the losers are
the stock and bondholdeTs, and then, relatively,
next the employees and tradesmen holding tue scrip
recently issued, which tided the company over
some bad places last Winter after these the mer.
chants of whom the companies purchased supplies.
Most of the checks protested 10 day were held by
the merchants and quite two.thrds held in
and around Philadelphia; that is, along the line Of
the road. Some NewYork parties are said to hold
the balance. While the protested paper amounts to
only $42O, ,O0O the floating Indebtedness, over and
above bonds and stocks is said to be vastly greater
sum.
Said prominent lawyer to THE TRIBUNE CORE
spondent: CAS- to the future, under the law the
company be put into the hands of a receiver
1t must go into the charge Of an assignee. Holders
Of checks must then sue upon them, obtain judg-
nent. and proceed to execute the Judgment by
seizure. This will give the company tmo to save
ITSELF if that is possible In all probability it will
be reorRanized, and the holders Of stock will be ad
mitted as stockholders in the new corporation,
isting stock to be taken at value Of one-third
one-fourth its present worth"
An officer Of the company said :, " am glad 1t has
happened at last. We had TO carry two worlds