Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1893-02-24
DOWNFALL OF READING.
Three Days of Panic in the New York
Stock Exchange.

The Reading Railroad Company Goes
Into Receivers Hands---HistOry of the
Great Concern, of the Coal Combine,
and President Mcleod.
The event of the week in financial cir
cles has been the panic in Reading rail
road stock, and the placing of the proper
ty in the hands of "a receiver, which took
place Monday. There had been for some
days suspicious indications in regard to the
Reading securities, but the trouble devel-
oped, like sudden tempest, in the New
York stock exchange last Friday. The
fact that the great concern had borrowed
money to pay the interest on its income
bonds, and its failure to meet promissory
note for 5000, 900, precpitated the catastro-
phe. Soon after the exchange opened the
stock began to tumbling in, in great blocks
of thousands of shares. 1t was the Phil
adelphia people who were unloading. No
support came to the stock from anywhere,
its price fell off six points, and during the
day over 100000 shares were sold. Satur-
day the selling was resumed, amid tre-
mendous excitement, from the moment the
exchange opened, and in the two hours be-
fore it closed for the Saturday half holiday
the enormous total of 514,7 shares had
been sold. In the two days the total sales
had been almost million shares and the
price of the stock had fallen from 468 to
36s. The total share capital of the con-
cern is $40, 105, ,361, at $50 per share.
On Monday came the crisis, and the
scenes were wilder and more exciting than
| have been seen in the exchange in many a
year. At the instant that the presidents
gavel fell, opening the exchange, the sales
of Reading began. A crushing, bowling,
frantic mob of brokers surged about the
Reading post. Their noise could be heard
far outside the building and people in the
streets turned to listen and wonder. The
stock opened at SO, loss of five-eighths
from the closing of Saturday. Then the
wild scenes of Friday and Saturday were
reGnacted on an even more remarkable
scale. The stock came on the market in
| great bundles of 500, 1000 and even 5000
shares. The price fell from 80 to 50 in a
moment, then by fractions declined to 33
and then to 80, and finally by whole points
to 81, 30 and 291, within ten minutes
from the opening. Such a volume of trad
| ing was never seen on the exchange in one
stock. In the first half-hour 250,000 shares
were dumped in; in the first hour the
sales aggregated the enormous amount of
100000 shares, and the total transactions
for the day in this stock footed up 95S, 900
shares or more than had been traded in
during the day and half of business at
the close of last week. The stock closed
at 295 or near the lowest point of the day.
Soon after noon news was received of
the appointment of receivers for the COM
pany by Judge Dallas of the United States
district court at Philadelphia, and this
tended to quiet the excitement and to
strengthen the situation somewhat. The
application for a receivership was made by
ex-senator Thomas c. Platt of New York,
as a holder of the company's third prefer
ence bonds. The receivers appointed are
A. A. Mcleod, president of the company; /;
Elisha p. Wilbur, president of the Lehigh
Valley division of the Reading, and Ed
ward NJ. Paxson, chief justice of the su-
preme court of the state of Pennsylvania
Justice PaXson has forwarded his resigna-
ton as justice of the supreme court to
Gov. Pattison. The receivers bond is
S500,000.
1t is not known who precipitated the
final attack on the Reading stock, or what
influences were at work under the surface.
In his bold policy of reaching out after
other railroad properties, in order to build
up mighty system-control of the New
England coal and other carrying trade be-
ing the latest feature in his plan-Presi-
dent Mcleod has antagonized many rail
road interests, and, for one, the New York,
New Haven Il Hartford company are not
shedding any tears over his downfall.
While it is estimated that the stockhold-
ers of Reading have lost, since Feb. l, by
the decline of their securities over S34,
000,0 600, the loss appears to be almost
wholly loss to spectators and not to the
general public.
History of the Reading System.
The Philadelphia & Reading railroad
company was chartered by the state o.
Pennsylvania April 4, 1888. Its origina
line was go miles in length, extending from
Philadelphia to Reading. 1t gradually eX
tended its lines by purchases and leases
and acquired extensive coal fields, and be
came one of the largest coal carriers in tn,
country. When Franklin b. Gowen wa
elected president he became filled with am
bilious schemes for the development of tn
= | property anu attempted, MUCH as mr. NC
t Leod has done, to secure monopoly o
= the coal trade The concern had variou
: vicissitudes and went into a receiver
- hands in 1880 and again in 1884. In 1SS
r. a reorganization was effected through tn
/ banking firm of Drexel, Morgan & Co.
d and on Jan. ?, 1888, the company wa
v once more restored to the hands of it
: owners, with the stock selling at 67t pc
: cent. Austin Corbin was elected president
and retained the Office until he was sue
IS ceeded in June, 1890, by Alexander A
e Mcleod Mr.. McLeod's presidency wa
It uneventful until about Feb. l. 1892, whe
). the transactions in Reading, Jersey Ger
# trail and Lehigh Valley stocks began t
- increase. Prices steadily advanced, an
II enormous quantities of the shares wer
o sold daily. People in Wall street knee
1t that some scheme was ahoat and wonder
v ed what it was. The few who were in tn
& secret bought and bought these three stock
- until they exhausted their resources. Fin
'e ally on February 10 an explanation of tn
't mystery was given to the public. The al
al uOunppmpnt pamn that the RaadinU ha