The Portland daily press., 1893-05-05
PANIC ON CHANGE.
ShipWrecks on the Storm Swept Sea
Of the Stock Market.
TWAS AN ILL WIND WHICH BLEW
FOR DEALERS YESTERDAY.

How the Panic Came About-The Leak
Began in National Cordage Stock
Failures Came Thick and Fast Yester-
daylin Wall Street and There Were
Lively Times in the Stock Exchange
: Banks Said To Be All Right.
New YORK, May 4.--There is too often
disposition to magnify accidents that
happen in Wall street; to talk about
decline in some special stock as if there
were panic, when, in fact. there was
nothing of the kind. Yesterday it was
real rush; it was an upheaval in the
market which left every one in COM
munication with the New York Stock
Exchange in anxious doubt about the
firmness of the ground upon which he
stood. The tension on the floor was too
great to permit Of real excitement.
1t is hard to say just what started the
break. Loans had been called because
the lending capacity of the banks had
been exhausted, not because of any lock-
ing up of money. Then followed a sharp
discrimination against securities that
were known to be cliqued and to be
largely held for speculative purposes.
These were gradually eliminated from
loans, and it was noticeable that banks
grew more and more conservative in
| passing upon. the collateral instead of
advancing their rates. There had been
money enough for Stock Exchange use,
and so every one seemed to think that
the steady shrinkage in values would
| prevent any question of money from
| affecting values. So it did, and all yes-
terday forenoon money was not above 6
| per cent, and the steady decline in the
market was regarded as only continu-
ance of the liquidation that has been go
| ing on ever since the new administration
| came in.
The leak which seemed to open the
way for the break wasIin National Cord
! age. This company only few weeks
| ago declared semi-annual dividend of 8
per cent. upon it's common stock, then
! selling around go. Since that time the
Pillsbury & Washburn Flour and Milling
Company sof minneapolis has passed
! dividend not only upon the preferred
but the common stock as well, owing to
| the high price of wheat in Chicago. The
company was
/
for wheat, which was relatively so much
higher than that of flour and SO has losr
| the grain, and must either close its mills
or grind wheat bought at prices which
admit of little profit on the sale of the
flour. The American Tobacco Company.
| which was supposed to have practical
monopoly of the making of cigarettes
Il ,I~s @<N1,
the well known brands, has been met
with such vigorous competition from
| new factories that its stock, first put out
at 10, has dropped about so points with
| out unloading any large amount upon
| the public. The preferred stock dropped
| yesterday six points on sales of very
| small lots.
1t is now pretty certain that National
| Cordage was the last straw. After ma
| nipulatlng the stock way above par and
making it almost as active as American
Sugar it was believed that it had been
pretty well distributed, and the fact
| that the company was paying its regular
| dividends led many to think that it was q
very secure investment. 1t was only a
few months ago that the common stock
was doubled against the purchase of
other plants not before controlled by the
company, and on Saturday, after
a gradual decline of week.
the stock sold at 81. On that day, after
the Exchange had closed, the directors
met and announced an issue of $780,
900 more preferred stock, not for the
| purchase of any new property, but to
obtain money with which to manage the
business.
| More Money Was Needed
|
to handle the business, since the manu-
facture of rope and twine went on stead
lily during the year, while the largest
sales were in the summer, when binder
twine had to be had, and yachts and 9TH
er sailing vessels were most active. And
so they increased the capital, and the
public, more suspicious now than ever,
regarded the new issue as so much
water. They began to sell at once.
| Yesterday, when the reckoning of the
days transactions on change began it
was found that National Cordage pre-
ferred led all the rest with fall Of
163 on sales of only $500 shares. The
common had lost 13 points with more
than ten times the business, while
Chicago Cas-, almost as active, had fallen
10s. American Sugar, with sales three
times that of any other stock, was in
next place with loss of 81. United
States Rubber fell off g. After the
slaughter of the industrials was figured
4