Omaha daily bee., 1899-12-19
FINANCIAL CRISIS Is REACHED
Panic on Wall Street Checked by the
Clearing House Banks.
CRASH IN INDUSTRIAL STOCK VALUES
Imperative Need of Money Develops n
violent Contraction of Values
Railroad stocks SufTer-Af-
fects Bond Market

veOped by the violent contraction in values
Stocks we're being thrown over without the
slightest regard to the price they would
bring and at distressing sacrifice of values.
No end to the helplessness Of the situa-
tion seemed in sight when in the last hour
of the market some 100000 900 was offered
on the stock exchange by the concerted ac
tion of the clearing house banks to force the
rate arbitrarily down to 6 per cent, without
regard to the distracted bidding at higher
rates, which was being done by other brok-
ers for distressed operators. The collapse in
the money rate checked the decline and
drove the bears to cover The recoveries
produced by their urgent bidding were al
most as violent as the declines had been, but
the losses were by no means entirely re-
trieved.
Large offerings of stocks continued at the
rally and at some points of the list prices
broke Anew before the close, making the
closing exceedingly irregular and unsettled
The excitement continued to the end with
sentiment looking forward anXiously for the
developments of another day.
The seriousness of the crisis has called
forth the best efforts of powerful and con-
servative financial interests, who are busy
concerting measures to tide over the money
difficulties which beset the stock market
and which. by reason of their extent and i'm
portance of the interests involved, threaten
to affect the countrys business interests un-
less obstacles are imposed
1t Is considered a point gained to have
effected a cessation OF the ruthless sacrifices
of values long enough for a period of con-
sideration over night For the selling OF
stocks unquestionaby reached that stage
where ordinary precautions of prudence or
ty baH haan IN ba wi, dc
and the sufferers from money stringency
were unloaded in true panic spirit. A pause
of a few hours for consideration is likely
to do much toward rectifying such a con-
dtion.
So far as actual news was concerned to-
day there was suspension by newly or
ganized trust company and by firm of
bankers and brokers who have figured as
traders in stocks to an extent of some i'm
portance. Neither event, in itself, would
have been sufficient to precipitate a crisis,
but they were supplemented with a whole
crop of wild and incoherent rumors that
spared no interest.
One would think from the tone Of the
gossip that was floating about by telephone,
telegraph or by messenger boy, by whispers,
or even by shouting in the stock exchange
lobbies, that the whole financial fabric had
been undermined and was about to tumble
in ruins. Yet the day closed with two fail
ures above mentioned as the sum total of dis
aster, so far as admitted insolvency was con-
cerned.
Result of Industrial Combinations.
The reason for the widespread sentiment
On the part of the trust company's suspen-
sion, was that it was one of large num-
ber of institutions recently formed on SINH
lar lines and which have thrved on the
multiplying of securities incident to the
industrial combinations which have been a
feature of the past year. The securities
of these combinations, as class, have been
in disfavor in Wall street for many weeks
past and in fact since the headlong imitation
in their prices and subsequent collapse last
spring. The disfavor which is attached to
them in Wall street has been quite iudis
criminate and based on many varying con-
The principal allegations against
them are over capitalization, eXorbitant
prices paid for constituent properties and
vulnerability to existing and threatened leg
sation against combinations.
1t is evident that in SO large a number
of combinations as have been made these
allegations can scarcely apply to all alike.
But the sheep have not been separated from
least fortunate of the new combinations
have been affiliated with the trust company
which closed its doors today. The incident
caused dstrust in the whole class of indus
tries, which is shown by the wide breaches
made in this class of securities during
the days trading. 1t is to be noted that
the very heavy commitment of capital to
the trust form of enterprise itself, and its
pcursions on the banking field have aroused
much discussion.
1t has been obvious for many months past
that a great deal of the money had been
locked up by capitalists in these new indus
trial combinations which were becoming
burdensome to carry, by reason of the heavy
demands for money in the regular channels,
the large absorption Of funds by reason of
the governments surplus revenues and the
urgent needs of the London money mar
ket growing out of the Transvaal war. Last
weeks threatening situation in London was
the outgrowth of the demand of stocks. Thus
it was that the trust failure coming on
affairs in Boston aroused the fear that the
suspected class of securities were on the
point of succumbng to adverse influence.
Money Rates Jump Up.
In the effort to protect these securities
others were involved including some of the
most substantial stocks on the list. The
fall in prices, instead of relieving the situa-
tion, added to the weakness with cumulative
force by reason of the shrnkage in the value
of collaterals. Before the concerted relief
by the clearing house banks the money rates
leaped to so, 60, 100 and, according TO the
official record, 125 per cent. Credible reports
assert that 1856 per cent was paid for money
during the day. The official record OF such
a transaction was lost.
An idea OF the severity OF losses may be
gained from a few specifications. Thus;
American Tobacco fell 211a; Metropolitan,
2OA Peoples Gas IA; Sugar, 1919; Con-
tinental Tobacco, 1l1A; Tennessee Coal, II;
Manhattan, Q, and Leather preferred, 90,
all in the list of industrials In the railroad
list such stocks as Northwestern, New York
Central Great Nnrihnrn nrnfnrrph Rncl,