New-York tribune., 1901-05-12
financial.
The Financial World.


new a matter which has been so thoroughly
exploited the causes of the crash in the stock
market While it has been given In fragments.
yet the whole story in its main outlines. has
been told in the press. The one thing that yet
remains to be told is of settlement between
the warning interests This may come any
moment. 1t may have been made before these
lines are printed. or the fight may go to the
end-which means that each party will maintain
it's respective position until final count Of the
actual certificates when the time for voting
comes. which is months away. On the balance
of chances. II seems safe betting that COM
promise will be reached.
There remains yet one unexplained mystery
what was the cause and who were the parties
who started in three weeks ago to buy Union
Pacific. and bought so furiously that 600OOO
shares were done in one day carrying the stock
from 9S to 107; and on the succeeding days.
other and just furious buying carried the
price UP TO 133. when 1t fell back on general
concession that the Hartman interests were still
in control. and that the attempt TO wrest control
from them had failed? Who were the parties
who bought against the Hartman interests?
What was their object in acting as they did?
But as to the competitive buying of Northern
Pacific, we have what may be called official
statement. That statement is TO the effect that
the Board Of Directors Of the Union Pacific COM
pany considered what position their road would
be placed in by the completion of the Burlington
deal; that they determined protective action:
that Great Northern stock so held that
control could not be purchased. and the Bur-
hngton had already been purchased. the only
way open was to acquire control of the Northern
Pacific; and that purchase of control was there
upon authorized.
This statement II will be seen. implies that
the Union Pacific Board acted as an official
body in the matter. Presumably. therefore, the
resolutions authorizing the purchase. and de-
fning the manner in which the money necessary
for the purchase should be provided. are Of
record on the minutes OF the Board. OF the
Executive Committee.
So far all is clear. The next step is not.
About as soon as these resolutions must have
been recorded, there occurred the rush TO buy
control of Union Pacific. 1t will not readily be
forgotten what mauiing the general market
got on Wednesday the oath Of last month.
when those GOO 900 shares Of Union Pacific were
DONE from 9S TO 107 There was howl that
U p. had been bolstered up TO cover the selling
of everything else; but when U. P continued 10
go up until. palpably competitive buying, IT
touched 133 on the Thursday following. MAY
2ndD the struggle for control was obvious, and
conceded on both sides.
All attention being concentrated on Union
period there had been very heavy buying OF
Northern Pacific which had carried the stock
UP about 70 points. The Morgan interests woke
UP TO the situation; it must be conceded, rather
tardny. They appear TO have done it, and de-
termined the necessary action, only after
the close of the market Saturday of last
week (the 18th inst1. An order to buy large
block Of stock said to be about 10000 shares.
was given. 1t was bought Monday. This
zN00
from the name Of the firm which had the order.
Every one now knows that the order was exc
cuted under the direction Of Mr. Keene
The execution OF the order was dramatic IN
it's effect. Ii was the disclosure TO the other
side that their position was known. There was
no more working under cover. Each side went
TO buying hOtly against the other. with the re-
suit that by Thursday morning n state of H.
fairs had been brought about which neither siG1--
had for instant contemplated, or eVe2
thought 10 he possible.
That a stock SSO.OOOOoo in amount, could by
the mere force OF two opposing interests buying
It, be swept from the market so Thoroughly
that the price for the days delivery should rise
to $1,000 per share. was something unheard or
in Wall Street unprecedented probably any
where and almost beyond any sane mans COM
prehension. Incidentally, it shows what enor-
nous wealth is available in these days for
market operations.
The resulting crash IN the stock market was
the necessary consequence Of the many COM
plications which this condition produced. Bro
kers whose clients had sold the stock short saw
ruin before them. or losses near TO it. The arbi-
traze houses were threatened with something
like extinction. They had stock in London. in
Amsterdam in Hamburg. and Berlin. 1t might
as we'll have been at the bottom Of the sea-
They had sold here for immediate delivery, de-
pending on borrowing the stock in the usual
way until the certificates could arrive. STOCK
could not be borrowed They had to deliver
To go into the market and bid for the few
shares still Offering might run the price up
even to two or three thousand a share. In racO
Il was an Impossible position. and had 1t not
been relieved by mutual agreement. last Thurs
day would probably have seen the most dlsas-
trous crash OF firms and banks which wan
Street ever knew.
1t was Immediately after Northern Pacific had
sold at $1,000 that the agreement was reached
and il was done in a few minutes over the tele-
phone An inquiry had been made to Mr.. Schn
in the matter of loaning the stock. and he re-
piled that whatever Mr. Morgan would do. they
would do. The inquirer then went to see Mr.
Bacon, and while waiting the $1,000 sale was
made. The market was then at its worst Mr.
Bacon spoke over the telephone in respect TO the
request. and the waiting group in the office saw
that he held the instrument for a minute or so
listening Then he said: We'll, If that is agree
able to you. it is to us We viii consider II
agreed upon" Then putting down the tnstru-
ment. he said. turning to those around. You
can say that all deliveries of Northern Pacific
are postponed. Make that announcement
Thereupon everybody bOlted out of the place
and made a bee line through the pelting rain for
his respective office. a great cheer went up IN