The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1901-05-10


in the country. The stock market collapse
was attributed exclusively to overspecu-
latiOn and an overextension of credits
used in holding stock which it was not
designed 10 keep, but to sell at higher
price. The shock which caused the collapse
was the Northern Pacific corner, without
dispute. The harm which might result
from the Northern Pacific episode was by
no means so great in any ones mind as
TO justify the extent of the collapse in
prices. But the delicate situation of the
market due to the overextension of specu-
lation made ii vulnerable to this shock
The decline once in force gained cumula-
tive strength. Spectators margins were
wiped out and brokers had TO sell the Sc
curities placed with them as collateral to
save themselves from loss thus adding to
the weight of the selling. The shrinkage in
the market value of securities placed with
bankers as collateral made it necessary
that they should demand increased col
lateral or call the loans with which specu-
lators were holding stocks. With their
credits thus reduced, further sales of
stocks had TO be made and so it came from
every quarter.
The Importance attached to the North
ern Pacific episode was made clear by the
eagerness of all classes to learn all devel-
opments concerning it, and the immediate
effect of any announcement regarding it up
on the stock market. The upward shoot to
$1,000 a share was the effective cause of the
greatest decentralization in the market. The
announcement later in the day OF the
measures for the relief of the shortages
and the relapse in the price of the stock
TO 500 allayed the Generalization almost
Immediately Announcements by j. L. Nor
gan & Co. and Kuhn, Loeb 81 Co who,
respectively, represent the two contesting
parties in Northern Pacific, that they
would not require deliveries of the stock
to-day, meant a respite of one day at
least from ruin for the shorts in the stock.
Later in the day Street & Norton an
nounced that they also would not require
deliveries of the stock. This firm has been
credited with acting for James r. keene
and bought 900 shares of Northern Pa
cific on Monday last, loaning 10000 shares
that night and calling in the greater part
of 1t the next day, thus disclosing the cor
ner in the stock The theory that Mr..
Keene's campaign had been directed to-
wards a squeeze Of the shorts was somewhat
shaken by this leniency towards his VIC
Tins.
BOTH PARTIES IN DOUBT.
1t was significant, also, that, although
the parties TO the contest for control
showed their willingness to relieve the
shorts by remitting the requirement to de-
liver the stock, they failed TO come to any
mutual agreement TO lend the stock, such
as was proposed by one party last night.
The surmise seems warranted from this un-
Willingness of each party to let any of their
stock get out of their hands, even to relieve
the shorts. that there was continued doubt
in the minds of both to where the actual
control of the property lies. Representa-
tives of both parties made emphatic claims
to-day, the one that they had maintained
the control and the other that they had Sc
cured it.
The hope OF relief from the conditions
prevailing the Stock Exchange to-day
centered i'm the possibility of a settlement
or a compromise between the contending
interests as to sharing the benefits of the
Burlington deal. which is expected to be in
the form which the compromise will take.
Incidentally the settlement of the terms
which the shorts will be allowed TO cover
| is. of course. of great Importance. Clear
| intimations were conveyed to-day. appar-
! emily on authority, that the figures at
! which Northern Pacific sold to-day
| far above any terms which it would be
thought of exacting from the shorts at the
| final settlement The probability tonight
seems TO be that 200 represents about the
figure which will be demanded.
The strong rally in the stock during the
latter part of the day did not serve to en-
| tirey alleviate the nervous fears prevalent
| in the Wal-street district Rumors were
persistent that many prominent houses had
been compromised seriously by the violent
slump in prices. All of these specific ru-
mors were emphatically denied on the di-
| rect authority of the parties affected. Bu-
so violent a collapse in prices occurred
to-day necessarily involves enormous losses
| somewhere. The extent of the decline was
tar in excess of the margin demanded by
| brokers, which is 10 per cent. indicating
| that they were unable to save themselves
from considerable losses in addition to
| those of their speculative customers. The
| situation was still felt TO be sufficiently
serious after the closing of the days mar
keI 10 constitute the heaviest moral pres
sure upon the great financial interests
whose conflict precipitated the crisis. to
| adjust and compromise their differences,
and confidence I'm the future is based upon
strong hope that some means OF doing
this will be found.
The Tribune tomorrow will say: After
the most disastrous period of yesterdays
crash in the stock market had passed a
number of the strongest banks in the city
termed a money pool TO lend the stock mar
ISet borrowers on approved collateral Late
last Crhursday) evening it was authorita-
lively stated that the loans made yesterday
(Thursday) by the associated banks and
j. p. Morgan & Co, amounting 10 nearly
so. 600 OO0 will not be called to-day CFriday).
and that the rate of interest will be marked
down to materially below yesterdays
| (Thursday's) ruling rate.
[For closing prices bid and review of
fluctuations, see market page OF Journall
SOME OF THE DECLINES.