The Savannah morning news. (Savannah, Ga.) 1900-current, 1901-05-10

PioNeu utterly lnenectiVe in face
OF the first quotations for Northern Pa
enc on the tape. The price paid for the
stock ran up quickly to 5000 per share ana
then to $500, to $500. and even to $7OO per
snare on regular transactions, and 81 900
per snare for cash The cash price paid
meant that unfortunate shorts who were
uhao.e to borrow the stock last night for
oenVery to-day had to pay whatever
cash price the engineers of the corner
chose 20 ask for it. The figures indicated
IN these opening transactions meant ruin
Tor very large outstanding short inter-
est in the stock. The perception of this
fact was the principal impelling cause In
producing the demoraliza ton in the stock
market.
Bears Had 1t All Their Way.
The concerted effort to support the mar.
ket by buying all stocks, which might be
offered, which is always the most effec-
tive manner of dissuading persons from
seihns, and which was undertaken, ac-
ccrding to the current belief in Wall
street, by some of the most powerful cap
ltaLsts in the country, was swept away
IKE whirlpool under the deluge of offer
lnss which came upon the market. AS
prices began to go down the disposition
to buy decreased and the determination
TO sell seemed to grow in geometrical ra-
ITO, as falling body gains in velocity the
farther it falls. Such a shoveling out of
stocks as occurred during the second hour
Of to-day's stock market was never seen
before. After a sale had been made at a
fixed price, broker would throw in an
additional block at anywhere from . -
10 points lower, without stopping to de-
mand any intermediate price for his Of
fering. The extent of the decline during
the half-hour was as great in some cases
as has taken weeks to attain on the ad-
vance, although all observers have agreed
that the rate at which prices have been
going up, has exceeded any previous ex-
perience.
Figures show the Drop.
The figures alone suffice to indicate tie
proportions of the drop. In Delaware and
Hudson, the extreme decline was So
points; Manhattan, 3S7s; Rock Island, 3512;
Union Pacific 49, Atchson, 341a; Atchison
preferred, 2812; St. Paul, 301a; Missouri
Pacific, 80; Southern Pacific, 29$4 United
States Steel preferred, 2615; while a range
of to 50 points would cover the collapse
in nearly every active stock in the Ex-
change. In the otuside market, the stress
of the demand for funds was shown by
the perpendicular drop in the price of
Standard Oil of Ill points overnight. The
stock sold at $50, compared with 821 last
night. The same urgent need was re-
hected in the bond market, where
all grades of bonds were offered
on a declining scale. The sacrifices there
were naturally much less than in the
stock department of the market. After
the turn in the market came, which it did
about noon, it was noticeable that the
selling of bonds still continued and this
was explained as being due to a wish to
secure funds to buy stocks at the attrac-
tive level of prices to which the market
had fallen. In fact, the bargain hunter
was on hand and alert, and even in such
a scene of disaster as that presented
there are those who reap the benefit.
The drop in prices carried stocks of many
substantial properties down to q level at
which the current rate of dividends paid
upon them and we'll assured, make them
attractive investments.
The Cause of the Collapse.
1t was a very notable fact that
throughout the most acute period of to-
DAYS disturbance there was nothing
heard to indicate the doubt of the sound
and prosperous conditions of industry
and business at large in the country. The
stock market collapse was attributed ex-
clusively to over-speculation and an over
extension of credits used in holding
stocks which it was not designed to keep,
but to sell at higher price. The shock
which caused the collapse was the North
ern Pacific corner without dispute. The
harm which might result from the North
ern Pacific episode was by no means so
great in anyone's mind to JUS
tifv the extent of the col
lapse in prices. But the delicate
situation of the market due to the over
extension of speculation made 1t Vulner-
able 10 this shock. The decline once in
force gained cumulative strength. Spec
ulators margins were wiped out and brok-
ers had to sell the securities placed with
them as collateral to save themselves
from loss, thus adding to the weight OF
the selling. The shrinkage in the mar
ket value of securities placed with bank
ers as collateral made it necessary that
thew should demand increased collateral
or call the loans, with which spectators
were holding stocks. With their credits
thus reduced, further sales of stocks had
IN he made. and so it came from every
quarter.
Northern Pacific Caused 1t.
The importance attached to the North
ern Pacific episode was made clear by the
eooerness of all classes to learn all devel-
opments concerning it, and the immediate
errect Of any announcement regarding 1t
unon the stock market The upward shoot
to 81 900 a share was the effective cause
~ the greatest decentralization in the mar
lot THE announcement later in the day
30 the measures for the relief of the
ehor+ages and the relapse in the price OF
the stock to 800 allayed the decentralization
almost Immediately. Announcements by
p Morgan & Co., and Kuhn, Loeb q
Co. who, respectively. represent the two
contesting parties in Northern Pacihc.
,i,at they would not require deliveries OF
the stock to-day. meant respite OF one
day at least from ruin for the shorts
a. Tho stock. Later In the day Street
a. Norton announced that they also Wouid
49, reouire deliveries OF the stock. This
grro has been credited with acting for
Ian,es r. Keene. and bought about 200
con .bares of Northern Pacific on Monday
last Ioaning 10000 shares that night, and
calIing in the greater part OF II the next
dav thus disclosing the corner in the
s,ock The theory that Mr.. Keene's cam
naign had been directed towards a squeeze
~ the shorts was somewhat shaken by
tbis lehiency towards his victims. IL
Was sisnifcant also that, although the
,,artfea 40 the contest for control showed
,heir Willingness to relieve the shorts by
rnnnitting the requirement to deliver
-,o.l, thew failed to come TO any mutual
-. .srpen1ent 10 lend the stock, such as was
nroposed by one party last night. The
a,,rnoise seems warranted from this unwill-
inoness Of either party to let any or their
',,clr Get out OF their hands even TO re-
,t.,,o the shorts that there was continued