Fifty years in Wall Street
to want to borrow money, and no one was willing to lend. The market
verged on panic. People were afraid of the course of the Government in
selling upwards of $12,000,000 gold.
_April, 1866._—Michigan Southern was cornered. The price rose from 84 to
104. The pool closed out and the price dropped to 80 within 24 hours.
Other corners were made in the same month in Reading, Rock Island,
Hudson River, Cleveland & Pittsburg and Northwestern preferred. Money
was plentiful and speculation was rampant.
_May, 1866._—The marketing of Erie stock by Daniel Drew caused a drop in
its price from 74½ on May 18th to 60½ on May 31st. The movement had very
little effect on the remainder of the market.
_July, 1866._—A panic in stocks followed the failure of Overend, Gurney
& Co., London bankers.
_August, 1866._—London markets were first quoted by Atlantic cable in
New York.
_November, 1866._—There was heavy speculation in stocks, produce, dry
goods and real estate. Poor men became rich by a single turn of the
wheel. Unexpectedly the Treasury drew about $15,000,000 for its own
purposes, money became tight and the bears became very active. Prices
declined about 10 points, and outsiders lost upwards of $25,000,000.
_December, 1866._—Northwestern preferred and Cumberland Coal were
cornered.
_January, 1867._—Prices broke on the 18th with a rush. Cumberland Coal
declined 55 points, and the general list went off in sympathy. There
were several failures. Money was tied up by bear operators.—President
Yelverton, of the Bank of North America, on learning of the failure of
A. J. Meyer & Co., the firm having overdrawn its account $219,000, was
seized with apoplexy and died.
_May, 1867._—A pool in Erie was broken by the sale of a large block of
English stock.
_October, 1867._—Daniel Drew was turned out of Erie, and the stock
advanced 10 points.
_December, 1867._—Vanderbilt secured control of New York Central.
_January, 1868._—A corner in Rock Island was broken, owing to the
company throwing 49,000 shares on the market. The stock declined
heavily.
_February, 1868._—The contest between Drew, Vanderbilt and Frank Worth
was at its height.
_April, 1868._—There was a break in Atlantic Mail, with subsequent
complications.
_June, 1868._—An unsuccessful attempt to corner Pacific Mail was made.
_July, 1868._—Jay Gould became president of Erie.
_October, 1868._—Money became stringent, owing to the withdrawal of
funds from New York for the West. The associated banks lost $20,000,000
in deposits and $12,000,000 in legal tenders, with a reduction of only
$9,000,000 in loans. Special efforts were made to break the stock
market, but the bull leaders had provided themselves with time loans,
running to the end of the year, and were thus enabled to hold prices.
_November, 1868._—Erie was cornered, and a panic extending through the
whole list occurred. It was helped by the inability of a leading
operator, a director of St. Paul, to meet puts on that stock. The common
and preferred fell about 20 points. Erie made an extraordinary issue of
shares. Later on money became more plentiful, prices advanced and the
market became very strong.
_April, 1869._—A bill to consolidate the New York Central and the Hudson
River railroad companies passed the Legislature.
_May, 1869._—The New York Stock Exchange and the Open Board of Brokers
were amalgamated under one management. The new Exchange began business
with 1,030 members and $750,000 in its treasury.—The era of
consolidations. Active stocks advanced to prices never before reached.
New York Central sold at 192-5/8. A movement to depress prices at the
close of the month met with some success.—The last rails of the Union
Pacific and Central Pacific railroads were laid. Trains began running
across the continent on the 15th.
_June, 1869._—Many brokers failed, the result of a successful bear
attack on the market.
_July, 1869._—Heavy speculation in the Vanderbilt stocks. New York
Central advanced to 217-7/8. Money was stringent.
_September, 1869._—New York Central dropped 25 points on the 22d, and a
panicky feeling was developed.—Gold reached 165 on Friday, the
24th—Black Friday. Transactions ran up into hundreds of millions, and
business was conducted with so much confusion that bids running from 135
to 160 were made at one and the same time in different parts of the
room. Between 11 and 12 o’clock the shorts settled on a basis of
148@158, the market price being 5@15 higher. At noon it was officially
announced that the Government would sell gold next day and buy bonds,
and within 15 minutes the price had fallen to 135, and the great
speculation had collapsed.
_April, 1870._—The cliques who had bought stocks on the decline after
Black Friday, started an upward movement in the last week of the month.
The public came in and top figures were reached about May 10. The
cliques unloaded, turned bears, depressed prices until margins were
wiped out, bought in again at the decline and were ready for another
advance.
_May, 1870._—The process of “shearing the lambs” was repeated in this
month.
_June, 1870._—James Boyd, carrying 40,000 shares of stock and $5,000,000
gold, failed. The market showed signs of breaking, but was sustained by
the cliques.
_July, 1870._—Congress authorized an addition of $54,000,000 to the
national currency.
_January, 1871._—A prominent operator repudiated his orders to buy
Reading. Several brokers failed in consequence. The market was only
slightly depressed.
_April, 1871._—There was much speculative excitement in the stock
market.
_June, 1871._—Rock Island was cornered. The pool began buying at 114½
and advanced it to 130-7/8. On liquidation the stock declined to 110.
Many failures occurred and bad faith was charged.
_October, 1871._—The week beginning October 9, 1871, was one of the most
eventful in the history of the Stock Exchange. The banks had expanded
beyond precedent and were compelled to contract loans to raise money for
crop purposes. The payment by France to Germany in settlement of war
claims caused the Bank of England rate to advance from 3 to 5 per cent.,
and produced a feeling bordering on panic in London. The New York market
was very sensitive when news of the Chicago fire came. Prices broke 4@10
points. On Tuesday there was great excitement; sales were enormous and
fluctuations wide. On Wednesday there was a rally on the belief that the
Government would purchase 5-20s. The lowest prices, however, were made
on Thursday. On Friday there was more steadiness and prices were higher.
The bank statement was favorable and matters quieted down.
_December, 1871._—The Ocean National Bank, the Union Square and the
Eighth National Bank failed. Money was scarce, but stocks were firmly
held. Operators and brokers were loaded up with stocks and they
sustained prices, awaiting an opportunity to get out.
_March, 1872._—The Erie revolution occurred. The Board of Directors was
overthrown, and Jay Gould resigned the presidency. Gen. Dix became his
successor. The operation caused great activity in the stock market, and
money became tight.
_June, 1872._—Stock dividends on Lake Shore and Michigan Central were
declared.
_August, 1872._—Gold was cliqued.
_September, 1872._—Erie was cornered. The Gould-Smith clique was short
of it. The stock first became scarce on purchases by German brokers for
foreign account. Then Drew became a heavy purchaser. At the same time
the German brokers were long of gold, and with the double idea of
punishing them and compelling those carrying Erie to sell out the
Gould-Smith clique endeavored to lock up money. This plan was defeated
by the refusal of two banks to pay out legal tenders on certified
checks. Just then, too, the Government bought $5,000,000 bonds and sold
the same amount of gold. This completely broke the speculative
manipulation of money, and a panic was averted. During the height of the
panic there were no quotations for money. Among the failures of the week
were Northrup, Chick & Co., bankers, the Glenham Woolen Manufacturing
Co., Paton & Co., dry goods, George Bird, Grinnell & Co., stock brokers,
Hoyt, Sprague & Co. and A. & W. Sprague. The banks suspended their
weekly statements, and they were not resumed until late in November.
_November, 1872._—Jay Gould was arrested on criminal charges based on
his management of the Erie Railroad. He surrendered securities, the face
value of which was more than $9,000,000, in December.—Northwestern was
cornered. It opened Nov. 20 at 83¾ and closed at 95. On Thursday it sold
at 100, and at the close on Friday 200 was bid. On Saturday buying in
under the rule ran the price up to 230. The settlement was made on the
following Tuesday, when the price declined to par, the highest bid made
being 85. Jay Gould, Horace F. Clark and Augustus Schell conducted the
corner, while the cornered were Drew and Henry N. Smith. It was one of
the most profitable corners ever made in Wall Street.
_February, 1873._—There was a noted corner in Northwestern.
_April, 1873._—The preliminary panic of the year occurred in this month.
The stock market was uneasy. The failure of a firm of silk importers was
followed by that of Barker & Allen, the members of which were related to
Vanderbilt. Three other firms also failed. Confidence returned and quiet
prevailed until the 26th, when the Atlantic Bank failed. This brought
about another depression, which was followed by a quick rally.
_May, 1873._—Heavy break in Pacific Mail. The further retirement of
greenbacks was prohibited by Congress.
_August, 1873._—Fraud was discovered in the issue of certain bonds of
the New York Central & Hudson River Railroad.
_September, 1873._—The New York Warehouse & Security Company failed on
the 8th; Kenyon, Cox & Co., in which Daniel Drew was a special partner,
on the 13th; Jay Cooke & Co. on the 18th, and Fisk & Hatch on the 19th.
Innumerable brokers failed. There were runs on the Fourth National Bank
and the Union Trust Company. The secretary of the company was a
defaulter to the extent of $500,000, and its doors were closed. The Bank
of the Commonwealth failed. There was a panic in the stock market, and
the excitement ran so high that the Governing Committee closed the
Exchange at 11 o’clock on Saturday, the 20th. The Gold Exchange Bank was
unable to effect all the clearances, and dealers were unable to get
their balances. The result was the temporary suspension of some dozen
firms. The Gold Exchange Bank having been enjoined by the courts from
making the clearances, the Bank of New York undertook the job and failed
in it. Next a committee of 20 was appointed to do the work, but it
failed also, because Smith, Gould & Martin refused to render a statement
to it. The final settlements were made between members themselves.
Smith, Gould & Martin, with contracts amounting to $9,000,000, settled
on a basis of 135. Business was resumed on Sept. 30.
_December, 1873._—The Credit Mobilier was organized for the construction
of the Union Pacific Railroad. It was composed of stockholders of the
railway company, and had a capital of $3,750,000. Profits were large,
and the stock was quoted at 400. Certain Congressmen were given stock at
par on their personal notes, the object being to gain their favor in
case adverse legislation was proposed. Oakes Ames, of Massachusetts, was
expelled from the House for his connection with the bribery, and James
Brooks, of New York, for accepting bribes. Other Congressmen were
censured. A proposition to impeach Vice-President Colfax was reported
against by the Judiciary Committee.
_January, 1874._—The value of the pound sterling was fixed by Congress
at $4.86.65.
_February, 1874._—Two letters, purporting to come from the Wabash and