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.