CHAPTER XXXI.

THE RECORD OF FIVE PANICS.

Recorded below are the movements of a few active stocks in the panics of 1873, 1884, 1893, 1895 and 1901. The figures include the high prices prevailing shortly before the panic, in some cases those the day previous, and in others several days prior thereto. The low prices are the low points in the panic. The recovery given is to prices established within a week or the low point in the panic, coming in some cases within a few days and others not until nearly a week afterwards.

We are accustomed to think of the panic of 1873 as a very serious event. It was sufficiently serious to compel the closing of the Stock Exchange, but the decline outside of Lake Shore and Western Union, seems singularly small in view of losses which have been seen since. The panic itself was the culmination of a feverish market which had lasted all the week, the final break coming on Saturday. The average decline in that panic for nine active stocks was 10.32 per cent. Figures follow:

The panic of 1884 reflected a larger average movement of prices, the losses of May 13-16 running from 8 to 15 points. The panic proper covered two days, while the recovery for ten stocks amounted to about five-eighths of the loss. Details follow:

The panic of 1893 was not very severe in the extent of the losses. The average fall in 13 stocks was 7.34 per cent. and in only a few cases did the loss exceed ten points. In the leading stocks quoted the losses were from 7 to 9 points, while the recovery was in nearly every case larger than the panic decline.

The Venezuela panic of 1895 was about equal in intensity to the panics of 1873 and 1884. The average of 15

stocks fell 9.72 per cent. and a considerable proportion
of the losses exceeded 10 points. The recovery was nor-
mal, about two-thirds the amount of the decline.

The declines are amazing when compared with the

losses in other panics. Drops exceeded 40 points each in

Atchison, St. Paul, Rock
Pacific and Union Pacific.
point were in some cases a week or more before the low
point, but the drop as between the close, May 8th, and the
low point, May 9th, covered in most cases a large propor-
tion of the total decline.

Island, Manhattan, Missouri
The figures showing the high

The recovery was equally noteworthy. Union Pacific fell 57 points and rose 472 points within one week. Missouri Pacific fell 4434 points and recovered 362 points in the same time. Other changes were almost as pronounced, going to show that in the extent of the fluctuations the panic this month was not to be named in the same breath with any panic record in the past.

It came and went so swiftly as to leave onlookers almost dazed. The speed and the extent of the recovery was all that saved the panic from being a financial catastrophe.

A long train of ills followed the smaller declines in panics past. The ills would have been a calamity had the low prices of May 9, 1901, continued for twenty-four hours.

The fluctuations of the May 9 panic show that while investment stock was not greatly disturbed and while commission houses proved to be strong enough to endure the strain without failure, the large trading which had been the feature of the market that year resulted in a rush to sell which carried prices far below what the decline would have been under normal selling pressure.

In other words, a great market represented by transactions of from two to three million shares a day, carries

with it the possibility of movements in prices as much greater than normal as is the volume of trading greater than normal. There is a relation between the volume of business and the movement of prices. Great activity means great movements whenever the normal balance between buyers and sellers is violently disturbed.