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139 7 the CoNSeQUeNCeS oF a “hoStile aCt” On Wednesday, May 1, the day Morgan is thought to have arrived in Aix, the New York Stock Exchange went crazy again for Union Pacific common. It opened up nearly two points. Then it rose in a cyclone of bid and ask; with frantic, sweaty mobs of traders swaying, waving, screaming, pushing. Up and up, rocketing nine points in just minutes. In one span of five minutes 32,000 shares of Union Pacific changed hands. Otto Loeb, a widely known trader, bought Union Pacific at 118½ and sold it a half hour later at 129, pocketing $40,000. Broker H. G. Campbell, known to be an agent of Harriman, sold 30,000 Union Pacific on the rise, perhaps signaling Harriman thought it was the top. One customer ordered his Union Pacific to be sold when it was at 122 or 123, but to his delight when the order was executed it was at 128. It closed at 122⅛, up 13 for the day, on volume of more than a half million shares, almost one of every five Exchange shares traded. New York Central closed up 7, the North Western up over 5. There were large purchases of many other railroads. Brokers “howled and shrieked in the execution of their orders,” said the Wall Street Journal, “even the messenger boys seemed to have caught the fever, for they rushed about, oftimes aimlessly, or so excited that they failed to remember the purpose for which they were sent.” Many clerks worked through the night to catch up on orders. Some leading commission houses, short on clerks, refused to take some orders. Brokers were so swamped that posts on the trading floor were tacked with buy and sell offers scrawled on paper slips: “We want 5,000 Steel common . Jones & Co.” One broker wanted to sell 250 shares that would have been valued at $21,000. He couldn’t find a specialist in the stock to take the order 140 THE CONSEQUENCES Of A “HOSTILE ACT” so he pinned a signed note to the specialist’s post. It went ignored. Red-eyed clerks worked until three or four in the morning; many had no place to sleep. The eight-story Stevens House on Broadway at West Twenty-Sixth, where they had once found beds, was filled; so were all three hundred rooms at the Astor House on lower Broadway. It was said one big commission house handled so much volume that in April it hadn’t closed its main office for a single hour day or night. The Exchange fined some commission houses for mistakes in their clearing sheets. The rush of orders made it impossible for some traders on the floor to place orders with specialists in certain stocks, even a half hour before trading began. There were reports that none of the specialists in twenty active stocks on Tuesday, April 30, could execute all their orders without making mistakes. They sometimes had to buy or sell a big lot and “trust that [they] would get even on [their] over-purchases or oversales.” One commission broker said he had stop-loss orders in twelve stocks and three orders for more than 1,000 shares, each to be executed at the market and the open, but he couldn’t place them with specialists and “had to take a chance on executing them all himself.” The tape ran so far behind, prices changed so fast, that orders to be executed at a set price had little or no value. Orders “at the market” became the rule. Brokers advised customers that any “stop loss order” was at their risk. The federal government reaped enormous revenue from the frenzy: a tax of $2 (charged to the customer not the broker) on every hundred shares traded. A clerical army of hundreds licked and pasted tax stamps on about a million traded certificates for the year in New York City alone. Rumors mushroomed on Union Pacific. Was Vanderbilt conferring with Morgan in Paris? The New York Times blared “Union Pacific Control Lost by E. H. Harriman,” claiming Chicago investors Marshall field, J. J. Mitchell (Gates’s banker), Norman B. Ream, and others had bought control of the Union Pacific on behalf of the Chicago and North Western with the aid of William K. Vanderbilt to protect the North Western’s transcontinental traffic and its Eastern connections threatened by Hill’s purchase of the Burlington . The story wasn’t true. What was...

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