The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1910-06-01
WALL STREET NEWS
Abrupt Break Follows News
from Washington.
SHIPPERS APPEAL TO TAFT
President Instruets Attorney Gen.
eraI 10 Enjoin Roads from Raising
Freight Rates-BreaI1 in Cotton and
Decline in Wheat-CIOsing Prices
Are the Lowest of the Day.

New York MAY 31.-The markets To-
day presented the unusual spectacle OF an
abrupt break in stocks, accompanying
an equally extraordinary break in cotton
and decline in wheat The very favor
able inference that might easily be drawn
from declines in wheat and cotton that
must greatly accelerate the export move
ment were entirely ignored, Attention
was centered altogether upon the efforts
of the administration at Washington to
prevent the railroads from putting into
effect increases in freight rates and upon
the action of the United States Supreme
Court in the very important Missouri
River rate cases and the corporation tax
cases.
The increases in freight rates had long
been planned by managers of all the big
railroad systems Of the country to COM
pensate them for the radical increases in
wages which have been awarded by most
OF the railroads of the country and for
other Increases in expenses brought about
by the prevailing high prices for many
materials necessary in railroad construc-
ton and maintenance
File New Schedules.
The Western roads had taken the lead
IN the movement for an increase OF
freight rates, and some time ago filed
with the Interstate Commerce Commission
many new schedules noticed TO take ef-
feet June /. There had been grumbling
among the shippers over the proposed
increases. but up TO the last two or three
days of the month no opposition had de-
veloped Of sufficient consequence to dis
turh railroad managers, and the impress
sion had become settled in the minds OF
security holders that the new rates would
be accepted without any formidable OPP
position and that railroad managers
would accordingly be in a position to
distribute among security holders such
ample dividends as are warranted by the
current high cost of living
When, therefore, it became known to-
day that in the market recess OF three
days very strong pressure had beer
brought 10 bear upon the administrator
by organizations OF shippers In the West
and by their Representatives in Con
gress. the market paused in an advance
maintained by American stocks in Lon
don during the recess.
Asks an Injunction.
When subsequently it was announced
that Senator La Toilette had introduced
a resolution instructing the Attorney
General TO secure an order enjoining the
railroads from putting the new rates into
effect tomorrow, the market first wavereC
uncertainty and then sold off easily. And
when later il became known that Presi
dent Taft had instructed the Attorney
= General to apply for such an injunction
stocks broke violently.
There was that element Of surprise II
the unfavorable news that ordinarily pro-
duces the more violent commotion in the
markets. Preconceived opinions were for
gotten and spectators at once considered
that the administration must be sue
cessful in its eIeventh-hour endeavor I,
upset business arrangements. which
though before It for a month. had en-
countered no opposition from it, that it
action must induce liquidation of invest
ment stocks by holders throughout tn
country, and. quite as important in it
bearing on the immediate future, tina
the setback to the railroads, whether o
not permanent. would delay negotiation
for the sale of bonds abroad. which "a
to the. present time have progressed salts
factorily.
For this peculiarly pessimistic construc
ton Of the administrations action SOM
justification seemed to be afforded by III
action Of the United states Suprem
Court in ordering a re-argument in tn
corporation income tax. and more es
peeially by the decision of the court II
the Missouri River rate cases.
Declines of two to four points in tn
standard speculative and investmen
shares were frequent and closing price
: were close to the low prices of the day
The trading was the most active sine
May 6. when news OF prospective larg
sales Of bonds abroad brought about al
abrupt recovery from a reactionary move
ment than of long duration.