New-York tribune., 1910-06-01

FINANCIAL MARKET
Wall Street Upset Over Railroad
Rate Situation.

Bear pressure and a total lack Of
support from substantial interests en-
couraged moderate declines throughout
the list in yesterdays early stock mar
ket dealings. while in the afternoon
further selling from the trading element
and genuine liquidation brought about
acute losses among the active issues.
The decline in the second half Of the
day. which was accompanied by ma
terial increase in the volume Of bust
ness. was based TO a. large extent on
Supreme Court decisions that did not ap-
peal to Wall, Street as favorable to cor
porations. though the corporation tax
suit was not among the cases decided by
the court. and by the announcement that
the administration would proceed against
the railroads in the West that had
served notice upon the Interstate Com
n1erce Commission of their intention to
increase freight rates. 1t is not crime
for a, railroad TO advance its rates, but
the government argues that the railroads
have combined for this purpose, and
that this combination Is wholly contrary
to the law.
The financial community believes that
the railroad companies are entitled TO
higher freight charges owing to the
increased wages they are paying and
the general increase in the cost of
operating their properties. and that If
they are prevented from advancing their
rates dividends will have to come down,
and in some cases be suspended. Hence
the weakness in railroad stocks yester-
dav on the announcement Of the gov
ernment's action in asking for an in
junction against the putting into effect
of proposed higher freight rates to-day.
The prominent shares broke with ex-
treme violence in the last half hour, de-
clines running from ) TO more than D
points in many issues, while notwith-
standing some faint-hearted support in
the final operations last prices were at
or near the lowest of the day. Reading
showed net decline of 81; Union Paci-
fic. 3s4: Southern Pacific, AS; United
States Steel. 2%s; Northern Pacific, 39s,
and Atchison, 80. A sharp break in
cotton and wheat was ignored on the
Stock Exchange, favorable developments
being overshadowed by the course of af-
fairs in Washington. as far as Stock
Exchange sentiment was concerned.
No material change in quotations
marked the course Of the money and
foreign exchange markets yesterday. as
compared with the final figures last
week. Demand sterling was a trifle
easier under the influence of a some
what larger offering Of bills. but the
general character of the dealings did
not suggest the development in the i'm
mediate future of a low level Of rates,
though the weakness in commodity
prices and the possibility Of further
sales Of American securities abroad en-
couraged the idea in many quarters that
the market would run more in favor of
this country in the rest of the year than
reported at any time in the last twelve
months. If the movement now under
way in the price of grain and cotton
continues, and If the crops make large
harvest, our export trade doubtless will
show marked improvement as the sea-
son progresses, and from current in
dications quotations for both grain and
cotton are proceeding toward the level
that will attract an active foreign in
ouiry for these commodities. While TT
IS toe early to figure on the outcome Of
the years harvest. il is satisfactory to
know that current conditions on the
farms are much better than reported a
few weeks ago The demand both for
time and call money is light, except a
fair inquiry is noted for the longest
naturities, but the banks show no dis
position 10 make concessions in rates, in
spite Of the strength OF local reserves,
which now stand for the Clearing House
institutions at So. 800 The banks at
this centre are conserving their re-
sources and are doing nothing to en-
courage active bull speculation in stocks,
doubtless having in mind the possibility
of developments that might upset the
financial situation If 81 should not be
J,.y in