New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-09-26
FINANCIAL MARKET
Railroad Rate and Political Un-
CertaintieS Retard Business
and Speculation.


litigation appear to favor the railroads
and encourage the hope that the time Is
/ not far distant when the question OF
| what constitutes a reasonable rate vii
have received judicial determination and
a definite rule of law established by the
! highest court for the guidance of the
shippers and the carriers. On the day
pany's report Judge Otis. Of St Paul,
acting as master in chancery for the
/ United States Circuit Court of Appeals.
decided a case of farreaching Importance
to the railroads, which If upheld by
the courts Will wipe out the rate making
power of the State Of Minnesota Fun
damental principles are set forth in the
finding OF the master in chancery which
doubtless will have a most important
bearing on future railroad legislation
Judge Otis asserts that the different
state legislatures in attempting TO reg
ulate intrastate rates cannot infringe
upon what he considers federal terri
tory, and that railroads are entitled to
earn per cent on the valuation Of such
portions OF their property as are actu-
ally employed in connection with the op-
erations of such railroads in their func-
tions as common carriers, excluding all
land holdings and outside investments
that the companies may have.
His Interpretation of the law is that
the question of capitalization in itself is
wholly an extraneous matter, and has
nothing whatever to do with the ques-
ton of rate making. The fact that the
case has been so thoroughly gone into in
regard to every detail. together with the
high character of the master in chan
Gerry, suggests to railroad men that il
will be upheld by the Circuit Court of
Appeals and later by the Supreme Court
of the United States. all of which tends
to create a more confident feeling in
business circles that legislation by states
against the railroads will be nullif1ed by
the courts if such legislation imposes an
unreasonable burden upon the trans
portation industry. Another item of in
terest in connection with the rate situa-
ton is the statement by one OF the Inter
state Commerce Commissioners that the
railroads must find some other means of
meeting increased operating costs than
indefinite rate advances. This does not
warrant the tdea that the present pro-
posed higher schedules will not be al
lowed, but it may be taken as an indi-
cation of a belief on the part of the
Interstate Commerce Commission that
further applications for increased trans
portatiOn charges would be considered
unreasonable
Until the rate question has been sat
tied it is not likely there Will he a sus-
tanned upward movement in the securi-
ties market. but in well informed Wall
Street circles il is believed that the
foundation is being made for bull OPERA
tons Of large proportions, Just as soon.
as the various uncertainties that are now
retarding speculation and general bust
ness have been cleared up. 1t may be
well worth noting that conditions in the
bond market show improvement. and
that on all declines stocks are absorbed
by strong financial interests. The So
called public is taking no part in current
operations, but it would not require
much encouragement in the way of IA
vorable news TO attract a better outside
demand. The best feature of the market
is relative strength in the face of per-
sistent efforts TO bring about an active
selling movement, while perhaps the
strongest factor making for higher
prices at some future time is the proba-
bility of a total yield of products from
the ground in the year now drawing to a
close Of money value of upward of
IS. 500 100000. At the moment there Is
some uncertainty over the course of the
money market in the rest Of the season.
owing to the complications that may
arise as a consequence of the refusal of
London bankers to accept our cotton
bills OF lading without an American bank
guarantee, which our banks will not
give, but it does not appear probable
that there will be serious disturbance in
the market, although much higher rates
for accommodation may develop.
In the matter of cotton bills Of lading
our banks are taking a sound economic
and banking view Of the question, and
il is absurd for the foreign bankers
to ask US to do something which UNI
der no circumstances the latter would
do themselves. Fortunately, We have
the cotton and Europe will have to buy
It. Financing the exports will be man
aged on this side. though perhaps with
some temporary embarrassment, unless
London abandons its present policy. In
the end London bankers may discover
that il will be up 10 the buyer to do the
financing of the movement. The iron
and steel trade situation is attracting
particular attention from Wall Street.
owing TO the contradictory reports re-
garding the condition of the industry.
It is quite evident that active specu-
lative efforts are being made to cause
uneasiness over the trade. but the best
Informed man on steel in the country,
r. II. Gary, chairman of the United
States Steel Corporation. asserts that
for a dull season satisfactory results are
being obtained. Moreover, Judge Gary
states that the idea of wide open cut
in prices for finished steel materials has
been created by spectators for stock
jobbing purposes.
Quotations for steel are under the
rrices prevailing earlier in the year. and
while some Of the smaller producers are
Offering their goods under the so-called