New-York tribune., 1911-02-25
FINANCIAL MARKETS
Local Banks Gain More than
S4,000,000 on Weeks Cur
renCV Movement.

Wall street was not prepared for the
sweeping decision against the railroads
bv the Interstate Commerce Commission,
and as a consequence if sold stocks more
from disappointment than from a well
defined idea that the refusal of the com
mission to indorse the proposed higher
freight schedules would upset the trans
portation business in this country. The
railroads have been making money un-
der existing rate tariffs. and there is
absolutely no good argument in favor OF
the theory that they will be compelled to
reduce dividends and stop Improvements
and new construction work because IT
has been decided that they are not en-
titled to charge more for the carrying or
merchandise. AS a matter of fact the
decision of the Interstate Commerce
Commission in favor Of the shippers is
distinct tribute to the wonderful growth
and prosperity Of the American railroads
in the last ten years. The rate con-
troversy was decided upon question OF
facts. and the action Of the commission
will not. as some hot headed railroad
mon state. drive our railroads into bank
ruptcv. Railroads have, to he sure,
shown a tremendous increase in operat-
ing expenses i'm the last eight months.
but in that time the dividend paying
properties. and there are few roads that
do not pay dividends. have earned at
rate i'm excess Of dividend requirements.
Furthermore, the outlook favors large
expansion in operating income, and bet
ter results in net returns through scien-
tifc management Of the properties.
Gross earnings are now showing big
gains over the results recorded at this
period last year when revenues were
unusually heavy, while the reports OF
various roads for December exhibit a
marked tendency toward better net re-
ceipts. Wall street worked itself into a
| condition Of emi-panic when the courts
many years ago decided against the
Trunk Line Associations: also in the
! Trans Missouri case and the Northern
! Securities combination. These decisions,
| however. imposed no burden upon the
railroads or the cOuntry's business, and
| their effect upon the financial markets
was Of short duration. A similar result
doubtless will be noted in the present
case. The idea that the present de-
cision will shut off new railroad CON
struction and that |.e natural develop
ment OF the country will he checked is
not well founded. and merely represents
the hasty conclusions by transportation
men who naturally are disappointed be-
cause their arguments favoring higher
rates have been turned down by body
Of experienced men, who are quite COM
| petent TO say whether or not the rail-
roads are entitled to demand of the hip
ping public additional compensation for
! their services.
Prices for American stocks i'm London
declined from to A points before the
| opening Of the local exchange, much OF
! the selling i'm the British market repre-
! conting operations from this side for
effect upon initial transactions here
Bear traders were active in all paris OF
the list and as a consequence Of Tho
carly declines commission houses were
heavy sellers for customers whose ac-
counts were poorly margined and who
could not supply additional margins, and
for the account of spectators who
though having available funds, were toe
badly frightened 10 protect their hold
ings. There was no investment selling and
no disposition among the larger interests
to part with their stocks. The latter were
the chief buyers on the decline. and
I while they did little TO encourage opera
tions for the rise they exhibited no indl-
cation Of nervousness and made no com
uonts that suggested they had any idea
Of giving mp the plans they have under
vav for the financing Of the require
rnents Of the railroads that need addi
tjonal funds for betterments and i'm
movements The rally that took place
i'm the late trading was due almost on
tirely 10 covering of shorts. the gains
recorded at that time running from ] Il
3 points, against maximum losses earlier