The Washington herald., 1913-06-01
FRISCO SCANDAL
TO Be PR0BED
Hints Of WiIHul Mis-state.
ments Of Roads Finances
Heard IN Wall Street.
BANKERS TAKE ACTION
Speyer & Co., Who Sold Bonds in
Paris, May Cali in Department
of Justice.

New York. May sI.-Hints Of wilful mis-
statements of the financial status Of the
St Louis and San Francisco Railroad.
of which Benjamin F. Yoakum is chair
man of the board of directors and L. w.
winchell president. have been thrown
out in Wall Street since the crisis in
the appointment last Tuesday of re-
ceivers at St. Louis,
The banking firm of James S. Speyer
& Co. which handled s6400o.000 of
the Frisco roads bonds, selling them all
over the world, claims to have been i'm
posed upon. The bankers were led to
believe from the roads official statement
of its financial stability, issued on April
I. just before blocks of its bonds were
sold in Paris, that the road has surplus
of approximately .H.a0o,ooo-
1t was upon the authority of Speyer
& Co. that the Frisco bonds were gilt
edged that the Paris Bourse took them
up, 100000 of the bonds being sold
there. This was six weeks ago.
Try to Block Move.
The first intimation that the Frisco
road was ia difficulties came when Mr..
Yoakum, hurryins to ST. Louis one
week ago, sought to borrow s2,5oo.ooo
TO meet notes falling due Monday.
These notes are backed by Frisco
bonds. When Mr.. Yoakum failed to
put through the loan, he had his at
torneys rush into court with the ap-
plication for receivers.
Had not word of Mr.. Yoakum's intent
leaked out to bankers in st. Louis,
Speyer & Co. would have been in ig-
norance of the move until 1t was over.
On hearing of the contemplated action,
Speyer & Co. instructed their St Louis
correspondents, Lehman and Charles
Naegal. to oppose il in court Despite
their objection. the court appointed as
receivers B. L. winchell, president of
the road and T. H. West, a director In
the Frisco road.
Now Wall Street is watching for
startling developments. speyer Co.
will confer here next Tuesday with their
attorneys TO take up a move for third
receiver. one of neutral tendency. not
afiliated with the Frisco road. IL the
receiver is appointed a court fight that
promises startling disclosures is threat
ened.
Bankers Are Determined.
speyer & Co. insist that a search
ing investigation be conducted to as
certain what financial opinions have
ensued in Frisco properties within the
last few months to throw the road into
financial stress. They want to know
how il happens that a road reporting
q net surplus of s1.eoo.ooo only a month
ago suddenly reached such straits that
receivers had to be sought
The attitude of the Paris bourse in
condemning a financial probe. whereby
s. 10000 was rung from French inves-
tors upon false representations as to
the Frisco roads solvency has animat-
ed Speyer & Co. to determined activity
in arriving at the action.
James S. Speyer. at his home in Ossin-
ing, today declined TO comment upon the
investigation, but intimated that
1t would proceed to the limit in the effort
to satisfy the bondholders as to the real
cause of the Frisco road being plunged
into trouble. II blame can be attached to
any officials. the Investigators will turn
the matter over to the Department of
Justice.