The Washington herald., 1913-05-28
STOCKS DECLINE
IN LAST HOUR
Receivership for Frisco Sys-
tenn Chief Bear influence
of the Session.
DEPRESSING FEATURES
Union Pacific Under Pressure-Rate
Advance Ordered Ineffective.
Gossip of the Day.
DEPRESSING FEATURES
Nv L. A. FLEMING.

BY i. A. FLEMING.
And just when the atmosphere scenes
to be clearing the weather man throw
in a bit more trouble as il the friend
Of their own. what with the Sherman
law, the Interstate Commerce Commits
sion, the long held-up rate decision, higl
money. high prices to labor. and Low
rates to shippers.
The smash given yesterday did no
come until late in the session. but II
shadow hung over the entire session
and il was sufficient to turn -sharl
rally after the opening into a bear raiC
and more or less general declines.
The St Louis and San Francisco Rail
road could not make the necessary ffnan
cial arrangements to care for s., 500 90
maturing obligations due June l. Mr.
Yokum exhausted every resource anC
then threw up the sponge and a receiver
was appointed.
drop OF 5 points in Frisco second
preferred followed. Rock Island issue!
in sympathy eased of la1 "a and wa.
sold heavily. while Denver, another mid
Western road. was given a taste of &
bear raid for 1-4al 81 loss.
What of the harvest?
What of the Harvest.
Conservative operators began to Won
der where other roads were to raise
the cash to meet their obligations. Rocl
Island IS were also of a point. Then
too, the placing of one-year notes to the
amount of $1,000 coo by the Mexican Ma.
tional Railroad Company on an pc
cent basis gave the street another jar
The question naturally arises how are
other companies to finance themselves
with credit shattered as it is today.
And while these influences were work
ing their way came the announcement
that the Interstate Commerce Commits
sion had ordered the Eastern railroads
TO cancel proposed advances in local
joint and proportional break bulk rates
domestic and export on grain and grain
products from Milwaukee and other
point in Wisconsin to trunk-line terri
tory east of the Niagara frontier. includ-
ing Boston. Philadelphia, and Baltimore.
1t WAS announced that the roads had
failed to prove the reasonableness of the
proposed rates.
Hitch I'm Union Pacific Plan.
Then followed the story of a hitch ir
the Union Pacific-Southern Pacific plaT
and This added to the weight. and al
things considered. the market did no
give such a bad account of itself, weak
il was.
London started the weakness selling
Union Pacific shortly after the opening
and checking a very prosperous APP
pearing rise. But it was easily stopped
the more so when the Frisco reports
began TO bear heavily on values.
Extreme dizziness marked the hours be-
tween L. o'clock and O'Clock. Then
came the news that Mr.. Yokum had
failed in Frisco financing and the de-
cline started with heavy selling by
shorts and weak close in close proxlm-
itv to the low point
1t was helped somewhat by the an
nouncement from Attorney General
McReynolds that a number of prosecu-
tions were in order.
Reading lost a point. Union Pacific Is
Steel 81 Fractional losses occurred in
the Hill stocks, Chesapeake and Ohio,
New York Central. Coppers. Illinois
Central, la11-2 on Atlantic Coast Line.
"a on Central Leather. despite regular
dividend, 13-f on Mexican Petroleum.
and S-s on Kansas City Southern.
Local Securities.
Local securities were rather slow but
steady. Bonds were in good request at
1914 for Gas IS. 1o1 3-s for Potomac Con-
solidated IS. So 3-S for Railway As, and lG3
for Telephone IS.
The rest of the list was scarcely mem
TONED.
The Stock Exchange will adjourn Sat-
urdsys in July. August and September An
effort to add June to the list failed The
exchange will stand adjourned from to-
morrow night until Monday morning.
Money.
Local money market is active and the
demand has increased during the month
Collateral loans are 5a51. per cent and
commercial paper, 5I1a5 per cent.
Merchants and real estate men are Dor
rowing quite freely.
On Paying Interest.
The Wall Street Journal thus comments
on paying interest on government de
posits:
In notifying the United States Treasury
that it declines TO carry gov eminent de-
posits at interest, the Chemical National
Bank has set good example The re-
quirement by the Treasury of interest on
these particular deposits is not in itself
so objectionable, but the Chemical Ma
tional Bank has steadily refused t. pay
interest on the reserve deposits of coun-
try banks. The payment of interest
on reserve money is unsound in theory
and dangerous in practice. II the other
national banks of New York would get
together and decline to bid against each
ether for such deposits, except by ex-
cellence Of service, il would be a long
step towards averting some of the worst
evils of periods of tight money and panic.
Payment of interest on reserve deposits
is one of the greatest obstacles to- sane
and safe legislation in regard to the
monetary system. Such deposits so far
as they fall within the amounts required
by law to be kept as reserves should be
in the custody of the central banking
mechanism, and in no circumstances
should they draw interest. At the pres
ent time, however, the amounts due to
national banks fnom approved reserve
agents amount to about $500 COZ. 600. and
If they are drawing interest at per
cent the banks are paying each other
more than $4,000 900. for the dangerous
privilege of carrying money which is like
ly to be withdrawn and lent at higher
rates when IL is needed most at the
financial centers. In many respects, it
to nothing more than a swap
ping of jack-knives between the banks,
without even temporary benefit to the
banking system. Yet a plan which pro-
posed to wipe this practice of the slate
would probably have the country banks
in arms against IL"
NEW YORK COTTON.