Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1913-06-06
FRISCO SCANDAL
CROWS WORSE
WITH TINE
American Credit Abroad in Dan
ger Of Being Assassinated
by 1t,
BY B. c EoRREs-

by 1t,
BY B. C. FORBES.
The latest scandal in American
High Finance grows worse on closer
acquaintance. Nothing quite SO bad
has occurred in years. America
credit abroad is in danger of being
assassinated.
Let me assure the Government
that an investigation of the ST. Louis
& San Francisco Railroad, il it gets
at the real, full facts, will disclose
something worth the pains. ! am not
Speaking at random.
The proposed probe by the Inter
state Commerce Commission is i'm
perativeIy demanded. BUT THERE
is A LARGER PROBLEM IN
VoLVED: THE COMMISSION
SHOULD HAVE JURISDICTION
OVER REcEIVERsHIPs. MEN
WHO RUN A ROAD TO RUIN
otlOOGC WI DE LET TN
CHARGE WHEN THE CRASH
COMES. INVESTORS ARE EN-
TITLED TO PROTECTION.
Friendly receivers used to be ap-
pointed when banks failed, and de-
positors seldom got any satisfsc-
ton, the funds usually going into
the pockets of the receivers, their
lawyer friends and other hungry
gentlemen during long drawn out,
as-you please, leave US alone pro-
eeedings. Former State Bank Super
intendent Clark Williams had the
Legislature empower the Banking
Department to handle failed institu-
tions, and the cost to depositors was
infinitesimal.
Could not the Interstate Com
meroe Commission achieve similar
results with bankrupt railroads? Why
should this body be given almost IN
limited control of solvent roads and
have not one word to say after dis
sster comes, when investors are in
urgent need Of protection, when in
telligent, expert supervision is more
than ever necessary?
To allow President Winehell and
Director West, of the Frisco sys-
tenn, full sway in treating the thou
sand Of investors who have been
caught in disaster was fraught with
danger, for 1t would stir up public
antaqonisnn, public distrust and pub
lie suspicion that could not fail
to feed soeialistic elamor. In
deed, a Socialist said to me yester-
day: "This is fine. II shows that
the present oapitalistie system is a
failure. These men wreck a prop
erty, and then they are allowed to
treat the sufferers-the security hold
srs as they like. Let's have more of
these little deals, and our party will
oct into the saddle sooner than you
may expect. Government ownership
"a necessary steppingstone-ls al
ready within sight"
asked 3. 2. Yoakum, chairman
OF the Frisco road and its control
ING power, a few plain, courteous
questions.
"Six weeks ago your company
gave French investors assurances
that earnings were doing very well,
and that your maturing indebtedness
would be taken care Of" said, Can
YOU not explain. for the satisfaction
Of all interested, what has Happened
since then to cause you to throw the
road into bankruptcy Re-. pont you
think the public are entitled TO this
information"
Mr.. Yoakum said he did not care
TO make any statement on the sub
jet.
"Did you notice that it is pro-
posed to start an investigation by
the Interstate Commerce Commits
sion, Mr.. Yoakum?"
Mr.. Yoakum Indicated that he had
no objection to any Investigation.
Reports we're again plentiful in
Wall Street. SpeYer & Cos legal
representative is due from St. Louis
and a statement describing exactly
what preceded the sudden appoint
nnent Of receivers is expected. Friends
OF this old established banking firm
are urging it to come forward with
a full explanation showing how il was
misled, how the management failed
TO fulfill certain pledges and how the
application for receivers upset all pre-
vious calculations. Speyer & Co..
however, have so far made no official
statement further than that they were
not consulted about the appointment
of receivers. Later the whole inside
Developments may be made known
In the battle that is pending GER
tain regulations can not but be NOR
tally wounded.
Extraordinary disclosures CON
esrninq the operations of the French
bankers who distributed the $1,000
600 Frisco bonds in Paris in April
are made in a communication re-
eeived last evening from a friend
in Paris who is in the inner circles
Of finance there. This letter was
written before the receivership pro-
esedings-a fact that makes It more
significant and prophetic.
THE FRISCO BONDS WERE
pLOATED IN PARIS AT 81 AT
The MOMENT THEY WE'RE
QUOTED IN NEW YORK At 78 IA.
WHEN THE NEW YORK QUOTA
lion WAS IS "a THEY WERE
STILL HELD IN PARIS At So ~
A DIFFERENCE OF SOME %
POINTS!
Nv well-informed friend, writing
en- May "a, says in part;
The ignorance Of the French pub
Tic about things American is such