The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-03-07
FINANCIAL NEWS
AND COMMENT
Interstate Commerce Commits
sion Report on st. Paul
Breaks Stocks.
PUBLICATION ILL TIMED
Market Has Only Opportunity
to Act without Reflection
on the Findings.
PUBLICATION I'LL TIMED

mission the statement would not be far
from the truth. Tho commission in the
innocence Of Its official heart was un-
doubtedly ignorant of the effects likely TO
be produced by fiinging suddenly into the
present disturbed Wall Street situation
during a stock market session such re-
port as that which 1t published against
the bookkeeping methods Of the Chicago,
Milwaukee and st. Paul Railway. 1t was
nevertheless the crudest kind OF blunder
to permit such publication while the
Stock Exchange was open for business.
The blunder Was made all the more gross
by issuing the report at such n time when
only fragmentary features Of It. and those
the features certain TO do the most harm.
could reach the financial community with
out affording any opportunity for careful
consideration of the findings before the
market closed.
1t is to be hoped that on future occasions
the commission will display more sense in
making It's announcements for the con
sequences Of administering an abrupt
shock to an unsettled financial market
might be disastrous. Even II they are
no more serious this time than they were
yesterday afternoon they are serious
enough. After the Stock Exchange closed
the opinion was arrived at In the finan-
cial district that the commissions find
ings were not 80 alarming an appeared a,
first. but In cases Of this kind first i'm
pressions count for much. and there was
no way Of telling last night in what terms
OF harm the official mischief making
might have 70 be measured. 1t was in
dicated on the commissions own showing
that the whole matter could be reduced
very much to a difference OF opinion as
to accounting methods, and II this is the
case II Is too bad that the commission did
not proceed more carefully to allow It's
findings to reach the public in coincidence
with the company's own construction and
Interpretation OF the issues involved
IL Is not astonishing that stocks broke
badly in the last half hour OF trading
The share list has had to resist many
unsettling developments Of late and senti-
ment has not been particularly cour.
ageous. The needs Of the railroads have
been much In the Wall Street mind. and
anything which seems adverse to railroad
interests has tended to have a depressing
effect on quoted values. Accordingl,
there was Il rush to sell stocks wher
Wall Street learned. only quarter oi
an hour or no before the close OF tn.
session. that the Interstate Commerce.
Commission had made n report based or
an examiners inquiry into the ST. Paul.
books and that the commission severed,
criticised and condemned the st. Pau
accounts OF the last three or four years
As the news reached the financial distric
! about all that anybody could see wa,
the statement that SERIOUS lrregulariti
were charged against the st. Paul ans
Puget Sound statements OF income and
expenses. as well as against their bal
ance sheets. Wall Street was told tina
the commission had uncovered. a stat.
OF affairs similar to those disclosed IL
the New Haven and ST. Louis and Sar
Francisco railways; that income hat
been overstated in 1910 and understates
In 1911. as an argument for rate in
creases. and that the Puget Sound hac
been overvalued by 500. 900, in or
der to facilitate the sale OF bonds.
In tho conditions under which Wal
Street does business one has sometime.
to act quickly and think afterward, ant
the impression that financial enormitie,
were alleged against the st. Pau
management had far reaching implica
tions. which were bound to break tho
stock market under the weight OF sales
promptly hurried In. II was small
consolation TO reflect In the evening tina,
the Interstate Commerce Commission did
not after all appear to Make other thar
technical accusations, and that II com
mented favorably on the financial condi-
ton Of tho st. Paul property. despite the
stress laid on bookkeeping insufiiciencies
from an official point Of view. The whole
episode was an excellent illustrati or
OF how things should not be done. and
was calculated to spread feeling OF
dismay. because of tho fashion In which
values had become dependent on govern.
mental conceptions OF the proprieties con-
nected with the discharg- Of official duty
Up TO the time OF the ST. Paul an
nouncement the stock market had con-
tended rather well against the depressing
influences emanatins from the hard bar
gain which the Chesapeake and Ohio had
to make before 1t could obtain financial
accommodation imperatively required.
Baltimore and Ohio. New York Central
and the shares OF other corporations
which are supposed to have new financing
under arrangement had undergone selling
pressure. but the customary leaders Of Tn,
list had exhibited striking degree Of
underlying frmness. This was particu-
larly true OF United States Steel and
Union Pacific. Chesapeake and Ohio fell
In the forenoon almost az much as It de-
clined on Thursday. The Rock Island
| collateral trust ~ broke to new low prices
on the extraordinary statement OF con-
lecture and curious figures which interests
! connected with the present Rock Island
management had caused to be published
II did not seem to be observed by Wal
Street generally that this statement no
only ola not emanate from the interest!
representing the collateral trust bonds
but that II did not appear to be In an,
way accepted by the bondholders protec
tive COMMITTEES as an authoritative de
scrIption of the Rock Island position
prospects and requirements.
After midday dealings In stocks con
tracted and the market was steady unit
the Interstate Commerce Commission ex
ploded Its st. Paul bomb. The expa !or
Of sales then rapidly swelled total trans
actions for the day to i fairly large ag
gregate. The market closed feverishl,
excited and weak at Nottom figures. viii
st. Paul down 4 points. Baltimore ant
| Ohio. New York Central, Northern PA
cific and Union Pacific were down NOR,
than 2 points each and the array of losse,
all around was substantial.
There was weakness In the Iondor
stock market on account of European ant
London conditions. as we'll as In respons,
to the unsettling aspects OF the Chesa
peake and Ohio arrangement, while tn,
Brazilian crisis was distinctly a factor
All matters of domestic politics in thi
country were thrown into the shade b!
such questions Of more immediate ma
cial concerns az have been already dis
cussed On the known movements O
money the local banks seem to have sus
tanned cash loss Of less than $4,000. 90,