The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-03-09

office. II has believed this all the more
because of the high ground OF national
honor taken by the President In respect
to the treaty obligations involved In the
Panama Canal tolls dispute.
I Even while perplextics abound progress
Is being made In forward directions. The
Wall Street stock market was first upset
| after the middle OF last week BY the an.
nounccment OF the terms which the Chesa.
peahe and Ohio Railroad had had to make
to place an Issue Of $4,000 900 OF FIVE
year per cent notes. all but a small
portion OF which is to retire three year
notes maturing next June. The terms
were clearly onerous. hut they were such
| as demonstrated subscription TO a sounder
theory OF finance than has obtained for a
| long time. Tho Chesapeake and Oh!os
troubles have been symptomatic Of the
| plague awaiting corporate arrangements
which yielded wholesale to the tcnpta-
! tons OF recourse through note issues TO
\ he market for temporary credit in order
to procure money for capital purposes.
Al matter Of fact this recourse has
been significant OF rather widespread
corporate malady not by any mcans con-
rned to railroads. II has affiicted Indus
trial enterprise. and the debate which IL
now being waged as To- how commercial
paper should he defined for the purposes
or the Federal reserve act has It's real root
IN the ease with which corporate business
generally has been able TO procure capital
FUNDS from the short time money market.
II In quite likely that there can he seen
IN the new Chesapeake and Ohio financing
the BEGINNINGS OF u process Of a general
readJustment of corporate affairs gcncr-
ally which will end In placing American
economic enterprise on much sounder
FOOTING than II has been In years.
According to the Chesapeake and Ohio
arrangement total OF 81 900 900 will,
before any dividends can be paid. be set
nGid,s rpt,,. IT, ~. IA.
TO be used for capital requirements. Quite
obviously there is medicine here which the
chesapeake and Ohio shareholders must
take as the New Haven shareholders are
taking theirs II Is the present price OF
Past assent to u management of affairs
which assured the adoption OF drastic
curative processes eventually. 1t will
nave desirable outcome In demonstrate
ing the necessity OF vigilance By stock
holders and II will teach the lesson that
there ~ no permanent profit from cor
porate finance which permits the payment
of unearned dividends or dividends dis
bursed at the expense OF a general i'm
pa!r'nent OF credit. In tho broadest sense
inc chesapeake and Ohio disclosures are
favorable. They reveal Il frank recogni.
ZION by responsible, corporation agents and
the.r bankers Of difficult situation and
cNince the courageous inauguration Of the
proper courses to pursue under the cir
cuinstances.
Furth"rmorc. the Chesapeake and Ohio
financing makes an important bubble CON
cession OF principle which ouyh, TO ob-
tain IN corporate conduct II ~ such "A
concession as should have a tendency 10
an.ct favorably the status OF MI IN. rail
roads az a time when the common carrier,
are asking the public to conccde a GER
tain principle OF rate regulation by Gov.
eminent. The Chesapeake and Ohio Ia.
gwen guarantees OF good faith for all
the railroads uhs,i, -
Washington OF the desrab!l,;y OF ALLOW.
Ing railroad owners and their represent.
atiNes 10 feel that charges for railway ser.
vice can be increased a. well AS r.-ii.od
AT need. In this respect Also Il IL 70 no
observed that railroad nansEccn-nts are
iar from being wholly responsible for the
Eardships which to-day attend railroad
financing. The downward regulation OF
iaiIroad rates by Government has done
much TO bring about present conditioos
ana apparently II IL only some reversal ,
OF pubic policy in this respec: which can.
IN combination with new policies OF rail
ROAD infringement. enable the railroad
system or the country TO do It's pa. IA
ne promotion o' general f,rosp.rI.v
When the faults OF the railroads have
petn duly exploited th.r. remains the
.Ahib!t OF insufficient earnings This or
hlbit IL most wretrhed IN current Return.
which are so bad that they n-,. q nov.-f,i
argument for th1t grant OF political In.
dulgenc" of greater liberal!ty in rate
masking which has been asked Of Wash.
inGton " ''"-
IN" -. Paul report which the Interstate
commerce Commission hurled Into The
STOCK market late on Friday afternoon
ielI on Il situation already weakened snr,c.
Whtt 10y the Implications OF the ch,sa
p.ake and ohio financing T. naturally
inspired a good many alarming cou,ec- |
'1le' nov the least Of which waa connected
WIN the chances OF the Eastern railroads
IN Their application Tor perrnis,Io,i "a !
make general fro.@ht rat. advances on |
sur" opportunity AZ Wal stree. had b, |
iorc the week ended TO view tho y, PAM !
"H"ir IN all It's hel rirea +; appeared thu, !
Nh''t the commission had don. had been
To Nentllate official dosmas rather ti.a,l :, /,
uncover any railroad dereilct!g,l Of r,-,r
tica! consequerc" Tie entire failure 70 /,
charsc any fraudulent and criminal cor.
uuCt against the st Paul officers tended /
10 sho" that the commission had done a /
piece OF routine work dealing chiefly Win /
rather stale tcchr!ca!ities but had dom. +, |
IN very clumsy and alarming f.tsr,pn |
ih-r" ala not. on such refec;ioH us tim,
permitted. seem to be any essential reason
LOT heieVinE tina; the long range outlook
Tor values had been dimmed or that srv
occasion had been supplied TO tho nnen.
c!ai community for losing either head n,
heart ~ W