St. Louis Post-Dispatch
May 20, 1929

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_ a * a. Sail a oe eines | ad Oe ~ ge he most TODAY REG US PA LONDON PM ST.LOUIS POST-DISPATCH The Only Evening Newspaper in St. Louis Withthe Associated Press News Service ~ a I LO AE IE EEL LIT IN, sai seid SPORT FINAL ——E Oe — ——-+ NO. 256. ST. LOUIS, MONDAY, MAY 20, 1929. —40 PAGES. PRICE 2 CENTS LROAD 5 WIN O'FALLON. - STOCK CRASH AMFTER RAIL gROUP BOOM ; Supreme Court Decision in } O'Fallon Case Carried Scores of Issues Up 2 to ‘Points. s0ME INDUSTRIALS } OFF 2 TO 20 POINTS ost Drasitc Shake-Out A Since the Break in Prices Which Followed the ‘Money Pinch’ in March. By the Associated Press. NEW YORK, May 20.—-The stock market went into a dive in the last hour of trading to- yy after an of @uying in the railroads today, in- dire: me U.S. Supreme Wourt's decision favorable to t Louis and O'Fallon Railroad in he famous valuation had ed scores of rails stocks up 2 t0 20 points. The railroad vickly dipped 2 to 20 points low their early high levels, an! a long Vist of industrials crashed | to 16 points below last week's closing quotations. | The average price of 5» tial stocks dec'ined 7 ulijities 5.3 points while 20 rails —Beivaneed 1.9 pcints There was nothing in the day's Ws to explain the sudden change ‘Speculative sentiment although Pgenera!l market had been head Mt downward for the greater part the day. Wall Street long has * expecting that a favorable de- amon WOuld start a weneral revival Mullish activity and when this med to develop, professiona! op- ws started a concerted “bear” tk on the general list which swelled by a targe volume of tidation by frichtenedyinvestors Wemall speculators. Some of Closing Prices. Closing quotations on some of the Wing issues were es follows: U. Stee] common, 17254, off 21 @eneral Motors, 78%. off 2%; Pererican Can, 135%, off. 7; Ana- mepadh. 116%. off 914: Radio, 90%, 7 4%: Packard Motors, 137% { 7%: General Electric, 272%, # 19's: National Cash Register. BL, off 6%; Curtiss Aero, Bers, off 10. 7 | Break Is Sudden. | The reaction came with startling meAness, and was over before Fads of investors and specu- _ knew it had happened, al- Bow the tape was only a few ~ late when it started, It : drastic shake-out me the break in prices which fol- the “money pinch” tast men, when the call money rate PEW to 20 per cent. Mndreds of “stop loss” orders atm just below the market by MOUs investors when higher re- ee rates seemed imminert week, Were touched off by the P. ikon Brokers, who had & eir customers that ¥ Louis & O'Fallon decision E » one fo the greatest bullish de- Bs of recent months. were With telephone calls by om who wanted to know what eg PPpened. ; of News Favorable. for the continued firm- money rates, the bulk of 8 hews developments were Dividends were re- ™ Goodyear Rubber for the me since 1921. and a flock rable earnings reports bs epanies were published Pe day. Call money held » * ber cent with the sup- e Per cent fundseavailable | Sulside market exhausted Pome day was over. cker ran for 28 ® Close. e Of the leading cammodity Pointed upward, wheat ra lt to 1's cents a bushel ¥ lon of the large decrease PYisible supply. Corn also a cent or more a bushel 8 of unfavorable weather Mbstantial decrease in the Pply, o'" exchange trading was With Sterling still hovering the “gold import’ point. sharp earlier outburst the case, indus: 8B; minutes ag — 3 Stock prices with F tables uid market news ~ found on pages 29, 30, issues | ' hose | | the San Joaquin, winner of last year's = at 33. HOOVER NAMES MEMBERS OF THE NATIONAL LAW ENFORCEMENT COMMISSION By the Associated Press. Vy ASHINGTON, RESIDENT HOOVER today P announcea the 11 members of the National Law En- fo-cement commission of which George W. Wickersha n is chairman. The other members are: Newton D. Baker of Cleve- land, Secretary of War in tie Wilson Cabinet: Frank in. Loesch, Chicago; Roscoe Pound. Dean of the Harvard Law School; William I. Grubb, Fed- eral District Judge for the Northern District of Alabamz; Monte M. Lemann, New Or- leans; William H. Kenyon, United States Circuit Judge; Kenneth R. McIntosh, Chief Justice of the Washington State Supreme Court; Paul J. McCor- mick, Federal District Jude for Southern California; Henry W. Anderson, Richmond, Va., and Ada L. Comstock, president May 20. | of Radcliffe College. 20,000 WATCH JUMPING FROGS OF CALAVERAS Tuolumne County Entry Wins Contest Mark Twain Made Famous. By the Associated Press. ANGELS CAMP, Cal., May 20.— There is a great chorus of mourn- ful croakings on ‘the part of the leaping amphibians of calaveras l‘or Hooligan, a grinning, blatant bullfrog frem a pond in Stanis- laus, Cal., was proclaimed the world’s champion leaping frog fol- lowing the annual internationat frog jumping contest here. It was Mark Twain himself who, many years ago, brought this jumping conipetition to the attention of the | publie. po.pis and | Hooligan, the new world’s record holder, jumped four feet to finals yesterday. Pride ot tournanient, won second with a wap «f three feet nine inches. Nearly 20,v00 visitors attended the contest in this town which, in the days of ‘49. was a famous mining camp. The citizens, garbed tike Old-time miners, welcomed the strangers with much firing of 45s and escorted them to ‘the Wild West saloons where they treated to soda pop. F, J, WADE JR. PAYS $20,000 FOR STOCK EXCHANGE SEAT Broker Buys It Front Max Kotany —Last Previous Sale Was for $8500. Festus J. Wade Jr., who recent- ly organized the investment bro- kerage firm of Festus J. Wade Jr «& Co., has purchased a seat on the St. Louis Stock Exchange for the reported record price of $20.- 000, it was learned today. The seat was sold by Max § Kotany. broker in the Security Building. The previous record price for a seat was $8500. which was pdid in the last’sale of a seat last No vember. Wade, a member of the board of directors of the new Mercantile- Commerce Bank & Trust Co, is associated in his new enterprise with Fred J. Oltman, who was as- sistant to the president of the Mer- ‘cantile. NITROGEN DIOXIDE KILLED 124 IN HOSPITAL EXPLOSION Lower of Cleveland Clinic Says Gas Was Given Off by Burning films. the Assuciated Press. CLEVELAND, O.. May 20.— Nitrogen dioxide formed from the decomposition of nitrocellulose X- day films caused the death of the 124 men and women in the Cleve- land Clinic disaster last Wednes.- day, Dr. William E. Lower, co- founder of the clinic and one of its directors, declared today. This is the first official state- ment to come from a director of the clinic regarding the direc! cause of the deaths. oe KILLED GIVING FLYING LESSON Arthur Argies Fatally Hurt Near Roosevelt Field. - the Associated Press. ROOSEVELT FIELD, N r., May “).—Arthur Argles of the Canadian A.r Corps Reserve, a commercial aviation instructor, was fatally in jured today when the plane in which he was training Albert H. Harris of New York City, fell 2000 feet near Roosevelt Field. Harris. who was seriously in- jured, had sent the plane into a tailspin as part of his training. The craft was wrecked. Argles died at the Mineola Hospital about an hour after the crash. He was a captain in the Royal Flying Corps during the World War, and last June was designated as co- pilot with Oliver LebeutilHer for a trans-Atlantic flight projected by Mabel Boll. The flight .as never made. Argles was born in Omaha. Dr. By hy j W 1} | were | ) tlood AVERGOESUPTO 99 FEET IN THIRD FLOOD OF SEASON Crest of 34.5 Feet by To- morrow Night Predicted as Mississippi Here Con- tinues to Rise. MERAMEC FALLING, OSAGE ALSO LOWER Switch Tracks on Down- town Levee Again Sub- merged — No Material Damage Done by Flood. The Mississippi River at St. Louis, continuing the rise above the 30-foot flood tevel begun Ist Wednesday, had a stage of 33 feet this morning. The Weather’ Bu- reau predicted a crest of 34.5 feet by tomorrow night. This is the third period in the river the last six weeks in which i has been above flood mark here. It reached a maximum for the year of 34.6 feet on April 27 and 28. the great flood of 1927, the here was 36.1. The Weathér oOo” In crest Bu- reau yesterday predicted a rise to 36 feet but found that extremeiy heavy rains which it had figured as covering by Wednesday, wide areaS were “spotty.’ The railroad switch tracks on the downtown levee again are sub- merged and in sections, in the vicinity of Market street, Washing- ton avenue and elsewhere, the water has reached almost to the stdewalks on the west side of the Wharf. Steamboats, instead = of being tied at the base of the slant- ing pavement of the levee, are fastened to the coluinns supporting the elevated’railroad. As usual at St. Louis, the rise has not caused material damage. 30.2 Feet at St. Chartes, At St. Charles this morning, the Missour}) River reached W Crest of 30.2 feet, which is 5.2 feet above mark. The Missouri, in minor flood across” the eastern part of Missouri, is falling. St. Charles had a crest of 33 feet in the 1927 inundation. The situation on nearby sippi River points is: Grafton, Ill... flood stage, 13 feet: today, 21.7 feet, a rise of 1.2: crest of 22.5 predicted for to- morrow. Alton, 26.8. a predicted Chester, day, 33.0 night. Cape Girerdeau. Mo., flood stage. '0: 36.2, same as yesterday. At St. Louis the Mississippi was above flood stage on April 12 and 13. when. it reached 30.5 feet; from April 24 to May 7, and since last Wednesday. The stream is mn flood now from Louisiana, Mo., to the Gulf of Mexico. The customary notification of the present rise has been sent to towns downstream by the Weather Bureau Osage and Meramec Falling. Rains in the Missouri Ozarks, along the Missouri River and in Northeastern Missouri, except the extreme northeast part. are respon- sible for the high waters. The Osage Hiver. in the central west- ern part of the State, has been in high flood. but a fall has begun at Osceola. Mo.. which will reach Tuscumbia, . Mo. tonight. The Osage did not go quite so high as in 1927. The Meramec River ts falling slowly. At Valley Park. where flood stage is 14 feet, to- day’s reading was 15.7 feet. a drop of .6 of a foot since yesterday The Ulinois River has been in minor flood for a long time Now it will fall above Peoria, Il.. and rise slightly below there. Slides and high water interfered with three railroads into St. Louis over the week-end. The Cuivre River overflowed the Burlington tracks at Old Monroe, Mo.. 52 miles northwest of St. Louis. Saturday night, but the tine was cleared today This rise was unusual. Northern trains were detoured Saturday night, yesterday and this morning by way of Rood- house, lll., and Louisiana, Mo., and western trains over the Wabash from Mexico, Mo Displaced Track Is Repaired, About 150 feet of track embank- ment slid out of place, due to ex- cessive rain, on the Missouri-Kan- sas-Texas track near McBaine, 170 miles west of St. Louis, Saturday Missis today 27.6 stage, 21; 1.8: crest of tomorrow [li., flood stage, to- 21.8. a rise of .b; crest oj predicted for Wednesday fiood rise of for oo. a a Continued on Page 3, Column 2. Again the Mississippi Covers the St. Louis Levee in by dotted lines. > as > - + ey - AU BR BME ms “~ : rte “ ) @ = 2 a + ee ; sterday's high. 65 «(5 p m.). = w Officiul forecast for St. Louis and vicinity: Partly vioudy tonight nud tomorrow: not much change in tcmperature, Missouri: Partly cloudy tonight and tomorrow: not much change in temperature. Illinois: Partly ‘loudy tonight ind tomorrow: iot much change ‘in temperature. _—, 7:11 sultrise (tomor- row); 4:43. Stage of the Mississippi. 33.0 feet, a rise of 1.8. COULD THAT GORILLA HAVE MONKEYED WITH THE. LEP MOTORS ? BILLIONS INVOLVED AS RULING AFFEGTS ALL ROADS IN US. Stone Dissent. In 5-to-3 Decision Court Upsets Inter- state Commerce Commission’s Basis of Valuation and Declares Repro- duction Cost New an Important Element — Holmes, Brandeis and systems of the entire country. * By Charles G. Ross, : Chief Washington Correspondent of the Post-Dispatch. WASHINGTON, May 20.—The St. Louis & O'Fallon Rail- way Co. won by dec&ion of the Supreme Court today what has been called ‘‘the greatest law suit in‘history.’’ In this suit the eontention of the O’Fallon was the contention of the railrvad The question was how railroad property should be valued ‘for rate-making purposes—whether according to the formula of the Interstate Commerce Commission or according to the demand of the roads that heavy weight be attached to the ‘‘re- | production cost’’ theory of determining values. It has been estimated ‘that between the Commission’s for- mula in the O’Fallon ease and $10,000,000 ,000, Three Justices Dissent. In a decision reached by a vote of 5 to 3, with Justices Holmes, Brandeis and Stone forming’ the minority, the Court today upset the findings of a three-Judge Federal Court in Missouri, which had sus- tained the commission’s order in the O'Fallon case. The victory thus was withthe O'Fallon, which means that the railroads scored against the Government as repre- sented by the Interstate Commerce Commission. The decision was expected to have a highly stimulating effect on railway securities. It knocks out Mhe valuation formula applied in the O’Fallon case and now being applied in other cases, and maxes it mandatory upon the commission to give weight to ~eproduction cost in the fixing of values. Justice Butler, because of his connection with valuation cases on the side of the railroads before going on the Supreme bench, did not participate in the decision. The case was argued before the Supreme Court early in the year, by a distinguished array of attor- neys on both sides. including three former members of the Cabinet, ment. It came to the Supreme Court on appeal by the O’Fallon from the Missouri Federal! Court, which, in upholding the Commission's order, found that even on the O’Fallon’s own showing of values, there was no confiscation. The valuation issue grew out of the Commission’s application of the law, which requires a railroad to turn over to the Government one-half of its earnings in excess of 6 per cent. Under this law, the Commission ruled that certain pay- ments must be made by the O'Fal- lon for the years 1920 to 1923 in- clusive. The O'Fallon held that the Com- mission, in fixing the value of its property for purposes of ‘the “re- capture” of excess profits, did not give due weight to the cost of re- producing the property at current commodity prices. How Commission Figured It. Under the Commission's formula, the value was based on the com- modity price level of 1914, before the war time inflation began to make itself felt. Additions and betterments since 1914 were fig- ured in at their actual cost, and the railroad was allowed the full current market value of its lands. The O'Fallon objected on the ground that the Commission, in defiance of previous decisions cf the Supreme Court, notably tne Southwestern Bell and the §Inf- dianapolis water cases, did not give due weight to the reproduc- tion cost of the structures erected prior to 1814. This contention of the road was upheld in the majority decision of the court today. Justice McRevrn- olds spoke for the majority. O'Fallon Loses One Point. The O'Fallon also contended that it should not have been valued separately, but in connec- and has since been under advise-" the valuation that,gyould. be set up under the railroads’ contention is a difference of at least tion with the Manufacturers’ Rail- way Co., which is under thé same ownership. It contends that the two roads, because of this joint ownership and other factors in common, were entitled to -"'single system” treatment, in which case the excess profits on the O'Fallon would have been offset by the de- ficits on the Manufacturers’. The Aower court rejected this conten- tion of the O'Fallon and in this respect the court was upheld. The “single,system” contention, however, was of minor importance. The wig issue revolved about che valuation question. Justice McReynolds in his opin- ion quotes the law that in deter- mining value for recapture pur- poses, the commission “shall give due consideration to all elements of value recognized by the law of the land for rate-making pur- poses.” Smyth vs. Ames Cited. This,” comments the Justice, “is an express command: and -he carrier has clear right to demand compliance therewith.” He says that the elements of value recugnized by the law of the land have been pointed out many times by the Supreme Court and that “among them is the present cost of construction or reproduc- tion.” The old rule of Smyth vs. Ames. always quoted in valuation cases, is cited. This rule named a large number of eloments to be taken into account in fixing value. There is also cited with approval the majority opinion in the famous Southwestern Bell case, in which it was said that “the highly impor- tant element of present costs’ must be given weight. This doctrine, the opinion says, has been consist. ently adhered to by the Supreme Court, “The report of the Commission.” the McReynolds opinion proceeds, “is long and argumentative. Much of it is devoted to general observa- tions relative to the method and purpose of making valuations: Inany objections are urged to the doctrine approved by us, and the superiority of another view is stoutly asserted. It carefully -e- frains from stating that any con- sideration whatever was given to present or reproduction costs in estimating the value of the ear- rier’s property. “Four dissenting Commissioners deciared that reproducticn costs were not considered: and the re- port itself confirms their view. Two of the majority avuw a like under- standing of the course pursued. Criticises I. Cc. C, “In the exercise of its proper function this Court has declared the law of the land concerning val- uations for rate making purposes. - The confmission disregarded the approved rule and has thereby failed to discharge the definite duty imposed by Congresa, “Unfortunately, proper hee@ was denied the timely admonitien ef the minority. The function ef this Continued on Page 2, Columm 2. E “ peer tne ce —— ° —_ 3 " a . . es : — x x, “ ° 7 _ . " Fr mania. Wet Se ¥ “é pyres merous * \ - . * - . — + ern - - Be > a ae Bars ryeg le eRe ee pete ae pet os we ieensgrernnate eaerene ~ephaiiaes ersten aaamie “ : - oye “ daa - a oe ° on . ~. Lt ae Ry AMR RRA te tae ih RG ipa Se Beith Cake thy wal Seay | o a ¥ ‘e+ PER, Bh om K = toad bviiedl aniarr. ~ ‘a so em oot sah iaacrarinernan pr anosainatong pcs’ bm “ervase etna ste Ses ; arta pence = pre holon We a abt A a sale el Sy Dp mp i a : wre ty gs z Aah, oar» ~ 7 se oe oy cone " ee ene . 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