Honest Wall Street

Freshmen of the University of Virigina fidgeted at the convocation, last week, of the institution's 104th academic year. Thomas Jefferson founded the school; Edgar Allen Poe roistered there. Roistering long ago yielded to sly escapades in Charlottesville and pranks along the countryside. Scholarship persists, and so lively and alert that businessmen like to address the students.

Vice President Charles Cason of the Chemical National Bank of Manhattan was University of Virginia's businessman speaker last week. He waited for the restless students to quiet down, then said: "The real responsible leaders in Wall Street today are big men-- men of brains, men of vision, men of honor. There are scrubs, too, to be sure, for they break into every place. They create much of the public misunderstanding and criticism of Wall Street. But the scrubs do not run Wall Street any more than they dominate this beautiful university of culture.

"There is no place in the world where there is a higher code of honor and ethics than in Wall Street. Every day transactions involving millions of dollars are carried on over the telephone without the suggestion of a signature or a written commitment. Any man or any institution showing the slightest disposition not to play fair is not allowed to play at all."

Next day those freshmen who learned at their preparatory schools to keep aware of current news, read in news journals of explicit confirmation to Banker Cason's statements. It was Hayden, Stone & Co.'s offer to pay all losses of people who invested, upon investment bankers' advice, in the Shipman Coal Co.

Hayden, Stone & Co. engineers last year studied Shipman Coal Co.'s property at Shamokin, Pa., and estimated that 10,000,000 tons of hard coal could be mined thereon. Thus assured, Hayden, Stone sold $800,000 of bonds for the coal company. Back of the bonds was Hayden, Stone's moral support, but not legal liability.

Those bonds are now practically worthless. The engineers had made a mistake in their coal soundings at Shamokin; receivers administer Shipman Coal affairs.

On Hayden, Stone's prestige the case was a nasty smudge, which a letter to Shipman Coal bondholders last week cleansed. That letter read: "We could not conscientiously advise you to spend your money on this property. If you do not, the receivers doubtless will arrange immediately for the sale of the company's assets, which consist of operating equipment having practically a scrap value only. . . .

"Under these circumstances, because of those who, relying on us and on our investigations, put their money into these securities, we hereby make the following offer. . . . We will defray the actual cost of [law suits]; and, in the end, will reimburse all depositors for the difference between the net amounts, if any, that may be finally received by you through such action or proceedings and the par value of the debentures deposited by them."