Los Angeles herald., 1910-07-29
ENGLISH CAPITAL
CONTROLS R.I.. RY.
Well Informed Persons Say For
eign Syndicate viii Retain
American Co.'s Shares
NEW RAILROAD GRANT TALKED
Market Decline Causes Outside
Capital to Place Stock
with Bankers
NEW RAILROAD GRANT TALKED
Associated Press1

NEW YORK, July 2S.-With the sale
! of the so-called Pearson holdings in
| Rock Island, Lehigh Valley, Wabash,
Missouri Pacific and Denver & Rio
! Grande stock confirmed, Wall street
was asking today what the Kuhn-Loeb
! syndicate, the purchasers, purpose to
! do with the securities.
! DIR. F. d. Pearson and his brother
| associates acquired the stock late in
| 1909 and early in 1910, with the dream
| of a vast transcOntinental system.
| This plan must now be abandoned,
| temporarily at least, but opinion Is
divided as to whether it will be re-
vived under new and more powerful
guidance. One member of the purchas-
ing syndicate said positively this after
noon that 1--WE have no plans for new
transcontinental railway system and
the purchase does not embrace control
of any OF the properties whose stocks
we have acquired"
WILL BUILD HUGE LINE
On the other hand, a banker con-
cerned said that the Pearsons' project
would be shelved only for the time be-
ing While the primary object of TAX
ing over the holdings he said, was to
save an awkward market situation,
yet he was of the opinion that Kuhn,
Loeb & Co., and their friends, in
Guiding some of the most important
banking interests in Germany would
seek to carry out the idea too big for
the Pearson group to swing.
Notwithstanding the sale there is
apparently no disposition ION the part
of the bankers syndicate to dispense
with the services of Mr., Pearson and
his English associate, Percival Farqu-
har, both of whom are likely to remain
n nf
concerned as heretofore.
The American members of the syn
dicate acting with Kuhn, Loeb & Co,
include the First National bank,
Morgan institution, but the Morgan
banking house itself, 1t is emphatically
declared, is in no way party to the
syndicate. 1t is believed, however,
that the Kuhn-Loeb syndicate will ere
long sell TO ]. P. Morgan & Co. its
newly acquired Lehigh Valley hold
ings, so that the road will remain In
the hands of the Morgan interests
where it has always been.
ENGLISH INTERESTS BUY STOCK
= Although Kuhn, Loeb & Co., made no
announcement today regarding the de-
velopments, the company in connection
with English interests headed by Sir
Ernest Cassell has obtained the largest
single holding of Rock Island. both
common and preferred. The syndicate
Is said to have been made UP Of Ca
madam and English operators with
English connections, headed by DR.. E.
S. Pearson, and had for Its aim
new transcontinental group. The de-
cline in the market upset the plan
and necessitated a turning over OF
the stocks purchased.
The block of Rock Island carries con-
troll Of the property and is accom-
panied by the Pearson holdings in Le-
high Valley, wabash and Missouri Pa
cific.
whether the transcontinental plan
will be carried out by the new ROCK
Island controllers, or whether the new
interests will assert their power IN al
tering present management still de-
pends on unsettled factors.
Certain banking interests here have
looked on the original Pearson plan
with favor, and it is not unlikely that
steps will be taken to carry it out.
LITTLE CAPITAL NEEDED
IT is pointed out that while the Pear
son syndicate could not have inaugu-
rated a transcontinental system eX-
cept by getting an actual preponder-
ance Of the stocks involved, the new
holders through associations should be
able to effect the practical union OF
the various properties with little
further outlay of capital.
Sir Ernest Cassell, the chief foreign
member of the new syndicate, repre-
sents one of the largest, if not the
largest single financial interest of Eng
land. and it is stated on good author
ity that the new Rock Island interest
took over the stock in question of pur-
poses of permanent investment.