The Washington herald., 1910-07-28
WALL STREET NEWS
Prices Up and Explanation
OF Sharp Decline Made.
FOREIGN FINANCIERs ARE HIT
Group of Canadian and British In
vestOrS bought Heavily OF Rock
Island and Lehigh Valley, and
When Banks Asked for Additional
Collateral, stock Was Sacrificed.

New York, July 1.-THE murkiness
lowering ove- the stock market for the
past week was cleared away to-day No
longer did prices run counter to news
developments OF the day nor 10 those
developments which IN the past few
weeks have remarkably strengthened the
monetary position and have given re-
psated assurance Of the tendency OK gen.
ers1 business toward safe and sound
basis.
For the first time this month there was
aggressive and confident buying of stocks
anc for the first time this year q de-
termined rally that held out more hope
OF continuing Improvement IN the Sc
curity markets than has any other
marked movement Of the year.
The abrupt and complete change IN the
market was not due 70 any considerable
change In any Of the fundamental condi-
tons affecting intrinsic values OF securi-
ties, any moro than was the decline Of
the past week due to any material ex-
tent to any depreciation in the funda-
mentals OF prosperity.
Foreign Capitalists Hard Hit.
Rather, as became positively known to-
day, the decline was principally preclpi-
tated by the overextended position Of a
group OF Canadian and British fnanciers
who, in the latter part of last year and
the early part OF the current year. first
bought heavily into Rock Island and Lee
high Valley and then, perceiving the
vision Of a transcontinental line. nc
quired unknown to their associates IN
ahf Nraf
blocks OF stock I'm Wabash. Missouri Pa.
ciic, and Denver. with the evident in
tention OF organizing q transcontlnenta
system.
These foreign financiers upward of tive
weeks ago found their resources impaire,
by the shrinkage In market value OF thei
securities. and in the course OF the las
previous market break liquidated a con
siderable portion OF their holdings. 1
was believed that this liquidation sup
piled funds ample for the protection o
the remainder. but the total Of the stock
holdings greater than then supposed wa
pledged as security for loans here an
in London. and bankers became more an
more importunate in demanding add
tional collateral
Collateral on the Market.
Before the opening OF the market yes
terday. those calls from the banks, whic
were noted In every market comment
were addressed in great part TO the grou
Of foreign investors and many OF IN
banks put the collateral on the marke
That extraordinarily costly liquidation
of Missouri Pacific and Rock Island
which started yesterdays abrupt break 8
the market, arose IN this way. an
throughout the day. in addition TO IN
securities actually sold. there overhun
the market the dark prospect Of furthe
extensive liquidation from the sam
sources.
Banks IN London. as well as here
threatened 20 close out collateral unles
an arrangement was made for the prc
lection Of the remaining holdings. Sue
an arrangement was definitely and pos
lively concluded to-day. and the reboun
IN TIE stock market was the result of &
This arrangement not only cleared up II
mystery surrounding the perpendicula
decline in stocks in t5e five previous day
but assured an absence OF all liQuidatic
from the source referred 70 in the futur
A conservative estimate of the mark,
value Of the securities carried by n
Canadian and British group placed It
81. 10000 Seldom does a stock mark
have 10 contend against such extrao
binary liquidation.