The Washington herald., 1910-08-01
WALL STREET NEWS
Liquidation of Syndicate's
Holdings Is Beneficial.
INVESTMENT BUYING COMES
Technical Position OF the Market
Greatly Improved by Transfer of
Large BlOcks-Bankers Had Adj
vised Against Purchase of Ameri-
can neutrality-suspicious. PeriIOus.

New York July U.-AccomplishmentS
this week In the readjustment OF compli- ]
Gated and even confused business and
financial conditions that have existed
since the first OF the year were notable. !
Since the first OF the year. as is now
everywhere known, there had overhung
the security markets the danger OF the
collapse OF a vast speculative structure
unsafely built by the syndicate headed
by DR.. F. S. Pearson and Percival Far
quhar.
It is doubtful Il any one outside the
syndicate knew up to a few weeks ago
how widely extended the corporations
had become. and then the liquidation, in
part publicly and in part at private sale,
Of some Of the holdings did not disclose
the enormous extent OF the syndicates
speculatIons or investments Only this
week. when the steady decline OF securi-
ties impaired the loans OF the syndicate,
was It seen that the line Of stocks accu-
INFLATED by the syndicate was the great
est concerned on any such operation in
recent years
However quixotic the pretensions Of the
syndicate managers and however ludi-
crous may now appear their dream OF
railroad empire, the threat OF liquidation
Of huge blocks OF stocks constituted the
graveSt menace Of year in which the
markets have been obliged 10 contend
with many untoWard events.
Operations Become PeriIOus.
The syndicate's loans were heavy IN
London. as we'll as in this city, so that
II was abroad as well as here that its
operations had become perilous TO the
cfahflftr- Of fro v,o~lrote DorLare frfrr-
ested in the acquisition Of the syndlcate's
securities now admit that the threat Of
forced liquidation had in it potentialities
Of tragedy, and It is only necessary 20
recur to what actually happened in the
stock market on Monday and Tuesday,
when a small part OF the syndicate's
holdings were closed out at forced sale
10 perceive the decentralization into which
the markets must inevitably have been
thrown by the Liquidation which then
seemed imminent Of all It's holdings.
That that forced liquidation was pre-
vented, at whatever cost to the syndl-
cate participating. was altogether the
most fortunate event OF the week and. in
immediate consequences, Of the year
The beneficial results OF the settlement
were more than the removal OF the
threatened liquidation. vastly important
as that was. In London, as well as in
this city, the settlement removed the rea-
son which bankers with knowledge OF the
syndicate's affairs had had for advising
against purchases Of American stocks.
extraordinarily cheap though the stocks
seemed.
Flood OF Buying Orders
When this restraint was taken away,
the result was shown in flood Of buy
ing orders from England and the Con-
tinent. which before the week was over
attained greater momentum than had
any other investment movement Of the
year Here also, though the movement
was not as pronounced, a healthy invest
ment demand set in. Moreover. as a per-
manent effect Of the settlement Of the
syndicate's troubles, it is gratifying that
the burden Of carrying the syndicate
stocks was assumed by bankers Of very
abundant resources and with such in
terest in other railroad securities as 70
assure MANAGEMENT OF their new hold
ings IN such a way that the present har
monious relations among bankers and
railroad managers will not be disturbed.
The technical position Of the market
was vastly improved by the transfer Of
the syndicate's holdings In the rally
that Immediately followed conclusion of
transaction it was plainly seen that the
market had become greatly oversold and
hurried covering OF short contracts con-
tributed 10 the advance OF more than five
points on the average on Wednesday and
Thursday This covering has deprived
the market of some Of the strength Of
the technical position, but in the closing
days Of the week another decline in
prices seemed little more than a natural
reaction following very vigorous rally.
The market then became more orderly
and composed. in pleasing contrast 10
its turbulence earlier in the week. There
may Of course, be imminent other iqui-
dalton. for the tremendous depreciation in
market values IN the last seven months
must inevitably have weakened many
holdings.
In the latter part Of the week, for in
stance. it was reported that a large block
Of high grade securities had changed
hands at private sale But It is certain.
at any rate. that the break in the market
on Monday and Tuesday must have re-
moved whatever liquidation OF any con-
sequence that might be apprehended from
commission houses Nor at the close OF
the week could it be ascertained that
there is impended any liquidation from
any important quarter. Generally, con-
hdence in the maintenance Of the recov-
cry was greater than after any OF the
previous declines Of the year.