The sun. [volume] (New York [N.Y.]) 1833-1916, 1910-07-28
Canadian and British Trans
continental Railroad
venturers Quit.
HUGE BLOCK OF STOCK SOLD
Rock Island, lehigh, Wabash, Mop
and Denver Kuhn, Loeb G
Co. Take En-.

One % the boldes' ventures in American
financial history and particularly in the
history q American railroading. came
to grief yesterday when there was trans
ferred TO Kuhn. Loeb A Co. Of this city
and a syndicate headed by them the bulk
Of a huge block Of American railroad
securities acquired IN the last nine months
by British and Canadian syndicate
headed ny DR.. p. y Pearson. The project
was a reminder ~ Hartman IN concsp-
ton. however unlike him in e1ecuWon
The men behind IL. from the manner
In which they carried on their operations.
contemplated nothing more nor les
than obtaining a dominant interest in
a chain Of railroads extending from the
Atlantic to the Pacific Coast.
Dr. Pearson V an American engineer ~
well known TO British and Canadian fnan-
ciers from the success 81 his operations
in Spanish American railroads as u that
r6ther Pearson. Sir weetmAn. from the
Great Britain and this country. Dr..
Pearson. who u not related to the other
en- gine-r II that name or associated with
him IN business. attracted the attention
Of British and Canadian investors prin-
cipally by the organization and opera
tion Of tramway companies in South
America and Mexico. Investors and
bankers derived remarkably handsome
profits from these enterprises. 50 that
on embarking in business In this country
he had powerful financial backing.
The first big venture Of DR. PeArson and
his associates in this country Vas made
in the latter part of last year Il was in
the stock and bonds Of ths Rock Island
Company, which owns the Chicago. Rock
Island and Pacific Railroad Company.
which IN turn owns practically al Of the
stock II the old Chicago. Rock Island and
Pacific Railway Company, one OF the best
Of the granger lines. DIR. Pearson made q
| physical examination Of the company's
properties and on his report the Canadian
and British hnanciers who had long fol-
lowed him and profited through him
bought heavily - r ock Island securities
Seemingly Judge ". II. Moore and ID. q
Reid. the ren then in absolute control Of
Rock Island. wer- willing To sell them
In the early part OF this year Dr. Pear
son and one az his associates. Percival
Farquhar. said TO be an Englishman. were
elected directors Of the Rock Island Com
pany IL was gwen out at the time that
the syndicate repre~~nted by them had
acquired about ~ per cent 81 the com
panys capital stock The company has
outstanding $1,000 On common and $50
COO on preferred The syndicate bought
NOR. heavily 81 the preferred than 81 the
common and also bought heavily Of Chi
caSo. Rock Island and Pacific Railroad ool-
lateral trust bonds 80 here was a tidy
investment 10 begin with.
II was also announced at that time that
Or Pearson and his associates were
acting IN harmony with Judge Moore and
Mr. Reid. the other dominant persons in
the Rock Island Company. These old
Rock Island men had long cast their eyes
on Lehigh Valley and presently directed
DR.. Pearson's attention 20 that property.
DR. Pearson made an examination Of that
property also. recommended IL 20 his
Canadian and British friends and got their
money into II just as IL was put into Rock
Island I,ehigh Valley stock. which sold
a. low a. 81 in the carly part Of last year
scared up Ia i2i'. az a result. IN part. Of
these purchases
Here the rath- - the old and new
Rock Island men seem 20 have diverged
Tho others were content with the expAn-
sion they had already made. DR. Pear
son and his associates went further until.
~ IL became known yesterday. they had
bought into CON panier with n stock CAPT
filtration OF fully sts5. 90 600 par value
and controlling 10. 81 miles Of road ek-
tending from the Atlantic ro the Pacifc.
These other operations were conducted
secretly Il was known and publicly
announced that the syndicate had ac-
CURED heavy interests IN Rock Island
and Lehigh Valley. Not until yesterday
did Il come out that DR.. Pearson and his
friends had gone further and made p,Ir-
chAse- Of American railroad stocks on
scale undoubtedly never paralells-i
hy any one group Of foreign capitalists
1T any one time.
Lehigh Valley runs from New York
to Buffalo and Rock Island from Chicago
west a. Denver. Here was a big gap
between Buffalo and Chicago and thu
syndicate bought into Wabash. a road
loosely controlled by the Gouds. which
connects those two cities From Denver
10 the Pacific Coast the best available
route was by the DsnveT and RIO Grande
which owns two-thirds % the took G!
the recently completed Western Pacific
But 70 per cent. OF the Denver and Rio
GrAnde stock IL owned by the Mlssour
Pacific. 40 that in order 70 acquire sub.
stantlal influence in Denver IL was neces-
sary Also to acq,-rs substantial infiuenc,