The Washington times., 1910-07-28
RAIL DREAM
SMASHED STREET
TranScontinental System
Plans Abandoned With
Heavy Loss.

ANNF IOSo'
NEW YORK. July sS.-A plan to unite
trauscOntineutaI railroads capitalized at
SsSl, 110 900, and regarded as one o. the
BoIdest railroad ventures in the history
of the country has fallen fat in wall
street with the transferenCe TO Kuhn.
Loeb & Co and a syndicate Of which
obey are the head the bulk OF huge
block Of American railroad securities
acquired during the past nine months
by a British and Canadian syndicate.
headed by Dr. F 5 Pearson, one Of
the best-tn0wn engineers in the world
The plan reminds the Street Of the
late r H. Harriman's venture, but Il
vas entirely unlike his IN execution,
for he was successful while the British
Canadian outfit was a failure in brief
this syndicate contemplated the con
troll Of q chain Of roads extending from
coast TO coast.
Sick Market Cured
With this transaction a DIAGNOSIS Of
the recent troubles in the stock market
was furnished and. at the same time.
the -r4re was announced. and the slump.
which had reached panic proportions
on Tuesday, was turned 10 a sudden
upturn.
The upturn came when II became
known that an international syndicate
headed by Kuhn, Loeb & Co had step
ped in and stopped the liquidation Of
an overeNtended group Of CANADIAN ana
English spectators with continental
connections BY taking over ar private
sale a block OF the securities or various
railroads constituting the nucleus OF
Ia -
20 be a new transcOntinental railway
group
Members OF the frm OF Kuhn. Loeb
& Co. refused absolutely to affirm or
the market the weight thrown upon it
as the result Of the entrance Of the
CveraubitiOus foreign entrants INTO the
American railway Ield- but conlFETla-
tioE in other quarters Of the news that
the market had been relieved Of the
impending burden OF liquidation made
the Street accept the silence Of the in
ternatiOnaI banking house as technl-
cal evasion.
The Forgotten New Factor.
DARING the declines in Rock Island,
Missouri Pacific, Denver and Rio
Grande. Wabash, and Leaigh valley in
recent markets the street had been
willing TO accept surface indications
as pointing to market defeat OF
American interests long identified
with these systems
Wall Street forgot. for the moment
the guessed ambitions Of tLe
English and Canadian syndicate mead
cd by IT. F. : Pearson, the developer
ard promoter OF some Sl3V,yJy'yyg OF
7 atm American electrical enterprises,
TO take q large part in the railroad
field in tins country. and when the
story gained currency that II was IL
group. its position weakened by the
heavy declines in the market value OF
securities purchased early IN the year
IN furtheraEce Of its plans, that had
been -he sick member of the financial
Hodv. market sentiment responded in
stanJIy TO the changed status Of at
Wall Street Hears
The first 1ntimation that Wall Street
had Of the entrance Of the Canadian
and English interests into railway at
faIrs IN this country came last Janu-
a-v- when II was rUmored that there
had been a change In control in
Rock Island
ever that control remained in the
hands or d. q. Reid William H
sIOOre. and their associates, but Dr. =.
= Pearson and SpeEllDg x Co. or
.1udon IN association VITA a group
of Canadian and European capitalists.
whose identity was only guessed at
then. had quietly acquired a large in
terest in the Rock Island
II was estimated in authoritative
quarters at The time that SOIneThllE
like one-nIth OF the Rock Island =
$40. G00. 600 capitalization had passed
n vas not until April that the hand
of the syndicate appeared III Rock
island affairs. on April Z r 8 Pear
son and Percival FarQuhar- representing
the British and Canadian interests, were
made new directors Of the ROCK Island
hoard il being announced that they
would work IN harmony with the con-
trolling interests
that a considerable block Of Rock
Island securities had passed into the
hands of French interests. and some
talk was heard Of Dutch and Belgian
particiua1iOn IN the purchases
Later DEVELOPMENTS showed that Dr.
Pearson and his friends had been buy
ing heavily into LehlEn NaAe1- IL was
known, however, that the ROCK Island
group had become interested IN JnaL
property. and tranScontinental ambitions
on the part Of the British and cana ian
capitalists were not suspected until =
developed thf- the sane interests mad
been quietly acquiring stock in the Wa
bash, the Missouri Pacific, and the Den
yer and Rio Graude-
These Gould roads linked together
with the MCOre-Reid properties would
give, through the Denver and Rio
transcOntineutaI connection with the
Pacific coast. while the L.ehigh Valley
and its entrance into New York would
supply the Atlantic outlet for the chain
Of railways
The transC0ntinentaI system which the
street came believe was the fnal OBJ
1ect OF the ambitions OF DR.. Pearson's
associates comprises some 1887 miles
Of railroad. and has a sock capitsIiza-
ton Of nearly $780, 200 0G0 The nrICes al
which the stocks Of the various groups
involved were Obtainable IN the market
last winter have never been eQualed