Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-07-31

great deal OF money for himself and
Wlde-aWake following, composed of
wealthy English and Canadian capitalists
and railroad men. He came very fast
and, having most engaging personality,
cemented to him a group of men who
were willing and able to back him to
almost any extent. Having SKINNED the
cream off of Mexico and South America
In his particular line. he turned to the
United States as a broader field tor big
operations.
Appealed to DR.. Pearson.
The idea of securing either control
or very loud voice in q chain of
railroads which when strung together
would make a transcontinental sys-
tenn extending from New York to San
francisco appealed to DR.. Pearson as
being about the right size for him
and his friends, and they proceeded
TO invest their millions in big minority
holdings of Rock Island, Lehigh Val
ley. Wabash. Missouri Pacific and Rio
Grande. the latter two also including
the thousand extension from
Salt Lake City to the coast, known as
Western Pacific.
All told these various roads owned
or operated about 10000 miles Of track
ana mad share capital of close to
SoOO,OOO,O0O The SAD story is briefly
expressed in the trite phrase. they
bit off more than they could chew"
They were landed with the goods at
high prices and were frozen out on the
slump which tore the market all to
pieces the first of the present week.
When they either could not or would
not put up any more margins kind
hearted bankers formed a syndicate to
take over several big blocks of the
Pearson holdings, which were up as
collateral, and the genial doctor and
his friends were shown the door with
scant ceremony.
Humor in Wall Street.
1t is mentioned as phase of one
of those queer pieces Of Wall street
humor that several of the parties who
let him have stock at high figures con-
tributed to the Kuhn-Loeb syndicate
which took over the wreckage under
the hammer. The fact which seems
to tickle Wall street particularly is
that the old Rock Island group of
fnanciers and railroad owners still re-
tain control Of their system. They
have Serenely weathered all the storms
or the last ten years and have emerged
on this occasion, as on all the others,
with more money than before the
storm broke. Indeed, 1t is the gossip
of the street that d. G. Reid and
Judg, Moore are worth more now than
always seem to have stuff to sell at
the top of every big boom. And then
they sit back and wait for bargains.
This seems to be good business.
Another. feature which marked the last
week or ten days of the great market
slump is the fact that enormous masses
of stock were sold for what they would
bring by innumerable banks and banking
institutions spread all over the country.
These stocks are supposed to represent
collateral on loans made by individual
spectators or investors who discovered
that they would be saving money by
financing their operations in Wall street
through their local banks instead Of let
ting their brokers and commission houses
handle the business and make scalp on
the interest. The accepted theory in Wall
street is that overloaded banks out in
the provinces finding themselves unable
to collect from other borrowers or realize
on farm mortgages and other property
of that kind were forced to get rid of
securities in their vaults for which there
was a quick market
Formed Unknown Quantity.
This great outpouring of stocks from
the scattered banks was the unknown
quantity in the situation which had not
been looked for and which was respon-
sible for the deadly sacrifice In several is
sues in the semi-active class. The outside
banks seemed to have been stricken with
an epidemic of fear lest they would not
get their stuff into the Wall street market
before the bottom fell out altogether Be
ing rather new in that particular line of
banking, they did not propose to get
caught in any such foolish way. They
therefore butchered their own friends and
clients with the utmost impartiality. In
the final analysis there will probably be
grand marking off OF losses due to the
precipitate haste shown in marketing the
collateral Of unlucky spectators who had
overplayed themselves.
In standardization it may be said plain
ly and fatty that many hundreds of mil
lions of dollars of sacrificed stocks and
bonds scattered all about the country
have passed from weak to strong hands,
repeating for the hundreth time an OPP
Grafton which is almost automatic In it's
workings. The strong people now hav-
ing repossesSed themselves of securities
which were sold last summer and fall on
the elimination of the famous Hartman
boom are probably willing to see the
market improve and prices advance.
Lame and Lazy Killed.
So far as can be now seen. the lame
and lazy have all either been run over
or killed and there is no further reason
for permitting a continuation of the de-
struction of prices. Mark you the use
of the word prices in this description.
Values have not been seriously i'm
paired The earning powers of the long
list of railroad and industrial corpora
tons. whose stocks have declined in price
25 to so points, have not been reduced to
any appreciable extent, 1t is inevitable
that general business should have under
gone more or less restriction on account
of the great bear market on the New
York Stock Exchange, but nothing COM
parable with the total shrinkage in the
market prices of stocks. Unless other
big game may be lurking about in the
shadows wounded and disabled. to be
added to the bag of the banking COM
binations the market situation should
mend rapidly.
Those who have been sorrowing be-
cause of lack of bull leadership in the
stock market may now discover that a
recovery In prices is possible without the
personal management of any one great
leader. 1t is recalled that through the