The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1910-07-31
MANY CONDITIONS CONTRIBUTED /
TO MAKING RECOVERY POSSIBLEl
ncOveng Steel Corporations Unexpectedly Report
Heavy Buying Important
Especial Financial Repre.ent.tlve s1un-ey P

Especial l
NEW YORK, July 5I--Although the
difficulty from which the so-caHed pear
son Syndicate" was extricated during
the week was an effect and not the
cause Of the collapse in prices on Mon
day and Tuesday, the taking over by
! the Kuhn, Loeb & Company syndicate
OF a large block Of securities which, Il
has since developed, were hanging over
I the market, was an immense relief. and
helped the Wall Street position anaZ-
lngly- Speculative stocks made an i'm
mediate response to the important an
nOuncement. Under extensive short
covering. and a considerable volume OF
! buying Of a better character, prices re-
covered sharply, and, as matter OF
[ fact what sid fair to run into a bear
psuic on Thursday, was averted only BY
some heavy selling by bankers who had
bought extensively on the breaks 10
prevent decentralization. and who lost no
time In converting some Of their hold
inss into cash On the FIVE TO ten point
Improvement
The rapidly and extent Of the recov-
cry in Wall Street in the mid-week was
clearly Influenced by several causes, not
the Pearson Syndicate episode alone.
That incident. OF course, made the
strongest appeal 70 tne ina gination, and
IL may be said, in passing, that imsgi-
nation has run riot in the wild conject-
Ures that have followed the transa elton.
Aside from this, however, one should
not lose sight OF the fact that the highly
favorable quarterly report Of the United
States Steel Corporation. developments
which bstoken q better understanding
between the copper producers, evidenced
BY an Improvement in the metal. some
relaxation IN the money market, and, al
/ the last a slight ameIioratiOn Of IN
favorable weather conditions in the corn
/ belt, all played a part in restoring mar
ket equilibrium The execution Of sealed
/ buying orders 20 which attention has
been directed in recent weeks. reduced
the floating supply Of stock, and created
an unpleasant position for the short in
1 teresr when the budget Of favorable
news came out.
UnCovering the Weak Spot.
OF the overshadowing development OF
the Week-the relief afforded TO a group
Of overextended speculative plungers-
the episode, though a trf7e more spec
tacular, Is quite similar to occurrences
which always figure at a time OF highly
disturbed security markets There were
two such in the market of 1903, once
when a syndicate quietly purchased.
from an Over-extended banking house.
a great quantity OF securities, including
a 100000 block OF Chicago. Burlington
& Quincy stock which had been with
held from the Northern Securities COM
binatiOn, and again at the time Of the
1
Guilty. wheu another syndicate took over
upwards OF s10,090,000 Of Atchison, To-
pelSa < Santa Fe preferred stock most
+. OF which turned Up later among the in
vestment holdings Of the Union Pacific
/ road. Everyone recalls. IN the market
Of 1907, the relief afforded TO an over
I extended banking house through the
{ sale OF the Tennessee Coal and Iron
( Company to the United States Steel Cor
poration, and about the same time an
other large banking and brokerage
house was relieved Of upwards Of SIS
cd. 600 in AmaIgamated Copper shares
and Brooklyn Rapid Transit securities.
In neither OF the above instances was
the cverext1nsioE Of the speculative
groups Of firms the cause OF market
declines They were merely incidental
to the depression The reactions had
continued long enough to uncover weak
spots just as It has done IN tire present
case. and the assistance rendered re-
Iieved the market somewhat as it has
done now
What viii surprise the rank and hio
among fnanciers as time develops Il
the magnitude Of the recent excursion
into high finance Of a group Of opera
tors who. without disparagement 20
their abilities in the field OF electrical
railway development n Spanish-Aneri-
can countries. rank as fnanciers OF the
second class here The Pearson. or,
more properly. the "FarQuhar Syndi-
cate'-fOr IL now appears that Percival
Farouhar. a former New York State
assemblynan, who once cherished am
b!tfons to become governor OF the
State Is the predominating personality
Of the aggregation-was engaged in an
ambitious enterprise Afflicted with
what the faculty OF nervous and mental
disease might diagnose as megaloma-
MA. the delusiou Of grandeur, Mr. Far
r71bar and HIS associates set out to &C
a;1ire = controlling OF influential inter
est IN a group of dissimilar properties
Dominated by various powerful finan-
cfers. To work out a scheme for q
rranscontineutai railway system by buy
ing m stock in the open market, patch