The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-08

transcontincntal railroad system which
should take in the Lchigh Valley, the
Wabash, the Rock Island, Missouri Pacific
and u nver and Rio Grandc ana which
was sidctrackcd in July, 1910.
The syndicate took It's name from Or.
+. =. Pearson. an American engineer.
who is not related to or connected IN
business with that Other Pearson, Sir
Wcrtman. now Lord COwdray. Pearson
and Farquhar had attracted tn attca.
ton Of British and Canadian investor.
By their successful organization and OPP
GRAFTON Of tramways in South America
and Mexico. When they started their
,ranscontincntal operation. th"s" invest
ors. VINO had TAX large profits from
the earlier enterprises. gave them large
backing.
Taruuhar. Pearson aud their associates
took thu first step in the big venture
late in 1909. when they invested heavily
in the stock and bonds ut the Rock
leland Seemingly Judge ". II. Moor"
and -. q. Reid. thu men then In dbSo-
lutc control NJ Rock Island. w"r,
+ willing to sell To- them. Early III 1910
both Pearson and Farquhar wor" elected
directors Of the Rock Island COMPANY,
II was given out At the tim" that ;h'
/ syndicate headed by these two mon rep
Resented about 90 per cent or IN" Iio'N
/ Islands capital stock The syndicat" also
! invested heavily I'm tho Rock lslands COL
lateral trust bonds.
II also was made known at IN" INN"
that Pc arson and his associates We're a. ting
! i'm harmony with Reid and Judg" Moore
! These old Rock Island men. II wdS un
/ derstood, cast longing eyes on l.chlsh
Valley and directed rcarsou's attention 10
/ that property Pearson made an '\am'-
/ ration Of the property. as Ne had h"i" OF
tho Rock Island recommended II 10 ms
/ -. l..,,. Ia. A.
! I.ehigh Valley went more Brlllsh ana
| Canadian capital. Lehigh Valley I'M
mcdiatcly began 10 soar.
| Leaving the 9TH Rock Island men be-
hind them. Farquhar and Pearson went
! ahead. now secretly. and bought railrohh
shares until their syndicate had interests
| In roads having a total capitalization OF
sts5. 900. OO0 apd controlling 1887 Jnll,
| OF railway extending from the Atlantic To
the Pacific The stock purchases OF IN"
syndicate We're made on scale never ne
fore paralleled by any group OF foreign
capitalists at one time.
To supply the gap between the !'chlgl,,
| valleys Western terminal at Buhalo ana
the Rock Islands Eastern terminal al
! Chicago the syndicate bought INTO
| Wabash Next it reached ont for the
Denver and Rio Grande and the Western
| Pacific. In order t. acquire suDstantldl
influence in the Denver and Rio Grande II
| was necessary to buy into the Missouri
Pacific. Altogether the investments actu-
ally made are estimated at SjO.OOo,Ooo'
Then, with 1910 not far advanced there
was a turn in the market ana investors
showed a Discrimination to 90 too tar III
putting money into railroads untl com
plicatod legal and political problems were
settled. The syndcate's holdings had Deer
pledged for loans in New York ana Lon
don. The securities held declined on th'
market until the banks began looking fol
additional collateral and the syndicate II
spite Of the bad market, began to let sc
Of its holdings. 80
Further calls came late In July OF tha'
year, and although the members OF Inc
syndicate undoubtedly could have mar
shalled resources to meet the demand, th'
syndicate did not respond and Rock Island
Missouri Pacihc and l.chigh valley Were
suddenly dumped on the market. Th"n
ON July 81. the bulk of the holdings col
locted by the syndicat" were transferred
AT private sale to a syndicate headed by
Kuhn. Loeb & co. aud the big scheme "a'
4 thing OF the past.