In line holography of particle fields suffers from image deterioration caused by intrinsic speckle noise. A theoretical model for this process involving multiple particles is developed, which shows that the virtual image of the particle ensemble is the dominant source of speckle in reconstruction. We quantify the effect of the speckle with a signal-to-noise ratio (SNR), which is found to depend on a speckle parameter, embodying particle diameter, concentration, and sample depth, and upon the film gamma. Experimental results show reasonably good agreement with our model. The SNR equation provides prediction of image quality and thence application limits of in-line holography for particle fields. The fundamental understanding obtained here points not only to constraints but also to possible improvements in holographic particle velocimetry (HPV) technique.