The Express.
London, England, 1859-02-01 00:00:00

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SION WATIR AT LONDON NIAIDON.
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LONDON, 171341 DAT. PM. 1.

AT a time when Beesia, Austria, Sardinia, and
other States are look lag wistfully to our market for
those pecuniary facilities without which military
despotisms cannot be kept up, oppressed nationalities
cannot be kept down, and designs against the peace
of Europe cannot be carried into execution, the
heavy depreciation of the projects lately introduced
suggests reflections which, if attended to, may cir-
cumscribe the area of loos in future. How happens
it that the Brazilian, Chilian, and Turkish Loam, ea
well sa Bahia Railway shares, have fallen to • dis-
count more or less considerable, and the shares of the
Red Sea and India Telegraph Company, guaranteed
41 per cent. per annum by the British Government,
to par The Brazilian Loan was so eagerly sought
after that the aggregate subscriptions represented
eight or nine millions sterling, instead of the mil-
lion and a half asked. Considered in relation to the
price long maintained by the Chili= Three per
Cents., a Chilian Four-antha-Half per Cent. Loan at
92 is cheap. The Old Turkish Six per Cent. Loan,
secured upon the tribute of Egypt, commands about
91 per rents ergo, the new Turkish Six per Cent.
Loan, likewise secured upon special revenues, ought
to be very tempting at the Seue-price of 85 per cent.,
and absolutely " dirt-cheap" at the present market
price—vie , about 79 per cent., more especially
considering that a month hence 3 per cent.
dividend will be doe. As regards the fourth
case cited—that of the Bahia Railway pro-
fect--sarely it is an anomaly time, whilst
the Reezilian Four-and-a-Half per Cost. Loess seen-
mend from 94 to 96 per cent., and the Brazilian Five
per Cents. 3 per cent. premium, • Brazilian get
ranter, of Serra pet Cent. stands at • dement. The
circumstaooe that for • portion—viz., 2 per cent.—
of the Seven per Cent. Guaranteed, the Bahia Rail-
way Company look to the Provincial Government
of Bahia, scareely helps to explain the anomaly
pointed out ; for the Provincial credit is locally esti-
mated as high as the ImperiaL Moreover, in the
came of the Pernambuco Railway Company, which
occupies the same position in many respects as the
Bahia, the Imperial Minister of Finance has
practically simplified the matter by paying the whole
7 per cent., taking spun himself the recuticatinn of
accounts with the Provincial autherities ; and it is
theere reasonably assumed that • idealise plan will
be adopted with respect to the Bahia Railway Com-
pany. We have instanced • fifth case of depression
—that of the lied Sea and India Telegraph pro-
ject—the shares is which were eagerly run after at
the allotment, but the premium on which has gra-
dually dwindled to tern. The British These per
Cents. are held to be sow worth nearly N
per amt. i the Turkish Guaranteed Fear per
Ceuta—the vales of which is determined solely
by the British guarantee of 4 per cent—ate
maintained at 3 or 4 per cent. premium, after allow-
ing foe the dividend accrued yet the Red Sim Tele-
graph, with • British Four aad.u•lialf per Cent.
g meantime, is barely kept from sinking to a discount.
Perhaps the uncertainty and risk attending tele-
graphic enterprises may be suggested, by way of
explanation. Ent no According to the statements
put forward by the Company, their position practi-
cally resolves itself they—The British Government
guarantees to the Company 4j per cent. upon a
certain amount of capital : responsible contractors
have bound themselves to the Company to de-
liver the telegraphic line in complete work-
ing order for • sum within that capital,
and to take upon themselves all the risks attending
the first establishment of the enterprise. It is,
therefore, scarcely an exaggeration to say that we
have here a British 4I per cent. guarantee going
a-tiegiing at par. Ia seek instance we have con-
fined ourselves to • consideration of the Government
'striates, leaving surplus profits from the Railway
we Telegraph entirely oat of the question.

Now fur the explanation, which is indeed so clear
that he who rues may read. A large portion of the
capital of each of these projects was allotted to
speculators, instead of to bona fide and solid holders.
We imply no rettectiou epee the gentlemen who con-
ducted the bean's cemented with the several allot-
ments. They had merely to distribute the capital as
fairly as they could amongst the numerous applicants.
each of whom, having lodged the stipulated deposit,had
an equal claim to consideration. ltightly viewed, the
class of speculative subscribers includes all those who
wrote for a larger amount of stock than they intended
to hold permanently. The man who asks to be allowed
to take a certain share in a new undertaking, and
is prepared to embark permanently • proportionate
amount of capital, is alone entitled to be considered a
bona fide investor. He who applies merely with •
view to netting a premium, or who writes for a
larger amount than he means to pay upon, trusting
that the market will give him a better price than
par for the surplus, is a speculator. Of the latter
class, some of course are greater speculators than
others, but the difference is merely is degree.
The result has been something after this wise:
the public at large, who did not care to participate
in or were excluded from the allotment, have
evinced little inclination to rush into the market as
buyers at a premium, and the speculators have been
chilled and disappointed by their apathy. As a
rule, the more frenzied the rush for an allotment,
the weaker and more speculative the subscriber,.
Many were barely poseemed of sufficient mean
or credit to meet the Ant instalment on their stock.
In this case, the obligation of selling was im-
media*, and imperative. Hence the sudden
fall which usually follows—sometimes pre-
cedes—the issue of allotment " letters." Others
held on desperately for • few weeks, until the pres-
sure of accruing calls and instalments forced the
stock from their band•—• process involving regret
that they had not sold before. Aod thus, in most

Wittiness, a steady supply of stock was flung upon
an already over supplied and therefore drooping
saarket. Even when the weakest of the speculative
allottees had been weeded out, the sales continued,
for account of persons who had obtained more stock
than they meant to hold for invnetment, or of the
stronger speculators, who were prepared, if nuts-
mry, to meet several successive " calls," but were at
length induced to realise oat el sheer dia-
rist at so unaatiafactory and disappointing a
state of affairs. The approach of the period for
each instalment has determined fresh sales. Even
when the whole of the capital shall have been paid
up, an immediate recovery is not a necessary came-
quenoe, for the absorption of the excessive supply of
stock may require time.
What is the moral of all this? Simply that the
sober public need be in no haste to rush after any
new stock, however tempting. Of late, in nine
cases out of ten, the ultimate advantage remains
with those cautious persons who hold entirely
aloof from the queue of speculative ap-
plicants, and are content to wait until the specu-
lator disgorges. They have now the option of em-
barking quietly such amount of money u they may
think proper, under much more settled conditions,
and at an important advantage, either in point of
market price or of accrued interest. Let the wary
investor eschew the speculative entrainment; for
he will gain by waiting. Possibly he may even
pick up at a greatly reduced price some of the stock
pressed upon the market by the original negotiators,
who, in some cues, seem not to scruple to get out of
• scrape upon the back* of those who have supported
them. "Promoters of public companies" may well
claim a distinct classification in the " Directory," if
regard be had to their number, complete organisa-
tion, acquaintance with high circles, and rising im-
portance in the commercial and financial world.
Their influence, however, is not a particularly
benign one; and when we regard the vast exten-
sion which the spirit of gambling, as proved by the
mania for allotments, has acquired of late years
amongst all classes of the community, even amongst
those which would appear to be moat eumpt, the
practical discouragement to "jobbing" involved in
the instances of disappointment above cited, forms a
, pertial set-off against the losses sustaiasd.