The Sun.
London, England, 1838-10-24 00:00:00

RAILWAY SHARES IN FRANCE.

The sort of panic which lately induced the holders of
shares in the Railroad Companies to part with their pro-
perty and surrender it an easy prey to speculators on their
depression, appears to have again subsided. The prices of
those shares have slightly improved ; still the state of the
market does not look very satisfactory. If we except the
Versailles (right bank) and St. Germain railroads, there is
not a single Company whose shares are not quoted below
the nominal par. The most depreciated are those of the
road between Strasburg and Basle, the shares of which
lose 30 per cent., and that of Orleans, the fail in which is 4 '
per cent. ; the St. Germain road, which gained a premium
of 110 per cent., is now only worth 660 f. per share.
According to the bulletin of the Bourse, there is at pre-
sent in the social capital of the three roads between Paris
and Orleans, Paris and Havre, and Strasburg and Basle,
a diminution or loss equivalent to 21 millions of francs, or
12 per cent. Yet this capital has received no application,
the works are scarcely commenced ; and even supposing
that one of the Companies should be under the necessity of
refunding the advances, the real loss would perhaps not ex-
ceed 3 or 4 per cent.
Fear, we know, is blind, yet the state of the market is
sufficiently precarious to awaken the solicitude of the
holders. By hurrying the sale of their shares, they neces-
sarily augment their depreciation ; they moreover accele-
rate the period when it will no longer be possible for them
to sell them, because no purchasers will be found ; and they
prepare the way for a catastrophe of which they will be
the first victims. lf, on the contrary, they wait for one of
th:-ise reactions so frequent in the money-market, they
will have a chance of retrieving the credit of enterprise,
fur which they evinced at first so much eagerness.
The railroad undertakings have to encounter a crisis,
which will put their credit to a severe test. But this
depression itself favours the placing of the shares. It
was the low price of stocks that induced petty capitalists
to lodge their money in public securities. If there
exists no floating debt in the Five per Cents., it is
because the holders hastened to vest their savings
in that security as they were accumulating, and that
the Five per Cents. were slowly rising from 47f. to 1101.
Railroads are now placed in precisely similar circum-
stances. Let us suppose, for instance, a capitalist who has
purchased shares in the Basle and Strasburg Railroad, at
347 f. 50c., the present price ; to what amount could he be
a loser if the Company was obliged to refund the advances,
and that the loss was .5 per cent ? Why, each holder
would still receive 450 f. per share, which would leave him
a clear profit of 100 f, or 20 per cent. If, on the other
hand, the operation be completed and produce an interest
of 5 per cent. per share, the holder who paid 347 f. -50 e.
for the title, will receive nearly 8 per cent. for his capital,
and if the interests were limited to 33- per cent., his profit
would still amount to 5 per cent. At all events this mode
of placing one's money is attended with no risk, while it
may happen that those who have had the courage to wait
patiently will realize handsome profits.
Our intention is neither to excuse nor aggravate by an
light.e take
tr"uer
Capitals are not wanting, and it is erroneous to suppose
tuinlitnigmsealys bwleamfiendthtehefamu,ltashodf
,c,ieerwtaitnheCmominpatnhieeist.
that France can only devote 200,000,000 to purposes of
industry. Confidence alone is wanting, and, in the absence
of confidence, reflection. 'The crisis proceeds from the de-
sertion of the market by capitalists, and its usurpation by
speculators. Things will resume their natural course the
moment speculators shall no longer be suffered to reign
alone.—Courrier Francais.