New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-12-08
Rise in National Funds
Anticipated in Formation
of New Ministry.
STATE BONDS ACTIVE;
OTHER SECTIONS DULL
Attention Again Unfavorably Di-
rected to Stocks and Bonds
in American Railroads.
By Cable to The Tribune. ]

Paris, Dec. THE Bourse was
| firmer at the end Of the week, owing to
repurchasing of rentes in the expecta-
ton of a boom in the national funds as
soon as the political crisis is ended.
Russian industrials are showing con-
siderable activity and foreign state
bonds are in demand. but the market
, for other securities is extremely dull.
Much discussion is being heard here
on the subject Of the Withholding Of
payments by the Missouri, Oklahoma
& Gulf Railway Company and of its
affiliated company, the Missouri, Okla
homa G. Gold Railway, and, coming
after the incidents connected with the
St. Louis and San Francisco lines, this
action has caused much anxiety among
French holders of American railroad
stock. These seem to fear that all
railroad companies in the United States
may eventually be compelled to follow
the lead and be subjected to the same
fate sooner or later as the above named
railway systems.
French financiers think that the in
formation concerning Missouri & Okla
homa is TO be regretted because the
type of bonds issued by this company so
! closely resembles the sort of bonds to
which the French general public is ac-
customed-that is. that the company
/ has had in view plan, not of redemp-
ton at par at a fixed date. but Of MAX
ing conditions for redemption at par by
annual drawings by lot.
This clause which is contrary TO
American custom. was thought here TO
be a sure guarantee against all mis-
fortunes which fall on American rail-
way enterprises. 1t is now regretted
that this remedy was of no help, and
only proves that the guarantees of all
securities rest solely on the margin be-
tween the expense OF the service OF the
bonds and the net profits attributed TO
them.
Doubtless the payment in entirety
and at fixed dates Of the capital in
vested in bonds may be inconvenient
at times Of monetary tension, but prac-
tice has shown that the great Ameri-
can railway systems enjoying high
credit in the country have never met
with difficulties in renewing their
loans.
Moreover American railway COM
panies have the right to renew their
loans falling due because they are alb
solute owners of their railway prop
erty, their grants being for all time. A
comparison between American COM
panies and French may be interesting,
the French companies being often
quoted as models of careful Industrial
and financial management
One American railway company
chiefly interests the French market
through the number of its shares held
in this country. That is the Otchison
Topeka & Santa Fe Company. There
fore, a comparison with this railway
will be typical.
One Of the most important considera-
tions in railway administration is the
keep-up of the rolling stock, the per-
manent way and its dependencies. The
cost of maintenance on the Atchison
line amounted TO only 1914 mile In
the year 1897, but the outlay has in
creased threefold within the last seven
teen years.
Taking this railway as an example,
the expenditure on American lines Is
far higher than on the French systems
for renewing the rolling stock and the
service and maintenance Of the sys-
TENS. The expenditure for working the
American railways has been much more
spasmodc, and necessarily so, than for
the upkeeping Of the rolling stock for
the using up of the latter does not come
under the same conditions.
Here. again, the same circumstances
do not apply to the French systems
with their much shorter lengths Of
track, but on the other hand more CEN
tralized traffic, than in the United
States, taken as a whole. The respec-
tive wages Of railway employees and
freight and passenger traffic returns
vary in the two countries, but the care
full management OF French railway
finance is exemplified in the stability of
the market levels of the bonds and
shares Of the French lines, the regu-
larity in the dividend returns and the
fact that bonds OF the principal railway
systems in France are considered to be
as sound an investment as government
securities. In fact. bond or share
certificates Of the Northern OF France
Railway or of the. Paris, Lyons &
Mediterranean, for example, are re-
garded as the very best Of gilt-edged
stock.