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ifotfigu intelligence*I




RAILWAY SPECULATION. In a very useful paper on Saturday morning, the Times raises a note of warning against the dangerous excess of the speculation in railway affairs supplying some striking facts, which show that the real excess is even greater than it appears, more beyond the control of the discreetest arnong the speculators, and more menacing in its conse- quences. Although we have upon former occasions copied articles upon this subject from the Spectator, yet We do not scruple to give an abridgement of the obser- vations made by so important a coadjutor :— We have carefully- investigated the amount of capital em- barked in railways, the number of shares in the market, and the value of the premiums upon them. It appears that .11 compa- nies have been formed during the last twelve months; of which the total capital engaged is £ .;5,.r)10,000, the number of shares is 1,086,650, and the total value of the premiums on those shares as quoted is £3,559,000, "We find, further, that there are 58 companies, of which, although neither the number of shares, nor their nominal amount, nor the amount paid up is stated, yet the premiums Qf such as are quoted (and they are not many) give an average premium of X 6 per share: but, adopting as the basis of calcu- lation the facts which appear as to the 44 companies of which the details are before us, we may assume that the capital em- barked in these 58 companies is X46,490,000, the number of shares 1,413,000, and the value ofpremutma is £ 4,641,000. We know further, from the General Share List, that the rise in the price of shares in the 27 companies which have existed more than a year, amounts on the whole to £1:3,-191,000; the number of shares in such companies exceeding £9,100,000; the total result, then, is, that the number of railway shares which are the subject of speculation is as fullows- In 27 old companies 9,100,000 In 41 companies established within 12 months.. 1,086,650 In 58 new companies. 1,113,000 Making a total of shares of 11,599,650 The rise of price or premium on which amounts to £ tr>,y90,000. The capital required for the 102 companies in the second and third classes alone amounts to not less than X82,000,000 but in addition to this, which has reference only to railways in the United Kingdom, we are aware of the names of not less than 20 foreign railways, of which shares to the amount of £10,100,000 are in the London market alone. On account of these latter, remittances have already been made to the continent to an amount of £ 3,000,000 and it is impossible to estimate the pro- bable remittances in twelve months to come at less than £ 10,000,000 of money. It is difficult, indeed, to assign limits to the extent to which demands may be made here with reference to foreign railways for as the laws of Belgium prohibit the sale of any share in a railway until the works are completed and the operations on the railroad commenced, there is a manifest in- ducement to the speculator in that country to extend, by every possible means, transactions in this country which in his own are effectually prevented." The printed list returned to the House of Commons, of persons holding shares in the several railways submitted to Parliament to an amount exceeding £2,000, which includes women and subordinates in official situations, as subscribers for such enor- mous sums as £ 50,000 to £ 600,000, shows how few are pos- sessed of the means to realise their engagements. The list of subscribers under £2,0,00 would very likely prove to be equally nctitious and speculations in foreign railways stand in the same category. "From these facts two circumstances are evident first, that the demand for payments on shares of foreign railways must create at an early period a pressure o t'u. money-market of this country; and secondly, that, iad "ltly of sueh a drain for foreign remittance, the sums requ: the fulfilment of domestic engagements exco-sd the surplus -pital properly applicablo to si'slj purposes, and can only bo ;u ,plied, if sup- plied at all,' -i extensive sale of other so-iuitv Moreover, n the temporary absence of rcsin,j,ion occasioned by the postponement of the bill for regulating joint-stock banks in Scotland, advantage has been taken ii) establish in that country joint-stock banks on dangerous principles, the profits of which are mainly to depend upon advances to be made upon the security of railway shares." How far these facts differ from those recorded in the history of the South Sea bubble of 1720, excepting in the absence of encouragement from the Government, the reader may jud^e. Those even who deem themselves moderate in their speculations may be dragged into the vortex by the recklessness of others, who, without capital, exist upon the probability of an advance in prices and, in their efforts to promote that advance are hasten- ing the explosion. "If evidence of such results, taken from later times, be required, we may safely refer to the periods of 1825—6 and 1835 — 6. At both periods, inordinate speculations, by means of commercial companies in the one case, and by in- vestments in foreign securities in the other, led to disasters from which the country did not recover for some years after- wards." From such grievous disasters we believe that there is yet time to escape, if those who hold high stations in the commer- cial world will only decidedly discountenance this speculative gambling by not accepting as security fictitious railway stock, and by withholding their countenance as well as their credit bom those who Me CPgaged in such ha:ardous trsni?ftcti9n¥/*

General JiltguIUng.