TOPICS OF THE DAY.
RAILWAY FINANCE.
How many dabblers in railway shares ever bestow a thought upon the railway itself? The early speculators in railways con- templated the development of a new branch of industry—a new application of capital, to multiply itself and increase the conve- nience of society at the same time. The cooperation of the shrewd adventurous traders who recognized the capabilities of railroads, with the ingenious engineers who devised and improved locomo- tives or obviated surface difficulties, is still active for good. Many lines are projected or in actual progress that may never begin to work, and never can be remunerative ; but when they are forgotten, and the inconvenience their failure occasions with them, there will remain a large residue of really useful rail- ways—a permanent addition to the wealth and power of the nation. But of all this most railway speculators never think. A mere accident of railway undertakings—the peculiar form assumed by their financial operations—is all that these persons meddle with. To facilitate the raising of the large sums required to construct and furnish forth a railway, the joint-stock company with transferable shares has been resorted to. By issuing shares, for sums which are only to be called in by instalments, and may be transferred from one person to another by a simple and econo- mical process, the money immediately required, and what may be called a guarantee-fund for the whole expenses, is collected and kept together with ease. The transferable shares afford fa- vourite investments for monied men, from the facility of realizing at a moment's notice. Property so variable in its value must, under any circumstances, be run upon by those who know how to make money by watching " the turn of the market," and seizing the right moment to buy or sell. In all this there is no- thing necessarily or exclusively connected with railway enter- prise : shares in glass-works, pawnbroking-establishments on a large scale, or even any article of merchandise, may be made the object of gambling speculations as well as railway shares.
But the time when a new branch of industry is developed by the agency of joint-stock companies, with transferable shares to be paid up by instalments, is generally provocative of sanguine expectations. This has occasioned the run upon railway shares. As railway after railway has been found to succeed, new railways have been projected; and the shares, even the scrips of all, have found a ready market. Disappointed applicants for shares have resolved to start railways of their own. It is no exaggeration to say, that maps have been taken up to see where no railway had yet been put down, and projected lines traced across districts which had no recommendation but that they were still unoccu- pied. The shares of the new railway, thus judiciously devised, were sure to be taken up by those who only purchase to sell as soon as they can do so at a premium. Sometimes two or even more companies have come out simultaneously with proposals for a railroad through the same district, and all their scrip has sold with equal rapidity. In proportion as the favourable fields of action are exhausted, the new schemes must naturally grow more and more wild and adventurous ; but, as the speculative passion, like every other, grows with feeding, they are caught up more eagerly than judicious ones were at first. Wild and ludicrous though many of the speculations be that are now eagerly received—headlong and unreflecting though the passion with which the public, neglectful of almost everything else, runs after them—there is yet no general danger. Money is transferred from old channels of investment, or withdrawn from inactivity to be poured into the new one ; head and hand labour- ers are employed and paid ; and the available roads will remain to the public when the phrensy subsides. The money will have changed hands, but will not be lost substantially. The fever of speculation has as yet been confined to the " share- market "—the produce and other markets are exempt from it : it, is only a limited, though a large number of the community, that has caught the infection ; and the majority of this class will awake from its dream in time, and be contented to find itself half as rich as it imagined. But, incidentally, there will be a great deal of individual suffering. Nearly half of the railway projects now in the field can never be carried into execution, either from natural obstacles, or the success of rival lines. Their shares are like the card in "the old maid," which every one tries to pass to his neighbour; he who cannot get quit of it being ac- counted the loser. And shares of this kind will be most likely to remain in the hands of those who do not understand the nature of the share-market—a class largely engaged in railway speculation. There is something so attractive in being told that Mr. — has made so much by buying' shares a week ago and selling them to- day. "Anybody can do that"; and everybody tries it. An- nuitant dowagers, beneficed clergy, lean men of literature, brief- less barristers, the whole of the "uneasy class," nay, menial ser- vants, will have a nibble in passing. Railway speculation is at present what the Government lottery used to be—a temptation to persons with slender means to throw away their little money and incur liabilities they can never meet. And it were well if it ended there : but the moral taint which this over-speculative spirit brings along with it is more pernicious still. The desire of ladies young and old, and all classes of annuitants, to make a little money by some lucky railway hit, is like the desire to inake a little money by a lucky night at cards : and when the desire grows to a passion, engrosses the whole soul, and spreads through whole families, as is it now doing, the respectability and happiness of not the least valuable class of society are compromised. This must be of right attributed not to railways but to railway finance.
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