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to fulfil the conditions of its contract, it is declared to have forfeited its privilege. The committee assented to this principle of forfeiture, but they were of opinion that it ought not to be made an indirect means of confiscating the property of joint-stock companies. Accordingly, it was proposed to sell by auction, for the benefit of the forfeited company, the works or the machinery which it might possess; and they even held, that the original contractors had some claim to an indemnity, to be fixed by law.

Thirdly. The French railways are not invested with the privilege of perpetual property; the longest lease of them which the state has granted is for ninety-nine years. After that term, the property reverts to the government; and the government has even the power of buying out the company before the expiration of this legal term, at a price to be fixed at not less than the capital represented by the average income of the preceding ten years.

Fourthly. Hitherto the state, in granting a railway privilege, has not only fixed the rate of charges which the company was empowered to make, but has reserved to itself the right of revising this tariff of charges from time to time. The committee were of opinion, that this latter power ought not to be retained by the state.

Fifthly. In order to protect the shareholders from fraud on the part of the directors, and to check the jobbing of shares as much as possible, the following conditions were proposed*: 1. That all the directors or administrators should be possessed of a number of shares sufficient to give a security for their administration, and that such shares should not be transferable until the completion of the works. 2. That no shares should be issued or made saleable until the act was passed. 3. That no gratuitous shares should be issued; and that the interest of the engineers and directors in the concern should

* We beg to refer our readers to the Appendix II. of the Second Report of the Irish Railway Commissioners, for their excellent “suggestions on the powers to be given to railway companies, and the restrictions to which they should be subjected." These suggestions offer very considerable analogies to the French regulations in the text; and some of them have been already adopted in Great Britain. For instance, the Act for the Dublin and Kingston Company required the payment of calls on the shares to the anount of 20 per cent., before they could be legally transferred ; which must have etfectually prevented the interference of professed jobbers in shares.-Report, p. 29, appendir.

not be negotiable or transferable. This latter clause is evidently too restrictive of the liberty necessary to companies of this kind; but its object was to avoid the scandalous traffic which is not unfrequently made of the interest of directors, and, above all, to obviate the possibility of those disgraceful bargains and sales of votes or assents for shares, of which we have had in this country but too many instances.

Sixthly. The committee recommended, that instead of authorizing the Minister of Public Works to put the railways up to public competition by tender, a plan which had been adopted in some other undertakings of an earlier date, the law itself should adjudge the undertaking to such persons as offered and were admitted to execute it, without insisting on the terms of the contract so much as on the security for its punctual fulfilment.

Seventhly. The greatest defect in the legislative proceedings of the French in these matters, arises from the acts which authorize the works being passed before the companies which are to execute them are formed. The plans are conceived, proposed, discussed, and sanctioned, before their authors can have or can give any assurance that they will command the capital required for their execution. The committee recommended (and they appear to have had in view the practical results of our own manner of proceeding) that the final conditions of the work should not be signed and approved by the Minister until the company had justified one half at least of its capital; and that before any bill should be brought into the Chamber the company should deposit one-tenth of its capital in the bank of consignments. The plans ought to be sufficiently mature to give an idea of the obstacles to be overcome, and the outlay to be made; and the company ought to be fully organized, and its by-laws submitted to the Conseil d'Etat, before the bill is read in the Chamber.

These conditions embodied the general principles upon which, in the opinion of the French committee, works of this kind ought to be conducted. The government did not oppose them; but in the course of the debate which opened on the following 8th of May, M. Molé declared that they were disposed to entrust several lines of railway to private companies, provided the government should be authorized to con

struct the road from Paris to the Belgian frontier, and that from Marseilles to Lyons. The Chamber, however, was not moved by these tardy concessions; and in pursuance of the recommendation of the committee, the whole measure was thrown out. A week afterwards, M. Martin (du Nord), the Minister of Public Works, brought in six bills in behalf of private companies for six railways. The first was to unite Lille with Dunkirk, which is eighteen leagues from that city, and is the natural outlet of the important manufactories of the Department du Nord. The cost of this railway was estimated at 16,000,000f. (640,0001.); but to enhance the utility of the line, the Minister observed, that the exports and imports of Dunkirk amount to 166,000 tons per annum.

The second line, from Bordeaux to Langon on the left bank of the Garonne, was to extend ten leagues, until it joined the roads to Bayonne and Toulouse. The cost (for a single line of rails) was estimated at 5,000,000f. (200,0001.). The steamboats which now ply between Bordeaux and Langon are computed to transport annually 500,000 passengers.

The third line was to run between Nîmes and Montpellier, where it would join the line between Montpellier and Cette. At some distance from Nîmes, this line would communicate with the road from Alais to Beaucaire, and thus form an unbroken railway from the Rhone to the canal du Midi. The rail-road between Montpellier and Nîmes is to be 49.00 kilometres, or more than twelve leagues in length, and to cost 10,000,000f.

Lastly, the administration proposed a railway between the manufacturing city of Sédan and the fortified town of Mézières, to avoid the frequent sinuosities of the Meuse. The distance is five leagues; the expense is estimated at 4,000,000f. Two other roads were proposed to convey the produce of the coal-fields to the river Allier, which made up this batch of projects.

Thus far the government appeared to persist in its intention of yielding none but branch lines of secondary importance to private companies. But the remonstrances of the public press and the dread of leaving France quite behind the other countries of Europe in the general improvement of communications, induced the ministers to waive some of their

pretensions. On the 26th May, two bills were brought in for the great lines from Paris to Hâvre and Dieppe, and from Paris to Orleans. Three days later, the government proposed to grant to M. Cockerill the line from Lille to Calais. As for the much-contested line to Belgium, the company which had been formed could only raise 40,000,000f.or half its proposed capital, and the government gladly seized that pretext to defer the solution of the difficulty. All these schemes, except that of the road from Bordeaux to Langon, received the sanction of the Chambers before the end of June; but as they were referred to different committees, which insisted on varions terms of agreement in the contracts, several of the grantees, and amongst others those who proposed to execute the roads from Montpellier to Nîmes, and from Lille to Calais, have availed themselves of certain clauses introduced into the cahier des charges to break off the contracts altogether.

The railways to Orleans and to Hâvre gave rise to much animated discussion in the newspapers, the parliamentary committees, and the Chambers. Eleven companies started for the former ; and the two companies which were in competition for the latter had adopted two systems and two routes of a totally distinct character.

One of the companies which was formed to undertake the line from Paris to Hâvre, proposed to follow the valley of the Seine. This route had been surveyed by two distinguished engineers, M. M. Polonceau and Bellanger, at an expense of 20,0001., and the scheme had been in agitation for four years. The other company was formed on the spur of the moment, and had no surveys of its own; but it adopted the plan originally proposed by the government across the plains of Normandy. The most striking difference between these companies consisted in the nature of their financial composition ; the former consisted of 4000 shareholders, who had simply paid a deposit of ten per cent. on their shares; the latter was supported by twenty great capitalists, with M. Aguado at their head, who took shares on their own account to the amount of 20,000,000f., and furnished a sort of personal security for the solvency of the undertaking. The Company of the Valley was a regular joint-stock company on the English plan; the Company of the Plains was an improvement on the French mode of souscription à forfait*.

The system of joint-stock companies has now been introduced in France with decided success; and its first effect has been to reveal the existence of large quantities of capital, which had before no means of gravitating, for a common purpose, to a common centre. Nevertheless, the habits of our thrifty neighbours are not to be completely metamorphosed in so short a time; and when the names of the capitalists who had embarked in the Company of the Plains were known, their authority obtained a decided preference for that company in the market, and stifled all opposition to their bill in the Chamber. The demands for shares are said to have amounted to 400,000,000f., though only 90,000,000f. were required for the proposed works. The government supported the bill ; and as the session was already near its close, the dread of losing another year expedited its passage. .

* As the nature of these forms of association may not be familiar to our readers, we borrow from an able production of M. Léon Faucher, in the Revue des deur Mondes, the following description of the two systems, which elucidates a somewhat novel question in political economy.

" Dans la souscription à forfait, il n'y a qu'un seul souscripteur direct; c'est le “ banquier qui l'entreprend—seul il est engagé à l'égard des concessionnaires, ou, " quand il a soumissionné lui-même la concession, à l'égard de l'état. La son

scription n'est point un contrat; elle ne donne pas aux souscripteurs le droit " d'obliger le gérant de la société à leur délivrer les actions qu'ils ont demandées ; " le gérant à son tour ne peut pas les contraindre à recevoir les titres ni à ver

ser les sommes représentées par ces valeurs, il n'y a d'engagement réel d'aucun "côté: ajoutons que si le banquier, la personne morale de l'association est re"sponsable, en revanche, il dispose d'un arbitraire illimité dans la distribution du “ fonds social. Il peut choisir entre les souscripteurs, livrer dix actions à ceux

qui en ont demandé cent, et cent à ceux qui en demandaient dix; préférer les

spéculateurs aux actionnaires sérieux, émettre enfin les actions aux époques “qu'il lui conviendra de fixer, précipiter l'émission ou la suspendre, et, au lieu de vendre, jouer.

“ La souscription directe, au contraire, présente un veritable contrat synallag“matique entre les administrateurs, qui sont les associés en nom collectif, et les “ commanditaires qui sont les souscripteurs. Le registre une fois ouvert, les con“ ditions sont égales pour tous ; il n'y a d'autre titre de préférence que le droit “ de priorité. Ici, la propriété c'est l'occupation, non point à titre gratuit, mais à " un prix fixé par avance, égal et invariable, valeur contre valeur, action contre " écus, et au pair. Le souscripteur met son griffe sur les actions qu'il se réserve; “cn même temps, et pour garantic de l'engagement, il verse un dixième de la “ valenr souscrite, chacun sait ce qu'il doit attendre ce qu'il fait, et avec qui il va “ s'associer. Les souscripteurs enregistrés publiquement, et dans un ordre successif, forment un corps. La propriété industrielle a son grand livre ; des valeurs "jusque là mysterieuses et par conséquent incertaines, sont revêtues du cachet de “ l'authenticité."

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