MELBOURNE TRAMWAY COMPANY'S SHARES.

Otago Witness, Issue 1956, 20 August 1891, Page 17

MELBOURNE TRAMWAY COMPANY'S SHARES.

(Fjbom Ooh Own Cobebspondbnt.)

Melbouene, August 6,

Tbe sensation of the week has undoubtedly been the fall in the price of Melbourne tramway N shares. This was occasioned by the publication in the morning newspapers of Saturday of the following letter from the oompany: — "Sir, — I am instructed by the directors of this company to state that, knowing the anxiety of shareholders to learn the net result of the year's operations, a draft balance submitted to them this evening, which is, however, subject to audit, shows in round figures, including £10,798 brought from previous balance, a total of £109,176, from whiclf £96,000 has been paid iv interim dividends, leaving a balance of £13,176 to carry forward.—- Yours, &c.~W. G. Spbigg, secretary." The net profit for the year was thus shown to be £98,378, which compared very badly with the previous year, when the neb profits were £146,842. Tbe decrease for the 12 months was thus no less than £48,464. The cause of the falling off is the opening of new lines which have not paid, for instance, the West Melbourne, Port Melbourne, and South Melbourne; while the Toorak and St. Kilda have scarcely paid expenses, nor have two horse lines in more distant suburbs. It appears that a revenue of Is per mile is required to pay. Thus, over a line four miles long each car would need to carry 16 passengers at tbe threepenny fare ; and this somewhat large average is not maintained throughout the day, especially in winter time. The result of the publication of this unsatisfactory report was a rapid fall in the price of shares, even from the low prices which had been ruling just previously ; for a suspicion that the returns were not to be so good this year bad borne prices down steadily. In June last year the shares (paid up to 10s) reached extravagant prices, being sold on 'Change up to £8 19s, while afe the same time a few sales were made outside at £9, and a little over. After tbe annual meeting in August, the shares fell to about £5 12s, and since then they have been almost steadily falling. About the middle of last month they came as low 88 £3, and on Friday last they were quoted at 58s. On Saturday and Monday they fell steadily till 46s 6d was reached, since which they have improved a shilling or two. To account for the intense interest in this stock it is necessary to know that it is the most favoured on the market with all classes of investors. As prices fell everyone imagined week by week that the bottom was at length reached, and that a rise would soon occur. Consequently hundreds of people invested their small savings in parcels of 35, 50, and 100. They considered the stock a safe investment and there was always the chance of a speculative rise. Consequently tbe dismay is widespread, and the disastrous fall is greatly felt.