Is the Eiffel Tower profitable or does it lose money year after year?
Historically and financially, the construction and operation of the Eiffel Tower has been an excellent operation. Incorporated into a public limited company with a capital of 5,100,000 francs, Compagnie de la Tour Eiffel was able to amortise its foundation capital before the end of the Exhibition. From 1900 all the owners of securities have been reimbursed and they own shares of enjoyment, which give them a share on all profits until the end of the concession of Mr Eiffel, that is to say until 31 December 1909. On the subject of this extraordinary movement of curiosity of the crowd, it is interesting to take the history of it in the financial bulletin of the Petit Journal, which, on July 8, 1889, wrote:
Profitability on opening
I was speaking in one of my last talks about what are called the values of Exposure, that is to say of those values which, more than any others, benefit from the present period. Do we know among them what is the most extraordinary? Do we want to know the company that achieves, perhaps, the most fabulous profits! It's the Eiffel Tower Society. The other day, caught in the endless queue of people waiting to climb one of the lifts, I calculated mentally, in order to deceive the wait, the recipes that the Society had to make. I arrived at a result such as once descended, I had the curiosity to inform me to know how much my calculations approached the truth.
I was knocked down! All I could have imagined was nothing near the actual results. Judge for yourself. Although the recipes only started on the 15th of May, and in the first days, as we know, the affluence was less because all the elevators were not working yet, as it is now. from May 15 to July 2, the Company has already collected 1,300,000 francs, an average of 30,000 francs per day, which can only increase now that the service is fully organized. The Company's capital is 5,100,000 francs represented by 10,200 shares of 500 francs. This means that in forty-eight days, the Company has already earned a sum representing a dividend of 23% on its capital. Is not it wonderful? Also, in two days, July 10, will the Company pay its shareholders 100 francs per share as a refund of their capital. It is not difficult to predict after what has just been read that at the end of the Exhibition and perhaps even before, the shareholders will have taken back their 500 francs and will continue to earn income while having more money in the case. So it is not surprising that shares rose rapidly from 500 to 835 francs. They will probably not stop in such a good way and the less optimistic predict the price of 1,000 francs in the very near future.
All of these predictions have been completed from point to point. At the closing of the Exhibition, the Eiffel Tower was closed; it reopened in the spring of 1890 and 1891, after having undergone changes and improvements in its interior appearance. On August 8, 1890, the general meeting of shareholders took the following resolutions, putting for six years the Tower under the following financial regime:
1st resolve. The general meeting, having heard the report of the board of directors and that of MM. the auditors approves the accounts for the financial year 1889 and decides that of the balance of available profits amounting to 268,484,62 francs, 100,000 francs will be allocated to the creation of a provident fund and 168,484.62 francs will be carried forward. in the 1890 exercise.
2nd resolve. The meeting re-elected Mr Eiffel director for six years.
3rd resolve. The general meeting decides, pursuant to article 21 of the by-laws, that the annual allocation of the board of directors as attendance fees will consist of the future and until new decision of the general meeting, in a fixed sum of 15,000 francs, plus an amount equivalent to ten per cent of the profits distributed.
4th resolve. The assembly appoints commissaires for the year 1890 MM. Jules Charton, Truelle, Dreyfus, and fixed at 1000 francs the allowance which should be granted to each of them.
The report of the Board of Directors does not suggest what the benefits might be in subsequent years: it merely warns shareholders that overhead costs will continue to be significant for this year. About them, here is how the report is expressed:
The Tower has a considerable amount of maintenance costs. In addition, this year, we are facing extraordinary expenses of a certain importance, both for the rehabilitation of overworked equipment and for the new requirements of the operation. The opening of the village hall, where we meet you today, the complete organization of restaurants, for which we have not found any concessionaires offering us acceptable conditions, the Salon de la Tour, the complete transformation of the third floor, etc., are so many improvements that we have deemed essential to the vitality of your business and whose value you can appreciate.
See also:
