Context The government wished to establish a concession to serve the central France and the Midi Pyrenees whilst freeing itself from the influence of the
CF Lyon-Méditerranée, which was dominated by the highly enterprising Paulin Talabot, and the increasingly powerful
Paris-Orléans, headed by
François Bartholoni. The companies, however, were slow to carry out the proposed work, which needed substantial capital. They were reluctant to invest in the construction of lines into sparsely populated, difficult to access mountainous terrain. Up to this point, railways had generally followed wide river valleys, or passed from one valley to the other via gentle inclines. A network through the
Massif Central required bolder technical solutions. The government encouraged the creation of new companies whose competition would alarm their wealthy rivals and cause the latter to come to terms with the policy of the State. At the same time, in order to raise the necessary capital, the government supported the creation of a new type of financial institution,
Crédit Mobilier, which was set up by the Pereire brothers with
Benoît Fould,
Victor de Persigny and Morny, amongst others. This financial enterprise was to serve the new regime's plans for the development of the nation's infrastructure (railways, transatlantic ships, docks, the funding of urban renewal in Paris and the provinces, etc.). A group of Parisian major banks opposed
Crédit Mobilier, fearing the emergence of a financial monopoly that would eclipse them. They created a banking syndicate under the leadership of
James de Rothschild, the
Réunion Financièr.
Realisation Up to this point, Morny had supported Bartholony in his hopes of extending the Clermont-Ferrand line into the Massive Central. Similarly, in the light of the threat from a
Crédit Mobilier railway monopoly, he supported Bartholony's plan at the end of 1852 to merge the Paris-Orléons, Lyon-Méditerranée and Paris-Lyon lines into a
Compagnie des chemins de fer du Sud which would serve the Massif Central. It would have been one of four great networks (
Ouest,
Nord,
Est and
Sud) into which France would be partitioned. The
Midi would be free to join with the
Sud, or to remain independent. But on 1 January 1853,
Le Moniteur Universel opposed the government's proposal. In addition, deputies from the Massif Central mining areas argued for branch lines to transport their products, particularly from the
Aveyron mines which had difficulty shipping their output via the river
Lot to
Bordeaux. The businessmen asserted that mineral deposits comparable to those found in England could also be found in the Massif Central, but that transport doubled its cost. With this in mind, representatives from the
Aubin mines in the Aveyron coal fields (notably
de Pourtalès and Seraincourt) tried to attract investors in England, where the plethora of British railway schemes no longer offered attractive premiums, to invest in a line linking Clermont-Ferrand to Toulouse via
Montauban to serve the Massif Central fields. They asked the Duke of Morny to chair the company that would construct the line. Morny incorporated the line from
Limoges to
Agen, which had been promoted without success by Magne (Minister of Public Works and a deputy from Dordogne) to Bartholony since November 1852, and the direct line from Bordeaux to Lyon via the south of the Massif Central, in association with
Crédit Mobilier, where Morny became a member of the board of directors in 1853 after it had been set up. Finally, on the initiative of Delahante, the
Compagnie des mines de la Loire, which wanted to improve access to its output, agreed with
Crédit Mobilier to merge the three small Saint-Etienne area railway companies into a single company with the aim of reconstructing these lines to give a streamlined operation with up-to-date equipment. Agreements were concluded between the three small companies to transfer their operations to a new
Compagnie des chemins de fer de jonction du Rhône à la Loire, whose concession was granted by decree on 17 May 1853. The company's statutes were approved on 30 September 1853.
Crédit Mobilier subscribed for 10,000 of the 60,000 share capital, and both the Pereire brothers took 1,000 shares.
Paris-Orléans now had a connection to Lyon for its Moulins, Saint-Germain-des-Fossés and Roanne lines, and the Pereire brothers were in a stronger position through control of the junctions between the Paris-Lyon line, the Lyon-Méditerranée line and the
Paris-Orléans. This situation was not displeasing to the government, which had feared the creation of an over-large
Sud network (referred to as
supra) in the hands of Bartholony (
Paris-Orléans) and Talabot (
Lyon-Méditerranée). == Creation of the company ==