THE WORK OF THE PROMOTER 233 



stone quarry, or where the carriage maker goes into the manu- 

 facture of automobiles, or a railroad may spend a portion of 

 its surplus in purchasing a coal property along its line. In 

 these investments, producers extend their business out of 

 their profits and with their own funds. More new wealth is 

 produced by this form of investment than by any other. 

 Every industry is constantly growing from within, as the 

 biologists would say, by intussusception, out of the profits of 

 the past, the individual producers are making innumerable 

 ventures of their money into untried fields in enterprises 

 where they alone stand to win or to lose, and where they act 

 from personal knowledge of the opportunity. 



A second class of investors there is, which may include 

 the members of the first class, but who are actuated by differ- 

 ent motives and who act in a different way. These are also 

 in possession of surplus funds from the employment of which 

 they wish to obtain a profit and they are ready to buy the 

 stock of any corporation which gives them an assurance of 

 satisfactory return. They are in the market for any securities 

 which they consider to be a safe and profitable investment. 

 The members of this class are not, as a rule, in close touch 

 with the industries whose securities they buy. A leather mer- 

 chant invests in steel, a banker in railroads, a retail dealer in 

 mining stock, not usually because he desires to identify him- 

 self with the business in which he invests, so far as to give it 

 his close personal attention and to assist in its management, 

 but solely that he may share in its profits. Included in this 

 class are all investment institutions and managers of trust 

 funds, who take no active part whatever in the numerous 

 enterprises whose securities they hold. The importance of 

 this vicarious interest in industry is steadily increasing, as 

 production is carried on on a larger scale, and as it therefore 

 becomes increasingly difficult for a few men to combine a 

 sufficient amount of capital for the inauguration of a new 

 enterprise, or the development of an enterprise already estab- 

 lished. Twenty years ago timber was readily accessible and 

 a few thousand dollars would build a sawmill. A half dozen 

 farmers, by combining their savings, could start in the lumber 

 business. To-day, a well equipped sawmill may cost $100,- 



