234 EDWARD SHERWOOD MEADE 



000 and added to this must be the expense of perhaps twenty 

 miles of railroad to reach the timber. The assistance of out- 

 side capital is becoming every year more essential to the 

 development of any industry or the exploitation of any re- 

 source. 



The proprietors of this outside capital, as we just now 

 observed, know little or nothing about the technical aspects 

 of the industries into which they put their money. They are 

 acquainted with these industries merely as sources of profit. 

 If they can be given satisfactory assurances that profits will 

 be forthcoming from a proposed development, they are will- 

 ing to invest money to that end. They will not, however, 

 devote themselves to searching out and preparing the proposi- 

 tions into which, when once discovered and prepared, they 

 are willing to put their money. This attitude of mind of the 

 general investor necessitates the promoter. The promoter, 

 then, is the man who discovers and " assembles" the proposi- 

 tion for the investor, who then, if satisfied with the prospect 

 of profit, provides the fund for its development. The pro- 

 moter may be, and not infrequently is himself engaged in the 

 industry which he proposes to extend or to develop in some 

 other locality. In this case, his proposals are more favorably 

 regarded by the investor who justly considers that the pro- 

 moter is well qualified to judge of the merits of the proposi- 

 tion. Mr. John W. Gates, who was associated almost from 

 the beginning with the wire industry of the United States, 

 was a promoter of this class. In projecting the Federal Steel 

 company and the American Steel and Wire company, he spoke 

 with the voice of authority. On the other hand, and this is 

 more often the case, the promoter may not be particularly 

 conversant with the practical and technical affairs of the in- 

 dustry. The limitations of practical knowledge may be illus- 

 trated by those promoters who make a specialty of certain 

 lines of industry, for example, street railways. A successful 

 street railway promoter will usually have a very keen and 

 trained judgment regarding street railway statistics. He will 

 know the exact percentage which operating expenses ought 

 to bear to total income under given conditions, and of the cost 

 per mile for running cars, and he will be able to analyze with 



