236 EDWARD SHERWOOD MEADE 



moter's judgment — if his property is located on competing 

 lines, he can look for substantial concessions in rates, but on 

 the other hand, he knows that these favorable rates may 

 flood the markets with low priced coal in which there is small 

 profit. If he has the facilities of a single line, he must con- 

 sider whether either the company or its officials are interested 

 in coal properties whose product will compete with his own, 

 in which event in a slack market, his car supply may be sud- 

 denly abbreviated. He may also take into account the hold- 

 ings in this road by another coal road in its bearing upon 

 differentials. All these and a number of other points, the 

 promoter will take into account in forming his judgment as 

 to the probable success of his enterprise; he will be the more 

 careful if he has a record of successful enterprises to strengthen 

 his appeal to the investor. 



Having formed a favorable judgment, having "discov- 

 ered" the proposition, the promoter now proceeds to "as- 

 semble" it. To this end, he must either purchase or secure 

 the right to purchase within a fixed time and at a fixed price 

 the property or privilege which he has determined to exploit, 

 whether mine, patent, timberland or franchise. As a general 

 rule, the method of option is the one usually followed as in- 

 volving a smaller outlay of cash by the promoter, and imply- 

 ing a smaller loss in case his flotation should be unsuccessful. 

 To continue our illustration: The promoter wishes to pur- 

 chase 5,000 acres of coal land owned by perhaps fifty farmers. 

 He goes into the district usually armed with a certificate of 

 reputability in the form of a local celebrity at $2.50 per day 

 and expenses paid, and visits these farmers at their homes. 

 He presents his purpose to them, assures them that he will 

 be able to raise the money to develop his proposition, and asks 

 them, for the sake of their mutual interest, and for a nominal 

 consideration in hand paid, to sell him an option to purchase 

 their property at any time within six months, at a price of 

 say, $20 per acre. Various arguments may be employed to 

 influence a general assent to this proposition. The landowners 

 may be shown that the value of the surface soil which will re- 

 main in their possession after the transfer of the coal, will be 

 increased by the demands which a coal mining community 



