THE WORK OF THE PROMOTER 237 



will make for the produce of their farms. They may be offered 

 the advantage of a railway which the opening of coal mines 

 will bring. The hopelessness of developing their own prop- 

 erty may be pointed out to them, and as a last resort the pro- 

 moter may threaten to "sew them up" by refusing to trans- 

 port their coal over his roads. By employing these or similar 

 arguments, the promoter persuades the farmers to option or 

 " lease" their land. As far as possible he keeps each owner 

 in ignorance of the terms offered to his neighbors; a general 

 diffusion of such information would cause a general raising 

 of prices. In dealing with the well-to-do and intelligent 

 farmers, he must often pay a high price for the option; the 

 price named in the instrument is also high. The promoter 

 submits to these onerous terms not merely because he wants 

 the land of these hard bargainers who know just how indis- 

 pensable their coal is to him, but also because he desires to 

 use their names and influence with other owners. These 

 higher prices are recovered in dealing with the more ignorant 

 landowners who are greatly impressed with the representa- 

 tions of the promoter, and also by the fact that their richer 

 neighbors have joined the scheme. It may even be necessary 

 for the promoter to employ a little coercion in the way of an 

 alliance with the" general storekeeper who may hold chattel 

 mortgages and judgment notes against the recalcitrant, power- 

 ful arguments when skillfully employed. 



The promoter has now " assembled" his proposition. 

 The owners have obligated themselves to sellto him at a price 

 until the expiration of six months. He knows exactly how 

 much the land will cost him and he has the land under con- 

 trol. The next thing is to " float" it, that is to say, to raise 

 the money necessary to develop it. To this end, the pro- 

 moter forms a corporation whose capitalization, if he is a con- 

 servative man, will be based on the probable earning power 

 of the property, say $100 per acre or $500,000 of stock. This 

 stock, to reserve the special details of the flotation to the dis- 

 cussion of the trust, he succeeds in placing at fifty cents on 

 the dollar before the six months of his option have expired, 

 either with investors who wish to hold the stock, or with 

 bankers and financiers who expect to sell at an advance. The 



