THE WORK OF THE PROMOTER 243 



profits of the promoter. The only result of such action would 

 be that the net earnings and dividends of the company would 

 be increased. The investor, however, would receive the same 

 rate of income from investing $1,000 in a 10 per cent stock at 

 70, as he would receive from $1,000 invested in an 18 per 

 cent stock at 126. It is true that the community might be 

 the gainer because a larger amount of coal might be produced 

 from the larger investment. This conclusion, however, rests 

 upon two assumptions: First, that the original plans of the 

 promoter were not large enough, since he could probably have 

 capitalized his enterprise at $900,000 instead of $500,000 in 

 case he considered that market and mining conditions war- 

 ranted the larger output of coal and, that the promoter will 

 make an ineffective and wasteful use of the $75,000 profit 

 which lie takes out of the enterprise and will not employ these 

 funds in furthering new enterprises to which he may turn his 

 attention. Neither of these assumptions is apparently well 

 grounded. The promoter has, it is safe to say, if he is a con- 

 servative and intelligent man, provided for as large a produc- 

 tion as is warranted by the conditions surrounding the enter- 

 prise, and if his profits appear large, they are usually turned 

 back into new ventures whose success will increase the wealth 

 of the community. We must conclude, therefore, that the 

 promoter performs an indispensable function in the com- 

 munity by discovering, formulating and assembling the busi- 

 ness propositions by whose development the wealth of society 

 is increased. He acts as the middleman or intermediary be- 

 tween the man with money to invest in securities and the 

 man with undeveloped property to sell for money. In the 

 present scheme of production, the resource and the money 

 are useless apart. Let them be brought together and wealth 

 is the result. In most cases, the unassisted coincidence of 

 investment funds with investment opportunities is wholly 

 fortuitous and uncertain. The investor and the land or patent 

 or mine owner have few things in common. Left to themselves 

 they would never meet. But the promoter brings these anti- 

 thetical elements together; in this way utilities are created 

 which did not before exist, and which are none the less a social 

 gain because most of the advantage is taken over by the pro- 

 moter and the financier. 



