ON RAISING AND LAYING OUT CAPITAL. 21 



CHAPTER III. 



ON RAISING AND LAYING OUT CAPITAL. 



ALLUSION has already been made to the necessity for 

 avoiding unnecessary legal expenses, and the same 

 caution should be extended to every branch of capital 

 expenditure. Capital once sunk cannot be recovered, except 

 by sacrifice of profits, and, therefore, the time to exercise 

 care and judgment is before the money is spent. For 

 various reasons, the expert care and skill that is applied 

 to larger concerns is not available, and, therefore, it is more 

 usual for a 5,000,000 cubic feet works to be overloaded 

 with capital responsibilities than a 50,000,000 works. And, 

 unfortunately, the smaller works has not, as a rule, the 

 opportunity for wiping out errors in this respect, by exten- 

 sion of business, that obtains in the larger. I know several 

 small companies with a capital equivalent to ^1,200 to 

 ^1,500 per million cubic feet of gas sold per annum. 

 Taking the higher limit, it is evident that a charge of 

 is. 6d. must be made on each thousand cubic feet of gas 

 sold before a modest 5 per cent, dividend can be paid to 

 the shareholders. 



A great desideratum, when the company is formed, is the 

 services of a gas engineer who combines with the necessary 

 expert knowledge for preparing a design on the most 

 efficient and economical lines, a sufficiently intimate know- 

 ledge of the district, the habits of the population, etc., to 



