28 CONSTRUCTION AND MANAGEMENT OF SMALL GASWORKS. 



similar to that of neighbouring large concerns. Com- 

 parisons with other undertakings in the locality are 

 absolutely useless as a means of indicating the value of one 

 particular undertaking. The practice of sending to a 

 special class of investors, also, is not to be regarded as a 

 recommendation. 



That somewhat indefinite value represented by the term 

 " goodwill " is not a large one in undertakings of this class, 

 and the difference between actual cost and a fair selling 

 price is in no case more than a moderate percentage on the 

 former. There is, therefore, very little margin for the 

 operation known as promotion, which means that third 

 parties manage to pocket a substantial profit on the tran- 

 saction. The effect of such operations on the permanent 

 business will be evident from the preceding remarks. 



But for one works or company about to start, there are a 

 dozen already existing, and some labouring under one or 

 more of Ihe disadvantages above indicated. And while 

 one is expected to indicate the pitfalls that may be avoided 

 by those who as yet are not committed and have a free 

 hand, it is also necessary to indicate the lines to be followed 

 by those who, possibly through the errors of their fore- 

 fathers rather than their own, are in a bad way. Things 

 move slowly in the small district, and the course of retrench- 

 ment may be tedious. Under such circumstances, one 

 must be satisfied to be slow and sure. By persistently 

 following a judicious course for perhaps twenty-five years, 

 it is possible to bring an apparently hopelessly encumbered 

 position into one of soundness and security. 



It is desirable that all the parties concerned in the affairs 

 of the company, whether paid employees or customers, 

 should have a financial interest in the undertaking. Out 

 of two managers that in other respects were equally suitable 



