PROMOTERS AND PROMOTING 



opportunity, and is justified in so represent- 

 ing; but he deliberately takes advantage of 

 this fact to market a scandalous over- 

 capitalization, in consequence of which, 

 after running gaily a little while, the enter- 

 prise must fail entirely or else be reorgan- 

 ized by bondholders, stockholders losing 

 all. Such disasters were common in Aus- 

 tria and Germany after 1870. A plant 

 costing, say, $25,000, would be got in hand 

 for $125,000, and then capitalized by a 

 stock company for two or three millions. 

 For a time demand and prices were artifi- 

 cially boomed and high dividends paid. 

 Then came depression, the passing of divi- 

 dends after dividends, stock at zero, and 

 crash.* 



"On May 8 and 9, 1873, tne Vienna 

 Bourse witnessed a reign of terror. There 

 were scenes as tumultuous as those of a revo- 

 lution. The raging passion of the unfor- 

 tunates beggared description. The keynote 

 of those days was the rapid, headlong 



* Glagau : "Borsen-und Grundungs-Schwindel in Deutsch- 

 land," 114. 



265 



