This section is from the book "Business Finance", by William Henry Lough. Also available from Amazon: Business Finance, A Practical Study of Financial Management in Private Business Concerns.
As noted in the preceding chapter, the word "promoter" has come to be associated with Colonel Sellers and J. Rufus Wallingford, and consequently is commonly regarded as a term of reproach rather than of praise. Yet, when it is used in its proper sense, it indicates a man of exceptional energy and foresight who is able to conceive a new enterprise and to set it on its feet. He belongs to the class of men who make for progress.
One unfavorable connotation for the word comes out of the expression, "professional promoter." Each one of"the two words in the expression is innocent in itself, but where they are combined they seem to imply an individual who is making his money by his wits at the expense of dupes. There is undoubtedly some truth in this implication, for a certain group of semicriminals who call themselves brokers and promoters make it their business to prey upon struggling enterprises and defraud them while they pretend to assist them.
Yet, there are some men of excellent standing to whom the term "professional promoter," if used in its correct sense, could properly be applied. Dewing mentions, among other men of this type, Charles M. Warner, who took part in promotions so widely separated as the American Malting Company, the Corn Products Refining Company, the Bay State Cotton Corporation, the International Cotton Mills Corporation, and the National Asphalt Company. He mentions, also, Seymour Scott, a small maltster of Lyons, N. Y., whom he describes as "a man of great optimism and emotional enthusiasm who later promoted another successful combination and still later became interested in the promotion of some beet sugar plants, hypothecated his holdings of American Malting Company stock in order to raise money and lost all of it with the failure of the beet sugar concern."*
The phrase quoted in the preceding paragraph, "great optimism and emotional enthusiasm," is a happy characterization of a certain type of professional promoter. He is the type who sees visions and sweeps hard-headed business men into the current of his own enthusiasm. The other type of promoter is the clever schemer - not necessarily dishonest - who pits men and interests against each other, or hitches them into partnerships, relying not so much on the contagion of his own enthusiasm as on his calculations as to the reactions of men on each other.
On the whole, the professional promoter is perhaps less flourishing and a rarer phenomenon than was the case ten to twenty years ago. There have not been so many large promotions or so much call for his services. His place, furthermore, is being taken by the occasional promoters who come from the following classes: