He who proves himself a successful and capable promoter is a very useful individual. As the difficult task falls to him of bringing capital and opportunity together for their mutual exploitation, no one can dispute that such men, when honest in their efforts, really perform a very valuable service when they succeed in raising capital to finance legitimate and meritorious enterprises.

In reality they are the men who find legitimate opportunities in which capital may be profitably employed. Born optimists as they are, they are never at a loss to devise methods of presenting their projects in a form sufficient to interest people of means.

Today, many cities and towns are richer in new industries, electric light, gas, or water plants, or transportation facilities, because of the efforts of some promoter whose confidence that such ventures would prove profitable induced him to devote all his time and energies to raise the required capital to start them. Many communities owe their railroad facilities to the same tireless boomers.

But not all promoters are upright and honest. Some are shifty and dishonest and are in the business to plunder investors. Honest promoters are constructionists; they are the men who do things in an honest way, never undertaking any proposition unless they are first thoroughly satisfied it is sound, and then sticking to it until it is a success. The crooked promoter is the reverse; he is an individual who is not only indifferent as to the ultimate outcome of a project, but mercenary, since he has but one purpose always in mind, which is to use his schemes to unload stocks or bonds on investors, caring little whether the securities are sound or not. His schemes are only traps to catch the dollars of the public, and are not newly developed opportunities for making money. It is unfortunate that this type of promoter is largely in the majority. Because of their pernicious efforts the business of promoting has in late years come into bad odor, although undeservedly, as it is a line of work that always will be necessary. Men capable of bringing capital and enterprises together will always be required; their services cannot very well be dispensed with.

The legitimate promoter has no brass band to herald him; he works very quietly and unostentatiously. He is a mole who keeps burrowing along without noise. If he is planning a merger of a number of industrial concerns, to bring about greater degree of stability for a certain line of manufacture, he usually starts by obtaining options on the plants and has his plans and statistics showing the possible profits well worked out before he is ready to lay them before capitalists. If he is bent upon building a new railroad or furnishing a community with some very much needed public service, he first has his rights of way or franchises safely tucked in his pocket before undertaking to raise the necessary capital. He never begins half-way, as he realizes the futility of attempting to induce large capitalists to finance his projects unless he is in a position to fulfill every promise he makes.

Furthermore, a promoter who has a good money-making opportunity and is intelligent enough to present it properly, usually experiences no difficulty in finding capital for it. Capital is hunting him as much as he is seeking it. The promoter, however, whom the public must watch very carefully and be on guard against, is the man who has a half-baked scheme which he wishes investors to finance entirely, taking all the chances. He may be not exactly a knave but simply a fool who imagines he has a good thing and believes he can raise enough money to exploit it by a direct appeal to the multitude of investors. Whether he is a knave or a fool, the result to the investor in the end is equally disastrous, if enough capital is not raised. All those then who have backed the promoter's confident promises with their capital, lose it when the critical period is reached, when more capital is required but can no longer be obtained.

Every year hundreds upon hundreds of such ventures succumb, for from their inception they never really have a chance to demonstrate what they are capable of accomplishing, merely through lack of sufficient capital.

The intelligent and successful promoter guards against such a contingency. He usually deals with wealthy capitalists and large underwriting bankers who are prepared to pledge all the necessary capital to insure the completion of the project before inviting investors to participate. They at least go to all lengths to be sure of their ground. It was in this way the steel merger, copper merger, and a dozen other well-known mergers were organized by shrewd promoters. Their securities may have been watered, but at least they always had a market.

Criticism may properly be directed at this watered capital, but it must be said in behalf of the original promoters that the holders of their stocks could realize something on them whenever they wanted to sell. As much cannot be claimed for the stocks of the many shifty schemes exploited during the last twenty years, by means of flamboyant and extravagant newspaper advertising. To mention the names of all these would alone require too many pages. Most of the securities issued by these schemers are now worthless. What money the public invested in them has been completely lost.

Only one general rule can be suggested by which an investor may judge the standing of a promoter who is endeavoring to enlist capital. That rule is to find what is the promoter's reputation in the financial community-whether he has any previous successes to his credit; never to accept his mere statements as facts, but to compel him to furnish a complete financial report which will show how much capital his project will require and then what assurances he can give that he will be able to raise it all.

By an investigation of his character it is possible to learn whether the proposition is of a substantial character, or whether the promoter is simply trying to raise a large amount of capital "on a shoe string." Other than this there are no specific rules. There are so many different ventures constantly being brought out and such a great variety in the plans adopted to raise capital, that each proposition must be judged individually and according to its merits.