Under the most favorable circumstances, the promoter does not lead an easy life. In investigating whatever proposition he has in mind, he must expend both money and time freely and it is quite likely that his efforts will be fruitless; he must exercise diplomacy and patience in securing his options or otherwise assembling his proposition; he must protect himself with the greatest care and forethought if he is to reap the reward of his efforts; he must approach the owners of capital with a proposition which he believes to be favorable to them, and yet must be prepared for rebuffs and suspicion. These are the customary difficulties in promoting any enterprise.

The above difficulties are doubled or tripled when the enterprise is a combination of previously independent concerns. And, if the combination includes concerns that have been previously competitive, the promoter is, first of all, confronted with the necessity of conciliating individuals who perhaps for years have been fighting each other with all the weapons at their command. Furthermore, the business interests of each separate concern going into the combination demand that it should make for itself the largest claims that it can reasonably support and should look with much suspicion on the claims that are advanced by the other concerns. Unless the promoter is a man of much force and unusual tact, it is almost inevitable that the negotiations should break off as a result of mutual distrust. This has been the result again and again, even though every person interested may have fully recognized the desirability of the proposed combination for the common good of all.

* Article by W. H. Gardiner in New York Annalist, June, 1915.

In addition to the questions and conflicts that arise in determining the financial terms of the combination, the creation of a working organization for the combination is more than likely to break up all negotiations. If the promoter is a true diplomat, he will probably try to postpone consideration of the management's personnel until after previous questions have all been disposed of. Nevertheless, it may, at the last moment wreck the whole project. The promoter must usually make up his mind between one of two courses: either he must bring in an outsider of high standing as the chief officer of the combination and give him discretion to pick the best men he can find, thus creating an efficient working organization, or he must "play politics" and choose the officers from the men whose influence he requires in order to form the combination. If he chooses the first alternative, he must make his appeal most strongly to the men who have capital invested and whose business sense will lead them to respect the necessity and justice of the proposed course of action, even though it may involve sacrifices on the part of some individuals. If he chooses the second alternative, he must make his appeal primarily to the active officers of the concerns that are to be combined, and must depend upon them to help him in influencing the owners of capital. Unfortunately, this second alternative is too often chosen, and is probably the direct cause of the breakdown of various combinations which should have proved highly successful.

The writer has in mind one combination formed within the last five years, which is still running and on the surface appears to be prosperous. The officers, however, were all chosen because of their influence, not because of their abilities. The president was formerly the head of a small and efficient plant which was much needed in the combination. He is a good manager of a one-man plant, but is wholly without training or ability to control a large organization. The treasurer was the head of one of the larger companies absorbed in the combination; he draws a larger salary than the president, yet has almost no active duties and devotes most of his time to other business enterprises. The vice-president is a relative of one of the bankers who helped to finance the combination. He is supposed to be one of the operating officials, yet he and the president are scarcely on speaking terms with each other. The other officers, including even some of those in subordinate positions, were similarly chosen for political reasons.

It seems scarcely possible that this particular combination should continue to exist much longer. Yet it may happen that an internal reorganization will be effected before it is too late, and thus the combination, which is probably basically sound, will after all, prove to be the success that was anticipated.

The difficulties which have to be overcome in organizing a combination among long-time competitors may be illustrated by recording the facts as to a recent attempt to organize a combination in the publishing field, as told by one of those interested:

An outside promoter was endeavoring to form the combination, but he was hampered by the fact that he is well known in the publishing field, and had had previous business dealings with the owners of the separate . companies. Most, if not all, of the men whom he approached regarded his arguments - whether justly or not is beside the point - with distrust.

One of these men stated, for example, that the promoter was a man of the type who, having himself had several disastrous experiences, had decided that he had become an expert well qualified to tell more successful publishers how to conduct their business.

Inasmuch as the proposed combination looked somewhat attractive to all of the men approached, the promoter was able to arrange for a meeting of these men in his office. At this meeting, which was informal, the promoter presided and undertook to draw out expressions of opinion from each person present. No personal unfriendliness was manifest, and the meeting proceeded harmoniously enough, until the question of the price to be paid for each company taken into the combination was raised. At this point, naturally, it was difficult to reach any agreement, particularly as each one present was more anxious to draw out the others than to present his own ideas.

If the promoter had commanded a great deal of respect, or even if he had been an outsider who was believed to be capable and impartial, he would have been able to put through some definite plan for appraising each of the companies interested. The truth was, however, that he had no more influence than any of the other persons present and his plan for appointing an appraisal committee, with himself as chairman, was coldly received. Inasmuch as no better plan was brought forward, the meeting finally adjourned without definite result and the same group of men were never afterwards brought together.