We may select from Dewing a few instances in corporate practice which will show just how promoters have secured their profits.

In the case of the Mount Vernon-Woodberry Cotton Duck Company, the promoters had remaining in their hands $6,250,000 in common stock. Figuring its market value at $25, this amounted to a cash profit of well over $1,500,000. However, Mr. Parks, the chief promoter, was in no situation to keep all these profits for himself; they were divided to a great extent among the various mill-owners whose personal co-operation had been necessary.

The United States Realty and Construction Company was incorporated in 1902 with a capitalization of $30,000,000 preferred and $36,000,000 common stock. The five promoters, who included some well-known and highly respected citizens of New York, stated publicly that they would receive a profit for organizing the new corporation and for procuring the necessary working capital. The announcement was put in the following form:

It is proper to state that we expect to receive for the responsibility and risks assumed by us in organizing the new corporation, procuring the cash capital, and for the expenses incurred, an individual profit which will or may include the stock of the new corporation remaining in our hands after carrying through the transaction.

The promoters' profits in this case are calculated to have amounted to about $6,000,000 in common stock, or approximately 10% of the total securities. At the outset the market value was about $1,800,000, and it had an average value during the first year of $720,000.

In the promotion of the Glucose Sugar Refining Company, in 1897, a promoting syndicate was formed which received $100 in preferred stock and $142.85 in common stock, for every $100 subscribed in money. In accordance with these terms, the subscribers paid in $4,500,000 cash, and received $4,500,000 in preferred and $6,428,250 of common stock. In addition, the promoters got approximately $3,000,000 in common stock for special funds, purchase money, bonuses, lawyers' expenses, and the like. The promoter, Joseph B. Green-hut, received direct a fee of $500,000 in common stock. Using the average quotation immediately after the formation of the combination, and omitting indirect profits, the promoters and underwriting syndicate appear to have obtained an immediate profit of $4,500,000.

At the organization of the American Bicycle Company, in 1898, the issues constituted $9,300,000 preferred, $17,700,000 common, and $10,000,000 debenture bonds. For the constituent plants the promoter paid approximately $6,700,000 in preferred stock, $11,000,000 in common, and $7,230,000 in debenture bonds, leaving himself approximately $2,600,000 in preferred, $6,700,000 in common, and $1,800,000 debentures. In spite of these enormous paper profits, Dewing says that after the promoter had paid the charges and commissions of bankers, attorneys, and others, there remained only a small profit for himself.

At the formation of the American Malting Company, in 1897, the amount left over for the promoters after the 22 plants of the company had been purchased, and over $2,000,000 of cash working capital provided, amounted to $500,000 of preferred stock and $7,750,000 common stock. This was out of a total of $12,500,000 preferred and $13,750,000 common.

From all of the above instances, it is clear that successful promotion may carry with it very large profits, and yet we must not overlook expenses and risk which seem, on the whole, to make these profits reasonable. After a careful study of various promotions, Dewing comes to the conclusion that "the extravagant feature of a promotion is usually connected with the indirect rather than the direct profit." The promoter, after all, is probably entitled to what he gets.