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.
By way of contrast with the care and the foresight exercised in estimating the possibilities of public utility propositions, as shown in the above quotation, take the experience of the Canadian Sardine Company which some years ago put up a half-million dollar plant at St. John, New Brunswick. The plant was thoroughly modern and efficient and was expected to yield large profits. Unfortunately, there was a period of two or three years after the completion of the plant when the sardines did not run. It was impossible to carry on the business and the company went into bankruptcy. Shortly thereafter, the sardines returned to the Newfoundland fishing banks, but it was then too late. This is a striking, but by no means extreme, instance of establishing a business and investing a large sum of money upon an uncertainty. It is precisely what careful, preliminary investigation will avoid or at least minimize.