160 BONUS SHARES

expenses. It has to placate, to use the unpleasant
American word, various interests in order to get to
work, or it has to lay out money, in building up a
concern by advertising or otherwise. It is impossible
that every penny which is put into it will go into
actual buildings, plant, machinery, and stock-in-
trade.

In America the system has been preferred by
which the actual tangible assets of a new concern are
financed wholly or largely by issues of bonds or
Preferred stock, and the Common stock is given
away to those interested in the promotion, for them
either to hold or to use in order to secure the co-opera-
tion of those who may be useful, or modify the
opposition of those who may be dangerous. The net
result of it is that the Common stock is represented
in fact by goodwill or the power to get to work. If
the company prospers, then it is the business of those
who hold these Common shares to see that assets
are accumulated out of profits, to be held against
their Common stock, so squeezing the water out of
it and making it good. The system thus possesses
this very considerable advantage, that those who
promote a company are interested in its future
welfare, and watch over it and guide it through its
subsequent existence, putting energy and good
management at its disposal in order that the paper
which they hold may be represented, not by water,
but by real assets, and so may bring them a tangible
reward. It has thus in some ways a great advantage
over the English system, by which the company
promoter is too often concerned merely in the