The Republican. [volume] (Oakland, Md.) 1877-current, 1886-06-19
FLOATING a COMPANY.


FLOATING a COMPANY.
How English Financial Agents Effect the
Sale of Questionable Stocks.
There exists in the city of London a
somewhat numerous class of men who
were formerly called promoters of
companies, but who have of late years
assumed the more sounding title of
financial agents. Let us suppose that
to one of these gentlemen there occurs
the happy thought of starting FIJI
Island tramway company. He loses
no time in putting his scheme into
shape, and the following may be taken
as a fair example of how he carries out
his intentions. His first work is to get
together board of directors, and this,
supposing he has had fair business
experience, is not so difficult as might
at first be supposed. Together with
the financial agent another class of
men has been called into existence by
the great extension of the joint stock
company system. The gentlemen who
help with their names the floating of
such enterprises form distinct class
of themselves, and are termed "guinea
pigs" most probably from the fact
of each ordinary director receiving u
guinea for each meeting he attends.
In order to be considered of any value
as director of a company guinea pig
ought to have handle to his name.
A Lord, Baronet or even a Knight is
looked upon as unexceptionable, and
may almost command his own price;
for it is not to be supposed
that director is to work for
nothing. His value, like most
other things, varies with the quail
ity of the article. A Peer who has II
seat in the Upper House will probably
not allow his name to appear on a
prospectus under $500 to f400 a year,
besides some so or 100 fully paid-up
shares. And he is worth the money.
The financial agents are well aware
that when Peer of the realm is Sc
cured and heads the list of directors,
the most difficult part of the task is ac-
complished. What remains will fol-
low as matter of course. The next
step is to write or to get some one to
write-for the promoter has generally
soul above literary composition
that portion of the prospectus begin
ming "The object for which this COM
pany is formed" and so on. This is
quickly accomplished. There are GER
tain gentlemen who describe them
selves as connected with the press
whose speciality is to compose these
prospectuses. The charge for such a
document varies from two to five
guineas, and they are cheap, even at
the latter price. There is, perhaps,
no kind of writing which requires more
skill than this. In the case of the Fiji
tramway company" the writer must
make it appear that no undertaking so
purely philanthropical, or so sure to
cause so much prosperity to FIJI, has
ever been proposed either by Govern
ment or private enterprise; while at
the same time he must, as it were, al
low to escape from his pen the fact
that a tramway company in the FIJI
Islands is certain to be exceedingly lu-
crative to all concerned. To repeat
the old French joke, he must not lie in
what he writes, but he must economize
the truth. The prospectus written,
and the officials, such as secretary, So
licitors, bankers, ETC., chosen, an ex-
pensive step comes neXt-namely, very
long advertisements in the leading
daily papers and elsewhere. But here
also modern enterprise comes to the
help of the promoter and sees him over
the difficulty, which to an outsider
might seem almost insurmountable. =
Chambers Journal