The Bennington banner. [volume] (Bennington, Vt.) 1858-1894, 1891-05-07
WINDY INVESTMENTS,

1t would be interesting to know Just
how many of these blooming" Yankee |
towns there are in the South at the pres
ent time laying on the stocks for want
of capital to go ahead, and how many
have been successful. They are new
invention, all alike, starting on a similar
basis, as we understand it, speculative
and more or less imaginary. The ordi-
nary course has been for the designers to
select "a tract of country where deposits
OF coal and iron ore are claimed to be,
which need only development, and locate
town. A company is organized to sell
stock, ordinarily at twenty-five cents on
the dollar, and with the proceeds pur-
chase the land and go on with the build
ing of furnaces and mills. The balance
of the one dollar-seventy-five cents-is
not paid in, neither is it expected to be.
This proportion, three-fourths of the
stock, is made to work the enterprise in
its earlier stages, in disposing of the
stock, and is the main lever in working
up the project.
1t is the speculative and unknown
quantity which which is made to work
on the Imagination to create expectation,
and to exhibit the profits in advance. 1t
is all wind, and this is the Objectionable
feature in the scheme. If such stock
were actually held at its par value and
not sold less, it is doubtful whether it
could have been sold at all. The princi-
pal and speculative feature would be re-
moved, and without this the handspring
would be gone, and there would be no
motion. This stock is not sold on Wall
street or in the conservative money
markets, but in the ordinary towns of
New England.
Perhaps the best illustrative NAV be
found in the affairs of Fort Payne, Ala.
A number of manufacturing plants have
been erected there and are now ready for
operation. But the stock has been alb
sOrbed and nothing remains to do bust
ness with. Northern people were in
duced to put in, say $4,000 upon being
assured that this amount would be suffi-
cient to build and operate a furnace.
The building of the furnace alone cost
Sl30, and the company now finds
itself empty handed and in debt to the
extent of $780, 900, and without sufficient
credit to borrow this latter amount and
other money sufficient to put the works
into operation.
This one case will illustrate how Fort
Payne has become stranded, where more
than 80, 900, 900 have been invested in roll
ling mills and other enterprises by North
ern people. The condition of Fort
Payne is also said to represent the actual
situation in a number of other towns all
over the South. The chief difficulty
seems to be that able financiers have NO
confidence in the sort of financiering that
has brought these establishments into
existence. The original stock holders are
disappointed, if not disgusted, and have
resolved to make no advances on theil
twenty-five per cent. stock. When the
managers appeal to capitalists to put
money into these enterprises to help them
out, they are told if the present holders
of the stock regard putting in more
money as throwing good money after
bad, that they, who have no bad money
invested, cannot be expected to take q
risk, which the owners will not take
themselves.
1t looks now as though the Northern
investments which have been so freely
made in these Southern booming towns
withing the past two or three years have
come to grief. The new chapter in al
probability will consist of insolvency
proceedings and forced sales, with origi
nal stock eliminated and lost, and enough
money realized to pay the subsequent in
ueOGeuHesS' Inc Original stOCkHOlueIs
who sold out when the boom was or
have made what money there has beer
made, and those who have held on fol
the imaginary 70 per cent. profit, or fol
any profit are the victims.
The vestibule trains that have run be
tween New England and these town,
with passengers who were to become
wealthy in day will run no more. The
great mass of stockholders will realiz'
that they have been misled by the wind,
, stock, and in all probability will come t
the conclusion that when they next in
vest down South" it will be at the rat,
of one hundred cents on the dollar o
actual, solid worth, in the opinion o
good judges.