Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-07-17
A DANGER SIGNAL.
What the United States Corporation Bu-
reau, of Chicago, Shows.

What the United States Corporation Bu-
reau, of Chicago, Shows.
Philadelphia Public Ledger.l
There is an establishment in Chicago
styled the Omitted States Corporation Bu-
reau," which reports that the newly COM
pleted corporations in the United States for
the week which ended last Friday (July 10Y
numbered $780, with capitalization" of
$74, 4,s5s, $685. Carried through the whole year
at the same rate this would make the annual
corporate capitalization" of the United
States nearly $4.OOo,0O0,OOO. From this it
would appear that corporation making and
capitalization imitation is one of the most
active and fertile industries of the country
So, indeed it is; but is it so sure that 1t is a
wholesome industry-good for the whole
public, or even for the permanent welfare
of those directly engaged in it?
Nobody well Informed on the subject can
believe that the activity shown in this direc-
tion is anything else than "pernicious ac-
tivity'-one of the very worst in its in
fiuences If the capitalization" which fig
ures so largely was an actual association of
real capital-that is, money and other prop
erty, real or personal. easily convertible into
money-aggregated for the purpose OF carry
ing out some productive or other useful
wOrk-that would be thing to be glad of
and to encourage. But it is well known that
1t is not so in regard to Il very large proper
tion of the grist turned out by these latter
day corporation mills.
What is capitalization" in the sense in
which it is now SO commonly used by profess
sional "promoters" and projectors? "a. y.
E" al w. NJ" 'B. G. W." or others see a
chance to put into their individual purses
much money of other people, and they ac-
cordingly get up II company. The only cap
italization" needed for that is to invest
few dollars in the purchase of Il charter and
rent for office room. Then they look around
for something to go into business on-some
scheme. 1t may be n project to run a new
railroad from anywhere to nowhere; or to
secure an option on great spread of unpro-
ductive land to be bought by the acre and
sold out by the foot; or the refusal of 4 lot of
rattletraps of any kind whatever to make
the show of property and business with. The
whole thing. "franchise" and all, may have
market value of $40, ,0oO-sometimes not even
that, or the half Oft. The next step is to have
share certificates or loan certificates printed
Then comes the business of "capitaliza-
tion," the main question being how much
of each sort of certificates is to be put out
If the thing is worth $40 600 of fair money
value, they "stock it, for 100000, and then
"bond it' for another 100000 more-and
your capitalization" "It is just AS easy as
lying" and they make "stock" and "bond"
for a $l,O00,0OO as well as for 500, 900 if they
choose. Then goes out q prospectus, with
maps and pictures and things and estimates
of profits and all that; and in come the "vic-
Tins" to inquire and get caught and the
group in their variety-some Of them being
simply credulous people-some of them be,
longing to the get rich. quick" order-and
others of them being quite as sharp and un-
scrupuIous as the promoters" and projec-
tors of the corporation and capitalization"
schemes themselves
1t is serious drawback to the census con-
cerning companies, corporations and "caEi-
tal' that there is reason to believe, and in
fact to know, that q very large percentage
of the returns are inflated and "watered"
after this fashion. How much is "wind'' and
how much water" there is unfortunately no
way to tell with any precision. We do
know, however, that with many of them,
when ordinary business pressure comes
upon them, there is no issue but thin air,and
that when others have to go into "liquida-
tion'' there is nothing left after the water
has all run out.
Far from being cause for qualification or
boasting, the large multiplication of such
corporations, and the great expansion of
such capitalization" as noticed in the Chi
cago Bureau of fCorporations-the weekly an
nouncements of their increase should be
taken as so many warnings and danger sig
nails to be on the look out.