Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1893-02-24
A WORD OF WARNING
Against OVERRIDING the Business of
building Electric street Railways.

The boom in street railways has develop
ed such proportions that the railroad com
missioners in their annual report call
special attention to, and warn people
against indiscriminate floating of street
railway securities. This financing of street
railway schemes has become almost a fever
and there never yet was a fever of this
kind in which excuses were not commit
ted, which eventually entailed heavy losses
on somebody. And that somebody is in
variably the confiding public and seldom
the promoters of the schemes.
1t is the business of the promoter to cast
about for opportunities and then when he
has discovered an attractive one, to organ
ize a concern, water it well, issue a glow
ing prospectus, offer the securities to the
public, which usually takes them, and then
quietly pocket his large profits. If the
railway happens to be happily situated
and a paying traffic over it is developed,
the stockholders perhaps receive dividends
and their holdings increase in value, but If
the reverse is the case, subsequent discover
les are likely to more or less embitter the
lives of stockholders who invested cash in
the enterprise
The point we wish to make in this: As
yet most of these street railway schemes
have turned out favorably, but there are
good indications that the business is being
overdone. An extraordinary desire for
street railway securities has seized the
people and the promoting class know well
how to make hay while the sun shines In
order to supply the demand, it becomes
necessary to construct lines between two
country towns, where there may be a pos
sibility of the road becoming paying one,
but where the majority of chances are
against any such success.
In time, Massachusetts and other sec
tions are likely to be perfect net work of
electric street railways. Now, all of these
cannot be supported, and consequently we
are likely to see the same event enacted,
which followed the abnormal and unreason-
able construction OF new Western railroad
lines twenty years ago. 1t seems TO be not
in the nature of things that such move
ments can be carried on in moderation 1t
must be overdone, everybody must make
money and the ultimate crash is fastened.
Perhaps some of the large electrical com
panies are partly responsible for overriding
this movement. They are anxious to dis
pose of their street railway apparatus. and
to do this they have been known to not
only accept the stock and bonds of a new
company in payment, but have actually
advanced money. To such an extent is
this done, that finance company has been
formed by the head of the General Electric
company for the purpose Of organizing,
recognizing and financing street railway
companies. 1t is possible that the manage
ment of the General Electric company is
afraid to longer pursue the always danger
GUS policy of accepting the securities of
companies to which it sells apparatus in
payment thereof and now propose to secure
as much if not more business by shifting
the burden of this policy on the new finance
company, which really means on the public,
for it is the public who will purchase the
stock and bonds issued by this finauce COM
Danv