ABSTRACT
In asking for subscriptions to bonds or shares in new corporation formed to take over a manufacturing or trading business, it is usual to employ reputable public accountants who are required to make a report stating what the profits have been for a number of years. Practiced experience, as well as the best economic theory, lays emphasis upon the importance of an able manager. It is proper to take the contingency into account in estimating on the probable future values of the bonds and shares of a corporation if offered for public subscription or sale. It is sometimes thought that the legal restrictions imposed upon corporations and state oversight to which they are subjected, are such drawbacks to the corporate form as to balance the advantages already referred to. Financial insolvency is a thing to be dreaded for its own sake; and when it would apparently lead to no better conditions than before, it confers no benefit upon the community.
