prise. It consists in showing by proper calculations its first cost, the probable total annual expense of maintenance, repairs, operation, and interest, the advisable allowance for deterioration or ultimate replacement, the probable gross income, and the resulting net income that can be used in paying dividends on the stock or other profits to the promoters. Whether any proposed enterprise, after being thus figured, will prove profitable will depend greatly on the state of the money market, the size of the project, the probabilities of future changes in governing conditions, and the personal equation of the investor. Generally speaking, if the computed net annual profits on the total cost of the investment (over and above all expenses of every kind, including maintenance, repairs, operation, sinking fund, and interest on all borrowed capital) do not exceed five (5) per cent of the said total cost, the project is not attractive; if it be as high as ten (10) per cent, the enterprise is deemed ordinarily good; and if it be fifteen (15) per cent or more, the scheme is termed "gilt-edged." Small projects necessitate greater probable percentages of net earnings than do large ones; and any possibility of a future reduction of income will call for a high estimate of net earning capacity. Finally, the measure of individual greed on the part of the investor will be found to be an important factor in the determination of the attractiveness of any suggested enterprise.

Such investigations as the economics of an important project should generally be entrusted only to engineers experienced in the line of activity to which the said project properly belongs; for if they be left to inexperienced investigators, it is more than likely that mistakes will be made and money lost in consequence. The professional men who generally do such work are the independent consulting engineers; certain specialists retained on salary solely for this purpose by important organizations, such as railroad companies; and engineers who are regularly in the employ of large banking houses. The work involved is of such importance that it usually commands large compensation—as, indeed, it should; because to do it effectively demands not only long experience but also good judgment and a vast amount of mental labor, both in order to make oneself capable in eneral and so as to consider thoroughly all the points embraced by the special problem in hand.

How short sighted most promoters of important projects can be! They imagine they can obtain expert opinion of real value without paying for it; consequently they collect a mass of scattered and divergent information, which, in most. cases, is of no earthly use. Any project of importance is, of necessity, a great economic problem, and ought to be solved at the very outset by special engineering talent of the highest order.

A glaring example of the utter folly of a community in proceeding with important engineering construction without first having a thorough economic study of the problem made by a competent specialist is given in Engineering News of November 30, 1916. It relates to the municipal water-power enterprise  on  which  the  city  of  Montreal  has  been  busy  for  some