adds to the ease with
which they may be issued, while the extended time, from ten to thirty
years, increases both the convenience of possession and the readiness to
issue. The people of a city do not hesitate to supply themselves with
magnificent waterworks at the expense of the people a generation later.
Thus municipal indebtedness is easy to contract, and the hard lesson of
paying for dead horses is seldom effectually learned. More insidious still
is the temptation to issue the bonds of a county for the building of a
railroad, whose prospective benefit in adding to the value of lands is
indefinitely magnified. A community of farmers already burdened by
mortgages can be tempted into additional burdens in county bonds from
expectation that a new railroad will double the value of their farms. The
facility with which states and nations negotiate bonds is so well
understood that it scarcely needs mention. Yet the burdens of taxation so
grievously felt are often self-inflicted by the people who favor unbounded
indebtedness. It is rarely the case that a well-to-do school district is
not better off when it meets the cost of its schoolhouse by immediate
taxes rather than to postpone payment by bonds.

The organization of a _stock company_ involves a peculiar system of
deferred payments, in that every holder of stock becomes in a sense both
debtor and creditor. He is debtor to all his associate shareholders, and
is also their creditor to the extent of his share. _Stock certificates_,
like bonds, may pass from hand to hand with ease, and foster the innate
spirit of speculation among a commercial people. The organization of a
stock company, especially of a great trust, is made relatively easy from
this fact, and in this way the general credit of a people is indefinitely
extended. A prosperous corporation is likely to distribute the results of
its prosperity by increased issues of stock, and the readiness with which
the public accepts such issues makes natural, though vicious, the
so-called _watering of stock_, familiar to all. The immediate object of
watered stock in fairly managed companies is the immediate distribution
among shareholders of any increased value without increased cost. As the
farms along a line of railway may have doubled their value with no
expenditure in improvements, so the railroad itself may have doubled its
value in the possibility of earnings through the rapid development of
settlements along the line. In