LIGHTING SECURITIES 
215 
labor costs increase at a greater rate than the earn 
ings. In the case of lighting companies, the labor 
item is very small, and not only have the companies 
nothing to fear from strikes, but they are fully able 
to meet all legitimate demands for increased sala 
ries. This is a very important factor and one 
which is liable to become increasingly so as years 
go on. 
The third distinct advantage of lighting, and in 
fact, all public utility securities, lies in the feature 
that such a company cannot go bankrupt and 
retire from business. An industrial or manufact 
uring corporation can at any time close up and the 
business may become almost a total loss. This is 
one of the reasons why industrial bonds are usually 
not in public favor. The value of industrial se 
curities is very dependent upon the energy and 
constant vigilance of the management, which is 
continually subject to the keenest competition. In 
the case of lighting and other public utility propo 
sitions, the courts have ruled that the companies 
cannot arbitrarily shut down and go out of busi 
ness even if their management, for some ulterior 
motive, so desires. The properties must be oper 
ated by some one and a total loss is almost impos 
sible in the case of public utilities. 
Of course, when purchasing lighting securities 
on distant properties, great dependence must be 
placed upon the integrity and good will of the bond 
house purchasing the same, as it is impossible for 
the investor to inspect the franchises, legal proceed 
ings, location of plant, local environments, manage