It was the best of times and it was the worst of times for capitalism as railroads stitched their way across the North American continent in the late 19th and early 20th centuries. The businesses associated with this daunting enterprise provided jobs, enabled commerce, and returned a profit to
many who had invested in them. On the other hand, as Charles Dole observed above in an article that appeared in The Atlantic Monthly titled “The Ethics of Speculation,” not all businesses – and not all businessmen – were created equal. Many ventures of that era lined the pockets of their creators
at the expense of the average investor. As Dole eloquently pointed out (too late for most), the asymmetry of knowledge all but guaranteed an asymmetry of financial outcome for those who became involved in the more unscrupulous schemes. The lesson of history suggests that the words
caveat emptor be taken seriously.
The railroads, of course, are long since built. But there is an industrial/commercial build-out going on today that bears some resemblance to that of the earlier era: the development of North American energy resources and related infrastructure.
Oil and gas (in all their many forms) are now being found in abundant supply thanks to modern retrieval technologies like multi-stage hydraulic fracturing (“fracking”), deep sea drilling offshore, and horizontal drilling on dry land. In the United States and Canada, potentially vast deposits are now being squeezed from shale, tar sands, and other geological strata previously considered inaccessible, not economically viable, or both.
Read entire essay here: 2014 Master Limited Partnerships_