merely a private institution?_]

If the Stock Exchange were ever to grow unmindful of the public
character of its functions and of its national duty, if through
inefficiency or for any other reason it should ever become inadequate
or untrustworthy to render to the country the services with constitute
its raison d'etre, it would not only be the right, but the duty of the
authorities, State or Federal, to step in.

But thus far, I fail to know of any valid reasons to make such action
called for.

Short Selling--Is it Justifiable?

Question:

_You have commenced your first answer with the words, "I need not
point out to your Commission." That is a complimentary assumption, but
I don't mind telling you that we here are very little acquainted with
the working of the Stock Exchange or the affairs of you Wall Street men
in general. What about short selling?_

Answer:

I do not mean to take a "holier than thou" attitude, but personally, I
have never sold a share of stock short in my life.

Short sellers are born, not made. But if there were not people born who
sell short, they would almost have to be invented.

Short selling has a legitimate place in the scheme of things economic.
It acts as a check on undue optimism, it tends to counteract the danger
of an upward runaway market, it supplies a sustaining force in a
heavily declining market at times of unexpected shock or panic. It is a
valuable element in preventing extremes of advance and decline.

[Sidenote: _Short selling Is it justifiable?_]

The short seller contracts to deliver at a certain price a certain
quantity of stocks which he does not own at the time, but which he
expects the course of the market to permit him to buy at a profit.

In its essence that is not very different from what every contractor
and merchant does when in the usual course of business he undertakes to
complete a job or to deliver goods without having first secured all of
the materials entering into the work or the merchandise.

The practice of short selling has been sanctioned by economists from
the first Napoleon's Minister of Finance to Horace White in our day.
While laws have at various times been enacted to prohibit that
operation, it is a noteworthy fact that in every instance I know of
these laws have been repealed after a short experience of their
effects.

[Sidenote: _Short selling Is it justifiable?_]

I am informed on good authority--though I cannot personal