Note 36 — Chapter III · THE BEAR AND SHORT SELLING

Some of those who admit the value of the stock market have subjected to severe criticism those who speculate for the fall of stocks. One reads constantly of the “bears” trying to accomplish such and such results by depressing securities. Napoleon had a long talk with Mollien, his Minister of Finance, in seeking to demonstrate that those who sold “short,” in the belief that national securities would fall, were traitors to their country. He argued that if these men were selling national securities for future delivery at less than their present value they were guilty of treason to the State. But Mollien replied in substance: “These men are not the ones who determine the price; they are only expressing their judgment upon what it will be. If they are wrong, if the credit of our State is to be maintained in the future at its former high standard, in spite of your military preparations, these men will suffer the penalty by having to make delivery at the price for which they sold, for they must go into the market and buy at the price then prevailing. It is their judgment, not their wish, that they express.”—“Wall Street and the Country,” by Charles A. Conant, pp. 111–112, G. P. Putnam’s Sons, New York, 1904.