196 THE WORK OF THE STOCK EXCHANGE 
forced to take a long position of stocks in 100s, by purchasing 
the various odd lots which customers may sell to him at all 
times, and to take a short position in 100’s by selling customers 
any number of shares they may wish. Of course the odd-lot 
dealer ultimately sells in 100-share lots the stock which he has 
accumulated by his odd-lot purchases, and he ultimately covers 
his short sale of odd lots by purchasing in 100-share lots. Yet 
it is obvious that if purchases on credit or short sales were 
forbidden, the odd-lot dealer could not successfully carry on his 
considerable and essential business in enabling small investors 
to sell or purchase readily. 
Speculative Nature of Margin Purchases and Short Sales. 
—For all the above instances, however, and many others of a 
similar nature, it is of course undoubtedly true that the vast 
majority of both margin purchases and short sales are made 
purely for the sake of obtaining a speculative profit through 
buying at a lower and selling at a higher price. The broader 
aspects of speculation as an economic phenomenon have already 
been treated.* Speculation will therefore be considered here 
only in so far as it finds practical everyday expression through 
the margin purchase and the short sale. 
Every so often, some native Solon will obtain a half-column 
in the papers to declare that stock speculation, particularly that 
of “bears” who sell short in the anticipation of declining stock 
prices, is injuring the intrinsic value of our railroad and indus- 
trial companies. Some indignant critics, indeed, openly state 
that short selling destroys the companies’ property, and picture 
the “bear raider’ as a sinister villain who delights in the ruin 
of other men’s goods by some mysterious means in the stock 
market. The sheer nonsense of such statements is of course 
apparent to anyone who knows anything at all about stock mar- 
ket transactions—a knowledge which, paradoxically enough, 
these critics of stock exchange speculation often hasten to dis- 
claim at the outset. 
14 See Chapter V.