CREDIT TRANSACTIONS IN SECURITIES 185 
to Jones, minus interest charges, brokerage commissions. and 
stamp taxes. 
[f, however, the expected rise in the price of Steel occurs 
and the stock sells at 165 on the market, Jones's margin has 
increased by $1,500. But perhaps Jones decides to conclude 
the transaction and “take his profit.” The broker, on Jones’s 
instructions, then sells the 100 shares of stock for $16,500 and, 
after paying off the loan of $10,000, returns to Jones $6,500 
minus brokerage commissions, interest charges, and stamp 
taxes. Thus Jones, in addition to recovering his original 
margin of $5,000, obtains a profit of almost $1,500 in the 
transaction. 
Selling for Deferred Delivery.—Since every sale is simply 
an exchange of money and goods, it is obvious that the factor 
of credit can become involved in a sale in two different ways— 
either through a postponement in the payment of money or in 
the delivery of goods. Respecting transactions in the stock 
market, we have briefly considered the practice of deferring the 
payment of money known as “buying on margin.” We must 
next examine ‘short selling,” which involves the deferred 
delivery of stock. 
The position of the man who sells stock short is funda- 
mentally identical with that of the farmer who sells his crop 
before it is planted, or of the publisher who sells his newspapers 
months before the events which they will chronicle have even 
occurred. All these three sellers, by employing their credit and 
deferring the delivery of their goods, sell something which for 
the time being they do not own, but which they feel confident 
they can obtain. All three owe goods instead of money, and, 
to conclude their sales on credit, all three must depend upon 
obtaining later the articles which they have sold—a task which 
may be either harder or easier than to obtain an equivalent sum 
of money. 
Attention has already been called to the fact that because of 
our almost universal habit of thinking of sales in terms of