[40] Despite the effort to avoid technical terms in these pages, the value of the bear should be considered from still another angle. Smith, a bear, sells short to Jones, a bull. The economic usefulness of Jones then becomes problematical, since he may sell out at any moment. His permanence as a holder or owner is merely optional, and his usefulness in the economic scheme of things is impaired. As a market factor he may be ignored. But there is nothing optional about Smith’s position, for he is now a _compulsory_ buyer; his economic status is fixed; he has become a very real potential force. [41] “The Stock Exchange and the Money Market,” by Horace White, “Annals of the American Society of Political and Social Science,” Vol. XXXVI, No. 3, Nov., 1910, pp. 563–573. [42] _Ibid._, p. 564. [43] The Stock Exchange authorities were asked by the Hughes Commissioners in 1909 what effect would result if this law were repealed. An interesting historical summary is involved in the reply to this question. “In our opinion the repeal of such a law would simply lead to constant evasions, which would cause the law to be practically a dead letter, and it is far better to leave it as it is, and to allow the supply and demand to regulate the rate for money. “It is reasonable to assume that the repeal of this law would result in a recurrence of the conditions which existed prior to its enactment. Prior to 1882, when this Act was passed, such loans were subject to the drastic provisions of the Usury Law, which imposes the forfeiture of the principal as a penalty for violation. The Usury Law, however, as to this class of loans, had for years been a dead letter, and whatever risks were incurred through its penalties were taken by lenders without hesitation. Demand loans were made at interest plus a commission, and in times of money stringency the interest rate represented by the so-called commission attained proportions which have been unknown since the passage of the Act of 1882. Extreme instances are to be found of a rate as high as 700 per cent. per annum. “Such violent fluctuations in the rate have been unknown since the passage of the Act of 1882. Since that time all quotations of interest on call loans have been at so much per cent. per annum, not, as was formerly the case, at ⅛ or ¼ of 1 per cent. per day. Through the extreme stringency which existed in the autumn of 1907, the rate ran from 12 to 30 per cent., with the exception, perhaps, of one or two days when practically no money was procurable at any price, when the quotation ran up to 100 or 110 per cent. per annum. It would seem demonstrated by experience that the law of 1882 has been a most potent factor in reducing the interest rate in times of stringency and in rendering it at all times more stable and equable.” [44] Cf. Mr. White’s article _supra_, p. 570. [45] Report of the Comptroller of the Currency, October, 30, 1912. [46] The _Wall Street Journal_, August 31, 1912.