“The prices of all industrial securities have fallen,” said the Deutsche Bank in 1900, “and this decline has been felt all the more because by reason of the ill-conceived Bourse Law, it struck the public with full force without being softened through covering purchases”--i. e., by the bears. Again, four years later, when the law was still in force, the same authority states “a serious political surprise would cause the worst panic, because there are no longer any dealers (shorts) to take up the securities which at such times are thrown on the market.” The Dresdner Bank in 1899 reported that the dangers arising from this prohibition cannot be overestimated “if with a change of economic conditions the unavoidable selling force cannot be met by dealers willing and able to buy.” “Short sellers do not determine prices,” says Professor Huebner. “By selling they simply express judgment as to what prices will be in the future. If their judgment is wrong they will suffer the penalty of being obliged to go into the market and buy the securities at higher prices. Nine tenths of the people are by nature ‘bulls,’ and the higher prices go, the more optimistic and elated they become. If it were not for a group of ‘short sellers,’ who resist an excessive inflation, it would be much easier than now to raise prices through the roof; and then, when the inflation became apparent to all, the descent would be abrupt and likely unchecked until the basement was reached. The operations of the ‘bear,’ however, make excessive inflation extremely expensive, and similarly tend to prevent a violent smash because the ‘bear,’ to realize his profits, must become a buyer. The writer has been told by several members of the New York Stock Exchange that they have seen days of panic when practically the only buyers, who were taking the vast volume of securities dumped on the exchange, were those who had sold ‘short,’ and who now turned buyers as the only way of closing their transactions. They were curious to know what would have happened in those panic days, when everybody wished to sell and few cared to invest, if the buying power had depended solely upon the real investment demand of the outside public.