WHO KILLED COCK ROBIN?

Four bills, proposing various regulations of short selling in stocks and commodities, are now before Senate committees, and a Congressional investigation of bearish activities on the New York Stock Exchange is impending.

The desire of Congress not only to alleviate the present depression but also to forestall future recurrences of the same nature is most commendable, but the complete prohibition of speculation on the fall of prices would do more harm than good. Only a narrow-minded person would believe that short sellers alone could cause a major slump of values. Their defenders point out that they exert a restraining influence on unwarranted optimism and expansion and that they usually buy heavily after a defiation of prices. Depressing security values by false rumors is a great evil, but it is no greater than the artificial stimulation of confidence.

The investigation will undoubtedly show that speculative markets fill a definite economic need but that they have assumed exaggerated importance in the few years. When the profits from stock sales instead of consumers' demand for goods determine the erection of factories, the government should regulate speculative manipulations. The enaction of legislation that will make speculation the servant and not the ruler of industry will do much to restore sanity to an unbalanced world.