848 READINGS IN RURAL ECONOMICS 



tone. The wheat markets of London, for instance, are essen- 

 tially non-speculative. The sea-board cities of the United States 

 are also essentially non-speculative wheat markets. The tone of 

 a modern market, however, is the product of many complex 

 circumstances, so that it is impossible to generalize. 



Speculative transactions of the modern markets assume that 

 the market is informed of the general circumstances of trade. 

 The gains of the operators are not secured by deceiving the 

 public, but are based upon the accuracy of their inferences from 

 the facts available. The facts are more or less generally known. 

 The general body of public information is supplemented to a 

 certain extent by private effort, but it is safe to say that the 

 known facts are practically accessible to anyone who really wishes 

 to get them. The great traders of the modern markets owe their 

 success to shrewd inferences, wide experience, and command of 

 credit in the commercial community. 



Two types of speculation are now possible : speculation for a 

 rise and speculation for a fall. The method of speculating for a 

 rise is entirely different from the older transactions of the Middle 

 Ages and the early modern periods. The speculation for a fall 

 is entirely new. 



The nature of modern speculation, however, is not to be un- 

 derstood from a mere designation of the contracts made on each 

 side. Speculation is a continuous process based upon differing 

 interpretations placed upon market conditions. In the large 

 wholesale markets it has become a sort of party contest between 

 " bulls " and '" bears." 



The notable speculative operations of the modern exchange 

 center around the general situation known as the "squeeze." 

 The name is derived from the uncomfortable position the bears 

 are in toward the close of a month when they have undertaken 

 to deliver larger amounts of stuff than are readily to be had in 

 the market. The competition of the bears for stuff to deliver on 

 " short " contracts forces prices up, so that there is a double sig- 

 nificance in the metaphor : it represents in part the notion that 

 the bears are subjected to pressure by the bulls, in part the idea 

 that the forces in the market push prices up to figures that are 



