The followers of the exchanges are divided into two camps. We know them as "bulls" and "bears." The bulls on the stock exchanges are the optimists, the men who are prepared to back their judgment of the betterment of trade and its consequent reflection in a better price for securities. The bears see the darker side of business and expect to benefit by a decline in values which may be brought about by a slackening in trade and from commercial disasters which they try to anticipate through sales of securities before the occurrence of the trouble.

On the constructive side of values are ranged the bulls; on the destructive side, the bears. Although, in public opinion, the bear's position is an unenviable one, his is a necessary role in the scientific game of speculation. As already pointed out, the bears in a critical period act as about the only mainstay against a wholesale destruction of values.

Still, it is more or less a stock-market truism that there are few chronic bears who, in the long course of events, have kept the large fortunes they were popularly supposed to have made, notwithstanding that their opportunities for quick and substantial profits, when their position is the correct one, are much greater.

Our greatest stock-market bears, those who have made stock-market history died comparatively poor men. Occasionally there passes over the stock market horizon a meteor in the shape of a successful and spectacular bear who happens to plunge on a decline in security prices at a psychological moment and is carried by the avalanche in the slaughter of values from comparative obscurity to a position of great wealth. Yet, usually his good fortune is only temporary. Somehow these striking figures seem not to realize that stock values can no more continuously decline than they can constantly go up. They overstay their market and within a short time all their wealth slips away as easily as it came to them.

A fair illustration of this, which is still remembered, is that of J. Brandt Walker, a daring Chicago speculator, who burst into fame as a big stock-market bear on the eve of the great panic of 1907. The newspapers all over the country printed columns about the many millions he was credited with making. There can be no question about his temporary success; no doubt his profits ran into millions, but it was less than a year later that he lost all his winnings, and as a prominent stock-market figure he became only a memory.

The chronic bear sooner or later invites disaster. So also does the chronic bull. The successful trader is that person who can adapt his opinions to the long trend in the course of values, whether it be downward or upward. That there takes place periodically an adjustment in business cannot be refuted, but it does not occur at regular periods, for if such were the case much of the uncertainty connected with speculation and upon which it thrives would be eliminated. Adjustments often come quite suddenly and unexpectedly. There will come a check to a boom. It usually occurs when we have exhausted, in the rapid haste for expansion, all the available capital at our command. In the same way a check to a decline will occur when all the forced liquidation has been completed. Between the two extremes there takes place a period of stagnation, a sort of pause in our activities, a pause to afford an opportunity to form new conclusions.

Broadly speaking, everyone who deals in securities is at one time or another a bull or a bear. When a person sells a stock it is a sign that he has concluded the rise in the stock's value has reached its apex and he is willing to let someone else take the chance of a further appreciation. He may sell for other reasons. Nevertheless, whatever the cause, the seller is constructively a bear. On the other hand, the buyer is a bull. If he is buying a stock he has sold to someone previously to make his delivery, it is a sign that he has decided in his own interest that the decline in value has run its course. But in a growing country the predominance of opinion is toward the bullish side of the market. It is a natural position.

J. Pierpont Morgan gave it as his opinion some years ago that anyone who is not a bull in this country will eventually go broke. His saying has become a stock-market adage and not without good reason. Our financial history so far has clearly shown that the country has emerged from every panic and depression stronger than ever and capable of greater progress.

In the eighties, when nearly two-thirds of our railroad mileage was in charge of the courts, men who had faith in the country 's future, men like Morgan, Hill, Kennedy, and Vanderbilt, were laying the foundations for their huge fortunes, whereas other men who could not see the sunlight behind the heavy clouds of pessimism, one by one went broke.

Then, too, it is only a natural trait of human nature to be a bull. Underlying the greatest progress is the spirit of optimism. It comes natural to most of us to see the bright side of business. In fact, our wishes are fathers to this hope. Our prosperity individually and collectively has progress as its foundation. Morgan knew this, and hence the now famous axiom.

The very fact that nearly nine out of ten people are naturally bulls in their inclination is what bucket-shop operators banked on in the successful conduct of their outlawed business before the authorities decided upon a concerted plan to put a stop to them. Bucket-shops are institutions which never buy anything, but simply gamble against the judgment of their customers. A bear panic or a bear market was necessary for their success, as such moves wiped out the paper profits of their customers, most of whom were perpetually "long" on stocks, or chronic bulls. These concerns were simply gambling places whose backers bet their capital on the price fluctuations against the capital of their clients. When bucket-shops were tolerated a long protracted bull market usually saw a great mortality in their number, whilst a bear market found them sprouting like mushrooms.

In the grain, cotton, and coffee markets, the position of the bulls and bears is a reversal of that occupied in the stock market. The bull on these staples is not the advance agent of prosperity. He does not expect to see higher prices because of the greater output in the harvest. Higher prices come to him as a result of a shortage in crops. The bear is really the bull considered in the light of the benefit accruing to the public from his operations.

He works for lower prices on his expectations of a bumper harvest.

The "longs" and the "shorts" are other names to differentiate between the bulls and the bears. The "longs" buy for a rise, the "shorts" sell for a decline.