212 PRINCIPLES OF RURAL ECONOMICS 



that is, to carry on all our exchanges, with one half the present 

 amount of metallic money, one half the productive energy which 

 is now used in providing these metals could then be turned 

 toward the production of other things which we cannot get 

 along without. 



Credit. One way of economizing in the use of metallic money 

 is to substitute credit in some form or other. In a highly or- 

 ganized system of credit one dollar of metallic money is fre- 

 quently enabled to do as much work as four or five could do in 

 the absence of a credit system. One dollar lying in a bank, for 

 example, may enable checks to be drawn and accounts to be 

 canceled one against another, and thus really do as much work, 

 with the assistance of the credit arrangements and practices, as 

 several dollars could do without their help. Theoretically it 

 would be an ideal system if all this mutual cancellation of ac- 

 counts and debts could be done without the use of the dollar. 

 This ideal has been compared to that of building all our roads 

 through the air, thus saving much good land. But both ideals are 

 probably incapable of complete realization, though progress can 

 doubtless be made toward both. If we could eliminate friction, 

 even perpetual motion might not be impossible ; but we cannot 

 eliminate friction, so there is an end of the matter. Similarly, 

 if we could eliminate certain tendencies of human nature, such 

 as selfishness and an occasional lack of confidence in others, a 

 pure credit currency might be possible ; but we have never yet 

 been able to eliminate these peculiarities, which may be called 

 social friction, and therefore it is useless for the lawmaker of 

 the present time to attempt to create a pure credit currency. 



However, it has proved practicable to organize the credit of 

 a country in such a way as to effect considerable economies in 

 the use of money ; that is, either to enable the business of the 

 country to be carried on with a smaller per capita circulation 

 of metallic money, or, as is more usually the case, to enable 



