115 

 CKKDIT KKPLACKS CAPITAL. 



It is then not Capital he needs but credit. 



It is a well known axiom that all progress or exten- 

 sion of tracje, generally speaking, is partially due to 

 the greater facilities for procuring capital in the form 

 of credit for trading purposes, that the greatest utility 

 or profit is derived, not from the possession of capital, 

 tout from its intermittent use : that the most rapid in- 

 crease of capital is attained when it is continually em- 

 ployed, that is, when it is passed from one hand to the 

 Bother according to who has the most productive use 

 for it at a given moment. 



On this is based the whole theory of hanks and 

 "banking. 



! T p to recent times, a man, merchant or farmer, pos- 

 isrssod of enterprise and personal energy, had great dif- 

 ficulty in obtaining command of additional capital. His 

 sole means was a direct partnership. During the past 

 half century the objection to lending money without 

 reserving the right to veto its expendtiure has given way 

 and it is to the evolving of reciprocal good faith, of what 

 is known as commercial integrity, that half the progress 

 of this country and every other is bound up. Progress, 

 .as understood in the modern sense of the word, is the 

 facility for acquiring means to exploit one's own ener- 

 gy or enterprise, or simply in short, credit. 



There is no industry, commercial or agricultural, 

 that is independent of credit nowadays, there is no dis- 

 honour in applying for additional capital for one's 

 undertakings, whether in the form of credit at a bank, 

 in loans on securities, dr simply advances from inter- 

 ested- parties. 



It is well understood that there are few enter- 

 prises that possess sufficient capital to be absolutely in- 

 dependent of outside aid ; to possess sufficient capital 

 to be independent of credit does not imply that the 

 most is being made of the said capital; nor is a conn 

 try richer because its commerce is independent of loans, 

 or its 'banks full of money. 



The capitalist, directly or through an agent, the 

 bank, is willing to lend, to take a share in the profits of 

 trading. Custom alone has established the conditions 

 on which he lends. For purely commercial enterprises. 

 Curiously, the rates, and conditions are in proportion to 

 the shortness of the period of the loan, which confirms 

 th** statement of a quick turn over being the most pro- 

 Stable, and seems to point out that one of the essentials 



