50 Wisconsin Academy of Sciences, Arts, and Letters. 



tests of civilization. It is neither wealth nor capital — does not 

 of itself create either. It brings wealth into the form of capital 

 and thus gives experience to the industrial talent of a country. 

 All written instruments of credit, when in use, whether in the 

 form of book accounts, bank bills, checks, bills of exchange, or 

 what not, are tangible evidences that trust has been imposed and 

 that the power to borrow has been exercised. But credit may be 

 signified by spoken words, as well as by written, or even without 

 the use of either. Prof. Perry says " credits are debts not yet 

 realized," meaning probably that instruments of credit are evi- 

 dences of rights not yet realized, and obligations yet unfulfilled. 

 Credit creates rights and rights imply obligations. The terras are 

 reciprocal. 



All this seems plain enough, but it is only by holding fast to 

 elementary truths that we can hope to reason clearly upon any 

 subject. More fallacies cluster about and take root in the sub- 

 ject of credit than in any other withio the whole range of politi- 

 cal economy. They find expression everywhere, but especially 

 in language and legislation connected with taxation and the cur- 

 rency. Chief among these is the Qotion that evidences of debt 

 are wealth. It seems to me that some political economists of high 

 standing are not wholly free from responsibility in this matter. 

 Even John Stuart Mill, who usually weighed his words with 

 great care, has used language in the preliminary chapter of his 

 "Principles of Political Economy," which even taken as a whole, 

 if not absolutely inaccurate, is difficult to reconcile with his own 

 teachings elsewhere, and is certainly misleading. He attempts to 

 draw a distinction between wealth as applied to the possessions of 

 an individual and to those of a nation or of mankind. "In the 

 wealth of mankind," he says, " nothing is included which does 

 not of itself answer some purpose of utility or pleasure. To an 

 individual anything is wealth which, though useless in itself, en- 

 ables him to claim from others a part of their stock of things use- 

 ful and pleasant. Take for instance a mortgage for a thousand 

 pounds on a landed estate. This is wealth to the person to whom 

 it brings in a revenue, and who could perhaps sell it in the mar- 

 ket for the full amount of the debt. But it is not wealth to the 



