The Nature and Functions of Credit. 57 



THE NATUEE AND FUNCTIONS OF CEEDIT. 



A. L. Chapin, D. D. 



Some exercise of trust between man and man is essential to the 

 very existence of human society. Trust implies two things ; first, 

 an intellectual belief in the truthfulness and integrity of one's 

 fellow-men ; and second, a blended feeling of dependence and 

 reliance in mutual relations and intercourse. As civilization 

 advances, this element of trust enters more and more into all the 

 various intercourse of mankind, and its extent and the soundness 

 of its basis become a sign of the social condition and moral char- 

 acter of a people. 



Credit is but a technical name for the trust which runs through 

 all the manifold processes of productive industry and commerce. 

 It is indispensable to the effective division of labor and to the 

 free and advantageous exchange of the products of labor. It 

 pervades the business operations of men the world over, as that 

 subtile agent, light, pervades the material universe. Its opera- 

 tions are most minute in their details, most magnificent in their 

 range and most grand and sometimes terrible in their results. It 

 seems a very small affair, when the butcher enters on the poor 

 sewing- woman's market book a. daily bit of meat, expecting the 

 account to be settled at the end of each week. It is nevertheless 

 an operation of credit, not altogether insignificant to the parties 

 concerned. You look with wonder at the silent manipulations of 

 the bank clerks as they pass in procession along the desks of the 

 New York clearing-house, and when you are told that what is 

 done there in that one still hour of the day adjusts thousands of 

 commercial transactions and redistributes a hundred millions of 

 wealth, you get some conception of the vast complications of this 

 agency we call credit. And when you hear that the nod of the 

 autocrat of the Rothschild's bank, settles questions of peace and 

 war between conflicting nations, you apprehend what a power 

 this agency, credit, is in human affairs. 



The word credit is in common use, employed quite vaguely, 



