The Nature and Functions of Credit 59 



neither walk nor flj^ The waxen wings of imagination on which 

 like Dfedalus, it sometimes boldly starts forth are quickly melted 

 and its fall is swift and ruinous. Credit must ever and anon feel 

 under it the solid ground of real wealth. The promise must 

 meet the test of actual fulfillment. Thus our first thought recurs 

 again. The essence of credit is confidence in these two things 

 which are its inseparable supports, the truthfulness and the prob- 

 able ability of the promisor, — a moral and a material property 

 joined. 



Money as a commonly accepted measure or standard of value, 

 fulfills an office of the highest consequence in all operations of 

 credit. Except in rare, special cases, it furnishes the terms of the 

 contract. Values immediately transferred are set down in terms 

 of money, which fix the measure of values for the deferred pay- 

 ment. If meantime a change occur in the purchasing power 

 of money, the actual effect of the contract is materially changed 

 to the disadvantage of one or other of the parties. Hence, what- 

 ever causes fluctuations in the quantity or quality of money, dis- 

 turbs credit. That steady, healthful trust which we have seen to 

 be the essence of credit can never be maintained with unstable 

 currency. To this cause mainly we must refer the distrust which 

 prevades the business of our country to-day, and in the midst of 

 of abundant resources paralyzes industry and brings thousands 

 of our stalwart, enterprising people face to face with abject 

 poverty. In the very nature of things, the co-relation between 

 money and credit is close and constant. An unnatural increase 

 in the quantity of that which passes for money by turning certain 

 forms of credit into money, as we saw in the issue of the govern- 

 ment greenbacks fifteen years ago, tends to a much greater ex- 

 pansion of credit. The artificial stimulus of this double expansion 

 produces in all business a delirium of intoxication. While the 

 excitement lasts every thing runs wild. But the reaction and 

 collapse are sure to come. We are living now in the day after 

 the debauch. Oh what headaches, what nausea, what exhaustion 

 do we meet on every hand. We wake as from a dream and won- 

 der how we ever suffered our trust to be imposed upon. We 

 look upon the wrecks lying all around and clutch the little we can 



