62 Wisconsin Academy of Sciences, A7is, and Letters. 



amounting in the aggregate to millions, must also be idle or be 

 wasted in unskillful and unsuccessful attempts to make it yield a 

 profit. Meantime hundreds of vigorous men must also be idle 

 for lack of this very capital to work upon. Credit is thus in- 

 dispensable to draw out the entire capital of a country and also 

 to develop most completely the industrial talent of the people. It 

 becomes thus the very spring of industrial enterprise. The sound 

 and healthy exercise of credit, is of the utmost consequence to the 

 laboring classes. 



2. Credit quickens exchanges. The plowmaker's winter work 

 gives him a large stock of plows in the spring. The farmers 

 want the plows in the spring, but they are to derive the means of 

 paying for them from the harvest. If no sale could be made till the 

 means of purchase were in hand, business with both parties 

 must be suspended. Through credit the exchange may be made 

 at once. As in this particular case, so of ten thousand other 

 things, credit turns them off at once, and capital on every hand 

 is rapidly turned over. It is thus an important function of credit, 

 to keep all the channels of business stirring with life and activity. 

 By it articles are brought within reach just when they are needed. 

 By no other means could the market be kept constantly sup- 

 plied. 



3. Credit serves directly as an instrument of exchange. The 

 simplest phase of this function is in ordinary book accounts. A. 

 buys of B. on credit, and B. buys of A. on credit. At the year's 

 end the books are balanced by the payment of the difference or 

 by simply carrying it over to begin the annual account for the 

 next year. Here exchanges are really made in kind without any 

 of the inconveniences of barter. This is ramified and extended 

 indefinitely, not only between individuals but between cities and 

 nations all around the world, and the greater part of the ex- 

 changes is resolved into exchanges in kind. The trade of Mil- 

 waukee to-day is mainly an account of credit with all other cities 

 of the country and the world with which she deals. The amount 

 of money invested in these exchanges is insignificant compared 

 with the values which are transferred through this asfcncv of 

 credit. 



