The Nature and Functions of Credit. 63 



4, Credit puts every man's wealth at his disposal just when he 

 wants to find and use it. A thrifty farmer finds when his har- 

 vests are all gathered in that he has ample provision for his house- 

 hold for a year, and a thousand bushels of wheat beside. He 

 concludes to devote this surplus of his wealth to his own improve- 

 ment by travel abroad. How can this thousand bushels of wheat 

 be made available for that ? Wbat he will really need is the 

 means of locomotion and something to eat and wear, wherever he 

 goes. How shall he get those things out of his present form of 

 wealth? He can't well carry his wheat with him. If he turns its 

 value into money, it will be difficult and dangerous to carry so 

 much gold and silver with him. Credit solves his problem. 

 Through the wheat buyer at home he may pass his grain into the 

 great channel of commerce, and it is made at once the basis of a 

 circular letter of credit which he can put into his pocket in the 

 assurance that in any one of the two hundred cities of the old 

 world named therein, he will find a correspondent of his banker, 

 who, on seeing the letter will furnish him the means of obtaining 

 whatever he may need, asking only that he leave his own auto- 

 graph attached to a receipt behind him. Possibly he may find 

 himself at a restaurant in Paris eating bread made of his own 

 wheat. However that may be, through this wonderful function 

 of credit, his wheat will carry him about everywhere, supplying 

 all his wants till its value is exhausted. The letter in which he 

 puts his trust, commands for him everywhere the trust of others 

 whom he never saw before and never will see again. 



With reference to all these functions of credit, however, it is to 

 be remembered that a basis of sound money is indispensable. Real 

 money is the ballast of the ship of trade. Credit furnishes the 

 sails. Any ballast that easily shifts in a storm is sure to bring 

 danger to the ship. The credit which controls the world and 

 binds all civilized nations together by the interests and mutual 

 service of universal industry and commerce, must be sustained by 

 the all-prevailing presence of money whose value is uniform and 

 stable. Quality in this matter is of more consequence even than 

 quantity. The nation that robs its money of these qualities of 

 stability and uniformity with that of the rest of the world, shatters 



