It is estimated that about ninety per cent. of the world's trade is
transacted upon credit. And in no country of the world are commercial
credits so freely granted as in the United States. This is a land of
seemingly unlimited faith in humanity, and yet a land in which
hazardous speculation, extravagance, and bankruptcy have often
prevailed. Statistics show that about ninety-five per cent. of our
merchants "fail to succeed," and yet no other country can boast of
such wealth, industrial energy, and generous confidence in business
integrity. While credit is not money, in that it cannot settle a debt,
it must be considered a very powerful agent in the creation of
capital. Credit is another name for trust. The business world bases
its confidence or trust in men upon their character and resources. And
the extent of this trust becomes the only limitation of the business
man's purchasing power. He who can show conclusively the ability and
disposition to fulfil obligations, has it within his power to command
the capital or merchandise of others. Credit is one of the fruits of a
higher civilisation and a settled condition of a country's business.
It bespeaks a quality of government, too, that is not to be
depreciated. The nations that are most successfully and equitably
governed and show the most stable conditions of currency also show us
the most extensive and efficient credit systems. It is abundantly true
that these same nations have on many occasions passed through periods
of great distress from failures widespread and panics severe, but it
must also be borne in mind that these very bankruptcies are more often
the abuse of prosperity than the product of adversity. Over-confidence
in men and things has resulted in speculation and precipitated
bankruptcy. And if it be urged that to the undue expansion of credit
is traceable the greater number of our financial disasters, it may be
said with still greater force that all our impetus to industrial
achievement has been and still is dependent upon the generous exercise
of credit. The construction of our railroads and canals, the operation
of our mines, the improvement of our great farm areas, the building of
our towns and cities, and the development of our extensive
manufacturing interests are all the result of the trust reposed in men
and the industrial interests they represent.