Credit means trust, from creditus, part, of credo. From the moment the interchange of commodities on the barter system was broken in upon by one individual not immediately giving the other what had been agreed upon that he should give in exchange for what was to be received, the credit system commenced.

Locke says credit is nothing but the expectation of money within some limited time, which is a very good definition of the word, because the trust implied involves the expectation on the part of the one trusted as well as on the part of the one who trusts. The one obtains credit on the representation that he expects money, and the one who gives credit does so because he believes in the expectations of the one trusted. Every one who has had a fair experience of life knows by a kind of instinct what is meant by trust, whether in reference to the lending of money or any other concerns. Credit can and does perform the functions of capital to an enormous extent, especially among nations where the economy of capital is highly developed; but credit can only perform those functions when capital is, or is believed to be, ready when necessary to take its place.

If the word credit be applied to any other kind of trust than that which relates to money, or any of its modern representatives which confer a purchasing power, the signification of the term cannot be altered. A breach of trust is the same in effect, although different in degree, whether it refer to the fulfilment of a monetary engagement or one of any other nature. A distinct engagement to discharge a duty, of whatever kind, means the dishonour of the person who of set purpose neglects that duty, just as much as the bill is dishonoured when not paid according to agreement at maturity. It is said that we possess no exact scientific definition of the term; but this seems to us to be enough said to prevent any misunderstanding regarding the signification of it, whether used with reference to one kind of trust or another. Most words of this nature have more than one meaning and will furnish the philological analyst with work for his dissecting knife; but we stop short of making any such investigation, our object not being ratiocination, but to show what credit means in practice. We therefore proceed to examine the development of credit, giving it to be understood to start with that we intend to use the word more particularly with reference to monetary and mercantile affairs.

As we have already remarked credit commenced in commerce from the moment that there was not an instantaneous exchange of the articles proposed to be bartered. The first step in the direction of breaking through the system of barter would as a matter of course be dictated by a desire for gain. This is the mainspring of all commerce. The object of both parties to a bargain to exchange commodities, is always to gain something. Each seeks an advantage at the other's expense. The preliminary movement, before the idea of credit suggested itself would be, that an attempt on both sides would be made to over-reach the other; in other words both would try to give as little as possible in exchange for as much as possible. In this process the weak and foolish would go to the wall, as we say, and the hardest-headed traders would by degrees gravitate to the front rank of their respective orders. When Greek had met Greek and more subtle modes of deception had to be devised, the trading would overflow the boundary line which is defined by the barter system, and would enter upon a new phase, that of credit-which up to this day has been incessantly growing and developing until it has become such a complex and intricately interwoven science that it may be said to permeate every civilised community from end to end. Nobody who has anything of his own, or who is old enough to engage even in the simplest affairs of life, can arrange any matter of business without realising the meaning of the word credit. If a thing is bought, no matter where, it has to be taken on trust; for there is not one in a thousand who can be perfectly satisfied beyond all doubt or question that what he buys at a shop is the full equivalent for the money paid. If a clerk is engaged to do certain work he must be trusted; if a Prime Minister forms a cabinet he is trusted by the nation. All the bills that lie in the portfolios of the banks in the United Kingdom, and in every other empire on the face of the globe are purchased in reliance on the credit of the persons whose names are written on them. The thirty millions of money that are deposited with the London and Westminster Bank are left there by the owners of the money under the full conviction of the stability of the bank. The person who takes his seat in a train, an omnibus, or a steam boat, does so trusting in the drivers of the two former, and the captain and crew of the latter to carry him safely to his destination. We make these few illustrations of the application of the word credit, as implying trust, outside the limits within which we have intended to confine ourselves, just to show that as a moral factor credit is the key-stone of the arch over which the daily business of the world passes, and without which not a ten thousandth part of what is transacted could be got through. If once credit were generally destroyed, and crumbled away, no man trusting another, there would be nothing for it but to break up society and radically reconstruct it. But for the scorching effect of publicity which withers the fair name of men who abuse the credit facilities offered to them in these modern times, the denseness of our great commercial communities of to-day might greatly endanger the development and even existence of the credit system. Men often try very hard to cheat the public by drawing them into unsound enterprises, and when successful go into hiding for a time, but each who ventures upon such dangerous ground, finds it must be done so adroitly and upon so considerable a scale to enable him to go into permanent hiding, that the harder work of winning the bread in the open road honestly comes to be recognised as the better paying of the two in the long run.