The word "credit" means, "I believe," "I trust." That is, I believe in a man, in a man's character, and in his ability, and therefore I trust him to do something tomorrow, three months from now, six months from now, nine months from now, one year, or possibly a longer time, which he cannot do today. That is credit. What a limitless field of opportunity and then of speculation this confidence of man in man opens up. Credit is to money what steam is to water, and credit like steam must always be kept within control, and within safe bounds, as in the case of steam, or there will be an explosion of credit, a most direful thing. Now, there never will be an explosion or crisis in the world of credit, so long as credit is subjected constantly to the test of coin redemption, that is, the conversion of credit into money, gold. So long as credit can be extinguished by payment in gold, it is under control. But, gentlemen, when gold redemption becomes impossible, look out! Let me read what MacLeod says about that:
"It is unextinguished credit which produces those terrible monetary cataclysms which scatter ruin and desolation among nations. It is by the excessive creation of credit that overproduction is brought about, which causes those terrible catastrophes, called 'commercial crises,' and the inability of credit-shops to extinguish the credit they have created, commonly called the failures of banks, is the cause of the most terrible social calamities of modern times."
MR. LAWYER: Now, we have the other side of the picture. On the one hand, we have Daniel Webster painting the possibilities of human achievements through credit--its tremendous power for good, when under control, and, on the other hand, the words of MacLeod pointing out the awful danger, the tragical consequences of credit beyond control. The years of 1873, 1893 and 1907 are illustrations of what happens when credit has passed the boundaries of control.
MR. BANKER: Precisely so, and what we want to do is to prevent the recurrence of those commercial tragedies which interrupt the currents of prosperity, spreading desolation and death throughout the length and breadth of the land.
MR. LABORINGMAN: It is to be hoped that we can do it, for no class suffers so much as the working masses during these periods of disaster, depression and distress. Don't you see that if any one of us has succeeded in laying aside by painful saving a little nest egg, in some savings bank, that it is wiped out, and he has to begin all over again? And if one of us fellows has accumulated enough to start some little business of his own, ninety-nine times out of one hundred he is cleaned out, and through no fault whatever of his own.