Atlantic Monthly | Page 3

payment of immense masses of outstanding debt. This, we say, is the central fact, common to all the nations; and the solution of it, as a problem, is to be sought in some vice or disturbing element common to the general system, and not in any local incident or cause.
Credit has gained so enormous an extension within the last two centuries, that it may almost be pronounced the distinctive feature of modern times. It existed, undoubtedly, in ancient days,--for its correlative, Debt, existed; and we know, that, among the Jews, Moses enacted a sponging law, which was to be carried into effect every fifty years; that Solon, among the Greeks, began his administration with the _Seisachtheia_, or relief-laws, designed to rescue the poor borrowers from their overbearing creditors; and that the usurers were a numerous class at Rome, where also the Patrician houses were immense debtor-prisons. But in ancient times, when the chief source of wealth (aside from conquest and confiscation by the State) was the labor of slaves, and the principal exchanges were effected either by direct barter or the coined metals, the system of credit could not have been very complicated or general. As for the lending of money on interest, it appears to have been looked at askance by most of the ancients; and the prejudice against it continued, under the fostering care of the Church, far down into the Middle Ages. With the emancipation of the towns, however, with the splendid development of the Italian republics, with the noble commercial triumphs of the cities of the Hansa, credit was recovered from the hands of the Jews, and began a career of rapid and beneficent expansion. It was in an especial manner promoted by the magnificent prospects unfolded to colonial and mining enterprise in the discovery of the New World, by the stimulus and the facilities afforded to industrial skill by the researches of natural science, and by the emancipation won for all the activities of the human mind through the free principles of the Reformation. Thus, by degrees, credit came to intervene in nearly every operation of commerce and of social exchange, from the small daily dealings of the mechanic at the shop, to the larger wholesale transactions of merchant with merchant, and to the prodigious expenditures and debts of imperial governments. Credit by note of hand, credit by book account, credit by mortgages and hypothecations, credit by bills of exchange, credit by certificates of stock, credit by bank-notes and post-notes, credit by exchequer and treasury drafts, credit, in short, in a thousand ways, enters into trade, filling up all its channels, turning all its wheels, freighting all its ships, coming down from the past, pervading the present, hovering over the future, reaching every nook and affecting every man and woman in the civilized world.
Such is the extent of credit; but let it be remarked in connection, that, in all these innumerable and multifarious forms of it, in all the stupendous interchanges of Mine and Thine, the ultimate reference is to one sole standard of value, which is the value of the precious metals. The civilized world has adopted these as the universal solvent of its vast masses of obligation. It is assumed that some standard is indispensable; it is asserted to be the imperative duty of governments, if they would not make their exactions of taxes arbitrary, unequal, and oppressive,--if they would render the dealings of individuals mutual and just,--if they would preserve the property and labor of their subjects from the merciless caprices of the powerful, and keep society from reverting to a more or less barbarous state,--to supply a fixed and equable money-measure; and the majority of the governments have selected gold and silver as the best. As seemingly less changeable in quantity and value than anything else, as imperishable, as portable, as divisible, as both convenient and safe, the precious metals challenge superiority over every other product; and accordingly every contract and every debt is resolvable into gold and silver. From this fact, the reader will see at once the prodigious significance of those materials in the economy of trade, and the prime necessity that they should be not only uniform in value, but so equally distributed that they may be easily attainable when needed. Every change in their value is a virtual change in the value of the vast variety of obligations which are measured and liquidated by them; and every apprehension of their scarcity or disappearance, by whatever cause excited, is an apprehension of embarrassment on the part of all those who have debts to pay or to receive.
But it happens that this standard is not an accurate standard. It does not _stand_, while other things alone move, but moves itself; its value is changeable,--fluctuating from time to time according