Part 30 (1/2)

The answer is short. Two things raise credit in trade, and, I may say, they are the only things required; there are some necessary addenda, but these are the fundamentals.

1. Industry. 2. Honesty.

I have dwelt upon the first; the last I have but a few words to say to, but they will be very significant; indeed, that head requires no comment, no explanations or enlargements: nothing can support credit, be it public or private, but honesty; a punctual dealing, a general probity in every transaction. He that once breaks through his honesty, violates his credit--once denominate a man a knave, and you need not forbid any man to trust him.

Even in the public it appears to be the same thing. Let any man view the public credit in its present flouris.h.i.+ng circ.u.mstances, and compare it with the latter end of the years of King Charles II. after the Exchequer had been shut up, parliamentary appropriations misapplied, and, in a word, the public faith broken; who would lend? Seven or eight per cent, was given for antic.i.p.ations in King William's time, though no new fraud had been offered, only because the old debts were unpaid; and how hard was it to get any one to lend money at all!

But, after by a long series of just and punctual dealing, the Parliament making good all the deficient funds, and paying even those debts for which no provision was made, and the like, how is the credit restored, the public faith made sacred again, and how money flows into the Exchequer without calling for, and that at three or four per cent.

interest, even from foreign countries as well as from our own people!

They that have credit can never want money; and this credit is to be raised by no other method, whether by private tradesmen, or public bodies of men, by nations and governments, but by a general probity and an honest punctual dealing.

The reason of this case is as plain as the a.s.sertion; the cause is in itself; no man lends his money but with an expectation of receiving it again with the interest. If the borrower pays it punctually without hesitations and defalcations, without difficulties, and, above all, without compulsion, what is the consequence?--he is called an honest man, he has the reputation of a punctual fair dealer. And what then?--why, then, he may borrow again whenever he will, he may take up money and goods, or anything, upon his bare words, or note; when another man must give bondsmen, or _mainprize_, that is, a p.a.w.n or pledge for security, and hardly be trusted to neither. This is credit.

It is not the quality of the person would give credit to his dealing; not kings, princes, emperors, it is all one; nay, a private shopkeeper shall borrow money much easier than a prince, if the credit of the tradesman has the reputation of being an honest man. Not the crown itself can give credit to the head that wears it, if once he that wears it comes but to mortgage his honour in the matter of payment of money.

Who would have lent King Charles II. fifty pounds on the credit of his word or bond, after the shutting up the Exchequer? The royal word was made a jest of, and the character of the king was esteemed a fluttering trifle, which no man would venture upon, much less venture his money upon.

In King William's time the case was much the same at first; though the king had not broken his credit then with any man, yet how did they break their faith with the whole world, by the deficiency of the funds, the giving high and ruinous interest to men almost as greedy as vultures, the causing the government to pay great and extravagant rates for what they bought, and great premiums for what they borrowed--these were the injuries to the public for want of credit; nor was it in the power of the whole nation to remedy it; on the contrary, they made it still grow worse and worse, till, as above, the parliament recovered it. And how was it done? Not but by the same method a private person must do the same, namely, by doing justly, and fairly, and honestly, by every body.

Thus credit began to revive, and to enlarge itself again; and usury, which had, as it were, eaten up mankind in business, declined, and so things came to their right way again.

The case is the same with a tradesman; if he shuffles in payment, bargains at one time, and pays at another, breaks his word and his honour in the road of his business, he is gone; no man will take his bills, no man will trust him.

The conclusion is open and clear: the tradesman cannot be too careful of his credit, he cannot buy it too dear, or be too careful to preserve it: it is in vain to maintain it by false and loose doing business; by breaking faith, refusing to perform agreements, and such shuffling things as those; the greatest monarch in Europe could not so preserve his credit.

Nothing but probity will support credit; just, and fair, and honourable dealings give credit, and nothing but the same just, and fair, and honourable dealings will preserve it.

FOOTNOTES:

[42] [How strikingly was this proved in the last war, when the British government obtained credit for no less than six hundred millions to conduct warlike operations, and by these means was ultimately victorious.]

[43] [The author's praises of credit must be received with caution. If his descriptions of the credit system of his own day are true, an improvement has since taken place, as business neither is nor can be now carried on to such an extent upon credit--a circ.u.mstance that redounds to the advantage of all parties.]

[44] [Defoe speaks of such cases as if there were something laudable in them, whereas it is obviously for the interest of all honest traders, that no such men should be allowed to carry on business.]

[45] [Defoe almost appears in this place to lay capital out of the question, and to represent credit as all in all. Credit is a matter of great consequence; but we must not attempt to carry on business by its means alone. It should only be considered as an aid to capital. Those who, without capital, endeavour to set up in business by means of credit, or, when capital is exhausted, attempt to struggle on by means of credit alone, will, in general, only have a life of anxiety and dispeace for their pains.]

CHAPTER XXV

OF THE TRADESMAN'S PUNCTUAL PAYING HIS BILLS AND PROMISSORY NOTES UNDER HIS HAND, AND THE CREDIT HE GAINS BY IT

As I said that credit is maintained by just and honourable dealing, so that just dealing depends very much upon the tradesman's punctual payment of money in all the several demands that are upon him. The ordinary demands of money upon a tradesman are--

I. Promises of money for goods bought at time.

II. Bills drawn upon him; which, generally speaking, are from the country, that is to say, from some places remote from where he lives.

Or,