CHAP. XXVII.

Of credit in trade; and how a tradesman ought to value and improve it. That our English tradesmen excel all others in the management of credit. How easily lost, and how hard to be recovered. Honesty and industry the two great supports of credit.

CREDIT, next to real stock, is the foundation, the life and soul of business in a private tradesman; it is his prosperity; it is his support in the substance of his whole trade; even in public matters it is the strength and fund of a nation: we felt in the late wars the consequence of both the extremes, viz., of wanting, and of enjoying, a complete fund of credit.

Credit makes war, and makes peace; raises armies, fits out navies, fights battles, besieges towns; and, in a word, it is more justly called the sinews of war, than the money itself; because it can do all these things without money; nay, it will bring in money to be subservient, though it be independent.

The

Credit makes the soldier fight without pay, the armies march without provisions, and it makes tradesmen keep open shop without stock. force of credit is not to be described by words; it is an impregnable fortification, either for a nation, or for a single man in business; and he that has credit is invulnerable, whether he has money or no; nay, it will make money; and, which is yet more, it adds a value, and supports whatever value it adds, to the meanest substance; it makes paper pass for money, and fills the exchequer and the

banks with as many millions as it pleases, upon demand.

Trade is anticipated by credit, and it grows by the anticipation; for men often buy clothes before they pay for them, because they want clothes before they can spare the money; and these are so many in number that really they add a great stroke to the bulk of our inland trade. How many families have we in England that live upon credit, even to the tune of two or three years' rent of their revenue, before it comes in! so that they may be said to eat the calf in the cow's belly: this encroachment they make upon the stock in trade; and even this very article may state the case: I doubt not but at this time the land owes to the trade some millions sterling; that is to say, the gentlemen owe to the tradesmen so much money, which, at long run, the rents of their lands must pay.

The tradesmen having then trusted the landed men with so much, where must they have it but by giving credit also to one another? trusting their goods and money into trade, one launching out into the hands of another, and forbearing payment till the lands make it good out of their produce; that is to say, out of their rents.

The trade is not limited, the produce of lands may and is restrained; trade cannot exceed the bounds of the goods it can sell; but while trade can increase its stock of cash by credit, it can increase its stock of goods for sale; and then it has nothing to do but to find a market to sell at; and this we have done in all parts of the world, still by the force of our stock's being so increased.

Thus credit raising stock at home, that stock enables us to give credit abroad; and thus the quantities of goods which we make, and which is infinitely increased at home, enables us to find or force

a vend abroad. This is apparent, our home trade having so far increased our manufacture, that England may be said to be able almost to clothe the whole world; and in our carrying on the foreign trade wholly upon the English stocks giving credit to almost all the nations of the world; for it is evident our stocks lie at this time upon credit in the warehouses of the merchants in Spain and Portugal, Holland and Germany, Italy and Turkey; nay, in New Spain and Brazil.

It must be likewise said, to the honour of our English tradesmen, that they understand how to manage the credit they both give and take, better than any other tradesmen in the world; indeed they have a greater opportunity to improve it and make use of it, and therefore may be supposed to be more ready in making the best of their credit, than any other nations are.

Hence it is that we frequently find tradesmen carrying on a prodigious trade with but a middling stock of their own, the rest being all managed by the force of their credit. For example; I have known a man in a private warehouse in London trade for forty thousand pounds a year sterling, and carry on such a return for many years together, and not have more than one thousand pounds' stock of his own, all the rest being the stocks of other men running continually through his hands. And this is not practised now and then, as a great rarity, but is very frequent in trade, and may be seen every day, as what, in its degree, runs through the whole body of the tradesmen in England.

We see very considerable families who buy nothing but on trust; even bread, beer, butter, cheese, beef and mutton, wine, grocery, &c., which even the meanest families buy generally for ready money. Thus I have known a family, whose revenue has been

some thousands a year, pay their butcher, and baker, and grocer, and cheesemonger, by a hundred pounds at a time, and be generally a hundred more in each of their debts; and yet the tradesmen have thought it well worth while to trust them, and their pay has in the end been very good.

This is what, I say, brings land so much in debt to trade, and obliges the tradesmen to take credit one of another; and yet they do not lose by it neither, for the tradesmen find it in the price, and they take care to make such families pay warmly for the credit, in the rate of their goods. Nor can it be expected it should be otherwise; for unless the profit answered it, the tradesman could not afford to be so long without his money.

This credit takes its beginning in our manufactures, even at the very first of the operation; for the master-manufacturer himself begins it. Take a country clothier or bay-maker, or what other maker of goods you please, provided he be one that puts out the goods to the making; though he cannot have credit for spinning and weaving, in which the poor are employed, who must have their money as they earn it; yet he buys his wool at the stapler's or feltmonger's, at two or three months' credit; he buys his oil and soap of the country shopkeeper, or has it sent down from his factor at London, and gets longer credit for that, and the like of all other things; so that a clothier of any considerable business, when he comes to die, shall appear to be four or five thousand pounds in debt.

But then look into his books, and you shall find his factor at Blackwell-hall, who sells his cloths, or the warehouse-keeper who sells his duroys and druggets, or both together, have two thousand pounds' worth of goods in hand left unsold; and has trusted out to drapers and merchants, to the value

of four thousand pounds more; and look into his workhouse at home, viz., his wool-lofts, his combing-shop, his yarn-chamber, and the like, and there you will find it, in wool unspun, and in yarn spun, and in wool at the spinner's, and in yarn at and in the looms at the weavers, in rape oil, Gallipoli oil, and perhaps soap, &c., in his warehouses, and in cloths at the milling-mill, and in his rowing-shops, finished and unfinished, four thousand pounds' worth of goods more; so that though this clothier owed five thousand pounds at his death, he has nevertheless died in good circumstances, and has five thousand pounds' estate clear to go among his children, and all his debts paid and discharged. However, it is evident, that at the very beginning of this manufacturer's trade, his five thousand pounds' stock is made ten thousand, by the help of his credit, and he trades for three times as much in the year; so that five thousand pounds' stock makes ten thousand pounds' stock and credit, and that together makes thirty thousand pounds a year returned in trade.

When you come from him to the warehousekeeper in London, there you double and treble upon it, to an unknown degree; for the London wholesale man shall at his death appear to have credit among the country clothiers for ten or fifteen thousand pounds, and yet have kept up an unspotted credit all his days.

When he is dead, and his executors or widow comes to look into things, they are frighted with the very appearance of such a weight of debts, and begin to doubt how his estate will come out at the end of it; but when they come to cast up his books and his warehouse, they find,

In debts abroad, perhaps thirty thousand pounds; In goods in his warehouse, twelve thousand pounds.

C. E. T. I.

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