chapter  III
5 Pages


THE MARKET IN RELATION TO CREDIT T HE work of the market in each of the two services which have just been discussed is influenced in a very important way by what is vaguely known as "credit." The part played by credit in the market organization cannot be

considered at all fully at the present stage. Its importance lies partly in the economies arising from what may vaguely be described as the normal level of credit ; partly in the influence which changes in this level exercise on the activity of the market; at one time greatly facilitating its work and causing an undue expansion in its operations; at another, checking its work and unduly contracting its operations; in either case, causing a disturbance in the adjustment of economic means to ends. At the moment we are concerned only to establish as clearly as possible the nature of credit and of the normal economies to which it gives rise; in the following chapter the matter will be carried a stage further and some preliminary account given of its effects in alternately stimulating and depressing the market.