ABSTRACT

But that increased demand for capital does not in itself explain how the volume of credit has been created. That explanation is found in an extension of the materials and machinery for the production of credit. Credit is produced by bankers and financiers, out of what? Not chiefly out of gold, and never merely out of gold. The main staple out of which credit is made is vendible goods, and the extension of credit must be attributed mainly to a growth of the vendible goods which can be used for making it.