176 THE WORK OF THE STOCK EXCHANGE
modity whatsoever, is simply an exchange of money and goods.
For this reason, strange though it may sound, it would from a
purely economic standpoint be quite correct to speak of buying
$75 with a ton of steel, or selling $60 for a suit of clothes.
Owing to our constant use of money as the measure for all
values, however, we habitually think of every sale in terms of
money rather than in terms of goods.
Sales for Cash and on Credit.—Sales can be divided into
two general classes, depending on whether or not they involve
the element of credit. In an outright or cash sale, the buyer
immediately pays his money and the seller at once delivers his
goods. Since there is no delay on either side of the transac-
tion, credit—which is simply a substitute for money or goods
in the form of a promise either to pay the one or to deliver the
other at some future time—is in no way involved. Yet cash
sales undoubtedly furnish a smaller part of our daily business
turnover today than do sales on credit. Indeed, the use of
credit had come to constitute a vital factor in business even
before the creation of our modern stock exchange or banking
systems. If by some economic miracle credit transactions could
be wholly abolished, our entire modern financial system would
at once degenerate into the crude business of money-changing
from which it rose centuries ago. All modern governments, by
their issuance of both bonds and fiduciary paper currency, show
how completely dependent they are upon the use of credit. As
for commerce and industry, neither has been wholly upon a
hasis of cash payment and immediate delivery since the eco-
nomic stagnation of the Dark Ages—if, indeed, they were
even then. It is, consequently, no exaggeration to say that
without the invention of the credit machinery which in modern
times permits the deferred payment of money and the deferred
delivery of goods, the vast material and spiritual progress of
the human race since the twelfth century would have been
utterly impossible.
