CREDIT TRANSACTIONS IN SECURITIES 177 
Fallacies Regarding Credit.—In spite of the extensive 
and time-honored employment of credit in business, compara- 
tively few men ever stop to analyze in detail exactly what credit 
is. In consequence, the average business man is only too apt 
to be puzzled when he is asked, “How can a man buy something 
which he doesn’t want to keep and when he hasn't enough 
money to pay for it?” or “How can a man sell something which 
he doesn’t own?” Superficially considered, both of these ques- 
tions would seem to imply a lack of business morality. And 
yet the simple answer to both these questions obviously is, “By 
using credit.” Thanks to the vast extension of our credit 
machinery during the past century, the deferred payment of 
money and the deferred delivery of goods have both become a 
daily commonplace, not merely in Stock Exchange transactions. 
but in every conceivable kind of modern business. 
One phase of this universal use of credit deserves considera- 
tion at this point. Although a sale is really an exchange of 
money and goods, our inevitable habit of thinking only on the 
money side of what is necessarily a two-sided transaction makes 
it easier for the average man to understand a deferred payment 
of money than a deferred delivery of goods. Owing someone 
money is an experience with which, fortunately or unfortu- 
nately, most of the human race is only too well acquainted, 
whereas owing someone goods—whether it be an overcoat, a 
barrel of molasses, or a share of stock—is apt to seem a novel 
and highly perplexing situation. 
Debts in Terms of Goods.—Yet a moment's thought will 
show that it is no more unnatural to owe goods than to owe 
money. In ancient times, long before money had been in- 
vented, all trading was necessarily conducted entirely by barter, 
which consists of an exchange of goods for goods. Thus an 
ancient Roman would exchange his cattle for someone’s bronze 
implements, or an American Indian would barter his furs for 
another Indian’s corn. In point of historical evolution, there- 
fore, it is altogether probable that credit was used to defer a