146 PARLIAMENTARY COLBERTISM 
natter of fact this fear proved illusory. The security and 
facilities for investment, offered by the Funds, tended to the 
more rapid formation of capital, and conferred lasting 
venefits on the trading community. From this time on- 
wards it became a usual thing for careful men to trade upon 
borrowed capital, since they found they could habitually 
obtain the loan of it on easy terms. During the latter part 
of the seventeenth century England was hampered in every 
way, both as to internal development, and commerce, and 
colonisation, by lack of capital; and the banking system 
which was inaugurated in 1696 had an enormous influence 
in remedying these evils. 
218. It was probably inevitable that, until a consider- 
able body of experience had been accumulated, there should 
be many and serious blunders as to the nature of credit, and 
the conditions under which the forms of credit are available 
to serve as money. The men of the eighteenth century found 
shat they had a new and very powerful economic instrument 
Phy wilture in their hands, and they only gradually discovered how to 
ditions of use it wisely. Strictly speaking credit is not wealth?, though 
re ey a man who has credit is able to procure the use of other 
ecognised, neople’s wealth. The forms of credit supply a method of 
anticipating expected wealth, and of obtaining immediate 
control over certain sums of money, because of expectations 
in regard to the future. Whenever the expectations are 
mistaken, and the actual wealth obtained falls short of the 
anticipated wealth, there is a danger of serious loss. By the 
judicious restriction of his advances, the banker may check 
over-sanguine speculation as to possible gain in the future. 
His readiness to grant loans on easy terms is of course 
an encouragement to speculation; it increases the quantity 
of paper money available, and tends to raise the rates of 
prices, and to render business more remunerative. On the 
other hand, the action of bankers in suddenly withdrawing 
accustomed facilities may create a feeling of alarm and 
distrust, which will make men unwilling to accept paper 
monev at all. and cause a sudden fall in values of every kind. 
4.1). 1689 
—1776. 
hut gave 
ppportuni- 
ea for 
trading on 
borrowed 
raprtal. 
1 On the difficulties of various trading companies who sunk their wealth in 
soncessions and had no circulating capital see below, p. 466.