The Brookings register. [volume] (Brookings, Brookings County, S.D.) 1903-1971, 1922-03-02
INDUSTRIAL &c
BASED ON CREDIT
WITHOUT IT COMMERCE AND
BUSINESS WOULD GO
TO CHAOS
VERY DANGEROUS WHEN INSTRUCTED
Head of Credit Mems Association
Says All Men Should Learn
General Principles
BY j.. II. Trego, Treasurer of National

BY J. H.. Trego, Treasurer of National
Association of Credit Men
Editors NOTE. H.. Tregoe is the
treasurer of the National Association
of Credit Men. This fact alone indi-
Gates his knowledge of the principles
upon which all our modern industrial
and commercial life is based. He has
wasted few words in his article. Men
dealing in finance, production, Or any
form of activity wherein credit plays
a part, will find his ideas Of value,
while to the layman it should appeal
on the basis of being an authoritative
statement tending toward general
knowledge.
The industrial system of the world
would go crashing into chaos tomor-
row if credit were destroyed.
The actual cash transactions Of the
world today are small in comparison
with it's credit transactions. Wipe
out credit and it's issues and our mon
ey-except gold and silver-would be
worthless, our manufacturing plants
would be forced to close, our stores to
shut up, our railroads cease to run,
industry, business manufacturing,
production, would be halted, there
would be no Jobs" no incomes, and
in place of system would reign an
archy.
Credit is not a tangible asset. 1t is
a spiritual thing more delicate than a
breath and yet strong enough to gov
ern a worlds work. 1t was endan-
gered in the world war and the
mere appearance of danger has been
enough to upset the economic balance
of our country today.
The public at large cannot realize
the immensely of the credit system
and how indispensable it has become
to commerce. Running back in his
tory to the days when living was sim
pie and human needs few, the ex-
change of commodity for commodity,
which we term barter, was sufficient
to crafty the wants Of men. Under
such method there was no commerce
as we think of it and social advance
ment was slow. With the increase
of human wants and as society became
more complex, the exchange of COM
modify for commodity was insufficient
to satisfy mems needs, and needs are
usually satisfied, In substitution for
barter, therefore, forms Of money be-
gan to be introduced as mediums Of
exchange. In the period of handcraft,
when articles Of dress and for the
satisfaction Of peoples wants were
produced in homes, money as ON
trasted with credit was sufficient for
the conduct Of business. 1t was not
sufficient, however, to stimulate COM
merce, and bring it into a period of in
tensiveness. With the industrial rev.
Olution, when power was substituted
for handcraft in the production of
commodities and steam became the
motive power for the transportation
of these commodities from the point
of production to the point of distri-
button, money was insufficient as a
medium Of exchange and there came
lhlo I'D pidSS Tx ClculJ Sy SIcUl W
supply the needs of the period. This
system characterized by great flexibil-
ity developed rapidly to serve human
needs.
From the earliest days credit in
some form was granted in the rela-
tons of men. AS a great commercial
system, however, it dated from the in
dustrial revolution and based upon it
world m has become so ex-
tensive and S % complex that credit
is the real ally of commerce and with
out it trading Of men with one an
other on a large scale and the huge
facilities for transporting commodities
would %languish and dwindle away. The
cal nature Of credit, being not ma.
terial but spiritual, has gone beyond
the grasp Of the casual thinker and
because of ignorance as to it's nature
and uses, mishaps have come upon our
commerce. We are today suffering
a depression because commercial cred
it was over extended and put to uses
for which it is neither designed nor
intended for credit cannot be manu-.
featured; the printing presses Of Rus.
STA may urn out paper rubles by the
trillions. but there is no human power
in Russia that can force the exchange
Of its fiat money for commodities at
it's face value. Credit is founded on
real value and is never better nor
worse than its underlying value. When
the governments of the %belligerant
nations borrowed billions Of their peo
pie for the purchase of war munitions
and to keep their men in the field
they were asking a form of credit
extremely dangerous in character for
1t inevitably meant credit initiation
There was no underlying yalue. the re-