in Commerce, a mutual trust or loan of merchandise or money, on the reputation of the prosperity and solvability of a dealer.

Credit is either public or private. Every trader ought to have some estate, stock, or portion of his own, sufficient to carry on the traffic he is engaged in: they should also keep their dealings within the extent of their capital, so that no disappointment in their returns may incapacitate them from supporting their credit. Yet traders of worth and judgment may sometimes lie under the necessity of borrowing money for carrying on their businesses to the best advantage; but then the borrower ought to be so just to his own reputation, and to his creditors, as to be well assured that he has sufficient effects within his power to pay off his obligations in due time. But if a trader should borrow money to the extent of his credit, and launch out into trade so as to employ it with the same freedom as if it was his own proper stock, such a way of management is very precarious, and may be attended with dangerous consequences. Merchants ought never to purchase their goods for exportation upon long credit, with intent to discharge the debt by the return of the same goods; for this has an injurious influence on trade several ways; and if any merchant has occasion to make use of his credit, it should always be for the borrowing of money, but never for the buying of goods; nor is the large credit given to wholesale traders a prudential or justifiable practice in trade.

The public credit of a nation is said to run high when the commodities of that nation find a ready vent, are sold at a good price, and when dealers may be safely trusted with them: also when lands and houses find ready purchasers; when money is to be borrowed at a low interest; when people think it safe and advantageous to venture large stocks in trade; and when notes, mortgages, &c., will pass for money.

Letters of Credit, are those given to persons in whom a merchant, &c., can trust, to take money of his correspondent abroad, in case he happens to need it.

Credit is also used for the currency which papers or bills have in the public or among dealers. In this sense credit is said to rise, when in negotiating the shares of the company, they are received and sold at prices above par, or the standard of their first creation. Discredit is opposed to credit, and is used where money, bills, &c., fall below par.

Credit was also anciently a right which lords had over their vassals; consisting in this, that during a certain time they might oblige them to lend them money. In this sense, the duke of Brittany had credit during fifteen days on his own subjects, and those of the bishop of Nantes; and the bishop had the same credit or right among his subjects and those of that prince.