This section is from the book "Banking Principles And Practice", by Ray B. Westerfield. Also available from Amazon: Banking principles and practice.
Exact agreement does not exist among financial men and writers as to the definition of commercial credits. In the United States the term "commercial paper" is widely used in a very technical sense, and refers only to such paper as is marketed through note-brokers. Such paper is short term, but is in large part continually renewed at maturity and sold to present holders or others, and therefore represents long-term advances. Another restrictive definition makes commercial credit relate only to credit extensions which facilitate the marketing of products. This definition is too restrictive; industrial loans for the purpose of buying raw materials and paying wages to workers may be as self - liquidating, may be for as short terms, and as safe for temporary investment as mercantile loans. This definition would exclude also loans to speculators and brokers, a considerable part of which are characterized by the two essentials of commercial credit, namely, short term, and self-liquidation. Important differences of opinion as to banking policy often arise from the inability to agree on a strict definition of commercial credit.
 
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