The credit instruments are many and, to facilitate their various uses, are highly specialized. Book credits, promissory notes, bills of exchange, drafts, acceptances, certificates of indebtedness, checks, bank notes, bonds, and the like all arise from credit transactions, however much the instruments themselves may differ in their details of form and terms, in their power to circulate, and in their creation by debtor or creditor. They purport to be claims for money, are evidences of debt of the debtor and of credit by the creditor, and are used to facilitate the exchange of goods and the investment of funds.

The issue of credit does not, however, by itself directly increase the wealth of the community. If Brown gives Jones a promissory note the volume of credit in the community has been increased by that amount, but the volume of wealth has not been affected one iota by that act. The deferment of the payment may, however, leave the capital in Brown's hands, and Brown may be a more efficient producer of wealth than Jones; the net result of the credit transaction for the community will thus indirectly be an increase of wealth.

The presumption is that the borrower is a more efficient producer than the lender, else the lender would use the capital in his own productive activities. One of the greatest functions of credit is just this - it throws control of productive capital into the hands of the most efficient producers, and this control results in additional consumable commodities for the community. One of the commonest of errors is to fail to keep in mind the fundamental fact that credits are not wealth, but at best claims to wealth, and that their issue does not add directly to the wealth of the community. The issue, for instance, of multiplied millions of dollars of credits by the government does not increase our national wealth directly, however prone the owner of a dollar bill is to regard it as part of his wealth.