It is important to conceive the exact nature of a credit. If Brown promises to pay to Jones at some later date, he creates a property right; Jones thereafter has a claim on Brown and Brown's wealth; the state has found it politically and economically expedient to guarantee, under certain conditions, this right; it is a " chose in action," recoverable by law. Fundamentally it is a jus in personam - a, right against the person of the promissor, and once in the history of jurisprudence was collectible by forced service from him. Slavery and imprisonment for debt have, however, been abandoned by the civil state, and such rights, in the absence of wealth of the debtor, are rather moral claims against him than anything else. The importance of the consideration of the moral qualities of the debtor by the creditor is, therefore, apparent; his ability to pay is best indicated by his present capital and his earning capacity, but his willingness to pay depends upon his character.

Credit is deferred payment; the creditor has confidence in the debtor's willingness and ability to pay; both willingness and ability to pay rest upon personal as well as impersonal elements. Willingness to pay is more a personal than an impersonal matter; and ability to pay is rather a matter of capital than of character, although the debtor's character - his business abilities - determine in no small degree his ownership or control of capital. The law supports the creditor as against the debtor who is able to pay but will not; but the law cannot make him willing to pay. Because his willingness is subject to caprice, it is difficult to estimate and so limits his credit to small compass. As business operations and discounting become more extensive and complex, the necessity of eliminating or reducing the personal element of credit or of reinforcing it increases, for intimate knowledge of the personal character of the debtors is more difficult to ascertain.