“[Credit] is an evidence of banking, but it is not the money itself. Money is gold, and nothing else.”

— J. P. Morgan

Testimony to the Pujo Committee (1912)

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J. P. Morgan 6

American financier, banker, philanthropist and art collector 1837–1913

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“Gold is money. Everything else is credit.”

J. P. Morgan (1837–1913) American financier, banker, philanthropist and art collector

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“The first thing [in credit] is character … before money or anything else. Money cannot buy it.… A man I do not trust could not get money from me on all the bonds in Christendom. I think that is the fundamental basis of business.”

J. P. Morgan (1837–1913) American financier, banker, philanthropist and art collector

Testimony to the Pujo Committee (1912)
Untermyer: Is not commercial credit based primarily upon money or property?
Morgan: No, sir; the first thing is character.
Testimony to the Pujo Committee (1912)

“By its means the banker creates the means of payment out of nothing, whereas when he receives a bag of money from his customer, one means of payment, a bank credit, is merely substituted for another, an equal amount of cash.”

Ralph George Hawtrey (1879–1975) British economist

Source: Currency and Credit (1919), Chapter II, "Metallic Money", p. 20 (2nd ed. 1921)
Context: The use of money does not disestablish the normal process of creating credit. Money, it is true, is always being paid into the banks by the retailers and others who receive it in the course of business, and they of course receive bank credits in return for the money thus deposited. But for the manufacturers and others who have to pay money out, credits are still created by the exchange of obligations, the banker's immediate obligation being given to his customer in exchange for the customer's obligation to repay at a future date. We shall still describe this dual operation as the creation of credit. By its means the banker creates the means of payment out of nothing, whereas when he receives a bag of money from his customer, one means of payment, a bank credit, is merely substituted for another, an equal amount of cash.