Learning the lingo for the new terms of credit
Oct 28 2008 Agenda
Alex Tulloch looks at the jargon coined for a world in financial turmoil.
Until the recent crisis nobody had ever heard of the expressions ‘credit crunch’ and ‘toxic debt.’ But now, all of a sudden, commentators on the telly and pundits in the newspapers are bandying these expressions about like confetti. They sound like cleverly devised, witty additions to the language, but in fact they are just new interpretations of old words with very long histories.
‘Credit’ is a Latin word derived from the verb credere ‘to believe.’ It is the same root as ‘creed’ (something we believe in), ‘creditable’ (believable) and, in the financial world, has long been used to signal the belief that loans will be returned in due course. Our ‘creditors’ are people who can afford to lend us money, but they will normally only do so if they believe they have a good chance of getting their money back. On the other hand, the people who borrow take on a certain amount of ‘debt’, another word with Latin origins. Debitum, which evolved into our ‘debt’ was from two words de ‘from´ and habere ‘to have’ which combined into debere ‘to have from someone’ and if we have money from someone, we are said to be ‘in their debt.’ So the present ‘credit crunch’ has come about because banks will not let others ‘have money from them’ because they don’t ‘believe’ they will necessarily ever see it again.
Of course anybody who knows anything about book-keeping knows that the ‘debit’ and ‘credit’ columns always have to match at the end of the financial year. Or, to put it another way, they have to ‘tally,’ and this is another word with a fascinating history.
In the early days of banking one of the ways of keeping track of who had borrowed what from whom was to use a ‘tally’ stick.
This meant that the creditor and debtor would take a long piece of wood and cut little notches ( Old French taille ‘cut’ ‘notch’) in it at irregular intervals.
This was then sliced lengthways and each party to the deal kept one half. Later, as and when required, the two halves could be put together again as an aide-mémoir to how much had been borrowed and the notches would be expected to match perfectly or ‘tally.’ A further refinement to the tally stick method of keeping track of financial deals was to have one half slightly longer than the other. This longer piece was known as the ‘stock’ and it was retained by the man who had lent the money. He then was referred to as the ‘stockholder,’ a term which has spawned others we easily recognise today such as stockbroker, stock market and stocks and shares. Until recently bad debts were just that, bad debts. Now it’s all changed and debts are no longer just bad but have to be ‘toxic’ and for the derivation of this word we have to go all the way back to the ancient Greeks. Their word toxon meant ‘bow’ (as in bows and arrows) and at some point the archers discovered that they could achieve a higher kill-rate on their enemies if they dipped their arrows in a poisonous concoction of some description before releasing them. Over time the word toxon came to refer to the mixture rather than the bow and arrows and eventually made its way into English meaning ‘poisonous.’ The original meaning, however, still survives in the word ‘intoxicated, which basically just means ‘poisoned’,’ and in our posh word for archery, ‘toxophily.’
And what about the ‘financial crisis’ we are all faced with in one way or another? Once again, for an explanation of the origin of these words we have to turn to Latin and Greek. ‘Finance’ is derived from the Latin word finis ‘end’ which also gave us words such as ‘final’ and ‘finish’ the idea being that ‘finances’ were originally monies used to settle a debt and to put an end to any transaction. And this idea is not all that far from another term much in the news these days: mortgage. This was originally two Old French words mort ‘dead’ and gage ‘pledge’ joined together to define a financial arrangement whereby if the sum borrowed was not repaid, the property was considered ‘dead,’ ie it no longer belonged to borrower but reverted to the lender. A ‘crisis’ to us is now a crucial stage in events and the adjective from it, critical, is very often used simply as another word for serious. The original Greek word krisis came from a verb meaning ‘to decide’ and referred to the time when there could be no more dithering and a decision had to be made. If we say that a patient is in a critical condition we usually mean that he or she is seriously ill, but what we are really saying is that the illness has reached a stage when someone has to make a clear, unequivocal decision regarding future treatment.
Perhaps this is the stage we are at now with the economy. The country is sick and in need of powerful medicine. We have reached the ‘crisis’ or time when important decisions have to be made. Gordon Brown and Alistair Darling must show some ‘critical’ ability or we are all in for a very rough ride in the months and possibly years ahead.
* Alex Tulloch is a professional linguist and Russian interpreter. He also regularly translates from French and Spanish and is the author of Word Routes: journeys through etymology published by Peter Owen, London.
