The Chinese have not yet been fully educated to understand the meaning of reserves; as, according to their traditional ideas, they always consider trading with actual bullion as the most desirable of operations, they have yet to learn that, so long as there is bullion or coin to meet every possible emergency, trading with credit is even better than trading with bullion. Their time-honoured customs have again induced them to believe that credit as understood by modern European nations, is not a desirable equation in trade; therefore, they have understood and practiced nothing but personal credit, which plays but a small part in modern commerce. Personal credit, as much as national credit, plays, however, a big part in big operations; and it may be remembered that some time ago, giving evidence before the Currency Commission of the United States, the late Mr. J. P. Morgan said that he would prefer to lend a million dollars to an honest man with no security than to an untrustworthy man with all the securities in the world. But such is not practicable in ordinary every day business. The credit of an individual or a bank has to have a substantial backing. The extensive use of credit is only in order to minimize the use of money. The only manner in which the banks could maintain their credit is by having adequate reserves.