like our own
is a large producer of gold and silver by mining. In this case the
products of the mines are as proper an article of export as the products
of the farms or of the factories, and should be estimated as a part of the
natural exports. For these reasons the balance of trade must be carefully
scrutinized before being accepted as proof of a nation's progress in
poverty or wealth.

_Bank loans._--So far, in dealing with the subject of banking, no mention
has been made of the function of extending individual credit by time
loans. One of the original purposes of banking was to make a convenient
office for the meeting of borrowers and lenders. The banks are still the
go-betweens of those who have money to lend and those who have to borrow.
In fact, every banking association is assumed to be a corporation of money
lenders. Under ordinary circumstances this corporation is able to loan to
individuals whose credit is good all of its capital not otherwise employed
in the machinery of the bank, a considerable portion of deposits from its
customers, and to a certain extent its own credit in the commercial world.
In the case of a national bank a portion of capital is loaned to the
government in the purchase of bonds, which are the basis of its
circulating notes. The circulating notes, from 60 per cent to 90 per cent
of the value of the bonds, are an extension of credit; that is, the
capital already loaned on time to the government is partially loaned again
to individuals. Again, the deposits of the customers, to be drawn as
needed, in ordinary circumstances are not needed the same day. The bank
soon learns by experience what portion it is safe to lend from day to day
to individuals who are sure to make payments when promised. Double
signatures, or endorsements, double the surety of prompt payment.

Thus the banks are enabled to provide safe keeping for money without
charge, and even to pay a low rate of interest upon considerable deposits
when times are good. In this way legitimate borrowers and legitimate
lenders find a close connection in the bank. A legitimate lender is one
who has property not needed at present for his own use. A legitimate
borrower is one who can use capital to advantage in production. Any
producer may at one part of a year be a lender and afterward a borrower to
advantage of everybody. If the banks are thoroughly satisfactory the
proceeds of the fall crops may serve the busy manufacturers as circulatin