Fluctuations in the Foreign Exchanges. 13 



terras of the money of another. This ratio is called the Mint 

 Par of Exchange," and depends on the intrinsic value of the 

 currency. The value of the currency unit is taken to depend on 

 the quantity of pure metal it contains as fixed by law, and the 

 mint par tells us how much of the currency of the other country 

 contains the identical quantity of the same pure metal. Thus, for 

 example, the value of 2,000 new sovereigns is legally the same as 

 the value of the gold in 2,522 Napoleons, which giA^es us the value 

 of £1 Os. Od. = 25-22 francs, and this is the French Mint par of 

 Exchange. In the same way the United States Mint par is 

 £\ = 4-86 dollars, The importance of the Mint par lies in the 

 fact that as the exchange frequently fluctuates above or below 

 par, we can only tell whether the rate is for or against us by 

 knowing the par, which is the centre about which it oscillates. 



The rate of exchange is very seldom at par, but rises above 

 or falls below it, according to the variation in the demand and 

 supply of bills. These varying rates in the currency of one 

 country which may be obtained for a fixed amount in the 

 currency of another form is what is called the Course of Exchange. 

 Or putting it more simply, the Course of Exchange is the price 

 list at which Bills of Exchange on diff'erent countries are selling 

 at a particular time. The first thing that strikes one about the 

 Course of Exchange as published in the daily papers, is the fact 

 that most of the quotations are in foreign money, expressing the 

 amount of foreign money payable, at the current rate, for one 

 sovereign. This arises from the fact that the bulk of our 

 transactions are settled by Bills drawn abroad. Owing to the 

 magnitude of our trade, the stability of our currency in normal 

 times, the facility with which credit could be obtained there and 

 other contributing causes, London became the settling place of 

 Europe and the world; and the seller of a good Bill on London 

 is always sure of a buyer at a good price. The foreign importer, 

 too, would rather pay for imports by remitting, than by allowing 

 us to draw on him, because the price to be paid depends partly 

 on his own success in bargaining. This arrangement also seems 



