BROOKS'
FOREIGN EXCHANGE
TEXT BOOK
AN ELEMENTARY TREATISE ON
AND THE MONETARY SYSTEMS
of THE WORLD
FOR THE INSTRUCTION and USE of THE BANKER, EXPORTER.
IMPORTER, TOURIST and PARTICULARLY FOR
THE SCHOLAR and STUDENT
1906
Revised September. 1908
/
By HOWARD K. BROOKS
Author of "Foreign Exchange," Figured, Explained, Simplified, Illustrated
Published by H. K. BROOKS. 78 Monroe Street
CHICAGO, ILL.. U. S. A.
jr
^4
COPYRIGHT 1906
BY HOWARD K. BROOKS
CHICAGO, ILL., U. S. A.
INTRODUCTION.
O doubt many who have become interested
in the science of foreign exchange are some-
what discouraged as well as surprised to
find so few text-books treating of this
science which are of value to the beginner.
The few books obtainable upon this subject
are either too far advanced for the student or are of such a
character as to require too close study to be readily compre-
hended. While the theory of foreign exchange is quite
clearly defined in a number of works upon the subject, the
use of technical terms, the absence of proper illustrations or
the inability of the writers to impart knowledge has made
it difficult for the beginner to understand the various pro-
cesses through which the results were obtained, and as a
result many students have become discouraged at trying to
master what seemed to them insurmountable problems, too
intricate to be overcome.
In presenting this publication the writer has invariably
kept in mind the importance of explaining, in simple
language, the essential principles of the science and where
there seemed any doubt of the clearness of the statements,
to supplement same with complete illustrations.
While practical experience is necessary in the more
intricate operations in foreign exchange transactions, stu-
dents and junior employes of banks and mercantile houses
should experience no difficulty, with well directed study
and application, in fitting themselves for lucrative positions
in the foreign departments of city banks and mercantile
institutions. In fact the writer b?Ht*e^tkeK>.BDortunity for
young men in the foreign exchange departments of the con-
cerns mentioned, are more encouraging and promise better
salaries for the future, than in almost any other line of trade.
With the very large and rapidly increasing export and
import business between the United States and foreign
countries, necessitating large commercial money transactions,
and the large and growing foreign population who are con-
stantly sending remittances of money to their friends and
relatives abroad, to say nothing of the enormous increase
in travel by Americans to foreign lands, the importance of a
general knowledge of foreign exchange business in its
various details is becoming greater each year.
Where a few years ago dealings in foreign exchange
were confined to a few leading banks and bankers at the
principal large cities, we now find nearly every bank and
financial institution equipped for handling such business.
Merchants who formerly imported goods through brokers
at seaport cities now have foreign departments for conduct-
; ng the business direct.
Therefore, we urge young men to devote time and
study to this branch, believing it will insure to them a higher
appreciation and ultimately a greater remuneration than is
afforded in other classes of financial and mercantile pursuits.
CHICAGO, ILL., U. S. A.
CONTENTS.
PAGES.
CHAPTER I. Foreign Exchange. Meaning of the term Class
of transactions Extent of the business Trade between
countries Exchange Centres Exchanging of the money
MargrafT's Explanation 1- 4
CHAPTER II. Monetary Systems of the World 5
Paper Money Gold Silver and Minor Coins Value of
foreign money 5- 7
Money of European Countries 7- 31
Money of Asiatic Countries 32- 42
Money of African Countries 43- 46
Money of Islands of the Pacific Ocean 46
Money of North American Countries 47- 52
Money of Central American Countries 52- 55
Money of West Indies Islands 55- 59
Money of South American Countries 59- 68
Meaning of 16 to 1, in coinage 69
Standard Bullion 69
Seigniorage 70
Coinage of gold 70
Adoption of gold standard 71
The term "Ratio" 71
Monetary units of principal countries, value, etc 72- 73
CHAPTER III. Conversion of foreign money into United States
money and vice versa 75
English Exchange 75- 80
French, Belgian and Swiss Exchange 81- 85
German Exchange 85- 91
Scandinavian Exchange 92
Russian Exchange, Austria-Hungarian Exchange 93
Holland Exchange 94- 95
Italian Exchange 96- 97
Chinese and Hong Kong Exchange 98
Japanese Exchange Mexican Exchange 99
Philippine Islands Exchange .- 100-101
India (British) Exchange TTTTTTT 101-102
Brazilian Exchange 102- 105
Portuguese "Exchange 105
Bulgarian Exchange Roumanian Exchange 106
Spanish Exchange 107-108
Servian Exchange Finnish Exchange 108-109
Grecian Exchange Turkish Exchange 110-111
South American Exchange Ill
CONTEXTS
CHAPTER IV. Quotations for Foreign Exchange 1 13
Methods of quoting , 113-116
Newspaper quotations 116-120
CHAPTER V. Rate of Exchange 121
Fixed, Fluctuating, Posted, Actual, Rising or Falling 121-122
CHAPTER VI. Causes of fluctuation in Rates of Exchange 123-125
CHAPTER VII. Pars of Exchange 127-130
Pars of Exchange between Great Britain and other countries 131
Commercial Par of Exchange 132-133
CHAPTER VIII. Arbitration of Exchange 135-138
CHAPTER IX. Foreign Commercial Forms 139
Circular Letter of Credit 139-146
Letter of Indication 147-149
Foreign Drafts and Checks 150-152
Travelers' Cheques 153-156
Cable Transfers of Money to Foreign Countries 157
Foreign Postal Remittances 158-161
Limited Foreign Checks 162
Foreign Pos " Money Order 163-165
Foreign Com ercial Bill of Exchange 166-172
Commercial Letter of Credit 173-177
CHAPTER X. Terms and Expressions 179-187
, Indorsements 187-188
CHAPTER XI. Buying Foreign Commercial Bills of Exchange ... 189-194
Buying Bills of Exchange on Great Britain 194-199
Buying Bills of Exchange on France 199-203
Buying Bills of Exchange on Germany 203-206
Buying Bills of Exchange on Holland 206-209
Hypothecation Certificate 210
APPENDIX.
The Use of the Cable in Foreign Exchange Transactions 212-213
Foreign Exchange Brokers 214
Jobbers of Foreign Exchange 215-217
Express Money Orders 218
Foreign Exchange Retailers' Guide to Profit 219
Foreign Exchange Retailers' Guide to Profit (English Money) ... 220
The Travelers' Guide Value of gold and silver coins in money
of other countries 221-223
Fractions of 100 by 64ths, expressed decimally 224
The Aim of the Author 225
Index.. ..226-239
CHAPTER I.
FOREIGN EXCHANGE,
The term "Foreign Exchange" is one commonly used to
apply to financial transactions between countries, the word
''foreign" implying a foreign country, "exchange" meaning to
barter or to give one thing for another.
The dictionary gives several definitions of the word "ex-
change," applicable to the term "Foreign Exchange;" for example:
"to part with in return for some equivalent; to exchange in
foreign countries for gold; the act of giving one thing or com-
modity for another; the process of exchanging one debt for
another, or the receiving or paying of money in one place for an
equal sum in another place by order, draft, or bill of exchange."
Exchange in its broad sense covers all exchanges of com-
modities, but the term "Foreign Exchange" is limited to tran-
sactions between countries in the monetary settlements of such
exchanges of commodities or of corporal interests.
Foreign Exchange is a system by which commercial
nations discharge their debts to each other. These debts, which
represent the difference between the amount we owe to foreign
countries and that which they owe us, have to be paid either
with cash or something equally satisfactory to creditors. The
transmitting of gold and currency, while sometimes resorted
to, is usually regarded an expensive and risky method; therefore,
to avoid this risk and expense, the system of exchanging debts
through the medium of commercial paper is adopted, and the
process of so doing is termed "Foreign Exchange business."
Among the various transactions which may properly be
termed Foreign Exchange are the following: The issuing
of a money order, draft, check, or bill of exchange payable in a
foreign country; the shipping of currency or coin from one country
to another; an order, either written or cabled (telegraphed), to
have a certain sum of money paid in a foreign country; a draft
payable in a foreign country drawn for the value of goods ex-
ported; a draft, money order, check or bill of exchange drawn in
a foreign country payable in this country; the buying or selling
of foreign currency or coin, whether here or abroad; a circular
letter of credit, commercial or mercantile letter of credit, circular
2 FOREIGN EXCHANGE TEXT BOOK
note, travelers' cheque, or other forms used either for obtaining
money or credit in a foreign country.
To have a clear understanding of what foreign exchange
business is and how it is conducted, one should know the various
sources from which foreign exchange transactions emanate.
Our exports and imports of commercial products and manufactured
articles furnish the greatest volume of the transactions, and
serve to illustrate the enormous extent of the business. By
referring to statistics compiled by the United States Government
we find that during the year 1905, the value of merchandise
imported into the United States from foreign countries amounted
to $1,179,358,846.00, and that the value of the merchandise
exported from the United States to foreign countries for the
same period reached the sum of $1,626,962,343.00, making the
total value of goods exported and imported $2,806,321,189.00,
and the difference between the value of importations and expor-
tations, representing the balance of trade in our favor, or balance
due us thereon from foreign countries, the sum of $447,603,497.00.
These figures, however, fall far short of representing the total
volume of business, for the period named, between this and foreign
countries which was handled through the medium of the system
we call "Foreign Exchange." The investments made by people
in this and foreign countries in each other's stocks, bonds and
enterprises of various kinds, and the interest and dividends
resulting from same; the cost for transportation of goods and
the commissions paid for services; the expense incurred for
travel in foreign countries on business or pleasure; money bor-
rowed or loaned to float large enterprises; remittances to relatives
and friends, and the many other sources from which foreign
exchange transactions are made up and which are not included
in the above figures, amount in the aggregate to a sum so
large as to seem almost incomprehensible, and for anyone to
form anything like a correct estimate of same would be very
difficult, if not impossible.
The exporters are very little interested in this balance.
When goods are shipped abroad, the exporter is at once reimbursed
for them by selling his foreign commercial bills of exchange against
such shipments to bankers and foreign exchange dealers. The
latter in return are reimbursed through the payment of the bills
at maturity and each export transaction terminates by the
amount being placed to the credit of the purchasers of the bills.
Against this credit the banker or dealer sells his own checks,
circular letters of credit, commercial letters of credit, bills of
exchange, etc., to importers or others wishing to remit or obtain
credit abroad, which largely offsets the balance in our favor and
any remaining balance does not stay long abroad unless it can
be more profitably invested there than here. The return from
FOREIGN EXCHANGE 3
abroad of American securities also offsets merchandise balances.
Trade between countries may be said to be conducted in a
manner quite similar to that employed between cities and towns
in this country, except that the method of payment or reim-
bursement to the shipper necessarily differs, by reason of the
greater distance, the difference in kind of money used, and the
different commercial customs. To obtain payment for goods
shipped to a foreign country which perhaps would not arrive at
destination for several weeks, and possibly months, according to
distance or whether shipped by fast or slow steamers, to say
nothing of the fact that for some countries steamers leave our
ports only semi-monthly or monthly, it is the usual custom of the
shipper, whom we term the "exporter," to sell his commercial bill
of exchange against the shipment in advance to the highest bidder,
ani he rarely experiences any difficulty in finding a ready pur-
chaser.
Our exporters, in competing with foreign manufacturers,
must take into consideration the cost of transportation, insurance
on goods, custom duties, commissions for services, difference in
value of money and the probable price at which they can discount
or sell their commercial bill (draft and documents) against same.
Time credit must also be extended to the buyer. If our exporters
had to wait for payment until maturity of their drafts, it would
mean the- tying up of a large amount of capital and possibly
prevent their competing successfully.
The payment of indebtedness between countries representing
innumerable transactions is adjusted through a very few centers,
or as we might sav, "Clearing Houses/' and corresponds to the
practice in vogue in this country, except that instead of being
adjusted or settled daily as is done through our bank Clearing
Houses, the balances are never brought to a final settlement, but
continue from year to year, adjusting themselves from time to
time as they mature. While the exact balances between countries
are never known, the volume of same is shown in the movements
of the "rates of exchange" above and below "par" between
countries.
New York is the exchange centre or clearing house of North
America, and to a large extent of South and Central Americas.
London is the exchange centre of the British Empire and partly
of the entire world; Paris of France, Belgium, Switzerland, Italy,
Spain, Bulgaria, Roumania and Greece; Berlin and Hamburg of
Germany, and to some extent of Russia; Vienna of Austria
Hungary; Stockholm of Sweden, Norway and Denmark; Hong
Kong of China and largely of other oriental countries; Yokohama
of Japan, and Manila of the Philippine Islands.
Any material excess over the usual indebtedness between
two countries is instantly reflected in the rise or fall of the rates
of exchange between those countries, caused by the increased
4 FOREIGN EXCHANGE TEXT BOOK
or decreased demand for exchange, and no sooner do these changes
in rates become known than operations are entered into which
cause the rates to reach normal conditions or nearly so.
The exchanging of the money of one country into that of
another country, whether by the exchange of the currency or
coin itself or by means of commercial paper, as a rule, results in
loss to the owner and gain to the purchaser, since each one re-
ceiving the money or paper converts it at a rate of exchange
favorable to themselves. For example: If the holder of a
"Letter of Credit" drawn in English money (pounds sterling)
presents same at a bank in Germam r , it is customary to ask for
and receive not English money, but the equivalent of same in
German money (marks), and in converting same the German
banker will do so at a rate of exchange that will enable him to
make a profit on the transaction, and he does so by determining
the number of marks for which he can sell a pound sterling and
then pays a less number to the holder of the letter of credit
for his draft. This method of converting money is practiced
by banks and other financial institutions in this country, as well
as abroad. For instance, if a holder of a draft or check, payable
suy in London, offers same for sale or presents it to be cashed at
a bank in this country, the banker will first determine the rate at
which exchange on London can be sold, and will then offer
such lower rate as will afford a profit in the use of the draft or
check purchased by sending same to London for credit or reselling
same to a banker having a London account.
If every country of the world used money of exactly the
same denominations and value, even though called by different
names, the exchanging of debts or the remitting of money between
countries would be a very simple matter, just as simple as it is to
exchange debts or to remit money to places within the United
States. Owing to the different monetary and financial conditions,
nearly every country now has a monetary system differing in
some respects from that of other countries.
Murgraff in "International Exchange," says: "In its tangible
shape Foreign Exchange is an evidence of indebtedness represented
by a negotiable instrument, the drawer or maker constituting the
creditor, the drawee the debtor, and title thereto is vested in the
payee."
"The indebtedness underlying foreign bills of exchange is
created in various ways; it may be issued against the value of
merchandise exported, securities, or actual funds. The major
portion of foreign bills of exchange, however, are drawn against
exports of commodities."
Foreign exchange transactions are generally regarded as
being very complicated, but while there are some operations
requiring experience and patient study, the system as a whole
cannot be said to be any more intricate than many of the problems
dailv arising in local mercantile business.
CHAPTER II.
THE
MONETARY SYSTEMS OF THE WORLD.
A knowledge of the money of account or monetary systems
of the various countries of the world is one of the first things
necessary to a clear understanding of foreign exchange transac-
tions.
There are various forms of money employed by the several
nations of the world to effect their exchanges. These forms may.
however, be generally classified as follows:
Government notes.
Bank notes.
Certificates of deposit for gold or silver.
Gold coin or bars.
Full legal tender silver.
Subsidiary silver coins having limited legal tender.
Minor coins, i. e., base metal tokens.
The most important attribute of any form of money is its
legal tender power; that is, the power conferred by law to dis-
charge a debt payable in money. While all forms of money have
in some countries a greater or less legal tender power, gold alone
possesses an unlimited legal tender power throughout the world.
Paper Money.
Government notes are issued by comparatively few countries.
Bank notes are issued in nearly all civilized countries. Gold
and silver certificates represent actual deposits of coin or bullion,
and some issues of notes are similarly covered by metallic (gold
or silver) money. Government and bank notes are generally
issued to a greater or less degree on the credit of the government
or bank issuing them and are exchangeable for coin in accordance
with the measure of that credit.
Paper money, such as government and bank notes and
certificates, are, as a -rule, intended solely for circulation within
the country in which issued and are not legal tender outside of
the country from which they emanate. Of course, paper money is
often accepted in small amounts for its full face value in other
countries, but it is always optional with the creditor as to its
acceptance.
Gold.
By virtue of the commercial usage and the laws of the various
countries of the world, gold may be said to be the only international
money, and its purchasing power is practically the same throughout
the civilized world. But bear in mind, the value of gold coins
6 FOREIGN EXCHANGE TEXT BOOK
is not always as expressed on their face. In large international
transactions the weight of the same is regarded and not the
number of pieces; and their value depends upon their weight and
fineness. By fineness is meant the proportion of pure metal. '
[Nearly all coins contain alloy, or inferior metal, which is added
to increase their durability.
The value or price of the gold money of account of commercial
countries is determined by the weight and fineness of the metal
contained therein, which weight and fineness are established by
the mint laws of the country issuing the money. It is therefore
essential that the standard of weight by which the various moneys
of account are established shall be unvarying and have the highest
legal sanction; otherwise there would be no stability of values
and no such thing as accurate deductions of pars of exchange.
I Gold js the only commodity in the world the value of which is
established by law.
The price of gold in the United States cannot be affected
by an abundance or a scarcity of supply. Our mints will buy
it at the price established by law, and although there is no inter-
national agreement to maintain the price, the fact that gold is
accepted by the chief commercial countries at the one universal
measure of values operates to prevent any attempt to materially
change its value. The price of diamonds, which are more valuable
than gold, is affected by the supply or demand. Silver, used
extensively as money, fluctuates in price like any commodity,
the supply and demand governing its value.
Silver and Minor Coins
are also intended for domestic use, and when accepted in other
countries it is at their actual metal value rather than at their face
value. For illustration : The purchasing power of the silver dollar
of the United States within this country, is as great for small sums
as the gold dollar, but in the other countries it would be accepted
only for its bullion value.
Value of Foreign Money.
Once each three months the Director of the United States
mint proclaims by Circular the value of foreign coins in terms
of the money of account of the United States for the purpose of
establishing uniformity in the calculations of duties upon im-
portations of merchandise entered at the various custom houses.
The valuations of gold moneys of account rarely ever change,
because the weight and fineness of the gold coins are fixed by
the laws of the countries issuing same, but the values of silver
moneys of account fluctuate frequently for the reason the market
price for silver is constantly changing. The coins of silver-
standard countries are valued by their pure silver contents at
che average market price of silver for the three months preceding
the date of issuance of the circular by the Treasury Department at
Washington.
In expressing the value of paper money and gold, silver and
minor coins in use in the various countries named in this chapter,
we have estimated same based upon the actual value of the gold
unit, therefore, while the values as given for gold coins may be
considered nearly accurate, those for paper notes and silver and
minor coins are not, but are merely an estimate of their home
value, based upon the actual value of their gold coins, if any, and
are given for comparative purposes only.
EUROPEAN COUNTRIES.
Money of Great Britain and Colonies.
Foremost among all nations of the earth in the magnitude ol
its commerce, its vast colonial possessions and dependencies, and
consequently its importance as the chief financial center, Great
Britain furnishes the most interesting study of the money of the
world. Without exception the sovereign is the most universally
recognized coin, and is one of the largest of units of money.
Probably more foreign exchange is drawn in sterling here and in
other countries than in the moneys of all other countries combined.
This is due, however, to the fact that London is the financial
center of the world, and exchange on that city is generally
acceptable, if not preferred. For the same reason probably
ninety per cent of all letters of credit issued throughout the
world are drawn in English money.
The currency of the country is gold, with subsidiary coins
of silver and bronze, supplemented by a convertible currency.
Monetary Unit:
Sovereign or Pound =20 Shillings
12 Pence = 1 Shilling
4 Farthings = 1 Penny
Table:
4 farthings (expressed "far.")=l penny s. d. far.
12 pence (expressed "d.") =1 shilling 1=20=240=960
20 shillings (expressed "s.") =1 pound 1= 12= 48
21 shillings =1 guinea 1= 4
Table of Weights of Money.
24 grains =1 pennyweight
20 penny weight = 1 ounce
12 ounces =1 pound
8 FOREIGN EXCHANGE TEXT BOOK
The value of the gold sovereign or pound in the money
of the United States is $4.8665. The nominal value of the shilling
is 24k cents and of the penny 2*6 cents. The commercial value
of the pound sterling in the United States fluctuates according
to the demand for checks, drafts or bills of exchange on England
and the supply of such exchange in the market for sale. The
paper currency and the gold, silver and minor coins in use, with
the weight, fineness, etc., and approximate equivalent value in
United States money are as follows:
PAPER MONEY.
Bank of England Notes 5 ($24.33), 10 ($48.67), 20
($97.33), 50 ($243.33), 100 ($486.65), 200 ($973.30), 500
($2433.25), 1,000 ($4866.50).
Irish Bank Notes 1 ($4.87), 3 ($14.60), 5 ($24.33),
10 ($48.67), 20 ($97.33), 50 ($243.33), 100 ($486.65). These
Irish Bank Notes are issued by several banks of Ireland, and
\vhile they circulate freely in Ireland, are subject to discount of
-', , 1 penny per pound in London transactions between banks.
Scotch Bank Notes of denominations of 1, 5, 10, 20
and 100 circulate freely in Scotland, but are subject to discount
of 1 penny per pound in London between banks. There are
quite a large number of banks in England that issue notes, but
they are subject to charges for collection in London, their circula-
tion being purely local.
Prior to 1798, the double standard (gold and silver) pre-
vailed with the legal ratio (a) of gold to silver of 1 to 15.21.
In 1798 an act was passed prohibiting the coinage of silver, anc
although it was intended this measure should be provisional only
it soon became permanent, and England, to all intents ana
purposes, has had the single gold standard since 1798. The single
gold standard was definitely adopted by virtue of the act of
Parliament passed June 22, 1816. The present legal ratio between
gold and silver in the coinage of Great Britain is as 1 to 14.28781.
The English colonies of Malta, Gibraltar, the Cape of Good
Hope, Natal, the Australian colonies, and New Zealand have the
same monetary system as in England. In Canada, however, the
gold dollar of the United States is the monetary unit and the
pound sterling or sovereign is a legal tender at the rate of $4.866
per pound.
GOLD COINS. ^ Value in
Gross Weight Fineness Pure Gold , United States
Denominations (Grains) (Thousandths) (t. rains) Money
5 pounds 616.3723 916i 565.0079^ S24.3328
2 pounds 246.5489 ... 9161 226. 0031 -cy 9.7331
Sovereign 123.2744 '*C 916s 113. 0015 f- 4.8665
Half Sovereign 61.6372 9l6if 56.5007 2.4332
The 5 and 2 pound pieces consist of the Special Jubilee issue in 1887,
and the Special Coronation issue in 1902.
(a) See explanation of term "ratio.''
THE MONETARY SYSTEMS OF THE WORLD
SILVER COINS.
Gross Weight
Denominations (Grains)
Crown (5 Shil.) 436.3637
Half Crown (2J Shil.) 218. 1818
Florin (2 Shil.) 174.5455
Shilling 87.2727
Six Pence 43.6363
Four Pence 29.0909
Three Pence 21.8181
Two Pence 14.5454
Penny 7.2727
The four-penny piece has been withdrawn, but is still accepted as
three-pence. The silver one-penny and two-penny pieces are called
"Mourdy" money, being distributed as Royal Alms on Mourday Thurs-
day (the day preceding Good Friday). They are only souvenir coins and
are not in general circulation.
Value in
Fineness Pure Silver United States
tThousandths) (Grains) Money
925
403.6364
$1.2166
925
201.8182
.6083
925
161.4545
4866
925
80.7272
.2433
925
40.3636
. 1216
925
26.9090
.0811
925
20. 1818
.0608
925
13.4545
.0405
925
6.7272
.0202
Denominations
1 Penny
Halfpenny
Farthing
MINOR COINS.
Weight
(Grains) Composition
145.8333 ( 95% Copper
87. 5000 \ 4% Tin
43.7500 ( 1% Zinc
Legal Tender
i To the amount
J of 1 Shilling.
Value
$0.0202
.0101
.0050
The sovereign is not a legal tender when its weight is below
112.2921 troy grains pure gold. The Bank of England does not
re-issue a sovereign when it is below the weight of 122.5 troy
grains of gold and alloy. Any one presenting Bank of England
notes at the Bank of England can obtain gold coins of legal weight
in exchange for the same without question, delay or expense.
The British possessions where English gold is unlimited
legal- tender are as follows: Antigua, Ascension, Australasia,
Bahama Islands, British Guiana, Basutoland, Bechuanaland,
Canada, Channel Islands, Cape of Good Hope, Cypress, Dominica,
Fiji Islands, Gambia, Gold Coast, Grenada, Jamaica, Lagas, Malta,
Montserrat, Natal, New Guinea, Nevix, Sierre Leone, St. Lucia,
St. Helena, Tobago, Trinidad, Transvaal, Tristan Da Cunha,
Virgin Islands and Turks Islands.
Straits Settlements, Labuan and Hong Kong.
The monetary system established in Hong Kong and Labuan
by order in council regulating the currency February 2, 1895,
adopted the Mexican silver dollar (or peso) of the standard weight
and millesimal fineness of 417.74 grains, 902.7 thousandths fine,
to be the standard coins of the colonies of Hong Kong and Labuan.
The British dollar and Hong Kong dollar to be treated as equal
to the standard coin. The dollar is a legal tender for the pay-
ment of any amount. The subsidiary silver coins are limited to
the amount of two dollars in payments.
10
FOREIGN EXCHANGE TEXT BOOK
The Straits Settlements coinage order of 1903 authorized
the issuance of a silver dollar weighing 416 grains, 900 thousandths
fine. By proclamation of the governor of the Straits Settlements,
dated August 24th, 1904, the Mexican, British and Hong Kong
Dollars are demonetized and the new coin is the only legal tender
dollar in the Straits Settlements.
SILVER COINS, HONG KONG AND LABUAN.
Denominations
British Dollar
Half Dollar
Twenty Cents
Ten Cents
Five Cents
Weight Fineness Pure Silver
(Grains) (Thousandths) (Grains)
Value in
United states
Money
416.0000
900
374.4000 ]
Estimated
209.5200
83.8088
800
800
167.6160
67.0464
| quarterly by
[ director of
41.9044
800
33.5232
1 United States
20.9520
800
16.7616
Mint,
LATIN UNION COUNTRIES.
(France, Belgium, Switzerland, Greece and Italy.)
Money of France.
Unit: Franc=100 Centimes
Table of Weights of Money.
1 gram,or 15. 43234 troy grains
10 grams=l dekagram, or 154. 3235 troy grains
10 dekagrams=l hektogram, or 1543. 2348 troy grains
10 hectograms=l kilogram, or 15432. 3487 troy grains
The actual value of the French gold franc in the money of
the United States as declared by the director of the United
States mint is 19 and 3-10ths cents ($0.193). Francs are the
currency of the countries forming the Latin Union, a union
formed for the adoption of a uniform monetary system, comprising
France, Belgium, Switzerland, Greece, and Italy. France,
Belgium and Switzerland call their unit the "franc." Greece
calls its unit the "drachma", and Italy the "lire." The free
circulation of gold and silver coins issued by the countries named
was further ratified at the convention held at Paris, France,
November 15th, 1893. By this convention, ratifying the original
arrangement, the gold and silver coins issued by each of the above
mentioned countries were granted free and unlimited circulation
at face value in the countries forming the Latin Union. The
Italian silver coins of less than 5 lire were, however, excluded from
this arrangement, as were also copper coins and paper money,
which latter are subject to a slight discount when exchanged in a
country other than that of issue. Austrian and Russian gold
pieces are current in France. The gold 20 and 10 lei pieces of
THE MONETARY SYSTEMS OF THE WORLD 11
Roum&nia, the gold 10 and 20 lew pieces of Bulgaria, the gold
10 and 20 dinar pieces of Servia, and the gold 10 and 20 peseta
pieces of Spain, being of the same size, weight and fineness, pass
current in the Latin Union countries, but the silver coins do not.
Tourists should carefully examine silver change offered by
cabmen and others, and reject French coins below the value of
5 francs minted prior to 1863 and Spanish South American and
Papal silver coins regardless of denomination.
The commercial value of the franc in the United States
fluctuates according to the demand for checks, drafts and bills
of exchange and the supply of such exchange in the market for
sale.
The paper currency and the gold, silver and minor coins in
circulation in France, with the weight, fineness, etc., and their
approximate equivalents in United States money, are as follows:
PAPER MONEY.
BANK OF FRANCE NOTES: 50 Francs ($9.65), 100 Francs $19. 30),
500 Francs ($96.50), 1000 Francs ($193.00). The old black and white
notes, now withdrawn, are still redeemable and are of denominations
as follows: 5 Francs ($0.97), 20 Francs ($3.86), 25 Francs ($4.83), 200
Francs ($38.60), 500 Francs ($96.50).
GOLD COINS.
Gross Wfiijrh
Denomination
100 Francs
50 Francs
20 Francs
10 Francs
5 Francs
The 50 and 100 Franc pieces are seldom seen in general circulation.
The following gold coins embrace what bankers term "French
Gold:" The 10 and 20-franc pieces of France, Belgium, and
Switzerland, the 10 and 20-iire pieces of Italy, the 10 and 20-
drachma pieces of Greece, the 10 and 20-dinar pieces of Servia,
the 10 and 20-lei pieces of Roumania, the 10 and 20-franc
pieces of Tunis (Africa), the 20-peseta pieces of Spain, the 4 and
8-florin pieces of Austria, and the 7^-ruble pieces of Russia.
The Tunis gold pieces are subject to a slight discount in Paris.
The 40, 50 and 100-franc pieces of France, and the 100-franc
pieces of Monaco, are occasionally seen and are included in "French
Gold."
Gross Weight Fineness Pure Gold
(Grains) (Thousandths) (Grains)
Value in
United States
Money
497.8178
900
448.0360
19.2952
248.9089
900
224.0180
9.6476
99.5635
900
89.6072
3.8590
49.7817
900
44.8036
1.9295
24.8908
900
22.4018
.9647
SILVER COINS.
Denomination
5 Francs
2 Francs
1 Franc
50 Centimes
20 Centimes
Value in
Gross Weight
Fineness
Pure Silver
United States
(Grains)
(Thousandths'!
(Grains)
Money
385.8089
900
347.2280
$0.9647
154.3235
835
128.8601
.3859
77.1617
835
64.4300
. .1929
38.5808
835
32.2150
.0964
15.4323
835
12.8860
.0385
12 FOREIGN EXCHANGE TEXT BOOK
Silver coins of less than 5 francs, bearing date prior to 1863, are not
current and should be rejected. The 20-centime silver piece is seldom
seen in general circulation.
The silver coins of the value of 5 francs are known as "ecus" in
France and are receivable to any amount. The variety of ecus is very
large and those in circulation are: French, any date from Napoleon I;
Swiss, from Confederation; Italian, from Napoleon I; Sicilian, Sardinian,
Belgian and Greek. The following "ecus" were withdrawn: Ferdi-
nand II. Provisional Government (Italian) 1813, Roumanian and Spanish.
MINOR COINS.
Gross Weight
Denomination Composition (Grains) Legal Tender Value
25 Centimes (Nickel) Pure Nickel 108.0240 $0.0482
10 Centimes (Bronze) ] q5C/ { 154.3235 ] .0192
5 Centimes (Bronze) vo .fe ;. 77. 1617 I To the amount .0096
2 Centimes (Bronze) [ *$ - ] 30. 8647 f of 5 Francs. .0038
1 Centime (Bronze) J l /0 z ( 15. 4323 J .0019
The 5 centimes piece is called "sou;" the 10 centimes piece "2 sou."
The following is a list of countries owned or controlled by
France where French gold would be current. Most of these
countries have adopted the French monetary system: Algeria,
Comoro Islands, Andorra, Guadaloupe, Guiana, Indo-China,
Madagascar, Martinique, Obok, Reunion, Senegal and Tunis.
Money of Belgium.
Unit: Franc=100 Centimes.
(Table of weights of money, same as for France.)
The actual value of the gold franc of Belgium in the money
of the United States as declared by the director of the U. S.
mint is the same as the franc of France and Switzerland,
namely, 19 3-10 cents ($0.193). The commercial value of the
Belgian franc in the United States is generally a trifle less
than the French franc and fluctuates according to the demand
for checks, drafts and bills of exchange on Belgium, and the
supply of such exchange in the market for sale.
The paper currency and gold, silver and minor coins in cir-
culation with the weight, fineness, etc., of coins, and their
approximate equivalent value in the United States money are
as follows:
PAPER MONEY.
By Banque Nationale de Belgique, 20 Francs ($3.86), 50 Francs
($9.65), 100 Francs ($19.30), 500 Francs ($96.50), 1000 Francs ($193.00).
Gross Weight Fineness Pure Gold
(Grains) (Thousandths) (Grains)
Value in
United States
Money
497.8178
900
448.0360
$19.2952
248.9089
900
224.0180
9.6476
99.5635
900
89.6072
3.8590
49.7817
900
44.8036
1.9295
24.8908
900
22.4018
.9647
THE MONETARY SYSTEMS OF THE WORLD 13
GOLD COINS.
Gross Weil*
Denomination
100 Francs
50 Francs
20 Francs
10 Francs
5 Francs
The 50 and 100-Franc pieces are seldom seen in general circulation.
SILVER COINS.
Gross Weisr:
Denomination
5 Francs
2 Francs
1 Franc
50 Centimes
20 Centimes
Silver coins of less than 5 francs bearing date prior to 1863, are not
current and should be rejected. The 20-centime silver piece is seldom
seen in general circulation.
MINOR COINS.
Gross Weight
Denomination Composition (Grains) Legal Tender Vaii:e
Gross Weight Fineness Pure Silver
(Grains) (Thousandths) (Grains)
Value in
United States
Money
385.8089
900
347.2280
$0.9647
154.3235
835
128.8601
.2859
77. 1617
835
64.4300
.1929
38.5808
835
32.2150
.0964
15.4323
835
12.8860
.0285
5 Centimes (Nickel) f 25 % mckel 46. 2970 f of 5 Francs. 0096
2 Centimes (Copper) I 61 . 7294 | To the amount . 0038
1 Centime (Copper) J pu 30.86471 of 2 Francs. .0019
Money of Switzerland.
Unit: Franc=100 Centimes
(Table of weights of money, same as for France.)
The actual value of the gold franc of Switzerland in the
money of the United States, as declared by the Director of the
U. S. mint, is the same as the franc of France and Belgium,
namely: 19 3-10 cents (SO. 193). The commercial value of the
Swiss franc in the United States is generally a trifle less than
the French franc, and fluctuates according to the demand for
checks, drafts and bills of exchange on Switzerland and the
supply of such exchange in the market for sale.
The paper currency and gold, silver and minor coins, princi-
pally in circulation, with the weight, fineness, etc., of the coins,
and their approximate equivalent value in United States money,
are as follows:
PAPER MONEY.
Swiss notes are issued by the forty-two Banks of Emission, the
designs of which are the same for all banks, the text on the various notes
varying and being applicable only to the individual banks. The denom-
inations are: 50 Francs ($9.65), 100 Francs ($19.30), 1000 Francs
($193.00.
FOREIGN EXCHANGE TEXT BOOK
GOLD COINS.
Denomination
100 Francs
50 Francs
20 Francs
10 Francs
5 Francs
Gross Weight Fineness
(Grains! (Thousandths)
Pure Gold
(Grains)
497.8178
900
448.0360
248.9089
900
224.0180
99.5635
900
89.6072
49.7817
900
44.8036
24.8908
900
22.4018
Value in
United States
Monev
$19.2952
9.6476
3.8590
1.9295
.9647
SILVER COINS.
Gross Weight Fineness Pure Silver
(Grains) (Thousandths) (Grains)
Value in
United States
Money
385.8089
900
347.2280
$0.9647
154.3235
835
128.8601
.3859
77. 1617
835
64.4300
.1929
38.5808
835
32.2150
.0964
15.4323
835
12.8860
.0385
Denomination
5 Francs
2 Francs
1 Franc
50 Centimes
20 Centimes
Silver coins of less than 5 francs bearing date prior to 1863 are not
current and should be rejected. The 20-centime silver piece is seldom
seen. The 50-centime, 1-franc and the 2-franc pieces with the reclining
figure have been withdrawn.
Denomination
20 Centimes (Nickel)
10 Centimes (Nickel)
5 Centimes (Nickle)
2 Centimes (Bronze)
1 Centime (Bronze)
MINOR COINS.
Gross Weight
(Grains)
61.7294
46.2970
30.8647
Legal Tender
!To the amount
of 10 Francs.
38.5807 | To the amount .0038
23.14851 of 2 Francs. .0019
Value
. 0385
.0192
.0096
Composition
Pure Nickel
75% copper
25% nickel
95% copper
4% tin and
1% zinc
The 10 and 5-centime pieces of brass (plated) of old issue are with-
drawn.
For further information, see money of France, pages 10, 11 and 12.
Money of Italy.
Unit: Lira=100 Centesimi (singular, Centesimo).
(Table of weights of money, same as in France.)
The actual value of the gold lira (plural lire) in the money
of the United States as declared by the Director of United States
mint is 19 and 3-10 cents ($0.193). The commercial value of
the lire in the United States fluctuates according to the demand
for checks, drafts and bills of exchange on Italy and the supply
of such exchange in the market.
The paper currency and gold, silver and minor coins, princi-
pally in circulation, with the weight, fineness, etc., of the coins,
and the approximate equivalent value in United States money,
are as follows:
(PAPER MONEY.
Banca d' Italia notes. 50 Lire ($9.65). 100 Lire ($19.30), 500 Lire
($96.50), 1000 Lire ($193.00). The State notes, 5 Lire ($0.97), 10 Lire
($1.92), 25 Lire ($4.83), Banca di Napoli notes, of 50, 100, 500 and 1,000
Lire of same value as. Banca d'ltalia notes. Notes of Banca Nationale
THE MONETARY SYSTEMS OF THE WORLD
15
were withdrawn and replaced with those of Banca d'ltalia, the more
familiar ones being Lire 500, yellow; Lire 100, pink; Lire 50, white with
pale blue print on paper very flimsy. Notes of local banks not mentioned
above are accepted by bankers only for collection. Notes of various
denominations issued by the Banca Nationale, Banca Toscana, Banca
Toscana di Credito, were withdrawn June 30th, 1905, on account of these
Banks having consolidated with the Banca d'ltalia.
GOLD COINS.
Denomination
20 Lire
10 Lire
5 Lire
Gross Weight
(Grains)
Fineness
(Thousandths)
Pure Gold
(Grains)
99.5635
900
89.6072
49.7817
900
44.8036
24.8908
900
22.4018
The 5-lire gold piece is seldom seen.
SILVER COINS.
Value in
United States
Money
$3.8590
1.9295
.9647
Value in
Gross Weight Fineness Pure Silver United State*
Denomination (Grains) (Thousandths) (Grains) Money
5 Lire 385 8089 900 347.2280 $0.9647
2 Lire 154.3235 835 128.8601 .3859
1 Lira 77.1617 835 64.4300 .1929
50 Centesimi 38.5808 835 32.2150 .0964
20 Centesimi 15.4323 835 12.8860 0385
The 5-lire pieces of Sardinia and Sicili are also current at their face
value.
The regulations regarding silver coins are similar to those mentioned
under head of silver coins of France. The Papal silver coins are demonet-
ized, but the. 10 and 20-lire gold pieces have values slightly under their
face value. The Papal silver coins are only worth the actual value of
their silver, and the only ones at present appearing are those of Pius IX.
MINOR COINS.
Denomination
Composition
Gross Weight
(Grains)
Legal Tender
20 Centesimi (Nickel) / 75% copper \ R1 70QA / To amount |
25 Centesimi (Nickel) \ 25% nickel / * \ of 5 Lire j
10 Centesimi (Bronze)
5 Centesimi (Bronze)
2 Centesimi (Bronze)
1 Centesimo (Bronze)
96% copper
4% tin
154.3235 |
77.1617 [ To amount of
30.8647 { each piece.
15.4323
Value
1.0385
.0483
.0192
.0096
.0038
.0019
Money of Bulgaria.
Unit: Lew (Lev)=100 Stotinki
(Table of weights of money, same as France.)
Bulgaria has the double standard. The present monetary
system was established in 1880. The country has no mint; its
silver pieces being coined in other countries.
The actual value of the gold lew or lev, in the money of the
United States, as declared by the Director of the United States
mint is 19 and 3-10 cents ($0.193). Exchange on cities of
Bulgaria is rarely, if ever, drawn in Bulgarian money, it being
customary to draw such exchange in French, English or German
money "at exchange" on Paris, London or Berlin; therefore,
the lew has no commercial value as exchange in the United
16 FOREIGN EXCHANGE TEXT BOOK
States,, the cost of remittance being governed by the price of
exchange on the other countries mentioned. The paper currency
and gold, silver and minor coins in circulation, with their weight,
fineness, etc., and their approximate equivalent value in United
States money, are as follows:
PAPER MONEY.
Xotes issued by the Banque Xationale Bulgare. Gold notes marked
"Zuamo," 5 Lews ($0.97), 10 Lews ($1.93), 20 Lews ($3.86,. 50 Lews
($9.65), 100 Lews ($19.30); Silver Xotes marked "Epedpo," 5 Lews
($0.97), 10 Lews ($1.93), 50 Lews ($9.65). The 50-Lews gold notes are
being withdrawn from circulation to be re-issued again with the word
"Epedpo" (silver) printed over the world "Zuamo" (gold).
GOLD COINS.
The present monetary law provides for the coinage of 10
and 0-lew gold pieces, but up to the present time none have
been coined. In the meantime foreign gold coins have been
officially rated as follows:
English Sovereign at Lews 25 . 25
German 20-Mark pieces at Lews 24. 50
French 20-Franc pieces at Lews 20. 00
Russian Old Imperial at Lews 20. 50
Turkish Pound at Lews 22. 70
Austrian Ducat at Lews 1 1 . 60
The weight, fineness, etc. of the new 20-lew piece will be
as follows:
Value in
Gross Weight Fineness Pure Gold United States
Denomination (Grains) (Thousandths) (Grains) Money
20 Lews (Alexander) 99.5635 900 89.6071 $3.8590
SILVER COINS.
Gross Wei or]
Denomination
5 Lews
2 Lews
1 Lew
\ Lew
MINOR COINS.
Gross Weight
Denomination Composition (Grains) Legal Tender Value
20 Stotinki ] f 77.1617 ] $0.0385
10 Stotinki x . , . 61.7294 f\ o dita)
5 Stotinki 46.2970 f
2 \ Stotinki J ( 30.8647 J .0048
This country has practically the same monetary system afe
France and other Latin Union countries.
Gross Weight Fineness Pure Silver
(Grains) (Thousandths) (Grains)
Value in
United States
Money
385.8089
900
347.2280
$0.9648
154.3235
835
128.8601
.3858
77.1617
835
64.4300
.1929
38.5808
835
32.2150
. 0965
THE MONETARY SYSTEMS OF THE WORLD
17
Money of Greece.
Unit: Drachma=100 Lepta (singular, Lepton)
(Table of weights of money, same as France.)
The actual value of the gold drachma in the money of the
United States, as declared by the Director of the United States
mint, is 19 and 3-10ths cents (SO. 193). Exchange on cities in
Greece is rarely, if ever, drawn in the money of Greece, but instead
is issued in English, French or German money, and for that reason
the drachma has no commercial value in the United States, the
cost of remittance to Greece being governed by the price of
exchange on England, France or Germany.
The paper currency and gold, silver and minor coins in
circulation and the weight, fineness, etc., of coins, and their
approximate equivalents in United States money, are as follows :
PAPER MONEY.
Bank notes are issued in various denominations of drachma
bv banks.
Denomination
20 Drachma
10 Drachma
5 Drachma
GOLD COINS.
Fineness Pure Gold
(Thousandths) (Grains)
99.5635 900 89.6072
49.7817 900 44.8036
24.8908 900 22.4018
Gross Weight
(Grains)
Value in
United States
Money
$3:859C
1.9295
.9647
SILVER COINS.
Denomination
5 Drachma
2 Drachma
1 Drachma
50 Lepta
20 Lepta
For further information concerning silver coins, see money of France,
page 10.
The gold and silver coins of Greece are similar to those issued in
France and other countries comprising the Latin Union.
Gross Weight Fineness Pure Silver
(Grains) (Thousandths) (Grains)
Value in
United States
Money
385.8089
900
347.2280
$0.9647
154.3235
835
128.8601
.3859
77.1617
835
64.4300
.1929
38.5808
835
32.2150
.0964
15.4323
835
12.8860
.0385
MINOR COINS.
Denomination
20 Lepta (Nickel)
10 Lepta (Nickel)
5 Lepta (Nickel)
2 Lepta (Bronze)
1 Lepton (Bronze)
Composition
1 75% copper
j 25% nickel
95% copper
4% tin
1% zinc
Legal Tender
Gross Weight
(Grains)
61.7294]
46.2970 |
30.8647 I To amount of
30.8647 5 Drachma
15.4323 I
Value
$0.0385
.0192
.0096
.0038
.0019
18 FOREIGN EXCHANGE TEXT BOOK
Money of Germany.
Unit: Reichsmark or Mark=100 Pfennigs
(Table of weights of money, same as France.)
The actual value of the gold German mark in the money
of the United States as declared by the Director of the United
States mint, is 23 8-10ths cents ($0.238). The commercial value
of the mark in the United States fluctuates according to the
demand for checks, drafts or bills of exchange on Germany, and
the supply of such exchange in the market for sale.
The paper currency and gold, silver and minor coins in
circulation with the weight, fineness, etc., and the approximate
equivalent value in United States money, are as follows:
PAPER MONEY.
5-Marks ($1.19), 20 Marks ($4.76), 50 Marks $(11.90), 100 .Marks
($23.80), 1,000 Marks ($238.00).
The following bank notes circulate generally throughout the empire:
Badische Bank, 100 marks; Baye.rische Bank, 100 marks; Sachsische
Bank, 100 marks; Wtirthemberische Noten Bank, 100 marks.
Notes of the following banks are withdrawn from circulation, the
closing day being December 31, 1905: Bank fur Sud Deutschland,
Darmstadt, and Frankfurter Bank. There are a few notes of private
banks still extant, but they are considered worthless.
GOLD COINS.
Value in
Gross Weight Fineness Pure Gold United States
Denomination (Grains) (Thousandths) (Grams:) Money
Double Crown
(20 Marks) 122.9177 900 110.6260 $4.7642
Crown (10 Marks) 61.4588 900 55.3130 2.3821
A 5-mark piece was formerly coined, but is now out of circulation.
Light gold pieces are redeemed at par where the abrasion is the result of
circulation only.
SILVER COINS.
Orn<;s \V*>io-
Denomination
5 Marks
2 Marks
1 Mark
50 Pfennigs
A 3-mark (German thaler) piece is also in circulation, its value in
U. S. money being about 72 cents. A 20-pfennig piece was formerly
coined, but is now withdrawn.
Silver "thalers" issued by any of the German Confederate States,
comprising the German Empire, are current, no matter what their date
of issue may be, although they are now being withdrawn from circulation.
Xo date has as yet been fixed when they will have become finally demon-
etized. Excluded from circulation are only the Austrian vereinthalers.
They are entirely withdrawn and have value only to collectors of old
coins.
Gross Weight Fineness Pure Silver
(Grains) (Thousandths) (Grains)
Value in
Uniteil States
Money
428.6765
900
385.8089
$1.1910
171.4706
900
154.3235
.4764
85.7353
900
77.1617
.2382
42.8676
900
38.5808
.1191
THE MONETARY SYSTEMS OF THE WORLD
19
Gross Weight
Composition
(Grains)
Legal Tender
Value
/ 75% copper
61.7294 1
SO. 0238
1 25% nickel
f 95% copper
J AG7 -fin
38.5808
} 51. 4406 !
To amount of
1 Mark.
.0119
.0047
1 * 70 " n
30.8647
.0023
l%zinc
J J
MINOR COINS.
Denomination
10 Pfennigs (Nickel)
5 Pfennigs (Nickel)
2 Pfennigs (Bronze)
1 Pfennig (Bronze)
The old 20-pfennig piece of nickel has been withdrawn.
Money of the Netherlands (Holland).
Unit: Florin or Gulden=100 Cents
(Table of weights of money, same as France.)
The money of account of Holland is the florin, gulden or
guilder (different translations of the same name), of 100 cents.
The actual value of the gold florin in the money of the United
States as declared by the Director of the United States mint is
40 and 2-10 cents ($0.402). The commercial value of the
florin in the United States fluctuates according to the demand
for checks, drafts and bills of exchange on Holland and the supply
of such exchange in the market for sale. The money in circulation
consists of paper currency, and gold, silver and copper coins, and
the weight, fineness, etc., of the latter, and the approximate
equivalent value in the money of the United States, are as follows:
PAPER MONEY.
25 Gulden ($10.05), 40 Gulden ($16.08), 60 Gulden ($24.12), 100
Gulden ($40.20), 200 Gulden ($80.40), 300 Gulden ($120.6Q), 1000
Gulden ($402.00), issued by the Netherlandsche Bank. State Bank notes
of 50 and 10 Gulden (value $20.10 and $4.02 respectively) , payable by the
Netherlandsche Bank, are also issued.
GOLD COINS.
Gross Weight
(Grains)
Fineness
(Thousandths)
900
Pure Gold
(Grains)
93.3348
Value in
United States
Money
$4.0195
Denomination
10-Gulden 103.7054
The old 10-florin pieces are subject to discount. Only the 10-gulden
or florin of William III and Queen Wilhelmine are now current. The
ratio in coinage of gold to silver is 1 to 15. 625.
SILVER COINS.
Denomination
Gross Weight Fineness Pure Silver
(Grains) (Thousandths) (Grains)
Rixdaler
(2| Gulden)
Gulden
385.8089
154.3235
945
945
364.5894
145.8357
Half-Gulden
77.1617
945
72.9178
Quarter-Gulden
(25 cents)
Tenth-Gulden
55.1706
640
35.3092
(10 cents)
Twentieth Gulden
21.6052
640
13.8273
(5 cents)
10.5711
640
6.7655
Value in
United Htates
Money
$1.0049
.4019
.2009
.1005
.0401
.0201
20 FOREIGN EXCHANGE TEXT BOOK
Guilders issued before 1840 and the 50-cent piece of William I are
withdrawn from circulation. No 2J gulden, William III, pieces have
been issued since 1874. Trade coins known as the ducat and double
ducat are in circulation, but their coinage has been discontinued.
MINOR COINS.
Gross Weight
Denomination Composition (Grains) Legal Tender Value
2J cents [ 95% copper 1 61.7294],, $0.0100
1 cent \ 4% tin and ^ 38.5807 1 ^ e T a , m< .0040
i cent [ 1% zinc j 19. 2903 J .0020
The monetary system of the Dutch colonies is the same as
that of the mother country.
Money of Norway, Sweden and Denmark (Scandinavian Union)
Unit: Krone or Crown=100 Ore
(Table of weights of money, same as France.)
The Scandinavan Monetary Union embraces Norway, Sweden
and Denmark, and the value of the gold krone or crown in the
money of the United States, as declared by the director of the
United States mint, is 26 and 8-10th cents' ($0.268). The com-
mercial value of the krone (plural kronor) in the United States
fluctuates according to the demand for checks, drafts and bills of
exchange on these countries, and the supply of such exchange in the
market for sale. Silver coins are legal tender as follows: The
2-kronor and 1-krone pieces to the amount of 20 kronor; the 50,
40, 25 and 10 ore pieces to the amount of 5 kronor. The money
in circulation consists of paper currency and gold, silver and
bronze coins, the weight, fineness, etc., of coins and the equivalent
value in the money of the United States, being as follows:
PAPER MONEY.
Since January 1st, 1904, notes in circulation are issued only oy the
Norges Bank in Norway,the Sveriges Riksbank in Sweden, and the Danskc
National Bank of Denmark, in denominations as follows: 5 Kronor
($1.34), 10 Kronor ($2.68), 50 Kronor ($13.40), 100 Kronor ($26.80)
500 Kronor ($134.00), 1000 Kronor ($268.00).
GOLD COINS.
Denomination
20 Crowns
10 Crowns
5 Crowns
Denomination
2 Crowns
1 Crown
50 Ore
40 Ore
25 Ore
10 Ore
Gross Weight
( Grains)
Fineness
(Thousandths)
Pure Gold
(Grains)
Value in
United States
Money
138.2831
900
124.4548
$5.3598
69.1415
900
62.2274
2.6799
34.5707
900
31.1137
1.3389
SILVER COINS.
Value in
Gross Weight
Fineness
Pure Silver
United States
(Grains)
(Thousandths)
(Grains)
Money
231.4853
800
185.1882
$0.5359
115.7426
800
92.5941
.2679
77.1617
600
46.2970
.1339
61.7294
600
37.0376
1070
37.3463
600
22.4077
.0669
22.3769
400
8.9507
.0267
THE MONETARY SYSTEMS OF THE WORLD 21
MINOR COINS (Bronze).
Gross Weight
Denomination Composition (Grains) Legal Tender Value
50re (95%copper ) 123.4588 ) Tth $0.0133
2 Ore
1 Ore
(95%copper ) 123.4588 ) Tth $0.0133
4% tin and ^ 61 . 7294 } 1 f t ,i? O " nt .0053
( 1% zinc. j 30. 8647 J 0026
Money of Austria-Hungary.
Unit: Krone (Korona) or Crown=100 Heller (farthings).
(Table of weights of money, same as France.)
The present unit system dates from 1892. The former unit
was the florin (or guilder) of 100 kreutzers. During the change
from the old to the new system the old coins are accepted on the
basis of one florin for 2 crowns; 1 kreutzer for 2 hellers.
The actual value of the gold krone (korona) (plural kronen)
in the money of the United States, as declared by the director of
the United States mint is 20 and 3-10 cents * ($0.203). The
commercial value of the krone or crown in the United States
fluctuates according to the demand for checks, drafts and bills
of exchange on these countries and the supply of such exchange
in the market for sale. The money in circulation consists of
paper currency, gold, silver and nickel coins. The weight,
fineness, etc., of coins and the approximate value in the money
of the United States, are as follows:
PAPER MONEY.
5 Kronen ($1.02), 10 Kronen ($2.03), 50 Kronen ($10.15), 100
Kronen ($20.30) 1000 Kronen ($203.00).
The old gulden or florin currency of which a considerable amount
is still in circulation -with the date of final redemption is as follows:
5 Florins (equal to 10 Kronen) August 31st, 1907.
10 Florins (equal to 20 Kronen) August 31st, 1909.
50 Florins (equal to 100 Kronen) August 31st, 1907, (a few left).
100 Florins (equal to 200 Kronen) October 31st, 1910.
1000 Florins (equal to 2000 Kronen) December 31st, 1910.
After these dates they will be valueless.
The new crown or kronen notes are of colors as follows: 10 crowns,
mauve; 20 crowns, red; 50 crowns, blue; 100 crowns, olive green;
1000 crowns, olive green.
Austrian paper money remains in circulation provisionally. The
paper florin is, like the silver florin, worth 2 crowns.
GOLD COINSL-
Value in
United States
Money
$4.0525
2.0262
9.1515
2.2878
The 8 florin and 4 florin gold trade coins although Austrian are
treated as "French Gold" but are to be no longer coined (see money of
France, page 10). The ducat is a gold coin corresponding in size to the
Denomination
20 Crown piece
10 Crown piece
4 Ducats
1 Ducat
Gross Weight
(Grams)
104.5552
52.2776
215.4912
53.8728
Fineness
(Thousandths)
900
900
986 1-9
986 1-9
Pure Gold
(Grains)
94.0997
47.0498
212.4983
53.1245
22 FOREIGN EXCHANGE TEXT BOOK
10 kronen piece. There are also 2 ducat and 4 ducat pieces. The
4 ducat piece is a very large, thin coin, about as large as a twenty dollar
United States gold piece, but only half as thick. Those issued in 1903 are
called "Munzducaten;" those of previous years "Randducaten." The
value of the ducat is about $2.30 United States money. The 4 ducat
piece is worth about $9.15, or four times the value of the single ducat,
plus 2 kronen 10 heller for a special minting charge. The ducat gold
pieces are not legal tender, but are a commercial coin, and the 4 ducat
piece is only coined to order at a special minting charge of 2 kronen 10
heller extra. The deduction for light weight gold is l-7th the total
value for every 1-2 gramme light. The ratio of gold to subsidary
silver in the new system is 1 to 13.69.
SILVER COINS.
Value in
United States
Money
$1.0131
.2026
.8104
.4052
.1013
.0810
.0405
The 20 and 10 kreutzer pieces are now accepted only for bullion value.
The Maria-Theresa Levantine silver Thaler pieces continue to be
stamped as trade coins, with the old weight and fineness, and are worth
about 97 cents in United States money. Silver coins are unlimited legal
tender to the State at their nominal value; to private parties to the
amount of 50 crowns.
The introduction of coins of the new system will be made by degrees,
in the course of several years, during which time the coins of the old
silver standard as well as the state notes will remain current. The coins of
the new system, multiplied by two, are the same value ;is the pieces of
the old silver and paper currency, 1 silver or paper florin, for instance,
being equal to 2 crowns, and 1 kreutzer to 2 hellers. The vj>lue of the
new crown is $0.2026 against $0.4052, the value of the old florin.
The 5-crown silver pieces are coined exclusively for account of the
State. This coin is unlimited legal tender to the State, at its nominal
value; in private business transactions, to 250 crowns.
A decree was issued January 28. 1901, ordering the retirement of the
2 and J florin pieces, and they are now out of circulation.
MINOR COINS.
Gross Weight
Denomination Composition (Grains) Legal Tender Value
20 Hellers (Nickel) \.-o . , , j 61 . 7294 \ To amount of | $0.0405
10 Hellers (Nickel) { l } 46.2970] 10 Crowns. I .0202
Gross Weight
Fineness
Pure Silver
Denomination
(Grains) (Thousandths)
(Grains)
5 Crown piece
370.3765
900
333.3388
1 Crown piece
77.1617
835
64.4300
2 Florins
381.0462
900
342.9416
1 Florin
190 5231
900
171.4708
\ Florin
82.4381
520
42.8678
20 Kreutzers
41. 1529
500
20.5764
10 Kreutzers
25.7205
400
10.2882
t c PP er , 1 51 . 441 1 n Public account
$*] 25. 7205
Money of Russia.
Unit: Ruble=100 Kopecks (Copecks)
The actual value of the gold ruble in the money of the
United States as declared by the Director of the United States
mint, is 51 and 5-10 cents (SO. 515). The commercial value
of the ruble in the United States fluctuates according to the
demand for checks, drafts and bills of exchange on Russia, and
THE MONETARY SYSTEMS OF THE WORLD
23
the supply of such exchange in the market for sale. The money
in circulation consists of paper currency and gold, silver and
copper coins. The denominations, weight, fineness, etc., of the
coins, and the approximate equivalent value in the money of the
United States, are as follows:
PAPER MONEY
Ruble, color, yellow ($0.52); 3 Ruble, color, green back ($1.55); 5
Rubles, color, blue ($2.58); 10 Rubles, color, red ($5.15); 25 Rubles,
color, divers ($12.88); 50 Rubles, series 1899, ($25.75); 100 Rubles,
series 1898, with portrait of Catherine ($51.50); 500 Rubles, series 1898
($257.50).
The notes of 100 rubles, rainbow colored, have been withdrawn
since January 1, 1903, and are reimburseable on written application at
Banque de L'Evat. St. Petersburg.
The 5 and 10 ruble notes, this shape are withdrawn.
The only 5 and 10 ruble notes now current are those
of this shape
Care must be taken in handling Russian notes, as some excellent
forgeries t?re extant, especially those of the 100 ruble notes mentioned
above, which forgeries were considered to be equal to the original notes.
Until recently the disparity between the value of the gold ruble and the
paper ruble was considerable, but at present the gold and paper currency
have equal value. There are no government notes. The only notes in
circulation are issued by the Imperial Bank of Russia, but they are
guaranteed by the treasury.
GOLD COINS.
OLD ISSUE: Alexander III, 5 rubles ($3.87); 10 rubles
($7.73). These coins are worth \\ times their face value, viz.:
7i and 15 rubles respectively. There is also a much older
gold coin (Imperale) valued at about 10 rubles, which must be
purchased as gold, as it is now withdrawn from circulation.
GOLD COINS (Present Issue.)
Denomination
15 Rubles
(Imperial)
10 Rubles
1\ Rubles
(Half Imperial)
5 Rubles
Gross Weight
(Grains)
199.1376
132.7584
99.5688
66.3792
Fineness
(Thousandths)
900
900
900
900
Pure Gold
(Grains)
179.2239
119.4826
89.6119
59.7413
Value in
United States
Money
$7.7185
5.1456
3.8592
2.5728
Gold coin of full weight is legal tender for a payment of any amount.
SILVER COINS.
Denomination
1 Ruble
50 Copecks
25 Copecks
20 Copecks
15 Copecks
10 Copecks
5 Copecks
Gross Weight Fineness
(Grains) (Thousandths)
308.5811 900
Value in
Pure Silver United States
(Grains) Money
277.7230 $0.5145
154.2905
900
138.
8615
.2573
77.1452
900
69.
4307
.1286
55.5446
500
27.
7723
.1029
41.6584
500
20
8292
.0771
27.7723
500
13
8861
.0514
13.8861
500
6,
9430
.0257
24 FOREIGN EXCHANGE TEXT BOOK
The silver ruble of Catharine II is occasionally seen and is still
receivable by the State Treasury.
The 1 ruble, 50-copeck and 25-copeck pieces are legal tender among
private persons to an amount not exceeding 25 rubles, and the other
silver coins to the amount of 3 rubles. Government treasuries receive
any of these silver coins to any amount, in all payments except for cus-
toms duties, the amount received for latter being governed by custom-
house regulations.
MINOR COINS.
Gross Weight
Denomination Composition (Grains) Legal Tender Value
5 Copecks Copper 252.78951 $0.0257
3 Copecks Copper 151.6737 .0154
2 Copecks Copper 101 . 1158 [ To the amount . 0102
1 Copeck Copper 50 5579 f of 3 Rubles. .0051
i Copeck Copper 25. 2789 | .0025
j Copeck Copper 12.6394J .0012
The ratio of gold to silver in present coinage is 1 to 23-2438.
Money of Finland.
Unit: Finmark=100 Penni
{Table of weights of money, same as France.)
Finland has a single gold standard. Previous to 1886
Finland had the same monetary system as Russia, but the Credit
Bills in the latter country did not circulate in Finland. By the
law of August 9, 1877, the present monetary system was established
with the "markkaa" (equal to the franc) as a monetary unit.
The actual value of the gold finmark or markkaa in the
money of the United States as declared by the Director of the
United States mint, is 19 and 3-10 cents (SO. 193). The
commercial value of the finmark in the United States fluctuates
according to the demand for checks, drafts and bills of exchange
on Finland and the supply of such exchange in the market for
sale. The money in circulation in Finland consists of paper
currency and gold, silver and bronze coins. The denominations,
weight, fineness, etc., and the approximate equivalent value in
United States money, are as follows:
PAPER MONEY.
5 Finmarks ($0.97), 10 Finmarks ($1.93), 20 Finmarks ($3.86),
50 Finmarks ($9.65), 100 Finmarks ($19.30), 500 Finmarks ($96.50)^
GOLD COINS.
Value in
Gross Weight Fineness Pure Gold United States
Denomination (Grains) (Thousandths) (Grains! Money
20 Markkaa 99.5695 900 89.6126 $-3.8592
10 Markkaa 49.7847 900 44.3063 1.9296
THE MONETARY SYSTEMS OF THE WORLD
25
SILVER COINS.
Denomination
2 Markkaa
1 Markkaa
50 Penni
25 Penni
Denomination
10 Penni
5 Penni
1 Penni
Value in
Gross Weight
Fineness
Pure Silver
United States
(Grains)
(Thousandths)
(Grains)
Money
159.9562
868
138.8421
$0.3859
79.9781
868
69.4210
.1929
39.3370
750
29.5028
.0965
19.6685
750
14.7514
.0483
MINOR COINS.
Gross Weight
Composition (Grains) Legal Tender
95% copper
4% tin and
1% zinc
] 197.4847 }
98. 7423 j-
J 19. 7484 J
To amount of
1 Markkaa.
Value
10.0192
.0096
.0019
Money of Portugal.
Unit: Milreis=1000 Reis
Table of Portuguese Money.
1 Milreis =2i Crusados=25 Reals=1000 Reis
1 Crusado =10 Reals= 400 Reis
1 Real = 40 Reis
(Table of weights of money, same as France.)
The present monetary system of Portugal was established by
the law of July 29th, 1854, with the milreis of 1000 reis as mone-
tary unit. One thousand milreis, or 1.000,000 reis, is called a
conto.
The actual value of the gold milreis in the money of the
United States as declared by the Director of the United States
mint, is SI. 08. Since exchange on places in Portugal is rarely,
if ever, drawn in the money of that country, but instead is drawn
in English, French or German money, the milreis has no com-
mercial value in the United States and the cost of remittances
to that country depends upon the price of exchange on the three
countries named. In that country it is the practice to count
large sums in contos or thousands of milreis, thus: 100 contos
equal 100,000 milreis.
The currency of the country consists almost exclusively
of silver and inconvertible paper. The paper currency and gold,
silver and minor coins, with the weight, fineness, etc., of the
coins and the approximate equivalent value in United States
money, are as follows:
PAPER MONEY.
100SOOO reis, or 100 milreis ($108.04), 50$000 reis, or 50 milreis
($54.02). 20SOOO reis, or 20 milreis ($21.61), 10$000 reis, or 10 milreis
($10.80). 5SOOO reis, or 5 milreis ($5.40), 2$500 reis, or 2 milreis ($2.70).
26
FOREIGN EXCHANGE TEXT BOOK
GOLD COINS.
Gross Weight
(Grains)
Fineness
(Thousandths)
Pure Gold
(Grains)
Value in
United States
Money
273.6928
916
250.8851
$10.8046
136.8464
916f
125.442<,
5.4023
54.7385
916
50.1770
2.1609
27.3692
916
25.0885
1.0804
SILVER COINS.
Gross Weight Fineness
(Grains) (Thousandths)
Pure Silver
(Grains)
Value in
United States
Money
385.8089
192.9044
77.1617
38.5808
19.2904
916
916
916^
916f
916|
353.6581
176.8290
70.7316
35.3658
17.6829
$1.0804
.5402
.2402
.1080
.0540
silver pieces
have been
withdrawn.
Silver is legal
Denomination
Crown
Half Crown
(5 Milreis)
Fifth Crown
(2 Milreis)
Tenth Crown
(1 Milreis)
Denomination
1000 Reis
500 Reis
200 Reis
100 Reis
50 Reis
tender only to the amount of 5 milreis, but by Lisbon commercial usage
one-third of all payments is accepted in that money.
MINOR COINS.
Gross Weight
Denomination
Composition (Grains)
Legal Tender Value
100 Reis (Nickel)
j 75% copper and 61.7294
$0. 1080
50 Reis (Nickel)
20 Reis (Bronze)
1 25% nickel 38.5807
(96% copper 185.1882
To the amount
of inn Roi<; - 021 <>
10 Reis (Bronze)
\ 2% tin and 92.5941
- 1S - .0108
5 Reis (Bronze)
( 2% zinc 46.2970
.0054
Money of Portuguese India.
The decree of December 22, 1895, published June 28, 1902,
provided for the coinage and issue of the following minor coins:
Denomination
Half tanga
Fourth tanga
Eighth tanga
Twelfth tanga
Gross Weight
(Grains)
200.6204 1
96.4521 i
50.1551 f
33.3339 j
Composition
c PP er > 2 % tin and 2 % zinc -
Money of Roumania.
Unit: Lei=100 Bani
(Table of weights of money, same as France.)
The laws of April 14, 1867, and April 30, 1879, introduced
the system of the Latin Union into Roumania, the franc being
called the lei, and the centime the bani; but in 1890 a measure
was passed by the Roumanian Chamber abrogating the double
standard and substituting fcr it the single gold standard, with
the subsidiary silver coinage having a paying power to the amount
of 50 lei or francs.
THE MONETARY SYSTEMS OF THE WORLD 27
The actual value of the gold lei in the money of the United
States, as declared by the Director of the United States mint,
is 19 and 3-10 cents ($0.193). The commercial value of the lei
in the United States fluctuates according to the demand for
checks and drafts on Roumania, and the supply of such exchange
in the market.
The paper currency and gold, silver and minor coins in
circulation with the we'ght, fineness, etc., of coins, and the
approximate equivalent value in United States money, are as
follows:
PAPER MONEY.
Notes issued by the Banque Nationale de Roumanie, 20 Lei ($3.86),
100 Lei ($19.30), 1000 Lei ($193.00). These NOTES are payable on
demand by said bank in the following gold:
In 20-Mark (German) pieces at ... 24 Lei, 70 Bani each.
In Sovereigns (Eng.) at 25 Lei, 22 Bani each.
In Ducats (Aus.-Hung.) at 11 Lei, 75 Bani each.
In Napoleons (French) at 20 Lei, 00 Bani each.
In Imperials (Russian) at 20 Lei, 60 Bani each.
The 5 and 10 lei notes issued by the Government have been with-
drawn and are now valueless. The discount on Roumanian notes in
Paris is about %.
GOLD COINS.
Value in
Gross Weight Fineness Pure Gold United States
Denomination (Grains) (Thousandths) (Grains) Money
20 Leis 99.5635 900 89.6072 $3.8590
10 Leis 49.7817 900 44.8036 1.9295
5 Leis 24.8908 900 22.4018 .9647
SILVER COINS.
Value in
Gross Weight Fineness Pure Silver United States
Denomination (Grains) (Thousandths) (Grains) Money
5 Leis 385.8089 900 347.2280 $0.9647
2 Leis 154.3235 835 128.8601 .3858
1 Lei 77.1617 835 64.4300 .1929
J Lei 38.5808 835 32.2150 .0965
These silver coins do not circulate in Latin Union countries but are
negotiable in Paris at a discount of about 5%.
MINOR COINS.
Gross Weight
Denomination Composition (Grains) Legal Tender Value
10 Bani (95<7coDDer 154.3235] $0.0192
5 Bani J 9 %& f?Z% 77 . 1 6 1 7 [ To the amount . 0096
1 Bani
JDEUll J *m A; J i i . AUi i i i \j nuc BUlVUUli . UUU
Bani 1 *#2 30.8647 f of 5 Lei. .0038
Bani 1/0! 15. 4323 J .0019
There are also 5, 10 and 20-bani pieces of nickel, the weight, fineness,
etc., of which we have no data.
28 FOREIGN EXCHANGE TEXT BOOK
Money of Servia.
Unit: Dinar=100 Paras
(Table of weights of money, same 'as France.)
Servia adopted the decimal system of coinage agreed upon
at Paris in 1865, between France, Italy and Switzerland. The
unit of value is the dinar of 100 paras. The actual currency of
the country' is inconvertible paper. Gold is usually at a premium,
the average amount of such premium during year 1903 being
1 per cent.
The actual value of the gold dinar in the money of the United
States is 19 and 3-10 cents ($0.193). The dinar has no com-
mercial value as exchange in the United States, since exchange
on that country is usually drawn in French, English, or German
money, payable at Paris, London or Berlin respectively.
The paper currency and gold, silver and minor coins in
circulation with the weight, fineness, etc., of coins and the ap-
proximate equivalent value in the money of the United States,
are as follows:
PAPER MONEY.
Notes issued by the National Bank of Servia as follows: 50 Dinar
($9.65), 100 Dinar ($19.30), payable in gold, and 10 Dinar ($1.93)
payable in silver.
GOLD COINS.
Value in
Gross Weight Fineness Pure Gold United States
(Grains) (Thousandths) (Grains)
Denomination
20 Dinars
( Milan d'Or.)
10 Dinars
99.5635
49.7817
900
900
89.6071
44.8035
Money
$3.8590
1.9295
SILVER COINS.
Denomination
5 Dinars
2 Dinars
1 Dinar
50 Paras
Gross Weight
(Grains)
385.8089
154.3235
77.1617
38.5808
Fineness
(Thousandths)
900
835
835
835
Pure Silver
(Grains)
347.2280
128.8601
64.4300
32.2150
Value in
United States
Money
$0.9647
.3859
.1929
.0964
500 dinars constitute a legal tender for 5 dinar pieces and
50 dinars for the rest of the silver coinage?
MINOR COINS.
Denomination Composition
20 Paras (Nickel)
10 Paras (Nickel)
5 Paras (Nickel)
10 Paras (Bronze) f 95% copper,
5 Paras (Bronze) < 4% tin and
1 Para (Bronze) [ 1% zinc
Gross Weight
(Grains)
Legal Tender
QO KQdl f
75% copper and ^ ' 2^94 J To amount of
25% nickel .~ ' on , n | 5 Dinar.
-7 1R1 7 j To the amount
is: 1323 of l Dinar '
Value
0.0385
.0192
.0096
.0096
.0019
THE MONETARY SYSTEMS OF THE WORLD
29
Money of Spain.
Unit: Peseta=100 Centimes
(Table of weights of money, same as France.)
In 1868 Spain adopted the monetary system of the Latin
Union and is therefore bi-metallic, with the silver peseta, equiva-
lent to the French franc, as monetary unit. The ratio of gold to
silver is 1 to 15. Gold and the 5 peseta .piece are unlimited
legal tender, while silver coins of less value than 5 pesetas are
legal tender for only 50 pesetas.
As gold is at a premium in comparison with silver and with
bank notes, it does not circulate in this country. The Bank of
Spain keeps it in safes in guarantee of its notes issued. During
1903, gold was at a premium of as high as 37.30 per cent, and at
times as low as 30J per cent, but the average premium was
34.60 per cent.
The actual value of the gold peseta in the money of the
United States, as declared by the Director of the United States
mint, is 19 and 3-10 cents ($0.193). The commercial value of
the peseta in the United States fluctuates according to the demand
for drafts, checks and bills of exchange on Spain and the supply of
such exchange in the market for sale. More often, however,
exchange on Spain, owing to great fluctuations, is drawn in
French, English or German money, and, therefore, at such time
the peseta has no commercial value in the United States.
The paper currency and gold, silver and minor coins in
circulation with the weight, fineness, etc., of coins and their
equivalent values in United States money, are as follows:
PAPER MONEY.
Notes issued by the Banco d'Espana, 25 Pesetas ($4.82), 50 Pesetas
($9.65), 100 Pesetas ($19.30), 500 Pesetas ($96.50), 1000 Pesetas ($193.00).
GOLD COINS.
Denomination
100 Pesetas
50 Pesetas
25 Pesetas
20 Pesetas
10 Pesetas
5 Pesetas
Gross Weight Fineness Pure Gold
(Grains) (Thousandths) (Grains)
Value in
United States
Money
497.8178
900
448.0360
$19.2952
248.9089
900
224.0180
9.6476
124.4543
900
112.0089
4.8238
99.5635
900
89.6072
3.8590
49.7817
900
44.8036
1.9295
24.8908
900
22.4018
.9647
SILVER COINS.
Gross Weight Fineness Pure Silver
(Grains) (Thousandths) (Grains)
Value in
United States
Money
385.8089
900
347.2280
$0.9647
154.3235
835
128.8607
.3859
77.1617
835
64.4300
.1929
38.5808
835
32.2150
.0964
15.4323
835
12.8860
.0386
Denomination
5 Pesetas
2 Pesetas
1 Peseta
50 Centimes
20 Centimes
All the silver coins now in circulation were coined since 1868.
issued previous to that date are not now accepted.
Coins
30 FOREIGN EXCHANGE TEXT BOOK
MINOR COINS.
Gross Weight
Denomination Composition (Grains) Legal Tender Value
(Bronze.)
lOCentimos f QW Ponnpr 154. 3235 f $0.0192
5 Centimes y j$> 2 ^ 77 . 1617 J To the amount . 0096
2 Centimes *ff ; 30.8647] of 5 Pesetas. .0038
1 Centime ( 1 /0 z 15. 4323 ( .0019
Money of Turkey and Syria.
Unit: Piastre=40 Paras
1 Para=3 Aspes.
(100 Piastres=l Turkish Pound.)
Table of Weights of Money.
4 grains =1 carat
16 carats =1 dram
100 drams =1 Cheky
400 drams =1 Oko
The actual value of the gold piastre in the money of the
United States as declared by the Director of the United States mint,
is 4 and 4-10 cents (SO. 044). The 100-piastre piece is called
the Turkish pound or medjidie, or lira, which in United States
money is worth $4.396, or considerably less than the English
pound. In exchange transactions between the United States
and this country it is customary to draw such exchange in Turkish
pounds, the commercial value of which fluctuates according to the
supply and demand.
The financial institutions of Turkey are almost entirely
in the hands of foreigners. The Turkish pound is a coin slightly
lighter than the English sovereign, but of the same fineness. They
are worth in London from 17 shillings 6 pence to 18 shillings each.
Merchants retain as far as possible the 20 piastre pieces and the
pound gold pieces to make their own payments, therefore the
latter are at a premium, usually about 8 per cent, with, a fluctua-
tion of % per cent above and below 8 per cent. For example,
upon April 1st, 1903, the premium for pound pieces was as follows:
The 20 piastre (medjidie) pieces were worth 108 5-40ths piastres
per pound. The 5 piastre (J medjidie) pieces were worth
107 30-40ths piastres per pound. Smaller silver pieces were
worth 104 10-40ths piastres per pound.
PAPER MONEY.
No paper money is issued by banks or the Government. French and
English paper money is in circulation.
THE MONETARY SYSTEMS OF THE WORLD
31
GOLD COINS.
Gross Weight
(Grains)
Denomination
500 Piastres
(5 Lire or Pounds) 556 . 8302
250 Piastres
( 2 J Lire or Pounds) 278.4151
100 Piastres
( 1 Lira or Pound) 111. 3660
50 Piastres
( i Lira or Pound) 55 . 6830
25 Piastres
(J Lira or Pound) 27.8415
Fineness
(Thousandths)
Pure Gold
(Grains)
Value in
United States
Money
916$
510.4277
$21.9822
255.2138
10.9911
102.0855
4.3964
51.0422
2.1982
25.5213
1.0991
SILVER COINS.
Gross Weight Fineness Pure Silver
(Grains) (Thousandths) (Grains)
Value in
United States
Money
371.2253
830
308.1170
$0.8793
185.6126
830
155.0585
.4396
92.8063
830
77.0292
.2198
37.1225
830
30.8117
.0879
18.5612
830
15.4058
.0439
s) 9.2806
830
7.7029
.0219
Denomination
20 Piastres
10 Piastres
5 Piastres
2 Piastres
1 Piastre
By a decree the Government lowered
piece to 19 piastres in consequence of which
is worth 108 piastres.
MINOR COINS.
the value of the 20-piastre
debasement the gold pound
Denomination
BRONZE.
1 Piastre (40 Paras)
$ Piastre (20 Paras)
\ Piastre (10 Paras)
Piastre ( 5 Paras)
4\j Piastre ( 1 Para)
Gross Weight
Composition (Grains) Legal Tender
/ Fine copper
\Fine copper
[ 95% copper,
J 3% tin,
330.0363
165.0181
82.5090 [
41.2545 f
No data.
1J% lead and 8.2501
zinc
Value
$0.0439
.0219
.0109
.0055
.0011
Pieces known as becklik and half-becklik and altilik and half-altilik,
of copper, are also issued.
Syria and the Holy Land.
This country is said to be a land of bandits, where travelers
must be accompanied by armed guards. It is a dependency
of Turkey and the Turkish authorities preserve the peace between
the warring factions of the Christian Churches. The most
acceptable coins for travelers to use are the French gold. Bank
notes are generally at a discount. In the Holy Land, French
and English gold coins arc ."preferred. Commercial accounts
in Syria are usually expressed in francs, and the following esti-
mate of values of coins which are current in Holy Land (Jeru-
salem, Beyrout and Damascus) are given:
Xapoleon (French) equal to 20 Francs.
Sovereign (Eng.) equal to 25 Francs 9 centimes.
Turkish Pound equal to 22 Francs 90 centimes.
Medijie (Silver) equal to 4 Francs 22 centimes.
3'2 FOREIGN EXCHANGE TEXT BOOK
Money of Ireland, Scotland and Wales.
(Same as Great Britain.)
ASIATIC COUNTRIES.
The Orient.
"The Orient" is the term usually denoting the countries from
Singapore, Straits Settlements, to Japan and would include the
East Indies (Java, Sumatra and Borneo), Cochin China, the
Straits Settlements, the Philippine Islands, China and Japan.
India is an Oriental country, but the term "Orient" does not
apply to it. The term "Far East" can also be considered
synonymous with "Orient."
The trade of the Orient is based on silver, not gold, and
the two currencies are the British trade dollar and the Mexican
dollar (old die). The great Oriental banks issue bank notes,
these notes being payable either in "local currency" i. e.,
British trade dollars or Mexican dollars. Drafts drawn payable
in China should be made payable in local currency. If pay-
ment is demanded in Mexican dollars the payee will be com-
pelled to pay a premium on same according to the day's rate.
Japan, however, has recently adopted the gold standard.
The largest Oriental Banks are the Hong Kong and Shanghai
Banking Corporation and the Chartered Bank of India, Australia
and China, controlled by English capital, the Deutsche- Asiatische
Bank, controlled by German capital, the Russo-Chinese Bank,
controlled by Russian capital, and the International Banking
Corporation, controlled by American capital. The fir^t two
are at present the only note-issuing banks of importance, but the
International Banking Corporation expect to issue notes soon.
The Yokohama Special Bank is controlled by Japanese capital.
Money of British India and Burmah.
Unit: Rupee =16 Annas
1 Anna= 4 Pice
1 Pice = 3 Pie
Table of Weights of Money.
4 Punks =1 Dhan
4 Dhans =1 Ruttee
8 Ruttees =1 Masha
12 Mashas =1 Tola
1 Tola =180 Grains
British India is under British military and civil rule. The
unit, the silver rupee, is a coin about the sue of a United States
silver 50-cent piece. With the depreciation of silver there has
been violent fluctuations in its value. When silver was worth
THE MONETARY SYSTEMS OF THE WORLD 33
four shillings (Eng.) per ounce ($1.00) the value of the rupee was
considered to be 2 shillings (Eng.) or about 50 cents United
States money, but with the fall of silver, the rupee fell to the
value of about 1 shilling (25 cents), and for some years was
subject to considerable changes, much to the disarrangement
of Anglo-Indian commerce. The Government, however, has
taken steps to steady the value of the rupee and has succeeded
in maintaining the value from about 31 cents to 33 cents, or
1 shilling 3 pence to 1 shilling 4 pence, English money. The
price of the rupee may be ascertained by noticing the quotations
for the sale of rupee paper, i. e., bills of exchange and telegraphic
transfers offered by the Indian Government through the Bank of
England, London.
The circulating mediums among foreigners are paper and
silver.
The actual value of the rupee in the money of the United
States fluctuates according to the price of silver. The commercial
value of the rupee in the United States fluctuates according to
the demand for drafts, checks and bills of exchange on India and
the supply of such exchange in the market for sale. Very fre-
quently exchange on India is drawn in English money (pounds
sterling) "at exchange" on London, and when so drawn the
price depends upon the price of English exchange.
The paper currency and gold, silver and minor coins in
circulation with the weight, fineness, etc., of coins, and their
approximate equivalent value, as estimated by the Director of
the United States mint, are as follows:
PAPER MONEY.
Notes are issued by the various Presidencies, a slight discount being
charged as exchange for the notes of one Presidency cashed in another.
The denominations are of 5 rupees and upwards to 10,000 rupees, the
value of which may be estimated at about 33 cents United States
money per rupee.
GOLD COINS.
The standard coin of India is the sovereign (English pound) but the
rupee is the money of account current at 15 rupees to the sovereign. The
gold coins are the 5 rupee, J mohur ($1.62); 10 rupee, mohur ($3.25);
mohur, 15 rupees ($4.87); double mohur, 30 rupees ($9.74).
These gold coins ceased to circulate as currency since 1835. Though
a certain number were struck in the mints, more or less regularly, down
to a recent period, they were not intended for circulation but for use as
ornaments, to hoard, or for the sake of .the mint mark to verify the
standard of the gold when offered for sale by goldsmiths and bullion
dealers in the same way in which rupees were preferred to uncoined
silver for conversion into ornaments. Such coinage has gradually
declined with the importation of gold bars, bearing recognized marks, and
for many years the few mohurs which had been coined have been struck
as specimens. In future they will not be a part of the Indian monetary
system.
34 FOREIGN EXCHANGE TEXT BOOK
SILVER COINS.
Value in
Gross Weight
Fineness
Pure Silver
United States
Denomination
(Grains)
(Thousandths)
(Grains)
Money
Rupee
180.0030
916
165.0027
$0.3244
Half-Rupee
90.0015
9161
82.5013
. 1622
Quarter-Rupee
45.0007
916
41.2506
.0811
Eighth-Rupee
22.5003
916
20.6253
.0405
Rupees and half rupees are full legal tender in payment or on
account side by side with the gold sovereign at the rate of 15 rupees to
the sovereign.
MINOR COINS.
Gross Weight
Denomination Composition (Grains) Legal Tender Value
2 Pice or \ Anna 200.0000] $0.0101
1 Pice or | Anna 100. 0000 ( To the amount .0050
i Pice or $ Anna 50 . 0000 ] of 1 Rupee. . 0025
1 Pice or 1-1 2 Anna 33.33331 .0016
Money of China.
New Unit: Dollar =100 Cents
Money Table.
10 cash or li =1 candareen
10 candareens or fun or fen =1 mace
10 mace or tsien =1 tael or liang
The cash or li (also called "sin" and by the Dutch "pitjes")
is represented by an actual coin, but the candareen, the mace
and the tael are simply denominations denoting certain fixed
weights of silver.
While the monetary unit of China is a silver dollar of 100
cents the money most used is called a "tael," which is not u
coin, but silver molded into cup-shaped ingots called "shoes,"
or "sycee" by the foreigners and "yentzu" or "yenliang" by the
natives. A tael is a weight supposed to be an ounce and by
the natives is called a "liang." A tael or ounce of silver
varies in weight as well as in value in the different localities.
The Shanghai tael, the Tientsin tael, the Pekin tael, the
Chefoo tael, the Hankow tael and all other taels are specified
local weights.
The Shanghai currency consists of shoes (or sycee) of
silver of about 50 taels weight each. These ingots are rendered
current by the "hong koo" who assays the metal and affixes
to each ingot assayed by him a stamp recording the "touch"
or degree of purity. The hong koo is not an official appointed
by the Chinese Government, but derives his authority entirely
through an arrangement among the native bankers. According
to the stamp affixed by him on each shoe the "compradores,"
who are either partners or trusted and well paid employees of
THE MONETARY SYSTEMS OF THE WORLD 35
business houses, add from up to 3 taels Shanghai weight per
50 taels of actual weight. This addition thus ranges from
for silver of the hong koo's standard up to 6 per cent for pure
silver of 100 toques or touch. A further addition of 2 per cent
is made in conformity with an old custom of long standing.
From these data it is easy to deduce the touch or purity of
Shanghai sycee, or more properly speaking, of sycee silver
calculated in the actual weight represented by it in Shanghai
taels of account.
100 taels, pure silver, plus 6% 106. 00
2% added 2. 12
Shanghai tael of account 108. 12
The so-called Haikwan or Customs tael, which is produced at
the Customs Bank, by melting and refining the Mexican,
Spanish and other foreign dollars received in payment of duties,
commands a premium over the dollars currency, ranging from
3 to 10 per cent, according to the supply and demand of the
two commodities.
At Hong Kong, Canton and Fuchau, chopped dollars,
which are simply Mexican dollars chopped or stamped by the
natives, are the circulating medium, and in all payments it is
the custom for them to be examined and weighed at the rate of
717 taels, Canton weight, per $1,000. At Foochow chopped
dollars of the lowest description pass current, but at Hong Kong
and Canton only fairly good chopped dollars are taken at par.
At Amoy, accounts are kept in currency dollars weighed
at 720 taels, Canton weight, per $1,000.
At these four ports clean and unchopped Mexican dollars
usually command a small premium in the market, and when
sold at a premium are counted instead of weighed.
The following are the approximate average weights of the
various descriptions of dollars circulating at these Chinese ports:
Japanese trade dollar 400 troy grains.
Japanese yen or dollar 416 troy grains.
Hong Kong dollar 416 troy grains.
Mexican dollar, about 416 J troy grains.
Carolus or Spanish dollar, about 414 troy grains.
The value in English money (pounds sterling) of the above
dollars depends upon the price of bar silver in London, and has
ranged in past years from 3 shillings 6 pence to 4 shillings 6
penc.e. Sycee and bar silver are dealt in at these ports at a
variable premium, the par being taken at 717 taels, Canton
weight, equal to $1,000.
Silver dollars, although coined and in use, are not very
popular except at the port cities. They bear the name of the
36 FOREIGN EXCHANGE TEXT BOOK
provinces by which issued, and although supposed to be of
uniform weight and fineness are more frequently refused than
accepted outside of those provinces.
Up to the present time the Chinese Government has not
attempted to issue paper money and there are no gold coins.
Gold is sold as a commodity in little bars of great fineness,
weighing from an ounce to five or six ounces. They are pretty
in appearance and bear in small characters the name of the shop
that has tried them down.
Bank notes are issued in the principal cities, varying in
amount from 500 to 10,000 "cash," but like the silver notes
are much counterfeited and have only local circulation.
A coin called "cash," or "li," made from an alloy of copper,
iron and tin, is extensively used. The coins are about the size
of the United States quarter dollar (25-cent piece) with a square
hole in the center for stringing them. They are generally con-
sidered worth in United States money about one-tenth of a cent
or about 1,000 to the United States dollar. They are usually
strung in lots of 500 or 1,000 with knots between each 100
for easier calculation.
This coin has impressed thereon Chinese characters stating
the reign, etc. ; on the reverse, Mantchu characters, stating the
name of the mint. Originally they represented one one-
thousandths part of a tael, and nominally they continue to
do so to the present day; but they have long since ceased
to keep up a corresponding metallic value. Not long ago it
required from 1,600 to 1,800 of these coins to make up the
value of a tael.
The actual value of the Chinese silver dollar in the money
of the United States varies according to the price of silver. In
exchange transactions between the United States and China,
drafts, checks and bills of exchange are usually drawn in "dollars
local currency" at exchange upon Hong Kong, although not
infrequently such exchange is drawn in English money at
exchange on London.
Silver pesos or dollars, known as the "Mexican" dollar,
are in general circulation at the seaport cities and to some
extent in other cities.
The paper currency, and gold, silver and minor coins in
circulation and their approximate equivalents in United States
money are as follows:
PAPER MONEY.
Notes issued by the Hong Kong and Shanghai Banking Corporation,
at Hong Kong in dollars of denominations of 1, 5, 10, 50 and 100 dollars;
at Shanghai and Tientsin, in both dollars and taels, in denominations of
1, 5, 10, 50 and 100. Notes issued by the Chartered Bank of India,
Australia and China, at Hong Kong, in dollars, in denominations of 5,
10, 50, 100 and 1,000; at Shanghai in both dollars and taels in denomi-
nations of 5, 10, 50 and 100, and at Shanghai in 1 dollar denomination.
THE MONETARY SYSTEMS OF THE WORLD 37
Notes issued by the Banque de 1'Indo-China at Shanghai in dollars in
denominations of 1, 5, 10 and 100. Notes issued by the Russo-Chinese
Bank at Shanghai in dollars in denominations of 1, 5 and 10. Notes
issued by the Yokohama Specie Bank, at Shanghai, Tientsin and Niu-
chwang in dollars in denominations of 1, 5 and 10.
GOLD COINS.
There are no gold coins in circulation except those of other countries.
SILVER COINS.
The Viceroys of Canton and Nanking mint dollars in small amounts
but they are only accepted by banks at considerable discount. British
dollar ($0.502, value January 1, 1906), Mexican dollar ($0.505 value
fanuary 1, 1906). The demand for Mexican dollars is such that they are
usually at a premium of from to 2 per cent, fluctuating daily. At
Shanghai, tael ($0.696 value January 1, 1906). This is not a coin, but a
weight of silver. The Mexican dollar circulates at Shanghai, from 73 to
76 taels being worth 100 Mexican dollars. The subsidiary silver coins
are 5 cents, 10 cents, 20 cents and 50 cents. The table of weights for
money at Shanghai is: 10 cash equal 1 mace; 10 mace equal 1 candareen;
10 candareens equal 1 tael. The British (Hong Kong) silver 5-cent piece
is equal to 36 candareens; the 10-cent piece, 72 candareens, and the
20-cent piece, 1 mace. The silver coins of the province Kwantung are
refused by banks and by the government, but circulate to a considerable
extent locally. In large native transactions ingots of silver form the
medium of exchange. These ingots are called " shoes " from some
fancied resemblance in shape. They range in weight from a half-tael to
100 taels.
MINOR COINS.
Coins called " cash " which are described on page 36 are in general
circulation among the natives.
^
Money of Japan.
Unit: Yen=100 Sen
iSen =10 Rin
Table of Weights of Money.
10 Shis =1 Rin
lORins =1 Fun
10 Funs =1 Momme
In 1897 Japan adopted the single gold standard with the
yen of 100 sen as the monetary unit. Gold coins are full legal
tender, silver coins to the amount of 10 yen and the minor
coins to the amount of 1 yen.
The actual value of the gold yen in the money of the
United States as declared by the director of the United States
mint is 49 8-10 cents ($0.498). The commercial value of
the yen fluctuates according to the demand for drafts, checks
and bills of exchange on Japan and the supply of such exchange
in the market for sale. The paper currency and gold, silver
and minor coins in circulation with the weight, fineness, etc., of
the coins, and the approximate value in the money of the
United States, are at follows:
38 FOREIGN EXCHANGE TEXT BOOK
PAPER MONEY.
Notes issued in denominations of 1, 5, 10, 25, 50, 100 and 500 yen.
The value of the gold yen in United States money is 49 8-10 cents
($0.498).
GOLD COINS.
Value in
Gross Weight Fineness Pure Gold United States
Denomination (Grains) (Thousandths) (Grains) Money
20 Yen 257.2033 900 231.4830 $9.9691
10 Yen 128.6024 900 115.7422 4.9845
5 Yen 64.3004 900 57.8704 2.4922
lYen(*) 12.8602 900 11.5742 .4984
(*) Not coined.
SILVER COINS.
Ornss \Voifrl
Denomination
50 Sen
20 Sen
10 Sen
The silver 1-yen coins issued under the monetary law of 1871 are to
be gradually exchanged for gold coins at the rate of 1 gold yen for 1
silver yen. Notice of suspension of these coins is to be given six months
in advance, and any not presented for exchange within 5 years are to be
treated as bullion. The old 5-yen silver coins are to continue in circu-
lation.
MINOR COINS.
Gross Weight
Denomination Composition (Grains) Legal Tender Value
Gross Weight
(Grains)
Fineness
(Thousandths)
Pure Silver
(Grains)
Value in
United States
Money
208.0019
800
166.4015
$0.2492
83.2020
800
56.5616
.0996
41.5979
800
33.2783
.0498
c e~ f -~i ~i\ J 75% copper and -, nn0 i 1 $0.0245
5 Sen (nickel) { 0( .
Money of Alaska.
Unit: Dollar=100 Cents
The money of the United States as well as that of Canada
is in circulation, but in the territory of the United States the
unit is a dollar of 100 cents. Being a great gold producing
country with poor banking facilities, gold dust is used for local
commercial purposes in lieu of coined pieces.
Money of Mexico.
Unit: Peso =100 Centavos
Table of Weights of Money.
48 Tormins or 8 Drachmas=l Onza or 28.752 grams or 443.7186
grains.
French weights are used.
Mexico's present money of account is the gold peso, the
value of which, as declared by the director of the United States
mint, is 49 8-10 cents ($0.498).
In exchange transactions between Mexico and United
States drafts, checks and bills of exchange are drawn either in
Mexican dollars or in United States dollars, the latter "at
exchange " on New York City. Being one of the chief silver pro-
ducing countries of the world the greater part of Mexico's coin-
age is exported to China and the Central and South American
countries. The gold standard was adopted by Act of Congress
of December 9, 1904.
50 FOREIGN EXCHANGE TEXT BOOK
The currency of Mexico consists of notes of banks, silver,
nickel and copper coins.
PAPER MONEY.
Notes of 28 different banks circulate at par in Mexico City,
their denominations being 5, 10, 20, 100, 500 and 1,000 pesos
or dollars.
The only notes accepted by the government offices in pay-
ment of duties are those of the Banco National de Mexico and
the Banco de Londres y'Mexico. These two banks do not
accept the notes of other Mexican banks, but they are generally
accepted by the other banks at par. The Banco Central Mexi-
cano, however, is obliged by contract to redeem all of the notes
of the 28 banks referred to at par, except two Yucatan bank notes,
which are at a discount of 5%.
GOLD COINS (old issue.)
Value in
Gross Weight Fineness Pure Gold United States
Denomination (Grains) (Thousandths) (Grains) Money
20 Pesos 522.2463 875 456.9655 $19.6798
10 Pesos 261.1154 875 228.4760 9.8396
5 Pesos 130.5577 875 114.2380 4.9198
2 Pesos 65.2788 875 57.1190 2.4599
1 Peso 26.1115 875 22.8476 .9839
The new gold coins are the 5 and 10-peso pieces. These
coins will be nine hundred thousandths (0.900) of fine gold, and
one hundred thousandths (0.100) alloy of copper. The gross
weight of the 10-peso pieces are 8.3333 grams or 128.6012 grains,
the 5-peso pieces being one-half the weight of the 10-peso.
In addition there are gold coins of eighth, quarter and half
doubloons and the doubloon. The value of the doubloon is
about $15.53. The peso or dollar gold coin does not circulate
but is used for export purposes by banks or for making pay-
ments upon gold basis. In buying the 20-peso pieces they
should be purchased by weight, as they are frequently worth
more than the United States $20 pieces.
SILVER COINS.
The principal silver coin is the peso or dollar, which of
modern coinage presents the most imperfect and irregular
minting in existence. While the designs have a similarity, the
successive issues vary slightly in size, thickness, milling and
even in roundness. Furthermore, there are many counterfeits
in brass and owing to the diversity of good Mexican pesos they
can only be detected by the acid test. The old design circulates
and is at a premium in the Orient. The subsidiary silver pieces
are even more imperfect than the peso or dollar pieces. There
is an old design (large) 50-centavo piece, also a new one similar
in size to the United States 50-cent piece. Of the 25-centavo
pieces there is a large thin one of old issue, also a new one cor-
responding in size to the United States 25-cent piece.
THE MONETARY SYSTEMS OF THE WORLD 51
SILVER COINS (old issue).
Value in
Gross Weight Fineness Pure Silver United States
Denomination (Grains) (Thousandths) (Grains) Money
Peso 417.8001 902.7 377.1803 1 Value of unit is
50 Centavos 208.9000 902.7 188.5901 estimated
20 Centavos 83.5600 902.7 75. 4360 \ quarterly by
10 Centavos 41.7800 902.7 37.7180 Director of
5 Centavos 20.8900 902.7 18. 8590 J U. S. Mint.
The peso and 50 centavo are of old and new style. The 20,
10 and 5-centavo pieces are of new style.
The silver coins to be minted under the Act of December
9, 1904, will be the 1-peso, 50-centavo, 20-centavo and 10-
centavo. The alloy of these new silver peso coins will be nine
thousand and twenty-seven ten-thousandths (0.9027) of pure
silver and nine hundred and seventy-three ten-thousandths
(0.0973) of copper. The other new coins will be eight hundred
thousandths (0.800) fine.
MINOR COINS (old issue).
One centavo of bronze, containing 95% copper, 4% tin
and 1% zinc, the nominal value being about 1 cent in United
States money.
Under the Act of December 9, 1904, there will be coined
a 5-centavo (5 cents) piece of nickel, and 2 and 1-centavo
pieces of bronze.
The equivalent value of the new Mexican gold peso (unit)
in terms of the gold coins of gold standard countries is as follows:
One Gold Peso Equals
Germany 2.09 Marks England 24.58 Pence
Argentina 0.516 Pesos Italy 2 . 58 Lire
Austria-Hung. . 2 . 45 Crowns Turkey 1 1 . 36 Piastres
Belgium 2 . 58 Francs India 1.53 Rupees
Bulgaria 2 . 58 Lews Philippine Is. . . . 996 Pesos
Brazil 0.912 Milreis Japan 1 . 00 Yen
Canada . 498 Dollars Liberia . 498 Dollars
Chile 1 . 36 Pesos Monaco 2 . 58 Francs
Costa Rico .... 1 . 07 Colons Norway 1 . 86 Kronors
Colombia . 498 Dollars Panama . 498 Balboas
Denmark 1 . 86 Kronor Netherlands . . .1.23 Florins
Spain 2.58 Pesetas Portugal 0.461 Milreis
Egypt 24 . 24 Pence Peru 1 . 02 Sols
United States . .0 . 498 Dollars Russia . 967 Rubles.
Ecuador 1 . 02 Sucres Roumania 2.58 Lei
France 2 . 58 Francs Switzerland ... 2 . 58 Francs
Finland 2 . 58 Finmarks Servia 2 . 58 Dinars
Greece 2.58 Drachma Sweden, 1-86 Kronor
Haiti 0.516 Gourdes Newfoundland .0. 491 Dollars
Br. Honduras . .0. 498 Dollars Uraguay 0. 481 Pesos
Venezuela 2 . 58 Bolivars.
The equivalent value of the silver pesos in money of coun-
tries having silver standard are declared by the Department of
Finance and Public Credit in months of May and November of
each year, and is based upon the average price of silver for the
preceding six months.
52
FOREIGN EXCHANGE TEXT BOOK
i
o
= 1.94 Peso
=2.01 Pesos
=9 . 76 Pesos
=0 . 39 Peso
=0 . 09 Peso
=0 . 65 Peso
The equivalent value of the gold units of countries having
gold standard in the money of Mexico (pesos and cents) from
and after July 1, 1905, is as follows:
1 German Mark
1 Argentina Peso
1 Aus.-Hun. Crown.
1 Belgian Franc
1 Bulgarian Lew
1 Brazilian Milreis
1 Canadian Dollar
1 Chilian Peso
1 Costa Rican Colon
1 Colombian Dollar
1 Scand. Kroner
1 Spanish Peseta
1 Egyptian Pound
1 U. S. Dollar
1 Ecuador Sucre
1 French Franc
1 Finnish Mark
1 Grecian Drachma
=0 . 48 Peso
==1.94 Peso
=0.41 Peso
=0 . 39 Peso
=0 . 39 Peso
10 Peso
01 Pesos
=0.74 Peso
=0.93 Peso
=2.01 Pesos
=0 . 54 Peso
=0 . 39 Peso
=9 . 90 Pesos
=2.01 Pesos
=0.98 Peso
=0 . 39 Peso
=0 . 39 Peso
=0 . 39 Peso
1 Haitian Gourd
1 British Hond. Dol.
1 English Pound
1 Italian Lira
1 Turkish Piastre
1 Indian Rupee
1 Philippine Peso
1 Japanese Yen
1 Panama Balboa
1 Netherlands Florin
1 Portuguese Milreis
1 Peruvian Sol
1 Russian Ruble
1 Roumanian Lei
1 Swiss Franc
1 Servian Dinar
1 Uruguay Peso
1 Venezuelan Bolivar
= 1.00 Peso
= 1.00 Peso
=2.01 Pesos
=0.81 Peso
=2. 17 Pesos
=0.98 Peso
1.03 Peso
. 39 Peso
0.39 Peso
. 39 Peso
2 . 08 Pesos
=0.39 Peso
Money of Newfoundland.
Unit: Dollar=100 Cents
Although a British colony, the money of account of New-
foundland is the dollar of 100 cents as in Canada and the United
States.
The actual value of the gold dollar in the money of United'
States is $1.014. The money in circulation consists of paper
currency supplied by banks in Canada and gold, silver and
copper coins. The gold coins of the United States and England
are also in circulation and are full legal tender.
CENTRAL AMERICAN COUNTRIES.
Money of British Honduras.
Unit: Peso or Dollar=100 Centavos or Cents
Although a British colony, the money of account is the peso
or dollar of 100 centavos or cents, as in other Central American
States and Mexico. No gold coins or paper money are issued.
The money in circulation consists of silver and bronze coins
and the gold coins of the United States and Central American
States. In exchange transactions between British Honduras
and the United States, drafts, checks and bills of exchange are
drawn in United States dollars at exchange on New York City
or in Mexican dollars. The actual value of the silver peso
fluctuates according to the price of silver.
THE MONETARY SYSTEMS OF THE WORLD 53
Money of Panama.
By decree of June 28, 1904, Panama adopted the gold
standard, prescribing as the unit of value a gold coin to be called
a "balboa." It also made the United States gold dollar and
its multiples legal tender in the Republic on an equivalence with
the balboa and its multiples.
The law prescribes the following pieces when the executive
.shall make provision for the same:
GOLD COINS.
Value in
Gross Weight Fineness Pure Gold
United States
Denomination
(Grains) (Thousandths) (Grains)
Money
1 Balboa
25.8 900 23.22
$1.00
2\ Balboa
64.5 900 58.05
2.50
5 Balboa
129.0 900 116.10
5.00
10 Balboa
258.0 900 232.20
10.00
20 Balboa
516.0 900 464.40
20.00
The pieces
of 10 or 20 balboa shall be coined
as whichever
shall be deemed
most necessary for commerce.
SILVER COINS.
- Value in
Gross Weight Fineness Pure Silver
United States
Denomination
(Grains) (Thousandths) (Grains)
Money
Peso
358.80 900 347.22
$0.50
JPeso
192.90 900 173.61
.25
1-5 Peso
77.16 900 69.44
.10
1-10 Peso
38.58 900 34.72
.05
1-20 Peso
19.29 900 17.36
.025
The peso is equal to one-half balboa.
National silver coins are legal tender at their nominal
value in all transactions. Provisions are made for the exchange
of Colombian silver coins for the new Panamanian silver coins.
MINOR COINS.
As no provision was made for the coining of n. vv minor
coins it is presumed the old minor coins will continue in use.
We have no data of the latter, however.
Money of Costa Rica.
Unit: Colon=100 Centimes
Costa Rica adopted the single gold standard in October,
1896. The unit is the colon, divided into 100 centimos. The
actual value of the gold colon in the money of the United States
as declared by the Director of the United States mint is SO. 4654.
The actual currency of the country is gold, silver and paper,
payable in gold or silver. Only fractional silver is coined and
silver is legal tender to the amount of 10 colon. Silver and
bronze coins are most extensively used and paper currency is
54
FOREIGN EXCHANGE TEXT BOOK
issued by banks. In exchange transactions between Costa Rica
and the United States, drafts, checks and bills of exchange are
drawn in United States dollars at exchange on New York City
or in Mexican dollars. The actual value of the silver coins
fluctuates according to the price of silver. The gold, silver
and minor coins in circulation and their approximate equiva-
lents in the United States, are as follows:
GOLD COINS.
Denomination
20 Colons
10 Colons
5 Colons
2 Colons
Gross Weight Fineness Pure Gold
(Grains) (Thousandths) (Grains)
Value in
United States
Money
240.1274
900
216.1147
$9.3072
120.0637
900
108.0573
4.6536
50.0318
900
54.0286
2.3268
24.0127
900
21.6114
.9307
Gold coins are full legal tender.
SILVER COINS.
The denomination and value of silver coins are as follows:
50 Centimes ( $ Colon) value $0 . 2367
25 Centimes ( | Colon) value 0.1163
10 Centimes (1-10 Colon) value 0.0465
5 Centimos ( 1-20 Colon) value . 0233
MINOR COINS.
Denomination
2 Centimos
1 Centimo
Composition
( 75% copper and
\ 25% nickel
Gross Weight
(Grains) Legal Tender
69.4456 /To amount of
34. 7228 \ 1 Colon
Value
$0.0092
.0046
Money of Guatemala, Honduras, Nicaragua and Salvador.
Unit: Peso=100 Centavos
These republics all have the same monetary system. Being
poor countries with comparatively small population, very little
money is used. The money in circulation consists of paper
currency and gold, silver and copper coins. The actual value
of the silver peso fluctuates according to the price of silver.
Gold is usually at a high premium in Honduras.
There is no mint in Nicaragua; all coins are made abroad,
as is also all paper currency.
GOLD COINS.
Value in
Gross Weight
Fineness
Pure Gold
United States
Denomination
(Grains)
(Thousandths)
(Grains)
Money
Onza or Doubloon
417.6659
875
365.4576
$15.7359
Half Onza
208.8329
875
182.7288
7.8694
20 Pesos
497.8169
900
448.0352
19.2952
10 Pesos
248.9084
900
224.0176
9.6476
5 Pesos
124.4542
900
112.0088
4.8238
2 Pesos
49.7816
900
44.8035
1.9295
iPeso
24.8908
900
22.4017
.9647
THE MONETARY SYSTEMS OF THE WORLD
55
SILVER COINS.
Value in
Gross Weight
Fineness
Pure Silver
United States
(Grains)
(Thousandths)
(Grains)
Money
358.8089
900
347.2280
Estimated
quarterly
192.9044
900
173.G140
by Director
of United
96.4522
900
86.8070
States mint
Denomination
Peso
Half Peso
(50 Centavos)
Quarter Peso
(25 Centavos)
Dime (10 Centavos) 38.5808 835
Half Dime
(5 Centavos) 19.2904 835
MINOR COINS.
Gross Weight
Denomination Composition (Grains)
2 Centavos J 75% copper and 69 . 4456
1 Centavo \ 25% nickel 34 . 7228
Atlantic Ocean.
32.2150
16.1075
Legal Tender
Value
$0.0200
.0100
BERMUDA ISLAND: Although the unit of money is the
same as in Great Britain, accounts are still kept in dollars and
cents. United States gold coins are accepted everywhere and
the British gold and silver coins are in circulation. A silver
British 4-penny piece called GROAT is supplied by Great Britain,
its nominal value being about 8 cents in United States money.
Paper money is issued by banks.
CAPE VERDE ISLANDS: These islands use principally the
money of Portugal, although those near Africa use the rupee
and coins in use in Zanzibar. In exchange transactions between
these islands and the United States, drafts, checks and bills of
exchange would most likely be drawn in English, French or
German money. Comparatively very little money is used and
very little trade with other countries.
SAINT HELENA ISLAND: This island, which is located in
mid-ocean, southwest of Africa, is controlled by Great Britain
and British money is alone legal tender, but being situated in a
direct line for vessels passing around Cape of Good Hope, all
kinds of money pass. No paper money is issued and gold is
little used.
WEST INDIES ISLANDS.
ANGUILLA, BAHAMA, BARBADOES AND JAMAICA ISLANDS.
Unit: Pounds=20 Shillings of 12 Pence.
These islands, being under British control, use the English
system as their unit of money, although, with the exception of
Jamaica, accounts are kept in dollars and cents. Gold coins
of the United States and Great Britain circulate and are accepted
evervwhere.
56 FOREIGN EXCHANGE TEXT BOOK
ANGUILLA is furnished by Great Britain with a four-penny
silver piece called groat, the equivalent in United States
money of about 8 cents. Paper money issued by banks at
Nassua, Bahama and Jamaica are used.
BAHAMA is also supplied with the silver piece called groat
as well as other silver and minor coins.
The monetary conditions at Barbadoes are the same as at
Bahama Islands.
At JAMAICA the gold coins most generally in use are those
of the United States, but British gold coins are of course accepted
and to some extent used. The active circulation consists of
silver and minor coins supplied by Great Britain. Paper money
is issued by the Colonial Bank.
In exchange transactions drafts, checks and bills are
drawn in English money at exchange on London or in United
States dollars at exchange on New York City.
Money of Haiti.
Unit: Gourde=100 Cents
The money of account of Haiti is the gourde of 100 cents.
The actual currency is an irredeemable paper. The metallic
gourdes have disappeared almost entirely from circulation and
are hoarded. Only the divisional coins are found in circulation,
but even these frequently command a premium of from 1 to 2
per cent. A great many United States gold pieces are to be
met with, owing to the fact that export duties have to be paid
in gold. Gold is usually at a high premium, ranging from 110
to 150 per cent.
The actual value of the gold gourde as declared by the
director of the United States mint is 96 and 5-10 cents
($0.965). In exchange transactions between Haiti and the
United States drafts, checks and bills of exchange are usually
drawn in United States dollars at exchange on New York City.
The money in circulation consists of paper currency and gold,
silver and bronze coins as follows:
GOLD COINS.
Value in
Gross Weight Fineness Pure Gold United States
Denomination (Grains) (Thousandths) (Grains) Money
10 Gourdes 248.9084 900 224.0176 $9.6476
5 Gourdes 124.4542 900 112.0088 4.8238
2 Gourdes 49.7816 900 44.8035 1.9295
1 Gourde 24.8908 900 22.4017 .9647
SILVER COINS.
Value in
Gross Weight Fineness Pure Silver United States
Denomination (Grains) (Thousandths) (Grains) Money
Gourde 385.8089 900 347.2280 $0.9647
Half Gourde 192.9044 835 161.0752 .4824
Fifth Gourde 77.1617 835 64.4300 .1929
Tenth Gourde 38.5808 835 32.2150 .0964
THE MONETARY SYSTEMS OF THE WORLD 57
MINOR COINS.
Gross Weight
Denomination Composition (Grains) Legal Tender Value
2 Centimes / 95 .% ^PR^' 154 . 3235 1 To amount of $0. 0192
1 Centime 7 $ pewter and 77 1617 2 Gourdes. .0096
\ * /o zinc j
Money of Cuba.
Unit: Peso=100 Centavos
The legal monetary system of Cuba is the same as that of
Spain, but, as a matter of fact, accounts are kept in piastres,
pesos, or dollars.
The metallic circulation is composed chiefly of United
States gold, Spanish luis or 20-peseta pieces, and alphonsinos
or 25-peseta pieces. The former in weight is identical with the
French 20-franc gold piece, and therefore possesses a bullion
value of S3. 86; the latter, equivalent to 25 pesetas, is worth
$4.82. By a Spanish decree the luis and alphonsinos, respec-
tively, or 4 and 5 duro pieces, were declared to be worth in
Cuba (Cuban money of account) $4.24 and $5.30, the arbitrary
premium of 6 per cent being extended to keep gold in the
island. These fictitious values were confirmed by an order of
President McKinley in December, 1898.
In Cuba when a dollar is mentioned it is the Cuban dollar
of account, which, in the absence of a special trade agreement,
may be discharged in the above-named coin at the rates given.
For Government purposes the United States currency is
the standard, official salaries and Cuban duties being paid in
that medium.
The relative values of Spanish gold and American gold are,
of course, slightly affected from day to day by special local
demand for one or the other. The present tendency is to extend
the use of the United States money. In the eastern end of the
island, particularly in Santiago, all transactions are in United
States currency, while in the western portion, in the prominent
markets of Habana, Mantanzas, Cardenas, etc., though many
transactions are based on the same standard, much of the
business is still done on the basis of Spanish gold.
From the above statement it appears that a Cuban book
account of say $530 could be satisfied with 100 alphonsinos,
or $482 in United States gold. Consequently Spanish coin in
comparison with Cuban money of account is at a premium of
6 per cent, and United States gold compared with the same
money of account appears to be at a premium of 11 per cent.
American gold, as compared with Spanish, therefore seems to
be at a premium of approximately 5 per cent. This, however,
58
FOREIGN EXCHANGE TEXT BOOK
is purely imaginary, as 500 nominal Spanish dollars or 100
alphonsinos have the same bullion value as $482 in United
States gold.
Cuba has no currency nor Government bank notes of its
own. The commercial money of the country, excepting in
Santiago province, is Spanish gold supplemented by French
gold. Spanish silver is the fractional currency used in connec-
tion with Spanish and French gold. In measuring other kinds
of money by the United States dollars there is no difference in
value between the United States gold dollar and any form of
United States paper currency, all being at a parity with each
other. United States silver when offered in quantities is taken
at a discount, but this is on account of its inconvenience in
handling and the preference for United States bills. The
United States silver certificate, as above indicated, is at par
with gold. The difference between a United States gold dollar
and a Spanish gold dollar is determined not only by the weight
and fineness of the gold in each but by the supply and demand
of exchange operations.
The value of the Spanish silver is fixed by the quotations at
Madrid of exchange on Paris or London, and in a lesser degree by
the supply and demand, and not by any intrinsic difference in
the metal.
The par of exchange in Cuba with London or England is
$4.44 Spanish gold to the pound sterling.
The actual value of the gold peso or dollar of Cuba as
declared by the director of the United States mint is 92 and
6-10 cents ($0.926). In exchange transactions between the
United States and Cuba drafts, checks and bills of exchange are
drawn in United States dollars at exchange on New York or in
pesos and centimes, the money of that country. The money
in circulation consists of paper currency, gold, silver and bronze
coins. United States money circulates freely.
GOLD COIN^.
Gross Weight Fineness Pure Gold
Denomination (Grains) (Thousandths) (Grains)
Spanish Quadruple
(Onza) 417.6659 875 365.4576
Doubloon Isabella 129.4327 900 116.4894
Alphonse
(25 pesetas') 124.4543 900 112.0089
Value in
United States
Money
S15.7389
5.0167
4.8238
MINOR COINS.
Denomination
10 Centimes
5 Centimos
2 Centimos
1 Centimo
Composition
| 95% copper,
> 4% tin and
j 1% zinc
Gross Weight
(Grains) Legal Tender Value
154.3235] $0.0192
77. 1617 [ To the amount of . 0096
30. 8647 f 5 Pesetas. .0038
15.4323 .0019
THE MONETARY SYSTEMS OF THE WORLD 59
Money of Porto Rico.
Unit: Dollar=100 Cents
The value of the gold dollar is the same as in the United
States, namely, 100 cents.
While in some cases accounts are still kept in Spanish
money, as a rule they are now kept in United States money
and drafts, checks and bills of exchange are so drawn.
Money of Santo Domingo.
Unit: Dollar=100 Cents
While the unit of money of this country is the same as in
the United States, so little money is used that no value of the
coins, mostly silver, can be given. Paper currency is issued
by banks.
Money of Martinique.
Unit: Franc=100 Centimes
The actual value of the gold franc in the money of the
United States is 19 and 3-10 cents ($0.193). This country
uses the money of France almost exclusively, although United
States gold coins are accepted. In exchange transactions
between the United States and Martinique, drafts, checks and
bills of exchange are usually drawn in United States dollars or
francs.
SOUTH AMERICA.
Money of Argentine Republic.
Unit: Peso=100 Centavos
The actual currency of Argentina is depreciated paper,
fluctuating greatly in value. Gold is usually at a high premium,
for instance, 180 premium that is, $280 paper to $100 gold.
Dur'ng the year 1903 gold was at a premium of 127.27 per cent.
Argentine gold coins are full legal tender. Silver coins are
legal tender only to the amount of 10 pesos and bronze coins
to the amount of 1 peso.
The value of the gold peso in the money of the United States
is 96 and 48-100 cents ($0.9648). In exchange transactions
between this country and the United States, drafts and bills
of exchange are generally drawn in United States dollars at
exchange on New York Caty, unless otherwise stipulated. The
money in circulation consists of paper currency and gold,
silver and copper coins, as follows:
60
FOREIGN EXCHANGE TEXT BOOK
PAPER MONEY.
The paper currency is composed exclusively of government
notes convertible into gold at the conversion office at the rate
of 44 centavos (cents) to one peso or dollar paper, whenever
that office has gold on hand. The denominations are: 1, 2, 5,
10, 20, 50, 100, 200, 500 and 1,000. There are also 50-centavo
notes and notes of 5, 10 and 20 centavos, the latter not being-
legal tender.
GOLD COINS.
Gross Weight Fineness
Denomination (Grains) (Thousandths)
Argentina (5 Pesos) 124 . 4542 900
Half Argentina
(2JPeso) 62.2271 900
SILVER COINS.
Denomination
Peso
50 Centavos
20 Centavos
10 Centavos
5 Centavos
Denomination
20 Centavos (Nickel)
10 Centavos (Nickel)
5 Centavos (Nickel)
2 Centavos(Bronze)
1 Centavo (Bronze)
Pure Gold
(Grains)
112.0088
56.0044
Gross Weight
Fineness
Pure Silver
(Grains)
(Thousandths)
(Grains)
385.8089
900
347.2280
192.9044
900
173.6140
77.1617
900
69.4456
38.5808
900
34.7228
19.2904
900
17.3614
Value in
United States
Money
$4.8238
2.4119
Value in
United State*
Money
$0.9648
.4824
.1929
.0964
.0482
MINOR COINS.
Composition
75% copper and
25% nickel
95% copper,
4% tin and
1% zinc
Gross Weight
(Grains)
61.7294 ]
46.2970 |
30.8647
Legal Tender
154.3235
77.1617
I To amount of
1 Peso.
Value
). 1929
.0964
.0482
.0192
.0096
Money of British Guiana.
Being a British colony the money in use is supplied by
Great Britain, although accounts are generally kept in dollars
and cents and drafts and bills of exchange are usually so drawn.
Paper money is issued by banks. Gold does not circulate.
It is at a premium of 1 to 2 per cent over the actual currency,
which is paper and silver coins.
Money of Bolivia.
Unit: Boliviano^ 100 Centavos
This country has the single silver standard. The money
of account is the silver boliviano or silver peso. The coinage
of gold has long since been suspended and the old onzas and escu-
dos are no longer found in the country. The Bank of Bolivia
issues paper money redeemable on demand and generally OB
a par with silver.
Value in
Gross Weight
Fineness
Pure Silver
United States
(Grains)
(Thousandths)
(Grains)
Money
385.8089
900
347.2280 1
Estimated
192.9044
900
173.6140 I
quarterly
69.4456
900
62.5010 [
by Director
34.7228
900
31.2505 |
of the
17.3614
900
15.6252 J
U. S. Mint,
THE MONETARY SYSTEMS OF THE WORLD 61
The value of the silver boliviano in the money of the United
States fluctuates according to the market price of silver. In
exchange transactions between Bolivia and the United States
drafts and bills of exchange are usually drawn in United States
dollars, at exchange on New York City, unless preferred in
other money. The money in circulation consists of paper
currency and silver, nickel and bronze coins. The home value
of the silver boliviano is about the same as the home value of
the silver dollar in the United States.
The weight, fineness, etc., of the silver coins are as follows:
SILVER COINS.
Grnss Wf>iirl
Denomination
Boliviano
50 Centavos
20 Centavos
10 Centavos
5 Centavos
The silver boliviano is worth about 43 to 44 cents at the
present time.
MINOR COINS.
Gross Weight
Denomination Composition (Grains) Legal Tender Value
10 Centavos (Nickel) j 75% copper and 77. 1617 (No data) $0.0964
5 Centavos (Nickel) 1 25% nickel 38. 5808 . 0482
1 Centavo (Bronze) J 95% copper, 1 154.. 3235 .0096
i Centavo (Bronze) *<4 77.1617 .0048
I i/o zinc j
Money of Brazil.
Unit: Milreis=1000 Reis
Owing to the depreciation of paper money practically all
~old and silver money has disappeared.
The milreis (1,000 reis) at par is worth 27 pence English
money or $0.545 United States money, so that the milreis is
worth only 44.4 per cent of its face value and the premium
on gold is 125 per cent. There are no bank notes in circulation.
Some of the notes in circulation bear the names of banks, but
the Government has arranged to take them over, so that they
are, to all intents and purposes, Government notes. The only
currency in circulation is paper and subsidiary nickel and
copper coins.
During the year 1903 the average premium on gold was
226.6 per cent, the highest being 234.2 per cent, the lowest
216.2 per cent.
The gold standard was adopted by Brazil in 1849. The
mint par of exchange between Brazil and England is 1 milreis
= 26.93 pence, which makes the 20-milreis piece worth 2-
62
FOREIGN EXCHANGE TEXT BOOK
4s lOd, and other gold pieces in proportion. Paper money
fluctuates in value to a considerable extent. One thousand
milreis is called a "conto;" 1,000 contos are called "conto
de conto."
The actual value of the gold milreis in the money of
the United States as declared by the Director of the United
States mint is 54 and 6-10 cents ($0.546). In exchange
transactions between this country and the United States,
drafts and bills of exchange are generally drawn in United States
dollars at exchange on New York City or in English money.
The weight, fineness, etc., of the coins of Brazil are as
follows :
GOLD COINS.
Denomination
20 Milreis
10 Milreis
5 Milreis
Denomination
500 Reis
Milreis
2 Milreis
Gross Weight
(Grains)
Fineness
(Thousandths)
Pure Gold
(Grains)
Value in
United States
Money
276.6973
138.3486
69.1743
917
917
917
253.7314
126.8657
63.4328
$10.9273
5.4636
2.7318
SILVER COINS.
Value in
Gross Weight
Fineness
Pure Silver
United States
(Grains)
(Thousandths)
(Grains)
Money
98.3812
917
90.2156
.2731
196.7625
917
180.4312
.5463
393.5250
917
360.8625
$1.0926
MINOR COINS.
Composition
Denomination
200 Reis (Nickel) ) ., ,
100 Reis (Nickel) % Sgl
50 Reis (Nickel) j 25/0 mckel
40 Reis (Bronze) ( 95% copper,
20 Reis (Bronze) \ 4% tin and
10 Reis (Bronze) [ 1% zinc
Gross Weight
(Grains)
Legal Tender
Value
*?! To amount of $0.1092
108. 0264 J
108'o2fi4l Toam0untof
1U8.U^D4< onn T?AIC
54.0132 200 Reis.
.0546
.0273
$0.0218
.0109
.0054
Money of Chile.
Unit: Peso=100 Centavos
Chile is nominally on a gold basis but the currency is
inconvertible paper.
Silver is legal tender to the amount of 50 pesos between
individuals, but full legal tender to the government. Gold is
full legal tender. The only mint in Chile is that at Santiago.
The law of March 9, 1904, provides for the coinage of new
copper coins as shown below:
The actual value of the gold peso in the money of United
States as declared by the Director of the United States mint is
36 5-10 cents (SO. 365). In exchange transactions between
this country and United States drafts, checks and bills of
exchange are generally drawn in United States dollars at
exchange on New York City, or in pesos.
THE MONETARY SYSTEMS OF THE WORLD
63
The value of the gold peso is fixed by law at 1 shilling 6 pence
(English money), or 36^ cents ($0.365) United States money,
and the 10 peso (doubloon) at 15 shillings (English), or $3.65
United States money.
PAPER MONEY.
Paper money is usually at a heavy discount. Notes are
issued by about fifteen banks and are subject to a variable
gold premium, and must be handled with caution on account
of man excellent counterfeits.
Gross Weight
Denomination (Grains)
Condor (20 Pesos) 184.9115
Doubloon ( 10 Pesos) 92 . 4557
Escudo (5 Pesos) 46 . 2278
Peso 9 . 2455
GOLD COINS.
Fineness
(Thousandths)
916
916f
916|
The gold peso is not coined.
Pure Gold
(Grains)
169.5022
84.7511
42.3755
8.4751
Value in
United States
. Money
$7.2998
3.6499
1.8249
.3649
There are
1000 fine, the
308.640 grains.
pieces, varying
Denomination
Peso
20 Centavos
10 Centavos
5 Centavos
SILVER COINS.
two silver pesos in circulation, one being 835-
other 700-1000 fine, both being 20 grams or
There are also 50, 20, 10 and 5 silver centavo
from 200-1000 to 835-1000 fine.
Gross Weight Fineness Pure Silver
(Grains) (Thousandths) (Grains)
Value in
United States
Money
308.6471
835
257.7203
$0.3649
61.7294
835
51.5440
.0730
30.8647
835
25.7720
.0365
15.4323
835
12.8860
.0183
MINOR COINS.
Denomination Composition
New Issue (Copper).
} Centavo
Old Issue (Copper).
2 Centavos
1 Centavo
J Centavo
95% copper and
5% nickel
Gross Weight
(Grains)
108.0240
77.1600
54.0120
38.5800
108.0264
77.1617
46.2970
Legal Tender
(No data)
(No data)
Value
$0.0091
.0073
.0036
.0018
$0.0072
.0036
.0018
Money of Colombia.
Unit: Dollar=100 Cents
By the law of October 25, 1903, Colombia adopted the
gold standard prescribing as a monetary unit a gold dollar
weighing 1,672 grams (25.8 grains) and 900 fine, the actual
value being the same as that of the United States gold dollar.
64
FOREIGN EXCHANGE TEXT BOOK
The new law provides that in public or private transactions
it is permissible to stipulate payment in either the gold monetary
unit or paper money. If contracts stipulate payment in gold,
the contract is complied with by the payment of an equivalent
sum in paper money at the rate of exchange ruling on the day
of payment. All obligations contracted for legal tender (moneda
corriente) in which no special class of money is stated, will be
understood as having been contracted for and will be payable in
bills of forced currency.
The actual currency of Colombia is inconvertible paper.
Gold is usually at a high premium,
In exchange transactions with the United States drafts,
checks and bills of exchange are usually drawn in United States
dollars at exchange on New York. The money in circulation
consists of a paper currency, and gold, silver and nickel coins,
as follows:
PAPER MONEY.
Notes issued by the Government and banks in denomina-
tions of 5, 10, 50, 100 and 500 pesos.
Denomination
Double Condor
Condor
Gross Weight
(Grains)
497.8178
248.9089
GOLD COINS.
Fineness
(Thousandths)
900
900
Pure Gold
(Grains)
448.0360
224.0180
Value in
United States
Money
$19.2952
9.6476
There are also gold coins called doubloons, half-doubloon
and quarter-doubloon in circulation.
SILVER COINS.
Denomination
Peso
2 Decimo
Decimo
Half Decimo
Gross Weight Fineness Pure Silver
(Grains) (Thousandths) (Grains)
Value in
United States
Money
385.8089
900
347.2280 1
Fluctuates
77.1617
38.5808
19.2904
835
835
835
64.4300 J
32.2150 1
16.1075
according to
price of
silver.
MINOR COINS.
5, 2 and J Centavo of nickel.
Money of Ecuador.
Unit: Sucre=100 Centavos
Ecuador has at present the single silver standard. Up to
1884 the currency of Ecuador consisted of the coins of the
neighboring countries. Since 1884 a national currency has
been introduced with the sucre or peso, 900-thousandths fine,
as the monetary unit. There is, however, a paper currency at
present depreciated over 50 per cent. There is no mint in the
country.
THE MONETARY SYSTEMS OF THE WORLD 65
The actual value of the gold sucre in the money of the
United States as declared by the director of the United States
mint is 48 and 7-10 cents ($0.487). In exchange transac-
tions with the United States drafts, checks and bills of exchange
are usually drawn in United States dollars at exchange on
New York City. The money in circulation consists of paper
currency and gold, silver and nickel and bronze coins as follows:
PAPER MONEY.
Notes issued by banks in denominations of 5, 10, 50, 100
and 500 sucres.
GOLD COINS.
Value in
Gross Weight Fineness Pure Gold United States
Denomination (Grains) (Thousandths) (Grains) Money
10 Sucres 125.5576 900 113.0018 $4.8665
There is also in circulation the gold condor ($9.65) and the
double condor ($19.30) pieces.
SILVER COINS,
Value in
Gross Weight Fineness Pure Silver United States
Denomination (Grains) (Thousandths) (Grains) Money
Sucre 385.8089 900 347.2280 $0.4866
Peseta (20 centavos) 77.1617 900 69.4456 .0973
Real ( 1 Centavos) 38.5808 900 34.7228 .0486
Midio-Real
(SCentavos) 19.2904 900 17.3614 .0243
MINOR COINS.
5, 1 and J-centavo pieces of nickel and 2 and 1-centavo pieces of bronze.
Money of French Guiana.
Unit: Franc=100 Centimes
Although the unit of money in this country is the same as
in France and the coins of that country are in general use,
accounts are usually kept in pesos and centavos, or dollars and
cents, as in the other South American countries.
Money of Paraguay.
Unit: Peso=8 Reals
The money of account of Paraguay is the peso, divided
into 8 reals. It is also divided into 100 centavos. The country,
however, has a depreciated paper currency. The gold onza is
rated officially at \1\ paper pesos, making the paper peso
equal to 1.3617 grams or 21.01375 grains, fine gold. Five-
franc pieces, venezolanos, and other piastres of the same kind
are in like manner reckoned as equivalent to \\ paper pesos.
A financial law promulgated October, 1903, fixes the value
of gold, silver and paper currency in Paraguay. This law
66 FOREIGN EXCHANGE TEXT BOOK
fixes the gold and silver of the Argentine Republic as the legal
currency in Paraguay. The United States $20 gold piece is
worth $20.40, and the English sovereign $5 in Paraguayan
gold. The banks and exchange houses observe this law. For
instance, in making a draft on the United States they will take
each dollar at $1.02, when it really bears a premium of 3J per
cent mint value in the Argentine gold. The exchange as a
rule is quoted at the rate of the day on which Argentine gold
is being sold. At present Argentine gold is stationary, its
rating being $8.75, which means that $8.75 Paraguayan paper
will purchase $1 Argentine gold. This makes the Paraguayan
paper peso or dollar worth at present 11J cents gold. In addi-
tion to the foregoing quotations of American gold there is a
bank discount and a computation of interest to be calculated.
The silver pieces of 25 grams (385.800 grains) 900-thousandths
fine will be valued at 94 cents (centavos) Paraguayan, and
the fractions their respective values accordingly.
Although the money of account of this country is as above
noted, the money in circulation is principally that of Argentine
Republic and Brazil. Very little money is in circulation or
needed, and there are comparatively very few exchange trans-
actions bet\veen this country and United States. We are unable
to give a list of gold and silver coins, or their value. For minor
coins see below:
MINOR COINS.
Gross Weight
Denomination Composition (Grains) Legal Tender Value
NICKEL.
20 Centavos or Cents f 75% copper, 61 . 7294 ] To amount of $0 . 1929
10 Centavos or Cents \ and 46 . 2970 [ 2% of the pay- . 0964
5 Centavos or Cents ( 25% nickel 30.8647 ment. .0482
Money of Peru.
Unit: Sol=10 Dineros of 10 Centavos
The unit, the silver sol, is the same weight and fineness as
the French 5-franc piece. The free coinage of silver was sus-
pended in April, 1897, and by the Act of December 27, 1897,
the gold standard was re-established, gold having been demone-
tized by Act of December 30, 1872, and thereafter went out of cir-
culation. The new gold coin, called the libra peruano (Peru-
vian pound) is of the same weight and fineness as the pound
sterling of England and both are now in circulation in Peru con-
currently, with the silver sol at the legal par of equality, which
is that of 1 to 31. This ratio values the sol at 24 pence (Eng-
lish), (48 cents United States) and the libra at 10 sols.
Paper money disappeared from circulation in 1887, and
its emission has ever since been prohibited.
THE MONETARY SYSTEMS OF THE WORLD 67
The actual value of the gold sol in the money of the United
States as declared by the Director of the United States mint
is 48 and 7-10 ($0.487). In exchange transactions between
Peru and the United States, drafts and bills of exchange are
usually drawn in United States dollars at exchange on New
York City, unless otherwise preferred. The money in circula-
tion consists of gold, silver and copper coins. This country
mines a vast quantity of silver.
The gold "libra," equal to 10 sols, is worth $4.8665 in
United States money.
The weight, fineness, etc., of the coins of Peru are as follows:
GOLD COINS.
Value in
Gross Weight Fineness Pure Gold United States
Denomination (Grains) (Thousandths) (Grains) Money
Libra 123.2744 916 113.0015 $4.8665
Half Libra 61.6372 916$ 56.5007 2.4332
SILVER COINS.
Denomination
Sol
Half Sol
Fifth Sol
Dinero (Dime)
Half Dinero
Gross Weight Fineness Pure Silver
(Grains) (Thousandths) (Grains)
Value in
United States
Money
385.8089
900
347.2280
$0.4866
192.9044
900
173.6140
.2433
77.1617
900
69.4456
.0973
38.5808
900
34.7228
.0486
19.2904
900
17.3614
.0243
The minor coins are 2 and 1 centavo pieces of bronze.
Money of Uruguay.
Unit: Peso=100 Centavos
The actual value of the gold peso of this country in the
money of the United States as declared by the Director of the
United States mint, is $1.034. In exchange transactions with
the United States, drafts, checks and bills of exchange are
usually drawn in United States dollars at exchange on New
York City unless preferred in the money of the country. The
money in circulation consists of paper currency and gold, silver
and minor coins as follows:
PAPER MONEY.
Notes issued by the local and foreign banks in various
denominations of pesos.
GOLD COINS.
Peso or patacoe ($1.04), 1\ pesos or 2 patacoe pieces ($2.59),
5 pesos or 4 patacoe pieces ($5.17).
68
FOREIGN* EXCHANGE TEXT BOOK
SILVER COINS.
Peso ($1.04), 50 centavos ($0.51), 20 centavos ($0.21),
10 centavos ($0.11). The values of these silver coins are esti-
mated at same value as for the gold pieces.
MINOR COINS.
No data. There is no mint in this country.
Money of Venezuela.
Unit: Bolivar=20 Centavos
'The monetary unit is the venezolano or peso, divided into
100 centavos, a silver coin equal in weight and fineness to the
French silver 5-franc piece. The ratio of gold to silver is 1 to
15. The only difference between the French monetary system
and that of Venezuela is that whereas the French 5-franc piece
is unlimited tender, the 5-bolivar piece or venezolano is legal
tender only to the amount of 500 bolivars, or about $100 in
United States gold coin. In this respect Venezuela is more
like a single gold standard country. For convenience, however,
it is generally classed among double standard countries.
The actual value of the gold bolivar in the money of the
United States is 19 and 3-10 cents ($0.193). In exchange
transactions with the United States, drafts and bills of exchange
are usually drawn in United States dollars at exchange on
New York City unless preferred in the money of some other
country.
The money in circulation consists of paper currency and
gold, silver and bronze coins as follows:
PAPER MONEY.
Notes issued by banks in various denominations of bolivars.
GOLD COINS.
Denomination
100 Bolivars
50 Bolivars
20 Bolivars
10 Bolivars
5 Bolivars
Gross Weight Fineness Pure Gold
(Grains) (Thousandths) (Grains)
Value in
United States
Money
497.8178
900
448.0360
$19.2952
248.9089
900
224.0180
9.6476
99.5635
900
89.6072
3.8590
49.7817
900
44.8036
1.9293
24.8908
900
22.4818
.9647
SILVER COINS.
Denomination
Gross Weight Fineness Pure Silver
(Grains) (Thousandths) (Grains)
Value in
United States
Money
5 Bolivars
385.8089
900
347.2280
$0.9352
2 Bolivars
154.3235
835
128.8601
.3470
Bolivar
77.1617
835
64.4300
. 1735
Half Bolivar
38.5808
835
32.2150
.0867
Quarter Bolivar
Fifth Bolivar
19.2904
15.4323
835
835
16.1075
12.8860
.0433
.0347
MINOR COINS No data.
THE MONETARY SYSTEMS OF THE WORLD 69
Miscellaneous.
AFGHANISTAN uses British India and Persian money.
ANDORA: Is the same as Spain.
ARABIA: One krusch equal to 40 diwani, equal to 1
marks ($0.395); 1 mahmudi equal to 20 gass, equal to about
1-5 of a mark, or about 5 cents. One makkafhaler equal
to 80 cabir, equal to 3.55 marks, or about 85 cents, United
States money.
CONGO STATES use French, German and English coins, and
brass wire.
HIMALAYA STATES: One mohar equal to 6 annas; 8 pies
equal to 80-100 of a mark, or about 19 cents United States
money. One mohri rupee equal to 2 mohar or about 38 cents
United States money.
KOREA uses same money as China. Recently one yang
equal to 10 mum, or about 24 cents in United States money.
LUXEMBURG uses French, Dutch and German money.
MONTENEGRO uses Austrian, Turkish and Russian money.
Meaning of 16 to 1.
The phrase "16 to 1" as applied to the coinage, means
that the mint value of IB ounces of silver shall be equal to the
mint value of one ounce of gold; that is, that 16 ounces of silver
shall be coinabJ.e ~'nto as many standard silver dollars as I ounce
of gold is coinaole into standard gold dollars.
Standard Bullion.
Standard bullion contains 900 parts of gold or pure silver
and 100 parts of copper alloy.
The coining value of an ounce of PURE gold is $20.67183,
and the coining value of an ounce of STANDARD gold is $18.60465.
The coining value in standard silver dollars of an ounce
of PURE SILVER is $1.2929, and the coining value of an ounce
of STANDARD silver is $1.1636.
70 FOREIGN EXCHANGE TEXT BOOK
Value of standard gold coins or bullion, 900-thousandths fine,
based upon the United States Government coining value of
an ounce of standard gold, namely: $18.60465 per ounce of
480 grains, from 1 to 9 ounces, with decimal for figuring
from 1 to 1,000 ounces.
1 Ounce, value $ 18.60465116
2 Ounces, value 37.20930232
3 Ounces, value 55.81395349
4 Ounces, value 74.41860465
5 Ounces, value 93.02325581
6 Ounces, value 111.62790698
7 Ounces, value 130.23255814
8 Ounces, value 148.83720930
9 Ounces, value 167.44186046
NOTE. Move decimal one figure to right for tens of ounces.
Move decimal two figures to right for hundreds of ounces.
Move decimal three figures to right for thousands of ounces.
Seigniorage.
This term as used in the United States, means the profit
arising from the coining of bullion. The Government does not
purchase gold bullion, but coins it on private account; that is,
standard gold bullion may be deposited at the mints in any
amount, to be coined for the benefit of the depositor, without
charge for coinage. There is no profit from the coinage of gold
bullion, the face value of gold coins being same as their bullion
value. But at the present ratio of 16 to 1 the face value of the
silver dollar is greater than its bullion value; therefore, when
silver bullion is purchased and coined into dollars, there is a
profit arising from such coinage, the amount of which depends
upon the price paid for the bullion. For example, there are
371^ grains of pure silver in a dollar, and there are 480 grains
of pure silver in a fine ounce. The coinage value of a fine
ounce is therefore $1.2929. If the fine ounce can be purchased
for 70 cents, the profit of its coinage (the seigniorage) is $0.5929,
und the profit on the 37 1 grains of pure silver in the single
dollar is $0.4586, which is the difference between the actual cost
of the bullion in the dollar and the nominal value of the coin.
The silver purchased by the Government is carried on the
books of the treasury at its actual cost, and the seigniorage is
declared on the coinage of each month and paid into the treasury.
Coinage of Gold.
In the United States there is free and unlimited coinage of
gold. Anyone may deposit standard gold bullion at the mints
without charge for coining. When other than standard bullion
is received for coinage a charge is made for parting, or for refin-
ing, or for copper alloy, as the case may be. Refining is elimi-
nation from the bullion of all base metal. Parting is separation
THE MONETARY SYSTEMS OF THE WORLD 71
of any silver which may be contained in the bullion. The
depositor receives in gold coin the full value of the gold in his
bullion, less charges for alloy, parting, etc.
Adoption of the Gold Standard.
Since the year 1894 the following countries have adopted
the gold standard:
Chile in 1895 Costa Rica in 1896 Russia in 1897
Japan in 1897 British India in 1899, at rate of 15 rupees to 1
pound sterling.
United States in 1900 Ecuador in 1900 San Domingo"(U. S. Stan-
dard) in 1901
Colombia in 1903 Panama in 1903 Mexico in 1904
The Term "Ratio."
The term "ratio" in coinage is used to express the equiva-
lent between gold and silver under the varying mint laws.
Thus it will be seen that the gold 5-franc piece weighs 1.613
grams, while the silver 5-franc piece weighs 25 grams the
relation is therefore 1 to 15 \ (arrived at by dividing the weight
of the silver piece by the weight of the gold piece). In other
words, a pound of gold would be coined into as many francs as
15^ pounds of silver; therefore it is said that the coining rate
of France is 1 to 15. This applies, however, to full debt-paying
silver ONLY, for it will be seen that while the subsidiary silver
pieces of France bear the same relation in weight, the fineness
is less, making the pieces less valuable. In many countries the
same result is effected by reducing the weight instead of the
fineness of subsidiary coins. It is for this reason such coins
are legal tender for small amounts only, rarely over $10 in any
civilized country, and they are made cheaper to prevent their
being exported, being intended solely for domestic use.
In a like manner, minor coins, which are intrinsically of
little value, are legal tender for very small amounts say
25 to 50 cents. In most countries nickel and bronze are used
for minor coins.
The ratio for coining when established by each nation
was intended to represent approximately the actual value
relation between gold and silver, and it may be said that for
many years this was nearly correct. But the great increase
in the production of silver since 1873 and the restrictions of
its use by many countries caused such a reduction in its market
value, that the ratio is now nearer 27 to 1 of gold, consequently
almost all nations have discontinued the free and unlimited
coinage of silver into full debt-paying money, for it is obvious
that if any one nation were to do so the silver product costing
but 65 cents per ounce would be brought to that nation's mints
and coined into pieces worth $1.2929 per ounce, w r hich could be used
to pay debts or purchase commodities in that country. In other
words, they would make about 64 centsper ounce onthe transaction.
72
FOREIGN EXCHANGE TEXT BOOK
The gold monetary units of principal countries of the world and their
weight, fineness and value expressed in terms of the
United States gold dollar.
Value in
Gross Weight Fineness Pure Gold United States
Country Name of Unit
(Grains) (Thousandths) (Grains)
Money
Alaska
Dollar
25
.8
900
23
.22
SI
.00
Algeria
Franc
4
.97817
900
4
.48036
.19295
Australia
Pound Sterl.
123
.2744
9163
113
.0015
4
.8665
Austria-Hung.
Kronen
5
22776
900
4
.70498
.20262
Bahama (I.)
Pounds Sterl.
123
2744
916$
113
.0015
4
.8665
Barbadoes (I.)
Pounds Sterl.
123
.2744
9163
113
.0015
4
.8665
Belgium
Franc
4
.97817
900
4
.48036
.19295
Bermuda (I.)
Pounds Sterl.
123
.2744
9163
113
.0015
4
.8665
Brazil
Milreis
13
.83486
917
12
.68657
.54636
Bulgaria
Lew
4
.97817
900
4
.48036
.19295
Canada
Dollar (U.S.)
25
,8
900
23
.22
1
.00
Cape Colony
Pounds Sterl.
123
.2744
9163
113
.0015
4
.8665
Chile
Peso
9
.24557
9163
8
.47511
.36499
Colombia
Dollar
25
.80287
900
23
.22258
1
.00
Costa Rica
Colon
12
.00637
900
10
.80573
1
.46536
Cuba
Peseta
(Legal unit)
4
.97817
900
4
,48036
.19295
Denmark
Kroner
6
91415
900
6
22274
.26799
Egypt
Egyptian P'.d
131
1750
875
114
,7781-
4
.9430
England
Pounds Sterl.
123
2744
916$
113
.0015
4
.8665
Fiji (I.)
Pounds Sterl.
123
2744
9163
113
.0015
4
.8665
Finland
Fin mark
4
97847
900
4
43063
19296
France
Franc
4
97817
900
4
48036
.19295
Germany
Reichsmark
6
14588
900
5
53130
23821
Greece
Drachma
4
97817
900
4
.48036
.19295
Hawaii
Dollar (U.S.)
25
8
900
23
,22
1
.00
Hayti
Gourde
24
89084
900
22
40176
.96476
Holland
Gulden
10
37054
900
9
33348
.40195
Ireland
Pounds Sterl.
123
2744
9163
113
0015
4
.8665
Italy
Lire
4
,97817
900
4
48036
19295
Jamaica (I.)
Pounds Sterl.
123
2744
916
113
0015
4
.8665
Japan
Yen
12.
86024
900
11.
57422
49845
Java
Gulden (Hoi.)
10.
37054
900
9.
33348
40195
Martinique
Fran c ( France) 4 .
97817
900
4.
48036
19295
Mexico
Peso
12
86023
900
11.
57421
4984
Natal
Pounds Sterl.
123
2744
916f
113.
0015
4
8665
New Zealand
Pounds Sterl.
123
2744
91F3
113
0015
4,
8665
Norway
Kronor
6
91415
900
6.
22274
26799
Panama
Balboa
25.
8
900
23.
22
1.
00
Porto Rica
Dollar(U.S.)
25.
8
900
23.
22
1
00
Portugal
Milreis
27.
3692
916
25.
0885
1.
0804
Roumania
Lei
4.
97817
900
4.
48036
19295
Russia
Ruble
13.
27584
900
11.
94826
51456
Scotland
Pounds Sterl.
123
2744
9163
113.
0015
4.
8665
Servia
Dinar
4
97817
900
4.
88035
19295
S. African Rep.
Pounds Sterl.
123
2744
9163
113.
0015
4.
8665
Spain
Peseta
4
97817
900
4.
48036
19295
Sumatra
Gulden
10.
37054
900
9.
33348
40195
Sweden
Kronor
6.
91415
900
6.
22274
26799
Switzerland
Franc
4
97817
900
4.
48036
19295
Tasmania
Pounds Sterl.
123,
2744
9163
113.
0015
4.
8665
Tunis
Pounds Sterl.
123,
.2744
9163
113.
0015
4.
8665
Turkey
Turkish P'd
111.
3660
9163
102.
0855
4.
3964
United States
Dollar
25.
8
900
23.
22
1.
00
Venezuela
Bolivar
4.
97817
900
4.
48036
1929*
Wales
Pounds Sterl.
123.
2744
9163
113.
0015
4"!
8665
THE MONETARY SYSTEMS OF THE WORLD
73
Gold monetary units of foreign countries arranged in the order of their
intrinsic value.
Countries
Units
Value
Egypt
Pound
$4.9430
Great Britain
and Colonies
Pounds Sterling
4.8665
Turkey
Pound
4.3964
Portugal
Milreis
1 . 0804
United States
Dollar
1.00
Canada
Dollar (U. S.)
1.00
Colombia
Dollar
1.00
Panama
Balboa
1.00
Hayti
Gourde
.96476
Brazil
Milreis
.54636
Russia
Ruble
.51456
Japan
Yen
.49845
Mexico
Peso
.4984
Costa Rica
Colon
.46536
Holland and
Colonies
Gulden
.40195
Chile
Peso
.36499
Denmark
1
.26799
Norway
[ Kroner
.26799
Sweden
J
.26799
Germany
Reichsmark
.23821
Austria- Hungary
Kronen
.20262
Belgium
Franc
.19295
Bulgaria
Lew
.19295
Cuba
Peseta
.19295
Finland
Finmark
.19295
France
Franc
.19295
Italy
Lire
.19295
Rou mania
Lew
.19295
Servia
Dinar
.19295
Spain
Peseta
.19295
Switzerland
Franc
.19295
Venezuela
Bolivar
. 19293-
^5
CHAPTER III.
CONVERSION OF FOREIGN MONEY INTO
UNITED STATES MONEY AND
VICE VERSA.
The methods of figuring or converting the monies of the
different foreign countries into the money of the United States
and vice versa are not generally understood even by dealers in
foreign exchange, for the reason that printed tables are pro-
vided and generally used for such purpose, which not only
insure accurate computation but save much time and labor.
Students, however, who desire to acquire a thorough knowl-
edge of the science of foreign exchange, should be able to figure
all transactions without the use of tables. The operations in
figures are shown in the following examples:
ENGLISH MONEY.
Table.
4 farthings (far.) =1 penny
12 pence (d) = shilling
20 shillings (s.) =1 pound or sovereign
21 shillings =1 guinea
s. d. far.
1 = 20 = 240 = 960
1 = 12 = 48
1 = 4
EXAMPLE 1.
ADDITION, ENGLISH MONET.
s.
d.
240
12
8
15
10
5
5
5
4
ANSWER 261 8s 5d
EXPLANATION. Since 12 pence equal 1 shilling and the
total of pence is 17, carry 1 to shillings, leaving 5 pence. As
the total of shillings is 28 (including 1 forward from pence) and
there are 20 shillings to the pound, carry 1 to pounds, leaving
8 shillings.
75
76 FOREIGN EXCHANGE TEXT BOOK
EXAMPLE 2.
MULTIPLICATION, ENGLISH MONEY.
s. d.
215 12 8
4
ANSWER 862 10s. 8d.
EXPLANATION. 4 times 8 pence = 32 pence or 2s 8d,
therefore carry 2 to shillings. 4 times 12s = 48s plus 2s = 50s,
or 2 10s, therefore carry 2 to pounds, leaving 10s. 4 times
2 15 = 860, plus 2 carried from shillings = 862.
EXAMPLE 3.
SUBTRACTION, ENGLISH MONEY.
s. d.
215 12 8
212 15 10
ANSWER 2 16s. lOd.
EXPLANATION. Since lOd cannot be subtracted from 8d,
add 12d to the minuend (upper figures), making 20d. lOd
from 20 = 10d. Since 16s (includes Is brought forward) cannot
be subtracted from 12s, add 20 to the minuend, making 32s.
16s from 32s = 16s. Carry 1 to pounds. 213 from 215 = 2.
EXAMPLE 4.
DIVISION, ENGLISH MONEY.
s. d.
4 )25 10 4
ANSWER 6 7s 7d.
EXPLANATION. Since 4 into 25 goes 6 times, leaving
remainder of 1 or 20s, carry 20 to shillings, making 30s.
4 into 30 goes 7 times, leaving remainder of 2s or 24d, thus mak-
ing 28d into which 4 goes 7 times.
EXAMPLE 5.
REDUCING POUNDS, SHILLINGS AND PENCE TO DECIMAL OF POUND FOR
CONVENIENCE IN FIGURING:
Reduce 525 10s 6d to pounds and decimal.
Operation: 525=525.
s. 10= .50
d. 6= .025
ANSWER (Decimal) 525.525
EXPLANATION. Multip> shillings by .05 because Is is
1-20 or 5-100 of a pound. Multiply the pence by .004 1-6
EXAMPLES IN THE CONVERSION OP MONEY 77
because Id is 1-240 or 4& thousandths of a pound. To avoid
the use of the fraction J, add 1 if amount is over 12 and 2 if over
35, and result will be the same.
NOTE. The reducing of pounds, shillings and pence to decimal as
above shown, simplifies the process of converting English money into
United States money, as will be seen by examples following.
EXAMPLE 6.
CONVERSION: ENGLISH MONEY INTO UNITED STATES MONEY:
To find the equivalent in United States money of 525 10s. 6d., at
"rate of exchange," &4.96J per pound:
Operation: 525=525.
s. 10= .50
d. 6== . 025
525.525
4.9650 RATE
26276250
3153150
4729725
2102100
ANSWER 2609.2316250 ($2609.23)
NOTE. See Example 5 for explanation of reducing pounds, shillings
and pence to decimal.
EXPLANATION. Reduce pounds, shillings and pence to
decimal as explained in Example 5. Multiply the decimal by
rate of exchange ($4.965), which gives amount in dollars and
cents United States money.
NOTE. See Example 7 showing conversion of same amount United
States money ($2.609.23), into English money, which verifies correctness
of figures iv\ example 6.
EXAMPLE 7.
CONVERSION: UNITED STATES MONEY INTO ENGLISH MONEY:
To find the equivalent in English money of $2,609.23 (United States
money) at rate of exchange, $4.96 per :
Operation: Rate 4.9650 ) 2609.2300 ( 525.524
2482.50 20
126.730 s. 10.480
99.300 12
27.4300 d. 5.760
24.8250
2.60500 ANSWER 525.1 Os. 6d
NOTE. See Example 6 show- 2.48250
ing conversion of same amount
English money (525.10s.6d.) into 122500
United States money, which veri- 99300
fies correctness of figures in Ex-
ample 7. 232000
198600
33400
78 FOREIGN EXCHANGE TEXT BOOK
EXPLANATION. Divide amount in dollars and cents
(United States money) by the rate of exchange per pound,
and it gives the amounts in pounds and decimal of pound.
Multiply the decimal (not the pounds) by 20 (20s = 1) and
it gives the shillings and decimal of shilling. Multiply the
decimal (not the shillings) by 12 (12d = ls) and you find the
pence and decimal of penny. If decimal of penny is 50 or over
add 1 to amount in pence, otherwise discard same.
EXAMPLE 8.
CONVERSION: ENGLISH MONEY INTO UNITED STATES MONEY (another way).
To find the equivalent in United States money of /226.8s.9d. at
"rate of exchange," $4.86 per .
Operation: 226 8s 9d
20s
4528
12d
54345
4.86 RATE.
326070
434760
217380
240 ) 264116.70 ( 1100.486
240
241
240 ANSWER $1,100.49
1167
960
2070
1920
1500
1440
XOTE. The method shown in Example 6 for converting English
money into United States money will be found more simple than that
employed in this example.
EXPLANATION. Multiply the pounds (226) by 20 (20s =
1) and add thereto the amount in shillings (8), which gives
amount in shillings. Multipy that product by 12 (12d = ls) and
add thereto the amount in pence (9), which gives total amount
in pence. Multiply the pence (54345) by rate per pound ($4.86)
and we find the pence and decimal. Divide that product by
240. there being 240 pence to the pound, and you arrive at
the equivalent in dollars and cents, United States money.
EXAMPLES ix THE CONVERSION OF MONEY 79
EXAMPLE 9.
INTEREST OR PERCENTAGE, ENGLISH MONEY.
To find interest at rate of 4 per cent on 550. 15s. lid. for one year.
Or what amount in English money 4 per cent of 550. 15s. lid. would be.
Operation: 550= 550.
15= .75
11= .046
Decimal 550.796
.04%
22. 03184 (pounds and decimal)
-20s.
s. 0.63680
12d.
d. 7.64160 ANSWER 22. Os. 8d.
EXPLANATION. First, reduce pounds, shillings and pence
to decimal as explained in Example 5. Multiply the WHOLE
decimal by rate per cent. (4%), which gives pounds and decimal
of pound. Multiply the decimal (not the pounds) by 20 (20s =
1) and you get the shillings and decimal of a shilling. Mul-
tiply the decimal of shilling (not the shillings) by 12 (12d = ls),
and it gives the pence and decimal of penny. As the decimal of
penny exceeds 5 (d) add 1 to pence.
EXAMPLE 10.
INTEREST, ENGLISH MONEY.
To find the interest in English money, on 50. 12s. 6d., for 93 days
at rate 6 per cent, allowing 365 days to the year.
Operation: 50=50.
s. 12= .60
d. 6= .025
Decimal 50.625
.06%
(Days in year) 365 ) 3. 03750 ( 00832
2920 .00832
93 days
1175
1095 02496
.07488
800
730 0.77376
20s.
s. 15.47520
12d.
d. 5.70240
ANSWER 0. 15s. 6d.
EXPLANATION. Reduce pounds, shillings and pence to
decimal as explained in Example 5. Multiply the pounds
80 FOREIGN' EXCHANGE TEXT BOOK
and decimal by rate per cent (6%). Divide the product by the
number of days in year (365) and multiply the quotient by the
number of days for which interest is to apply (93). Multiply
that product by 20 (20s = 1) and it gives the shillings and
decimal. Multiply the decimal of shillings (not the shillings)
by 12 (12d = ls) and you find the pence and decimal of penny.
EXAMPLE 11.
INTEREST OR PER CENT ENGLISH MONEY.
To find 4 per cent, of 550. 15s. lid.
Operation: 5.50 15s. lid.
. 04% (Rate per cent.)
22.03 3s. 8d
20s.
s. 0.63 (3s. added)
12
d. 7. 64 (8d. added) ANSWER 22. Os. 8d.
EXPLANATION. Point off two figures from the right in
pounds. Multiply by rate per cent (4%). 4 times lld=44d
or 3s 8d. 4 times 15s = 60s, plus 3s (carried from pence) =
3 3s. 4 times 5.50 plus 3 = 22.03. Multiply DECIMAL of
pounds .03 by 20s = 60 plus 3s = .63s. Multiply" 63s by 12d,
adding 8d = 7.64d or 8d, thus giving answer, 22 Os 8d.
EXAMPLE 12.
IMPORTATIONS, VALUED IN ENGLISH MONEY.
To find in United States money value of goods imported, invoiced at
550. 15s. lid., the advalorem duty upon which is 30 per cent:
Operation: 550=550.
s. 15= .75
d. 11= .046
Decimal 550.796
Rate of Exchange (par) 4 . 8665 As used by Custom House.
2680.45
.30%
Cost in U. S. money $804.135. duty,
without duty. $2680 . 4487340
804.13
Cost including duty $3484 . 58 ANSWER
EXPLANATION. Reduce pounds, shillings and pence to
decimal as explained in Example 5. Multiply decimal by the
nar rate of exchange as fixed by Director of the United States
fiiiiii. Multiply product by rate per cent duty (30%) and add
that product to cost, not including duty.
EXAMPLES ix THE CONVERSION OF MONEY 81
French, Belgian and Swiss Money.
1 Franc=100 Centimes
The money of account of France, Belgium and Switzerland
is the franc of 100 centimes, the actual value of the gold unit
in the money of the United States being 19.3 cents.
In exchange transactions between the United States and
France, Belgium and Switzerland, the rate of exchange as
usually quoted in large cities is the variable number of francs
and centimes allowed per $1.00, which is expressed, for example,
thus: Frs. 5.16j, meaning that 5 francs and 16 centimes would
be allowed for each $1.00 United States money. At the smaller
cities and towns it is customary for sellers of exchange to quote
the rate for a single franc, as follows: 19.35 cents, meaning 19
and 35-100 cents (United States money) for each franc.
See "Quotations for Foreign Exchange," Chapter IV.
EXAMPLE 13.
CONVERSION: FRENCH, BELGIAN AND Swiss MONEY INTO UNITED STATES
MONEY.
Find cost of francs 5250.50 at rate of exchange francs 5. 16J.
Operation :
(Rate)) 5 . 1625 ) 5250 . 5000 ( 1017 . 046
51625
88000 ANSWER $1017.05
51625
363750
361375
237500
206500
310000
309750
EXPLANATION. Divide the amount in francs by the rate
of exchange.
EXAMPLE 14.
CONVERSION: UNITED STATES MONEY INTO FRENCH, BELGIAN AND Swiss
MONEY.
To find the amount in francs and centimes that can be purchased
for $ 1 1 7 . 05 at rate of exchange, francs 5 . 1 6 J per $1.00.
Operation: 1017.05
5.1625
508525
203410
610230
101705
508525
Francs 5,250.520625 ANSWER Francs 5,250.52
82 FOREIGN EXCHANGE TEXT BOOK
EXPLANATION. Multiply amount in United States money
by the rate of exchange.
NOTE. Example 14 is reverse of Example 13. The difference of 2
centimes ( \ cent) is caused by not using exact fraction . 046 centimes.
EXAMPLE 15.
CONVERSION: FRENCH, BELGIUM AND Swiss MONEY INTO UNITED STATES
MONEY.
To find' cost of francs 5250 . 50 in United States money at rate of
exchange, francs 516J minus 1-16 of 1 per cent, (expressed francs
516J 1-16).
Operation: 5. 1625 ) 5250.5000 ( 1017.046 (U. S. money)
51625
88000
51625
(1-16 of 1% of amount)
$1017.05 363750
.01 361375
16) 10.1705 237500
206500 $1017.05
.6356or64c. .64
310000
309750 $1016.41 ANSWER
See Quotations for Foreign Exchange, Chapter IV.
EXPLANATION. Divide amount in francs and centimes
(5250.50) by rate of exchange without using fraction 1-16
of 1 per cent, as that applies only to amount in United States
money.. Find 1-16 of 1 per cent of amount in United States
money ($1,017.05), which is 64 cents. Deduct 64 cents from
amount in United States monev and vou have the answer.
EXAMPLE 16.
CONVERSION: FRENCH, BELGIAN AND Swiss MONEY INTO UNITED STATES
MONEY.
To find cost of francs 5250.50 in United States money at rate of
exchange, francs 5.16J plus 1-16 of 1% (expressed francs 5. 16J+1-16).
Operation: 5.1625 ) 5250.5000 ($1017.05
(See operation Example 15.)
1-1 6 of i per cent of $101 7. 05=64 cents (See Example 15)
$10 17. 05 pi us 64 cents =$1017.69 ANSWER
EXPLANATION. Divide amount in francs and centimes by
rate of exchange, which gives amount in United States money.
Find 1-16 of 1 per cent of amount of United States money
and add same thereto.
EXAMPLES IN THE CONVERSION OF MONEY 83
EXAMPLE 17.
CONVERSION OF UNITED STATES MONEY INTO FRENCH, BELGIAN AND
Swiss MONEY.
To find amount of francs and centimes that can be purchased for
$1017.05 at rate of exchange, francs 5.16J minus 1-16 of 1 per cent
(expressed francs 5. 16J-1-16).
Operation: 5. 1625 x 101 7. 05=francs 5250.52
(See Example 14.)
1-16 of 1% of $1017. 05=64 cents
5.1625
.64
206500
309750
3.304000 francs
Francs 5250. 52 plus francs 3. 30=francs 5,253. 82, the answer.
EXPLANATION. Multiply amount of United States money
by rate of exchange, as in Example 14, which gives amount
in francs and centimes. Find 1-16 of 1 per cent of amount
of United States money, as in Example 15. Multiply that
product (64 cents) by rate, which gives amount in francs and
centimes (F. 3.30) to be added to amount of francs and cen-
times given at the regular rate (frs. 5.16^).
EXAMPLE 18.
CONVERSION: UNITED STATES MONEY ;NTO FRENCH, BELGIAN AND
Swiss MONEY.
To find amount in francs and centimes that can be purchased for
$1017.05 at rate of exchange francs 5.16J plus 1-16 (expressed francs
5.16H-1-16).
Operation: $1017.05
5.1625 (rate)
Equals 5,250.52 francs
(See Example 14.)
1-16 of 1% of $10 17. 05=64 cents
(See Example 15.)
64 cents at rate of exchange, francs 5.16J will be francs 3.30
which is arrived at by multiplying rate 5. 1625 by 64 cents).
Deduct francs 3.30 from francs 5250.52=francs 5,247.22 ANSWER
EXPLANATION. Multiply amount in United States money
by rate of exchange (not including fraction 1-16 of 1 per
cent) to find amount in francs and centimes at regular rate
which can be purchased for $1,017.05. As the fraction is plus,
a less number of francs and centimes would be given, therefore
irancs 3.30, which are equivalent to 64 cents at rate 5. 16 j, should
be deducted.
NOTE. Always bear in mind that where the fractional rates of plus
or minus are used, it applies only to the amount in United States money;
therefore, in determining the amount of francs and centimes that can be
allowed for a certain sum in United States money, if the fraction is minus,
more francs and centimes will be given; and if plus, a less number.
84 FOREIGN EXCHANGE TEXT BOOK
EXAMPLE 19.
CONVERSION: To FIND PRICE PER SINGLE FRANC WHEN RATE QUOTED
is PER $1.00.
To find the price of a single franc when rate of exchange is quoted at
francs 5.16J.
Operation: 5.1625) 1.000000 ( .1937
51625
483750
464625
191250
154875
363750
361375
ANSWER .1937 cents or 19 37-100 cents per franc.
EXPLANATION. Divide one dollar by the rate per $1.00.
NOTE. For figuring large sums the amount in cents should be
carried out five or six figures, as for example: . 1937046.
Always bear in mind that the higher the quoted rate per $1.00 for
French, Belgian and Swiss exchange the lower the actual price. For
example: $5,000 at rate francs 5.15 would give 25,750 francs, while
25,750 francs at rate francs 5.20 per 1.00 would cost only $4,951.92.
CONVERSION, FRENCH EXCHANGE: To FIND THE PRICE OF A SINGLE
FRANC WHEN RATE is QUOTED PER $1.00 AND is SUPPLEMENTED
BY A FRACTIONAL RATE OF PLUS OR MINUS, SUCH AS FRANCS 5. 16J-
1-16.
EXPLANATION. First find the price of a single franc at
the straight rate of 5.16|, as shown in Example 19, which, if
carried out, would have been .1937046+, then find 1-16 of
1 per cent of that rate, which in this case would be .000121.
If fraction were minus, as quoted above, you would deduct
.000121 from .1937046, which would leave net rate .1935836+,
THE ANSWER. If fraction were plus 1-16 of 1 per cent the
product .000121 should be added to rate, thus making net
rate per single franc .1938256+. It is unnecessary to use all
the figures of the decimal when figuring the smaller amounts
in francs and dollars.
EXAMPLE 20.
CONVERSION: FRENCH, BELGIAN AND Swiss MONEY INTO UNITED STATES
MONEY, WHEN RATE OF EXCHANGE is QUOTED PER SINGLE FRANC.
To find cost of francs 5250. 50 at rate 19. 37 cents per single franc.
Operation: 5250.50
.1937
3675350
1575150
4725450
525050
1017. 021850, or $1017. 02 ANSWER.
EXAMPLES IN THE CONVERSION OF MONEY 85
EXPLANATION. Multiply the amount in francs and cen-
times by the rate per single franc.
NOTE. See Example 13. You will note that the same amount in
francs and centimes at rate francs 5. 16J gives same result, or practically
so, for the reason shown in Example 19. In other words, the rate francs
5. 16J per $1.00 is practically same as .1937 cents per single franc, the
slight difference being due to not using the full decimal of cents.
EXAMPLE 21.
CONVERSION: UNITED STATES MONEY INTO FRENCH, BELGIAN AND Swiss
MONEY WHEN RATE OF EXCHANGE is QUOTED PER SINGLE FRANC.
To find the amount in francs and centimes that can be purchased
for $1017.02 at rate of exchange . 1937 cents per franc.
Operation: 1937 ) 1017.0200 ( 5250.49
9685
4852
3874
9780
9685
9500
7748
17520
17433
87
ANSW6R Francs 5250.49.
EXPLANATION. Divide the amount in dollars and cents
by the rate of exchange per single franc.
NOTE. You will observe that Example 21 is proof of the correct-
ness of Example 20 of same amounts, the slight difference in amount
of centimes being on account of not using the full fraction.
ADDITION, SUBTRACTION, DIVISION AND MULTIPLICATION OF FRENCH,
BELGIAN AND Swiss MONEY is DETERMINED BY SAME PROCESS AS
WITH UNITED STATES MONEY.
GERMAN MONEY.
1 Mark=100 Pfennigs
The monetary unit of Germany is the reichsmark or
mark, of 100 pfennigs, the value of the gold unit in the money
of the United States, as fixed by the Director of the United
States mint, being 23.8 cents.
In exchange transactions with Germany it is the custom
in large cities to base the rate of exchange upon the equiva-
lent of 4 marks, expressed in cents thus: "95 cents," meaning
that for each 4 marks 95 cents would be charged.
86 FOREIGN EXCHANGE TEXT BOOK
In the smaller cities and towns, the rate of exchange
is quoted for a single mark, thus: "23.85 cents," meaning
that for each mark, 23 and 85-100 cents would be charged.
See " Quotations for Foreign Exchange," Chapter IV.
EXAMPLE 22.
CONVERSION: MARKS INTO DOLLARS AT RATE PER 4 MARKS.
To find the cost of marks 5240.20 at rate of exchange 95 1-16
cents per 4 marks.
Operation: 4) .950625 (95 1-16)
.237656=1 Mark
Marks 5240.20
at . 237656 per 1 Mark
3144120
2620100
3144120
3668140
1572060
1048040
$1245. 36497120 or $1,245. 36 ANSWER.
EXPLANATION. Divide the rate per 4 marks by 4 to deter-
mine the cost of a single mark. Multiply the amount in marks
and pfennigs by cost per single mark,and the result will be the
cost in United States money.
EXAMPLE 23.
To find the cost of 5000 marks at rate of exchange, 95 J cents per
4 marks.
Operation: 5000 Marks
.9525 Rate per 4 marks.
25000
10000
25000
45000
4 ) 47625000
1190.625 ANSWER $1190.63
EXPLANATION. Multiply amount in marks by the rate
of exchange per 4 marks and divide the product by 4 (marks).
EXAMPLES IN THE CONVERSION OF MONEY 87
EXAMPLE 24.
CONVERSION: DOLLARS INTO MARKS AT RATE PER 4 MARKS.
To find the amount in marks and pfennigs that can be purchased for
$1245. 37 at rate of exchange, 95 1-16 per 4 marks.
Operation: 4 ) .950625 rate per 4 marks
. 237656 rate per 1 mark.
.237656) 1245.370000 ( 5240.22
1188280
570900
475312
955880 ANSWER, marks 5240.22.
950624
525600
475312
502880
475312
27568
EXPLANATION. Divide the rate by 4 to determine rate
per single mark. Divide amount in dollars and Gents by rate
per single mark and the result will be amount in marks and
pfennigs.
EXAMPLE 25.
CONVERSION: DOLLARS INTO MARKS AT RATE PER 4 MARKS (another way).
To find the amount in marks and pfennigs that can be purchased for
$1190.62i at rate of exchange, 95J cents per 4 marks.
Operation: .9525 ) 1190.6250 ( 1250.00
9525 4 marks
23812 5000.00 marks ANSWER
19050
47625
47625
NOTE. See Example 23 for proof of correctness of these figures.
EXPLANATION. Divide amount in dollars and cents by
the rate per 4 marks, and multiply the quotient by 4, and the
result will be in marks and pfennigs
88
FOREIGN EXCHANGE TEXT BOOK
EXAMPLE 26.
CONVERSION: MARKS INTO DOLLARS AT RATE PER 4 MARKS, SUPPLE-
MENTED WITH FRACTIONAL QUOTATIONS.
To find the cost of marks 5240.50 at rate of exchange, 95 J cents
per 4 marks, minus 1-32 of 1% (expressed 95J 1-32).
Operation: 4 ) .9525 rate per 4 marks
. 238125 rate per 1 mark
1-32 of 1%=
5240.50 marks
at .238125 cents per mark
2620250
1048100
524050
4192400
1572150
1048100
1-32 of 1%
$1247.89406250
39
ANSWER $1247.50
1247.89
.01
32 ) 12 . 4789 ( . 389 or 39 cts.
96
287
256
318
288
EXPLANATION. Divide rate per 4 marks (without fraction)
by 4 to find rate per single mark. Multiply amount in marks
and pfennigs by rate per single mark and the result will be
amount in dollars and cents. Find 1-32 of 1 per cent of
amount in dollars and cents and deduct same from cost at
regular rate.
NOTE. If supplementary fractional rate were PLUS 1-32 of 1%
instead of MINUS, its equivalent of 39 cents would be added to cost at
regular rate.
EXAMPLES IN THE CONVERSION OF MONEY 89
EXAMPLE 27.
CONVERSION: DOLLARS INTO MARKS AT RATE PER 4 MARKS, SUPPLE-
MENTED WITH FRACTIONAL QUOTATIONS.
What amount in marks and pfennigs can be purchased for $1,247.89
at rate of exchange, 95J plus 1-32 of 1% (expressed 95i+l-32.)
Operation: 4 ) 9525 Rate per 4 marks
.2381 rate per 1 mark, or .238125, carried out
.238125 ) 1247.890000 ( 5240.48
1190625
572650
476250
964000 Marks 5240. 48
1-32 of 1% of 952500 1.64
Marks 5240. 48= Marks 1.64
(See below.) 1150000 5238. 84 Marks
952500 ANSWER
5240.48
.01 1975000
1905000
32) 52. 4048 ( 1.637 or marks 1.64 -
32 70000
204
192
120
96
244
224
20
EXPLAXATIOX. Divide the rate per 4 marks (without
fraction) by 4 to determine rate per single mark. Divide
amount in dollars and cents by rate per single mark and the
result will be amount in marks and pfennigs. Find 1-32 of
1 per cent of amount in marks and pfennigs deducting
same from amount in marks and pfennigs at regular rate.
NOTE. If supplementary fractional rate had been MINUS 1-32 of 1%
instead of PLUS, its equivalent of 1 . 64 marks would have been added
instead of deducted.
90
FOREIGN EXCHANGE TEXT BOOK
EXAMPLE 28.
CONVERSION: MARKS INTO DOLLARS AT RATE PER 4 MARKS, SUPPLE-
MENTED WITH FRACTIONAL RATE. (Another way).
To find the cost of marks 5240.50 at rate of exchange, 95J cents
per 4 marks minus 1-32 of 1% (expressed 95^ 1-32).
Operation: 5240.50 marks
. 9525 rate per 4 marks
2620250
1048100
2620250
4716450
4) 4991576250
1247.894
39
1-32 of 1% of $1247.89=39 cents
(See Example 26).
$1247.50 ANSWER
NOTE. For verification of the result see Example 26.
EXPLANATION. Multiply amount in marks and pfennigs
by the rate per 4 marks and divide the product by 4, which
gives amount in dollars and cents at regular rate. Deduct
therefrom 1-32 of 1 per cent and the result will be the cost.
NOTE. If the fraction had been PLUS instead of MINUS, the 39 cents
would have been added instead of subtracted.
EXAMPLE 29.
CONVERSION: DOLLARS INTO MARKS AT RATE PER 4 MARKS, SUPPLE-
MENTED BY FRACTIONAL RATE. (Another method.)
To find the amount in marks and pfennigs that can be purchased for
$1247.89 at rate of exchange, 95J cents per 4 marks plus 1-32 of 1%
(expressed 95J+ 1-32).
Operation: .9525) 1247.89000 ( 1310.12
9525 4
29539
28575
9640
9525
5240.48 marks
1.64
11500
9525
19750
19050
5238 . 84 marks ANSWER
1-32 of 1% of
Marks 5240 . 48= Marks 1.64
(See Example 27).
700
NOTE. See Example 27 for verification of these figures.)
EXPLANATION. Divide amount in dollars and cents by
rate per 4 marks and multiply that result by 4 to find amount
of marks and pfennigs at regular rate. Find 1-32 of 1 per
IN THE CONVERSION OF MONEY 91
cent of amount in marks and pfennigs (5240.48) and deduct
same from amount of marks and pfennigs at regular rate and
the result will be the net amount of marks and pfennigs that
can be purchased.
NOTE. If the fraction had been MINUS 1-32 of 1% instead of PLUS
1-32 of 1%, the 1 . 64 marks would have been added instead of subtracted.
German Exchange Quotations, per 4 Marks.
To determine the price of a single mark when rate is quoted
per 4 marks, supplemented by fractional quotations, plus or
minus, such as 95| 1-16: First find the rate per single
mark at the regular quotation (95) by dividing same by 4,
as in Examples 22, 24, 26 and 27. This would make .238125
cents per mark. 1-16 of 1 per cent of .238125 is .0001488,
which if deducted from .238125 gives .237976+, the net rate
per single mark at quotation of 95^ 1-16. If fraction
were plus 1-16, the equivalent of this fraction of 1 per cent
would be added to rate per single mark, making same .2382738
Where the amount to be converted is small it is unnecessary
to use all the figures here used in the decimal of a cent.
EXAMPLE 30.
CONVERSION: MARKS INTO DOLLARS AT RATE PER SINGLE MARK.
To find the cost of marks 2050.50 at rate 23.82 cents per mark.
Operation : 2050 . 50 marks
. 2382 rate per 1 mark
410100
1640400
615150
410100
488 . 429 100 or $488 . 43 ANSWER
EXPLANATION. Multiply amount in marks and pfennigs
by rate per single mark.
EXAMPLE 311
CONVERSION: DOLLARS INTO MARKS AT RATE PER SINGLE MARK.
What amount in marks and pfennigs will $488.43 bring at rate
23.82 cents per single mark?
Operation: .2382 ) 488.4300 ( 2050. 50 marks ANSWER
4764
12030
11910
12000
11910
900
92 FOREIGN EXCHANGE TEXT BOOK
EXPLANATION. Divide amount in dollars and cents by.
rate per single mark.
NOTE. Addition, multiplication, subtraction, interest or percentage,
are computed in German money the same as in United States money.
Scandinavian Exchange.
Money of Norway, Sweden and Denmark:
Table.
1 Krone=100 Ores
EXAMPLE 32.
CONVERSION: KRONORS INTO DOLLARS.
Find the cost of kronors 200 . 50 at rate of 26 . 80 cents per kroner.
Operation : 200 . 50 kronors
. 2680 rate per 1 krone
1604000
120300
40100
53 . 734000 or $53 . 73 ANSWER
EXPLANATION. Multiply amount in kronors and ores by
rate per single krone.
EXAMPLE 33.
CONVERSION: DOLLARS INTO KRONORS.
What amount in kronors and ores will $53.73 buy at rate of 26.80
cents per krone?
Operation: .2680 ) 53.7300 ( 200.485
5360
13000
10720
22800
21440
13600
13400
ANSWER Kronor 200 . 49
NOTE. This example proves correctness of Example 32. The
difference of 1 ore is due to fraction of cent not being used.
EXPLANATION. Divide amount in dollars and cents by
rate per krone.
NOTE. Addition, multiplication, subtraction and interest or
percentage, are" computed the same as in United States money.
EXAMPLES IN THE CONVERSION OF MONEY 93
Russian Exchange.
Money of Russia: 1 Ruble=100 Kopecks
EXAMPLE 34.
CONVERSION: RUBLES INTO DOLLARS.
Find the cost of rubles 500. 10 at rate of 51.60 cents per ruble.
Operation : 500.10 rubles
.5160 rate per 1 ruble
3000600
50010
250050
$258. 051600 or $258. 05 ANSWER
EXPLANATION. Multiply amount in rubles and kopecks
by rate per ruble.
EXAMPLE 35.
CONVERSION: DOLLARS INTO RUBLES.
What amount in rubles and kopecks will $258.05 buy at rate
51.60 per ruble?
Operation: .5160 ) 258.0500 ( 500.096
25800
50000
46440
35600
30960
ANSWER rubles 500. 10
EXPLANATION. Divide amount in dollars and cents by
rate per single ruble.
NOTE. Addition, multiplication, subtraction and interest or
percentage are computed the same as in United States money
Austria-Hungarian Exchange.
Money of Austria -Hungary : Unit, 1 Krone=100 Hellers
EXAMPLE 36.
CONVERSION: KRONEN INTO DOLLARS.
Find the cost of kronen 250.25 at rate 20.40 cents per krone.
Operation : 250 . 25 kronen
. 2040 rate per 1 krone
1001000
50050
51 . 051000 or $51 . 05 ANSWER
EXPLANATION. Multiply amount in kronen and heller by
rate per single krone.
94 FOREIGN EXCHANGE TEXT BOOK
EXAMPLE 37.
DOLLARS INTO KRONEN.
What amount in kronen and heller will $51.05 buy at rate 20.40
cents per single krone.
Operation: .2040 ) 51.0500 ( 250.245
4080
10250
10200
NOTE. This example is 5000
proof of correctness of 4080
Example 36.
9200
8160
10400
10200
EXPLANATION. Divide amount in dollars and cents by
rate per single krone.
NOTE. Addition, multiplication, subtraction and interest or
percentage, are computed the same as in United States money.
Holland (Netherlands) Exchange.
Money of Holland: Unit, 1 Gulden or Florin=100 Cents
EXAMPLE 38.
CONVERSION: GULDEN INTO DOLLARS.
Find the cost of gulden 250.50 at rate of 40.35 cents per gulden.
Operation: 250.50
.4035
125250
75150
100200
101.076750 or $101. 08 ANSWER.
EXPLANATION. Multiply amount in gulden and cents by
rate per single gulden or florin.
EXAMPLE 39.
CONVERSION: DOLLARS INTO GULDEN.
What amount in gulden and cents will $101 . 08 buy at rate of 40. 35
per gulden?
Operation: .4035 ) 101.0800 ) 250. 50 gulden ANSWER
8070
20380
NOTE. This example is 20175
proof of correctness of
xample 38. 20500
20175
3250
EXPLANATION. Divide amount in dollars and cents by
rate per single gulden.
EXAMPLES IN THE CONVERSION OF MONEY. 95
Another Method of Figuring Holland Exchange.
In the larger cities it is the practice to quote the rate for
Holland exchange in cents and fractions of a cent, thus: 40 3-16
cents per gulden and when such rates are not considered
sufficiently close to secure the business they will be supple-
mented with fractional rates as in French and German exchange,
thus: 40 3-16 minus 1-32 of 1 per cent, expressed 40 3-161-32.
EXAMPLE 40.
CONVERSION, GULDENS INTO DOLLARS.
Find cost of gulden 5,000.00 at rate of 40 3-16 1-32.
Operation : 5000 . 00 gulden
401875=40 3-16 cents expressed decimally
2500000
3500000
4000000
500000 1-32 of 1 % of $2009 . 38=63 cents
2000000
$2009.37500000
63
$2008. 74 ANSWER
EXPLANATION. Multiply amount in gulden and cents by
rate (not including plus or minus fraction); then find 1-32
of 1 per cent of amount in dollars and cents and deduct same
if MINUS or add if PLUS.
EXAMPLE 41.
CONVERSION: DOLLARS INTO GULDEN.
What amount in gulden and cents will $2,008.75 buy at rate of
40 3-161-32 of 1%?
Operation: .401875 ) 2008.750000 ( 4998. 44 gulden
1607500 1.56
40 1 2500 5000 . 00 gulden
3616875 ANSWER
3956250
3616875
1-32 of 1% of 3393750
5000 gulden=gulden 1 . 56 3215000
1787500
1607500
1800000
1607500
192500
NOTE. This example is proof of correctness of Example 40.
96 FOREIGN EXCHANGE TEXT BOOK
EXPLANATION. Divide the amount in dollars and cents by
regular rate (40 3-16), not using the fraction 1-32. Find
1-32 of 1 per cent of amount in gulden and cents, adding
same to total. Bear in mind that where fractions such as
1-32 or +1-32 are used and you are converting dollars
into gulden, the equivalent of the fraction in United States
money converted into gulden must be added if MINUS and
deducted if PLUS.
NOTE. Addition, subtraction, multiplication and percentage are
computed in Dutch money as in United States money.
Italian Exchange.
Money of Italy: Unit, 1 Lira=100 Centesimi
EXAMPLE 42.
CONVERSION: LIRE INTO DOLLARS.
Find the cost of lire 1050 . 25 at rate 19 . 40 cents per single lira.
Operation: 1050.25
.1940
4201000
945225
105025
203 . 748500 or $203 . 75 ANSWER
EXPLANATION. Multiply amount in lire and centesimi
by rate per single lira.
EXAMPLE 43.
CONVERSION: DOLLARS INTO LIRE.
What amount in lire and centesimi will $203. 75 buy at rate of 19. 40
cents per lira?
Operation: .1940) 203. 7500 ( 1050. 25 lire ANSWER
1940
9750
9700
5000
3880
11200
9700
1500
NOTE. The example here given proves the correctness of Example 42.
EXPLANATION. Divide amount in dollars and cents by
rate per single lira.
EXAMPLES IN THE CONVERSION OF MONEY 97
Another Method of Figuring Italian Exchange.
In the larger cities it is the practice when quoting rates
for Italian exchange to quote the number of lire and centesimi
that will be allowed per dollar as in the case of French exchange,
thus, lire 5.17J, meaning that 5 lire 17 centesimi would be
allowed for each $1.
EXAMPLE 44.
CONVERSION: LIRE INTO DOLLARS.
Find the cost of lire 2500.50 at rate of lire 5. 17 J per $1.00.
Operation: 5.1750) 2500.5000 ( 483.188
207000
430500
414000
ANSWER $483.19
165000
155250
97500
51750
457500
414000
435000
414000
EXPLANATION. Divide amount in lire and centesimi by
the rate per $1.
NOTE. Where supplementary fractional rates are used, such as plus
1-32 or minus 1-32 of 1%, use same method of figuring as in French
exchange (see Examples 15, 16, 17 and 18).
EXAMPLE 45.
CONVERSION: DOLLARS INTO LIRE.
What amount in lire and centesimi will $483.19 buy at rate of lire
5.17J per $1.00?
Operation: $483.19
5. 1750 lire per $1.00
2415950
338233
48319
241595
Lire 2500 . 508250 ANSWER lire 2500 . 50
NOTE. This example is proof of correctness of Example 44.
EXPLANATION. Multiply amount in dollars and cents by
rate per $1.
NOTE. Where supplementary fractional rates are used, such as plus
1-32 or minus 1-32 of 1%, which is frequently the case, use the same
method of figuring as in French exchange. See Examples 15, 16, 17 and 18.
NOTE. Addition, multiplication, subtraction and percentage are
computed in Italian money as in United States money.
98 FOREIGN EXCHANGE TEXT BOOK
Chinese and Hong Kong Exchange.
Money of China: Unit, 1 Dollar=100 Cents
Money of Hong Kong: Unit, 1 Dollar =100 Cents
NOTE. At Hong Kong, the dollar of 100 cents, local currency, is
the money of account in general use. At other cities in China a silver
coin called "tael," which varies in value according to location, is in
general use in trade as a unit. This coin, however, is disregarded in
exchange transactions between the United States and China, and in
drawing drafts payable at cities other than Hong Kong it is customary
to draw same in dollars and cents, local currency, at exchange on Hong
Kong.
EXAMPLE 46.
CONVERSION: HONG KONG DOLLARS INTO UNITED STATES DOLLARS.
Find the cost of 500 dollars, 50 cents Hong Kong local currency, at
rate of 42.10 cents per dollar.
Operation: 500.50
.4210
500500
100100
200200
210.710500 ANSWER $210.71
EXPLANATION. Multiply amount in dollars and cents,
Hong Kong, local currency, by rate in United States money
per one dollar.
EXAMPLE 47.
CONVERSION: UNITED STATES DOLLARS INTO HONG KONG DOLLARS.
What amount in Hong Kong dollars and cents will $210.71 buy at
rate of 42. 10 cents (United States money) per dollar?
Operation: .4210 ) 210.7100 ( 500.498
21050
21000
16840
41600
37890
37100
33680
ANSWER 500. 50 Hong Kong Dollars
NOTE. This example is proof of correctness of Example 46.
EXPLANATION. Divide amount in dollars and cents by
rate per dollar.
NOTE. Addition, subtraction, multiplication and percentage are
computed in China and Hong Kong money as in United States money.
EXAMPLES IN THE CONVERSION OF MONEY 99
Japanese Exchange.
Money of Japan: Unit, 1 Yen=100 Sen
EXAMPLE 48.
CONVERSION: YEN INTO DOLLARS.
Find cost of yen 500. 50 at rate of 50. 25 cents per yen.
Operation: 500.50
.5025
250250
100100
250250
251.501250 ANSWER $251.50
EXPLANATION. Multiply amount in yen and sen by rate
per yen.
EXAMPLE 49.
CONVERSION: DOLLARS INTO YEN.
What amount in yen and sen will $251.50 buy at rate 50.25 cents
per yen? Operation: .5025 ) 251.5000 ( 500.497
25125
25000
20100
ANSWER Yen 500 . 50
49000
45225
37750
35175
NOTE. This example is proof of correctness of Example 48.
EXPLANATION. Divide amount in dollars and cents by rate
per yen.
NOTE. Addition, subtraction, multiplication and percentage are
computed in Japanese money same as in United States money.
Mexican Exchange.
Money of Mexico: Unit, 1 Peso (or Dollar)=100 Centavos (or Cents)
EXAMPLE 50.
CONVERSION: PESOS INTO DOLLARS.
Find cost of Pesos 450 . 25 at rate 45 . 50 per peso or dollar.
Operation: 450.25
.4550
2251250
225125
180100
204 863750 or $204. 86 ANSWER
EXPLANATION. Multiply amount in pesos (Mexican dol-
lars) by rate per peso or dollar.
100 FOREIGN EXCHANGE TEXT BOOK
EXAMPLE 51.
CONVERSION: UNITED STATES DOLLARS INTO PESOS OR MEXICAN DOLLARS.
What amount in pesos and centavos (Mexican dollars and cents) will
$204 . 86 buy at rate 45 . 50 cents per peso or dollar?
Operation : .4550)204.8600(450.241
18200
22860 ANSWER pesos 450.24
22750
11000
9100
19000
18200
8000
NOTE. This example is proof of correctness of example 50; the slight
difference of 1 centavo being due to not using full decimal.
EXPLANATION. Divide amount in dollars and cents
(United States money) by rate per peso (or dollar).
XOTE. Addition, subtraction, multiplication, and percentage in
Mexican money is computed the same as in United States money.
Philippine Islands and Manila Exchange.
Money of Philippine Islands: Unit, 1 Peso=100 Centavos
EXAMPLE 52.
CONVERSION: PESOS INTO DOLLARS.
Find the cost of pesos 1500.50 at rate of 48.25 cents per peso.
Operation: 1500.50
.4825
750250
300100
1200400
600200
723.991250 or $723.99 ANSWER
EXPLANATION. Multiply amount in pesos and Centavos
by rate per single peso.
EXAMPLES IN THE CONVERSION OF MONEY 101
EXAMPLE 53.
CONVERSION: DOLLARS INTO PESOS.
What amount in pesos and centavos will $723.99 buy at rate of
48.25 cents per peso?
Operation: .4825 ) 723.9900 ( 1500.497 or pesos 1500.50
4825 ANSWER
24149
24125
24000
19300
47000
43425
35750
33775
NOTE. This example is proof of correctness of Example 52.
EXPLANATION. Divide amount in dollars and cents by
the rate per peso.
NOTE. Addition, subtraction, multiplication and percentage in
Philippine money is computed same as in United States money.
Indian (British) Exchange.
TUT n f T^^JO . J 1 Rupee=16 Annas
Money of India; x An & =12 pieg
EXAMPLE 54.
CONVERSION: RUPEES INTO DOLLARS.
Find the cost of 250 rupees, 12 anna, 10 pies at rate of 33.75 cents
per rupee.
Operation: Rupees 250=250.
Annas 12= .75 (.06J x 12=. 75 )
Pies 10= .050 (.005 x 10=. 050)
250.800
.3375
1254000
1755600
752400
752400
84.6450000 or $84.65 ANSWER
EXPLANATION. To reduce annas and pies to decimal of
a rupee, multiply the annas by .0625, because 1 anna is 6|-
100 of a rupee. Multiply the pies by .005, because 1 pie is
102 FOREIGN EXCHANGE TEXT BOOK
5-1000 of a rupee. This latter fraction is not exact, but the value
of the pie is so little that it is unnecessary to use a closer fraction
unless amount is very large, in which case add 2 if over 30.
Multiply the rupees and decimal of rupee by the rate per single
rupee. Note the similarity to the figuring of English exchange.
EXAMPLE 55.
CONVERSION: DOLLARS INTO RUPEES.
What amount in rupees will $84. 65 buy at rate 33. 75 cents per single
rupee?
Operation: .3375 ) 84.6500 ( 250.8 rupees
6750 16
17150 12.8 annas
16875 12
27500 9.6 pies
27000
ANSWER rupees 250, annas 12,
5000 pies 10
NOTE. This example is proof of correctness of Example 54.
EXPLANATION. Divide the amount in dollars and cents
by the rate per rupee to find amount in rupees and decimal of
same. Multiply the decimal (not the rupees) by 16, because
16 annas = 1 rupee. Multiply the decimal (not the annas) by
12, because 12 pies = l anna. Note the similarity to figuring
English exchange.
Brazilian Exchange.
Money of Brazil: Unit, 1 Milreis=1000 Reis
The money of account of Brazil is the milreis, the par value
of which in the money of the United States is 54.6 cents. Unlike
the decimals of units of other South American countries, where
100 of the decimal equal one of the unit, the milreis is divided
into 1,000 reis.
In the notation of accounts the milreis are separated from
the reis by a sign, thus or $, the latter being called "cifras;"
and the thousandths in milreis are separated from the hun-
dredths by a colon (:). For example, six thousand five hundred
milreis 450 reis, would be expressed thus: Rs 6:500$450.
EXAMPLES IN THE CONVERSION' OF MONEY 103
EXAMPLE 56.
CONVERSION: MILREIS INTO DOLLARS.
Find the cost of 6,500 milreis 450 reis (expressed Rs. 6:500 $450) at
rate 55 . 25 cents per milreis.
Operation : 6500 . 450 milreis
5525 rate per 1 milreis
32502250
13000900
32502250
32502250
3591.4986250 or $3591. 50 ANSWER
EXPLANATION. Multiply the amount in milreis and reis
by the rate for single milreis.
EXAMPLE 57.
CONVERSION: DOLLARS INTO MILREIS.
What amount in milreis and reis will $3591.50 buy at rate of 55.25
per milreis?
Operation : . . 5525 ) 3591. 5000000 ( 6500 . 452
33150
27650
27625
ANSWER Rs. 6:500 $452
25000
22100
29000
27625
13750
11050
NOTE. This example is proof of correctness of Example 56, the
difference of 2 reis being due to not using exact decimal.
EXPLANATION. Divide amount in milreis and reis by the
rate per single milreis.
CONVERSION: BRAZILIAN EXCHANGE INTO ENGLISH MONEY.
As it is frequently the custom of Brazilian merchants to
quote prices on coffee and other commodities to American
buyers in English money (pence per dollar), the following
illustration will show the method of conversion:
104 FOREIGN EXCHANGE TEXT BOOK
EXAMPLE 58.
MiCREio INTO POUNDS, SHILLINGS AND PENCE.
If an invoice of coffee amounted to Rs. 6:500 $450 and rate of exchange
was quoted at 22 pence per railreis, what wonld the bill amount to in
English money?
Operation: M 6500.450
3250225
13000900
13000900
12) 146260.125
20 ) 12188. and4d
609 and 8s ANSWER 609, 8s. 4d.
EXPLANATION. Multiply the amount in milreis by the rate
of exchange (22 pence per milreis) which gives amount in
pence. Divide amount in pence by 12 (12d = ls) and it gives
amount in shillings and pence. Divide amount in shillings by
20 (20s = 1) and the result will be amount in pounds and
shillings.
EXAMPLE 59.
If the purchaser of the coffee in this country should remit draft for
invoice 609 8s 4d and current rate of exchange was, say, $4.86 per
pound, the cost in United States money would be arrived at as follows:
Operation: 609= 609.
8s = .40
4d = .017
609.417
4.86
3656502
4875336
2437668
2961.76662
ANSWER $2961.77
For explanation of reducing pounds, shillings and pence to decimal
of a pound see Example 5.
(See Example 60.)
EXAMPLES IN THE CONVERSION OF MONEY. 105
EXAMPLE 60.
If milreis 6:500$450 cost $2961.77 (United States money) and it
was desired to know the cost per milreis, the procedure would be as
follows:
Operation: 6500.450) 2961.77000( .45562+
26001800
36159000
32502250
ANSWER .45562 cents
36567500
32502250
40652500
39002700
3497100
EXPLANATION. Divide Amount in United States money
by amount in Brazilian money and it gives the rate per milreis.
Portuguese Exchange.
Money of Portugal: Unit, 1 Milreis=1000 Reis
The value of the gold milreis in the money of the United
States is Si. 08, while the value of the gold milreis of Brazil is
only 54.6 cents.
The monetary table of Portugal is as follows:
1 milreis =2J crusados=25 reals 1000 reis
1 crusado =10reals= 400 reis
1 real= 40 reis
EXAMPLE 61^...
CONVERSION, MILREIS INTO DOLLARS.
Find the cost of 600 milreis 500 reis at rate of $ 1 . 08 per milreis.
Operation : 600 . 500 milreis
1 . 08 rate per 1 milreis
4804000
600500
648 . 54000 ANSWER $648 . 54
EXPLANATION. Multiply the amount in milreis and reis
by the rate per milreis.
106 FOREIGJN EXCHANGE TEXT BOOK
EXAMPLE 62.
CONVERSION: DOLLARS INTO MILREIS.
What amount in milreis and reis will $648.54 buy at rate Si. 08 per
milreis?
Operation: 1.08 ) 648.5400 ( 600.500
648
540
540
ANSWER milreis 600 . 500
EXPLANATION. Divide amount in United States money
by the rate per milreis and the result will be amount in milreis
and reis.
Bulgarian Exchange.
Money of Bulgaria: Unit, 1 Lew=100 Stotinka
This country has practically the same system as France,
with coins of like value, but with different names.
The rate of exchange for drafts or bills of exchange on
Bulgaria is rarely if ever quoted, it being customary to draw
exchange on that country either in French, German or English
money at exchange on Paris, Berlin or London.
The value of the gold lew in the money of the United
States is the same as the franc of France, namely, 19.3 cents.
Roumanian Exchange.
Money of Roumania: Unit, 1 Lei=100 Bani
This country has practically the same monetary system
as France, with coins of like value but with different names.
The exact value of the gold unit (lei) in the money of the United
States is the same as the franc of France 19.3 cents.
The rate of exchange for drafts and bills of exchange
on Bulgaria is sometimes quoted by leading sellers of foreign
exchange, and following examples will illustrate method of
figuring same:
EXAMPLE 63.
CONVERSION: LEI INTO DOLLARS.
Find the cost of lei 250. 25 at rate of 19. 45 cents per lei.
Operation: 250.25
.1945
125125
100100
225225
25025
48.673625 ANSWER $48. 67
EXPLANATION. Multiply the amount in lei and bani by
the rate of exchange per lei.
EXAMPLES IN THE CONVERSION OF MONEY 107
EXAMPLE 64.
CONVERSION: DOLLARS INTO LEI.
What amount in lei and bani can be purchased for $48.67 at rate of
19.45 cents per lei?
Operation: .1945)48.6700(250.23
3890
9770
9725 ANSWER lei 250.23
4500
3890
6100
5835
NOTE. This example is proof of Example 63, the difference of 2
bani being due to not using full fraction in United States money.
EXPLAXATIOX. Divide amount in United States money by
the rate of exchange per lei.
Spanish Exchange.
Money of Spain: Unit, 1 Peseta= 100 Centimes
This country has practically the same monetary system
as France, with coins of like value but of different names. The
actual value of the gold peseta in the money of the United
States is the same as the franc of France, 19.3 cents.
While drafts and bills of exchange on Spain are more often
drawn in French, English or German money, the rate of exchange
for pesetas is frequently quoted and the following are the methods
of figuring same:
EXAMPLE 65.
CONVERSION: PESETAS INTO DOLLARS.
Find the cost of pesetas 250.25 at rate-of 19.45 cents per peseta.
Operation : 250 . 25 pesetas
.1945
125125
100100
225225
25025
48.673625 ANSWER $48.67
EXPLANATION. Multiply the amount in pesetas and
centimes by the rate of exchange per peseta.
108 FOREIGN EXCHANGE TEXT BOOK
EXAMPLE 66.
CONVERSION: DOLLARS INTO PESETAS.
What amount in pesetas and centimes will $48.67 buy at rate of
19.45 cents per peseta.?
Operation: . 1945 ) 48.670000 ( 250. 23 pesetas ANSWER
3890
9770
9725
4500
3890
6100
5835
NOTE. This example is proof of correctness of Example 65. The
difference of 2 centimes is due to full fraction in United States money
not being used.
EXPLANATION. Divide the amount in United States money
by the rate of exchange per peseta.
Servian Exchange.
Money of Servia: Unit, 1 Dinar=100 Paras
This country has practically the same monetary system
as France, with coins of like value of different names.
The actual value of the gold dinar in the money of the
United States is the same as the franc of France, 19.3 cents.
The rate of exchange for drafts and bills of exchange
on Servia is rarely, if ever, quoted, it being customary to draw
same either in francs on Paris, pounds sterling on London, or
marks on Berlin. The method of figuring Servian exchange
is the same as for French exchange where the rate quoted is
per single dinar.
See Examples 20 and 21.
Finnish Exchange.
Money of Finland: Unit, 1 Finmark=100 Penni
The monetary system of this country is almost identical
with that of France, having coins of like value, with different
EXAMPLES IN THE CONVERSION OF MONEY 109
names. The actual value of the gold finmark in the money
of the United States is the same as the franc of France, 19.3
cents.
In exchange transactions between the United States and
Finland the rate of exchange for drafts and bills of exchange
is usually quoted at so many cents and hundredths of a cent
per finmark.
EXAMPLE 67.
CONVERSION: FINMARKS INTO DOLLARS.
Find the cost of 500 finmarks 50 penni at rate of 19.50 cents per
finmark.
Operation : 500 . 50 finmarks
.1950
2502500
450450
50050
97.597500 ANSWER $97. 60
EXPLANATION. Multiply the amount in finmarks and
penni by the rate of exchange per finmark.
EXAMPLE 68.
CONVERSION: DOLLARS INTO FINMARKS.
What amount in finmarks and penni will $97.60 buy at rate of
19.50 cents per finmark?
Operation: . 1950 ) 97.600000 (500.51
9750
10000
9750
2500
1950
ANSWER finmarks 500 . 5 1
NOTE. This example is proof of correctness of Example 67, the
difference of 1 penni is due to not using exact fraction in United States
money.
EXPLANATION. Divide amount in United States money
by the rate of exchange per finmark.
110 FOREIGN EXCHANGE TEXT BOOK
Grecian Exchange.
Money of Greece: Unit, 1 Drachma=100 Lepta
This country has practically the same monetary system as
France, with coins of like value, with different names. The
actual value of the gold drachma in the money of the United
States is the same as the franc of France, 19.3. The rate of
exchange for drafts and bills of exchange is rarely, if ever,
quoted in the money of Greece, it being customary to draw
such exchange in pounds sterling at exchange on London, or
in francs at exchange on Paris, or in marks at exchange on
Berlin, whichever is preferred by purchaser. The method of
figuring Grecian exchange is the same as for French exchange
where the rate quoted is per single drachma.
See Examples 20 and 21.
Turkish Exchange.
f 1 Turkish Pound =100 Piastres
Money of Turkey : \ 1 Piastre = 40 Paras
[ 1 Para = 3 Aspes
The actual mint value of the Turkish pound in the money
of the United States is $4.396, which, as will be noted, is con-
siderably less than the English pound sterling, and instead of
having the decimal of shillings and pence as in the case of the
English pound, is divided into 100 piastres, thus making the
figuring of Turkish money much easier than English money.
EXAMPLE 69.
CONVERSION: TURKISH POUNDS INTO DOLLARS.
Find the cost of 550 pounds 50 piastres at rate of $4. 50 per pound.
Operation : 550 . 50 pounds
4 . 50 rate per pound
2752500
220200
2477.2500 ANSWER $2,477. 25
EXPLANATION. Multiply the amount in pounds and
piastres by the rate per pound.
EXAMPLES IN THE CONVERSION OF MONEY 111
EXAMPLE 70.
CONVERSION: DOLLARS INTO TURKISH POUNDS.
What amount in pounds and piastres will $2,477.25 buy at rate of
S4.50 per pound?
Operation: 4.50 ) 2477.2500 ( 550.50
2250
2272
2250
2250
2250
ANSWER Turkish pounds 550 . 50
NOTE. This example is proof of correctness of Example 69.
EXPLANATION. Divide the amount in dollars and cents
by the rate per Turkish pound.
South American Exchange (Except Brazil).
The money of account of Argentine Republic, Chile, Colom-
bia, Paraguay and Uruguay, is the peso of 100 centavos, the
same as the money of Mexico. Owing to the fluctuation in the
value of the peso of these countries, the rate of exchange is
rarely ever quoted, but instead drafts and bills of exchange
are usually drawn in United States dollars at exchange on
New York City, or in pounds sterling, at exchange on London.
Bolivia's money of account is called the boliviano, of 100
centavos; Ecuador's the sucre, of 100 centavos; Peru's the
sol, of 10 dineros, and Venezuela's the bolivar, of 20 centavos.
As in the case of other South American countries exchange is
usually drawn in United States dollars or pounds sterling.
The method of figuring the money of these countries is the
same as for Mexican exchange. See examples 50 and 51.
Other Countries.
Australia, New Zealand, Tasmania, Straits Settlements and
Jamaica, being English colonies, use the English monetary
system, the pound sterling. See Examples 1 to 12, inclusive.
112 FOREIGN EXCHANGE TEXT BOOK
The Central American countries have the same monetary
system as Mexico, the peso of 100 centavos. See Examples
50 and 51.
Algeria uses the French monetary system. See Examples
13 to 21, inclusive.
The Dutch East Indies countries use the Holland (Nether-
lands) monetary system. See Examples 38 to 41, inclusive.
The African countries of Cape Colony, Natal, Orange Free
State, and South African Republic, or Transvaal, all use the
English system of money. See Examples 1 to 12, inclusive.
Egypt's monetary system is the pound of 100 piastres as
in Turkey, but the English, French and German systems are
generally used for remittances to that country. For figuring
Egyptian exchange see Examples 69 and 70.
CHAPTER IV.
QUOTATIONS FOR FOREIGN EXCHANGE.
Quotations for foreign exchange, such as drafts, checks,
commercial bills, etc., are rarely understood except by those
familiar with the business.
In quoting the rate of exchange for drafts, checks, etc.,
on countries other than Germany, France and sometimes Italy,
the rate quoted is per single unit; that is, so much per pound
sterling on England, per kronor on Norway, Sweden and Den-
mark, per ruble on Russia, etc. Exchange on France, Germany
and Italy, when quoted by dealers at the smaller places, would
be the same so much per single franc, mark or lira, but at the
larger cities it is the custom when quoting the rate for exchange
drawn in francs to quote the number of francs and centimes
that will be allowed for $1.00, as for instance, 5.15f, meaning
that for each $1.00 you will be allowed 5 francs, 15f centimes.
For German exchange the quotation would be for 4 marks
instead of one; for example, 95 5-16 cents, meaning that for each
4 marks you would have to pay 95 5-16 cents.
The allowance of f of a centime per $1.00, considering
that one whole centime is worth only about 1-5 of a cent in
our money, and a fraction like 5-16 of a cent on 4 marks,
may seem a very small item, but on a transaction of 100,000
francs (about $19,400.00) f of a centime |per $1.00 in the
quotation would make a difference of over $23.00, and 5-16
of a cent per 4 marks in the quotation on 100,000 marks (about
$24,000.00) would amount to a difference of over $78.00, or
over $15.00 on each 1-16 of a cent.
One peculiarity in the French quotation is that the rate
when quoted per $1.00 is advanced or lowered by f of a
centime. For illustration: the next lower rate to francs 5.15
would be 5.15f, then 5.16^, 5.16|, 5.17J, etc., there being just
f between each quotation. Bear in mind, the greater the
number of francs and centimes allowed per dollar the lower
the rate, since as the quotation is per $1.00, the more francs
and centimes you would receive for your money. For example,
$5,000 at rate francs 5.15 would give 25,750 francs, while 25,750
francs at rate francs 5.20 would only cost $4,951.92.
The reason for this method of quoting French exchange,
which is the reverse of that for other kinds of exchange, is that
113
114 FOREIGN EXCHANGE TEXT BOOK
f of a centime is equivalent to J- of 1 per cent in the pound
sterling, and by reason of most of the French exchange being
formerly covered or paid through English exchange, this method
served as a convenience in figuring and the conversion tables
formerly published were so arranged. Another reason assigned
for this method of quoting French exchange is that, as there
are five francs to the United States dollar, | of 1 per cent
on one franc would call for f of 1 per cent on five francs;
besides, until recent years, J of 1 per cent difference in quota-
tion was regarded sufficiently close for commercial purposes.
Owing to the sharp competition among dealers in foreign
exchange during the past few years, and which is becoming
keener all the time, the difference of f of a centime in French
exchange quotations is not close enough; therefore the quota-
tions on francs, 5.15, 5.15f. 5.16|, etc., are supplemented with
fractional quotations, such as plus or minus 1-64, 1-32, 1-16,
3-32, 1-8, etc., of 1 per cent. For example, if the quotation
francs 5.15f per $1.00 was thought a little too high to secure the
business, the quotation francs 5.15f 1-32 would be given,
thus lowering the price 1-32 of 1 per cent of the gross amount
in dollars and cents represented in the transaction. This
supplementary fractional quotation of minus 1-32, as will be
seen in the following illustration, makes quite a difference in
the price on a large transaction:
100,000 francs at rate of francs 5.15| per $1. 00=$19,393.94
1-32 of 1% of $19,393.94 amounts to $6.06, the saving.
In the use of the plus and minus quotations it should
always be remembered they do not apply directly to the rate,
but mean 1-64, 1-32, 1-16, etc., of 1 per cent, plus or minus
the equivalent amount in United States money. Also bear
in mind that where the fractional quotation plus or minus is
used, such for example as francs 5.15f+l-32 or 5.1 of 1-32,
and the purchaser calls for an amount in francs and centimes
EQUIVALENT TO A CERTAIN FIXED SUM IN UNITED STATES MONKY,
then the purchaser will receive a greater or less number of
francs, as the case may be. (See Example 17, page 83; Example
18, page 83.)
Quotations applying to French exchange also apply to
Belgian, Swiss and Italian exchange, when same are quoted
per $1.00.
Quotations for exchange on Greece, Servia and Bulgaria,
which countries have monetary systems almost identical with
that of France, are nearly always made in either English or
French exchange. Quotations for exchange on Roiunania
are frequently made in money of that country (lei) per single
unit, but more often in English or French exchange.
Quotations for German exchange, when quoted for four
marks instead of one, are also supplemented by the plus and
QUOTATIONS OF FOREIGN EXCHANGE 115
minus fractional quotations as in French exchange, as for
example: If 95 5-16 cents per 4 marks was thought a little
too high, 95 5-16 (minus) 1-32 (of 1 per cent.) would be
quoted, which on a transaction of 100,000 marks would make
a difference to the purchaser of about $7.50.
In exchange transactions between the United States and
England the quotations are sometimes supplemented with
quotations such as plus $1.00, which means $1.00 additional
will be charged on each 1,000 pounds, making a difference in
the rate of 10 points; that is, if the quotation were, say, $4. 87^
+$1.00, it would be practically the same as $4.8735. The
custom of using the supplementary quotation of plus $1.00
is fast dying out and instead, where transactions are of large
amounts, the rates are advanced or lowered by 5-100 of a
cent per pound, such as $4.87, $4.8705, $4.8710, $4.8715, etc.,
each 5-100 of a cent making a difference of $5.00 on each
10,000 pounds, or $250.00 on a transaction of 500,000 pounds
(nearly 2 million dollars), not infrequently made by large
financial institutions in a single day.
In a publication entitled "Foreign Exchange: Figured,
Explained, Simplified, Illustrated/' furnishing conversion tables
for all classes of foreign exchange transactions, the author
(H. 'K. Brooks, 78 Monroe St., Chicago) has undertaken to
have adopted a method for quoting French exchange which
w r ould do away with the confusing fractional quotations plus
or minus fractions of 1 per cent, by supplying conversion
tables for francs the equivalent of $1.00 by eighths of a centime.
For example: Instead of jumping from francs 5.15 to francs
5.15f, which would be the next lower quotation under present
system, the tables in his book are for francs 5.15, 5.15J, 5.15|,
5.15|, 5.15| and then 5.15f, and the same method is used in
quoting the other rates for French, Belgian, Swiss and Italian
exchange. This plan practically serves the same purpose as
the use of the plus and minus fractions, avoids complication
in figuring, and no doubt will be generally adopted in the
near future.
The following are samples of quotations for exchange on
the principal countries:
English Exchange: $4.87f per , meaning $4.87375 per pound Sterling.
French Exchange: (large cities) francs 5.161 or francs 5.161 1-32,
meaning that 5 francs 161 centimes will be allowed for each $1.00
United States money. Where the fraction- -1-32 is used, a deduction
of 1-32 of 1% of the amount in United States money (after figuring
at rate francs 5. 161) will be allowed.
French Exchange: (small places) 19.25 cents per franc, which means
that each franc will cost you 19 and 25 hundredths cents, United Statss
money.
116 FOREIGN EXCHANGE TEXT BOOK
Belgian and Swiss Exchange: is quoted same as French exchange.
German Exchange: (large cities) 95 3-16 cents per 4 marks, meaning
that for each 4 marks you would be charged 95 and 3-16 cents,
which expressed decimally would be .951875. If you divide these
figures by four the result will be the price per single mark, or . 23796+.
The fractions plus and minus 1-16, 1-32, 1-64, etc., are used with
German exchange quotations per 4 marks as in the case of French
exchange.
German Exchange: (small places) 23.80 cents per mark. This means
that 23 and 80-100 cents, U. S. money, would be charged for each
mark.
Italian Exchange: (large cities) lire 5.17. This means that for each
$1.00 (United States money) 5 lire 17i centesimi would be allowed or
paid.
Italian Exchange: (small places) 19.35 cents per lira, meaning that 19
and 35-100 cents (United States money) would be charged per lira
(Italian money).
The following quotations, which cover the ordinary fluctuations,
are used in French, Swiss and Belgian exchange, where same is quoted per
$1.00: francs 5.10, 5.101, 5.11J, 5.1H, 5.12i, 5.13J, 5.13J, 5.14,
5.15, 5.151, 5.16i, 5.161, 5.17i, 5. 181, 5.18J, 5.19f, 5.20, 5.201,
5.21J, 5.2H, 5.22i, 5.231, 5. 233, 5.241, 5.25. As explained on page
114, if it is desired to quote between these rates the fractions, either plus
or minus, 1-64, 1-32, 1-16, 1-8, and 3-32 of 1% are used.
Finnish Exchange ] Are quoted at so many
Spanish Exchange
Austria-Hungarian Exchange.
Norwegian, Swedish and Danish Exchange.
Holland (Dutch) Exchange.
Roumanian Exchange.
Russian Exchange.
Mexican, Central and South American,
Hong Kong (China) Manilla and Japanese
Exchange.
cents and fractions of a
cent in our money, that
will be charged or paid
per single unit of these
countries. For example,
Hong Kong Exchange
may be quoted 45 . 55
cents per dollar in Hong
Kong currency.
Turkish Exchange: $4.50 per Turkish pound, meaning you would be
charged $4.50 United States money for each Turkish pound.
Newspaper Quotations.
Quotations on foreign exchange, as they appear in the
financial columns of our leading daily newspapers and in weekly
financial publications, ire seldom understood except by those
very familiar with the business. Although almost every news-
paper has a different way of quoting the rates, some more
QUOTATIONS OF FOREIGN EXCHANGE 117
complete than others, the following, which is a facsimile of
clipping from a daily paper, is given for illustration and explana-
tion by reason of its completeness:
Foreign Exchange.
Sterling was firm with bankers' 60 day
bills quoted at 1-8 of a cent, cheques 5,
and cables 10 points above Friday's
close. Rates for actual business follow:
Bankers', 60 days 4.84 @4.84|
Bankers', sight 4.8695@4.87
Cable transfers 4.8735@4.8740
Documents for payment4 . 84f @4.84f
Ninety days on bankers 4 . 82| @4 . 82|
Commercial sight 4. 8685@4.8690
Continentals were less active, virtually
unchanged. Bankers' sight francs
closed at 5.16@5.16} plus 1-32;
marks, 95| less 1-32 @95f ; guilders,40f
less 1-32@40|.
Following were the posted rates of the
leading drawers of foreign exchange:
Sterling 4.88
Paris, francs 5.15
Berlin, reichsmarks 95|
Amsterdam, florins 40|
Antwerp, francs 5 . 15|
Genoa, lire 5 . 15|
Zurich, francs 5 . 15|
Vienna, kronen 20 . 40
Stockholm, kronors 26. 90
St. Petersburg, rubles 51 . 70
"FIRM" means a good demand with prices tending upward.
STEADY would mean a fair demand with prices likely to
remain stationary.
STRONG would mean a large demand with prices certain to
go higher.
DULL or WEAK would mean very little or no demand with
prices tending lower.
BANKERS' 60 DAYS: This quotation is for bankers' drafts
drawn in pounds sterling upon (or payable by) a bank in London,
60 days after sight or after acceptance by the paying bank.
The rates 4.84 to 4.84| mean per pound sterling.
BANKERS' SIGHT: A bankers' draft for a sum in pounds
sterling upon a bank in London, payable at sight or upon
demand. The rates $4.8690 to $4.87 mean per pound sterling.
118 FOREIGN EXCHANGE TEXT BOOK
CABLE TRANSFERS: Where the money (pounds sterling)
is paid abroad (London) upon an order sent by cable. The
amount would be paid in London immediately upon receipt of
cable instructions, usually within a few hours. (See Cable
Transfers, Chap. IX.)
DOCUMENTS FOR PAYMENT: This refers to commercial bills
of exchange (see Chap. IX) with documents (bill of lading and
insurance certificate attached to draft), drawn against an
export shipment, the words "for payment" meaning that the
draft must be paid before documents are given up, thus insur-
ing payment before delivery of goods. If "documents" were
for acceptance the documents would be delivered when draft
was accepted by person upon whom drawn (called "drawee"),
thus enabling drawee to obtain goods before payment of draft.
This quotation refers to drafts drawn in pounds sterling, drawn
payable 60 days after sight (acceptance). The rates quoted
are per pound sterling.
NINETY DAYS ON BANKERS: Means drafts drawn by either
banks or merchants (exporters) in pounds sterling upon (pay-
able by) a bank, 90 days after the draft is accepted by bank
upon which drawn.
COMMERCIAL SIGHT: Drafts drawn by merchants
(exporters) payable at sight against balances in a bank abroad
which may have accumulated through sale of merchandise
exported.
CONTINENTALS WERE LESS ACTIVE, VIRTUALLY UNCHANGED:
This refers to bills of exchange and drafts upon cities or countries
of Europe, other than Great Britain.
BANKERS' SIGHT FRANCS: This refers to drafts drawn by
bankers .in money of France (francs) payable by a bank, pre-
sumably at Paris. The quotation, 5.16^ to 5.16j plus 1-32 is
for francs per $1.00, as explained in this chapter. The quota-
tions for marks are for 4 marks on Germany, and those for
guilders are on Holland, per guilder or gulden, or florin.
POSTED RATES: The quotations given as posted rates
mean rates at which leading sellers of exchange were selling
over their counter to customers, while the preceding rates in
the above clipping refer to rates at which bankers bought the
exchange, or in other words, "buying rates."
STERLING: This quotation is for sight drafts drawn in
*he money of England, pounds sterling.
PARIS, FRANCS: Drafts or checks drawn in French francs
payable only at Paris. The rate is per $1.00.
BERLIN, REICHSMARKS, DEMAND: A draft drawn payable
at Berlin, Germany, in marks. The rate is for 4 marks.
QUOTATIONS OF FOREIGN EXCHANGE 119
AMSTERDAM, FLORINS: Demand checks or drafts on
Amsterdam, Holland, drawn in money of Holland, florins or
guilders (or gulden) (different nomenclature of same money).
The rate is per gulden.
ANTWERP, FRANCS: This is a quotation for 5 francs 15f
centimes per $1.00 for demand drafts drawn payable at Antwerp,
Belgium. This country has the same monetary system as
France, with coins of same name.
GENOA, LIRE: This quotation means that for a demand
check or draft on Genoa, Italy, you would have to pay at rate
of 5 lire 15f centesimi per $1.00.
ZURICH, FRANCS: For demand checks and drafts payable
at Zurich, Switzerland, you would be allowed 5 francs 15f
centimes for each $1.00.
VIENNA KRONEN: For demand checks or drafts on Vienna,
Austria. The rate quoted is 20.40 per kronen, the money of
Austria.
STOCKHOLM, KRONORS: For demand checks and drafts
on Stockholm, Sweden. The rate is 26.90 cents per kroner,
the money of Norway, Sweden and Denmark.
ST. PETERSBURG, RUBLES: For demand checks and drafts
on St. Petersburg, Russia. The rate is 51.70 cents per ruble,
the monev of Russia.
Other Newspaper Quotations.
Under the head of "Money Markets of the World" we
frequently see quotations reading like this:
" Discount at London, 2|%; Paris, 2 7-16%; Berlin, 3J%."
Foreign discount rates mean the rate per cent charged or
allowed on drafts discounted or paid before due. They usually
apply to drafts drawn on bankers.
Some newspapers quote rates on foreign exchange in this
manner: "Sterling exchange, posted rates $4.88; actual rates,
$4.87{. Documentary rate's, $4.84." Posted or nominal
rates are those charged the general public for checks and drafts
and apply more particularly to smaller sums. Actual rates are
inside terms made to brokers or large buyers for large sums.
Documentary rates are for commercial bills of exchange, which
are drawn against commodities exported. (See "Commercial
Bills of Exchange," Chap. TX).
120 FOREIGN EXCHANGE TEXT BOOK
We also frequently see quotations in newspapers reading
in this manner: "Dated at Paris, Exchange on London frs.
25.14J for checks." "Dated at Berlin, Exchange on London,
m. 20.865 f r checks." These quotations refer to the rates at
which you can buy, in Paris and Berlin, respectively, checks
payable at London. In this instance, you would be allowed
25 francs 14 centimes at Paris and 20 marks 36 pfennigs at
Berlin, per pound sterling for checks payable at London.
While the quotations given by newspapers for exchange
upon the principal cities, such as New York, Chicago, St. Louis,
etc., do not apply directly to foreign exchange transactions,
the rates for such exchange often materially affect the rates
for foreign exchange. It is usually quoted in this way: "New
York exchange, 15 cents discount before clearings, 20 cents
discount after clearings," or it may be at a premium instead
of a discount.
"New York exchange" means checks payable by a bank
in New York. Fifteen cents discount in this case would mean
that New York exchange (checks, drafts, etc.) in sales between
banks (not as a rule with the public) a check would be sold
at a discount of 15 cents for each $1,000. If quoted at 15
cents premium, they would charge 15 cents additional per
$1,000.
The reason the rates for New York exchange affect the
rates for foreign exchange is, that the rates in the West and
elsewhere in the United States are based or controlled by the
rates in New York, because New York is the principal buying
market; therefore if New York exchange in, say Chicago, is at a
discount, in large transactions banks would sell a draft on
London or other foreign city at a lower rate, depending upon
amount of discount, or if New York exchange in Chicago was
at a premium, then they would charge a higher rate for a draft
on London, than it could be bought for in New York. The
cost of transferring the funds is taken into consideration.
CHAPTER V,
RATE OF EXCHANGE.
Fixed, Fluctuating, Posted, Actual, Rising or Falling.
The term "rate of exchange" means the value or price of
the money of one country reckoned in the money of any other
country, the value being a fixed rate of exchange the price a
fluctuating rate of exchange.
The rate of exchange quoted between any two countries
is for drafts, checks or bills of exchange, and the price includes,
besides the actual equivalent of the standard coin, some allow-
ance for interest, according to the tenor of the draft, and a pre-
mium which the seller demands for the economy and superior
convenience of his draft or check, as compared with a remittance
in currency or bullion. This premium, which represents the
fluctuation, is more or less according to the amount of exchange
in the market for sale and the demand for same.
The rate of exchange when applied to the buying or selling
of drafts, checks, money orders, letters of credit, travelers'
cheques, etc., means the price in our money that will be charged
or paid per pound sterling, franc, mark, kronor, lira, or other
moneys of foreign countries. For example, a customer inquires
for the rate of exchange for a check on London. It is given
to him as, say, $4.88 per pound. In quoting the rate of exchange
for drafts, checks, etc., on France and Germany, especially in
large cities, instead of quoting the rate for a single franc or
mark, the rate of exchange for French francs is frequently
quoted for the number of francs and centimes that will be
allowed or paid per SI. 00, and in the case of German marks the
quotation will be for 4 marks instead of 1. (See Quotations for
Foreign Exchange, Chap. IV.)
A FIXED RATE OF EXCHANGE is one where a fixed rate is
charged for a certain period or indefinitely. For illustration:
The Government issues money orders, drawn in foreign
money, payable at a fixed rate of exchange, plus certain fees.
The American Express Company issues a form known as
Travelers' Cheques, upon which is printed the equivalent
value in the moneys of the various European countries, such
equivalents being based upon fixed rates of exchange.
The expression "fluctuating rate of exchange" is very often
used because the rate of exchange for drafts, checks, bills of
121
122 FOREIGN EXCHANGE TEXT BOOK
exchange, etc., vary nearly every day, and, except for small
sums, for which it is customary to charge a fairly high rate, it
would not be practical to use fixed rates.
In ESTABLISHING or DETERMINING a rate of exchange,
whether "fixed" or "fluctuating," it is arrived at as follows:
To the actual equivalent in our money of pure gold or silver
contained in the units of money of the different foreign countries
is added, if buying, or allowed, if selling, interest from date of
purchase or sale to date of payment abroad. To this is added
the actual expense of having such drafts or bills paid or collected
abroad, or, in other words, the commission charged by foreign
bankers for their service. The cost of revenue stamps which
the various countries require to be affixed to such paper must be
taken into consideration, and finally the premium or profit to
the seller of the exchange. (See Causes of Fluctuation of Rates
of Exchange, Chap. VI.)
POSTED RATES, in foreign exchange transactions are the
rates posted daily on bulletins of leading dealers in foreign
exchange. They are, as a rule, intended to apply to small
sums and for letters of credit. It is customary for bankers
and others issuing letters of credit (they are generally drawn
in pounds sterling) to charge, in addition to a fee (usually 1
per cent) the POSTED rate of exchange. ,The posted rate of
sterling exchange, for example, is generally from ^ to H cents
per pound higher than the actual rates, which latter are used
in the sale of foreign demand checks for large amounts.
ACTUAL RATES OF EXCHANGE are rates made each day by
bankers and brokers for sales or purchases of large sums and
are based upon the actual conditions of the market, the supply,
demand, etc., admitting of very little profit over and above
the actual cost.
The words "rising" or "falling" when applied to exchange
rates between countries may be favorable or unfavorable,
depending upon the custom of quoting exchange rate. For
example, in quoting the rate of exchange between France and
England, it is quoted at so many francs and centimes to the
pound sterling, and the higher the quotation the more favorable
to England. The rates between England and China, Japan and
South American countries are quoted at so many shillings and
pence to the dollar, yen, peso, sol, etc., the units of money of
the countries named, therefore the higher the quoted rate the
more unfavorable to England, since England would have to
give more shillings and pence to their unit.
CHAPTER VI,
CAUSES OF FLUCTUATION IN RATES OF
EXCHANGE.
The fluctuation in the price of foreign exchange, or as it
is termed, "the rate of exchange," is due to a number of causes.
If the value of the goods we exported greatly exceeded the value
of the goods we imported during a certain period, the large
balance due us from other countries would, if there were no
other international transactions to offset same, cause the price
of exchange here to be lower, for the reason that there would be
less demand for remittances to foreign countries, since it is
always the difference between the debits and credits that is
remitted. On the other hand, if we owed foreign countries a
much greater amount than they owed us, exchange here would
be higher by reason of increased demand for it.
It is not alone our commercial trade that regulates the
price of exchange. The monetary conditions here and abroad
may entirely offset other conditions.
When the loaning rate for money here is high, capitalists and
bankers will loan their money here instead of investing same
in foreign commercial bills, which causes less demand for the
bills, and hence lower rates. If rates for money abroad are
high, there will be a greater demand for commercial bills or
other exchange on foreign countries, for the purpose of getting
the money to such countries to take advantage of the high
interest rates, thereby causing higher rates here for foreign
exchange. If the rates for money abroad are lower than here,
our capitalists will borrow money in their markets for invest-
ment here, thus increasing our indebtedness to foreign countries,
and when such loans become due, there will be an increased
demand for foreign exchange to pay same, resulting in higher
rates.
The investments made by capitalists in stocks, bonds and
financial and commercial enterprises in foreign countries mate-
rially affect the rates for foreign exchange because it increases
or lessens the indebtedness between countries, thus creating
demand for exchange to pay same.
The discount rates at London, Paris, Berlin and other
European centers very seriously affect the buying and selling
123
124 FOREIGN* EXCHANGE TEXT BOOK
price of commercial bills drawn against commodities exported
These discount rates are the rates per cent at which commercial
paper of the different classes may be discounted, that is, the
allowance made for cashing or taking up the paper before
maturity, or before due and payable, and as the rates here for
checks, drafts, etc., on foreign countries are based upon the
cost of placing credit abroad to meet payment of such checks,
drafts, etc., by means of sending commercial bills, it will be seen
that the discount rates abroad affect the rates here. When the
discount rates abroad are high the rate for commercial bills
here will be lower, and when low abroad the rate for commer-
cial bills here will be higher. It is, therefore, always to the
advantage of the exporters in this country when discount rates
abroad are low. For illustration: The buyers of commercial
bills in this country, in order to determine the rates which they
can afford to pay, take into account three things: first, the
rates at which they can sell demand checks, drafts, cables, etc.,
upon date of purchase of the bills; second, the rates at which
such bills can be discounted abroad, in order to convert them
into money or credit; and third, the cost of revenue stamps
that must be affixed to the bills abroad to comply with internal
revenue laws. A difference of 1 per cent in discount rates,
say in London, would make a difference of 1| cent per pound
in the cost of discounting a 90 days sight draft there, and neces-
sarily a corresponding difference in the rates for sale here of
such bill on London.
Under normal conditions the rates for foreign exchange
fluctuate between what are termed gold exporting or gold
importing points, which means the actual cost of the gold plus
the cost of transporting it from one point to another. For
example, if you wished to remit, say, to London the equivalent
of 50,000 '(or approximately $250,000) and you found that
the cost of the gold coin or bullion and the expense of freight,
insurance, commission, etc., would be considerably less than
the cost of a draft or check for the amount, payable at London,
then you would ship gold in preference. If the cost were equal
or greater for shipping the gold, then you would remit the
check, as it- would be more convenient and accompanied with
less risk, even at same price. Therefore, the rates naturally
do not go much above or much below the gold points.
When the rate for demand sterling gets down to, say $4.83f
to $4.84 per pound sterling, it is generally cheaper to import gold
in large amounts than to have remittance made from abroad
by check. If such exchange here reaches as high as $4.88^
to $4.88J per pound, then gold can be exported equally as
cheap as for a remittance by check, draft, etc., or a cable transfer.
But notwithstanding these various conditions mentioned
which affect the market price of foreign exchange in this country,
CAUSES OF FLUCTUATION IN RATES OP EXCHANGE 125
it is after all the supply and demand that mainly regulates the
price, as in the case of wheat, corn, or any other commodity.
In domestic exchange there is never any question of parity,
as in the case of foreign exchange, and when exchange on New
York City at Chicago is quoted, for example, at 30 to 40 cents
per $1,000 discount, it means that there is a larger amount of
money due from people and banks in New York to people and
banks in Chicago than there is due New York City from people
and banks in Chicago. There is always something on the
ledgers at both points and the rate of exchange, discount or
premium, indicates the extent of the balance in favor of either
of the cities.
In foreign exchange the parities of the different gold coins
representing the unit of the currencies of the various countries
have to be considered as related to our unit, the gold dollar.
The equivalent of the British gold sovereign, or pound sterling,
in the gold money of the United States, is, for instance, $4.8665.
When the rate of exchange here for demand drafts or bills of
exchange on London is above $4.8665, there is a greater amount
due from this country to London or to Great Britain than is
owing to us, while if the rate of exchange is below $4.8665, it
indicates that Great Britain owes this country a greater amount
than is owing from this country to Great Britain. When the
rate of exchange is so far above or below par ($4.8665) as to
exceed the actual cost of moving the gold coin or metal, then
the metal or coin is shipped, instead of remitting by draft,
check or cable.
/U-l
CHAPTER VII.
PARS OF EXCHANGE.
"Par of exchange" means equal of exchange. There is a
" mint par of exchange" and also what we term the "commercial
par of exchange."
The mint par of exchange between the United States and
foreign countries is the actual value in our money of the pure
metal contained in the coins representing the units of money
of the various countries; or, to express it differently, the equiva-
lent of the unit of money of one country expressed in the currency
of another country using the same metal (gold or silver) as a
standard of value.
The Director of the United States mint is required at stated
periods to proclaim the value of the coins or units of the various
foreign countries, in our money, for the purpose of computing
the worth of importations of goods and also the amount of
custom duties assessable thereon. The value of the gold coins
of countries, as fixed by the Director of the mint, rarely ever
changes, since the weight and fineness qf the gold units of
countries are fixed by law in the United States by Act of
Congress, in Great Britain by act of Parliament.
The "mint par of exchange" is often called the "real
exchange," and the commercial par of exchange is said to be the
"nominal exchange," just as the shares of a company are said
to be of the "nominal" or "face value" stated on the share
certificates, while the real value would be its actual worth in
open market at moment of sale. Thus the "real exchange" is
the exchange rate of the day. The terms "fixed" and "mov-
able" exchange may also be said- to apply to the mint and
commercial pars of exchange, respectively.
To determine the actual mint par of exchange between
any two countries, it is only necessary to divide the weight of
the pure gold in the gold unit of the one country by the weight
of the pure gold in the coin of the other country. The mint
par of exchange between the United States and countries
having silver monetary units is arrived at in the same way,
but as the price of silver fluctuates, the values of silver coins
frequently change, and their value is based upon the price of
silver for the preceding three months.
127
128 FOREIGN EXCHANGE TEXT BOOK
The following illustrations give the actual mint par of
exchange between the United States and principal foreign
countries and the method of figuring same.
THE BRITISH POUND STERLING: The value of the pound
sterling, or Victoria sovereign, in our money, as fixed by Act
of Congress, March 3, 1873, for computing the value of goods
imported which is expressed in English money, was 84.8665,
and this value has never since been changed.
THE BRITISH SOVEREIGN weighs 123.274478 troy grains,
and is 11-12 fine; therefore the pure gold contained therein
weighs 113.0016 troy grains. The gold dollar of the United
States weighs 25.8 troy grains, and is 9-10 fine, or 23.22
troy grains pure gold. To arrive at the mint par of exchange
of the sovereign in our money, divide the weight of the pure
gold in the sovereign (113.0016 troy grains) by the amount
of pure gold in the dollar (23.22 troy grains) and the quotient
is $4.866520, or as usually expressed and used for commercial
purposes, $4.8665.
THE FRENCH FRANC, which is also the chief money of
account in Belgium, Switzerland, Italy (called lira), Greece
(called drachma). Servia (called dinar), Spain (called peseta),
Roumania (called lei), Bulgaria (called lew), and Finland (called
finmark), weighs 4.978128 troy grains and is 9-10 fine;
therefore the pure gold therein weighs 4.4803152 troy grains.
Dividing the weight of the pure gold in the franc (4.4803152 troy
grains) by the pure gold in the United States dollar (23.22 troy
g/ains) gives the mint par of exchange of the franc in our
money as .19295+. ' The number of francs and centimes con-
tained in the United States dollar is ascertained by dividing
$1.00 by .19295, which gives 5 francs 18.134+ centimes, or, as
usually expressed, francs 5.18.
THE GERMAN REICHSMARK OR MARK, of gold, weighs
6.1458 troy grains and is 9-10 fine; therefore the pure gold
therein weighs 5.53122 troy grains, which latter if divided by
the pure gold weight in the United States dollar (23.22 troy
grains) gives the mint par of exchange, or 23.8309 cents, or
as proclaimed by the Director of the United States mint, 23.8
cents.
THE AUSTRIA-HUNGARY GOLD KRONEN, OR CROWN, weighs
gross 5.2277616 troy grains, and is 9-10 fine, thus making
the weight of the pure gold therein 4.704498544 troy grains,
which, if divided by the weight of the pure gold in the United
States dollar (23.22 troy grains), gives 20.2626 cents, or 20.3
cents as the mint par of exchange or actual value of the gold
kronen in our money.
THE SCANDINAVIAN (Norway, Sweden and Denmark)
GOLD KRONOR OR CROWN, weighs 6.9141 troy grains and is
9-10 fine, which leaves the weight of the pure gold therein
OF EXCHANGE 129
as 6.22269 troy grains, which if divided by the weight of the
pure gold in the United States dollar (23.22 troy grains) gives
26.798 cents, or as stated by the director of the United States
mint, 26.8 cents, as the mint par of exchange.
THE RUSSIAN GOLD RUBLE, OR ROUBLE, weighs gross,
13.273894 troy grains and is 9-10ths fine, leaving weight of
pure gold 11.9465046 grains, which if divided by the weight
of pure gold in the United States dollar gives the value of the
ruble in our money 51.449 cents, or as declared by the director
of the United States mint, 51.5 cents.
THE HOLLAND GULDEN OR GUILDER, OR FLORIN (different
translations of same name), weighs gross 10.26682 troy grains
and is 9-10 fine and, therefore, contains 9.333489 troy
grains pure gold. Dividing this weight by the weight of pure
metal in the gold dollar (23.22 troy grains) gives 40.19 cents,
or as stated by the director of the United States mint, 40.2
cents, which is the par of exchange between this country and
Holland.
THE PORTUGUESE GOLD MILREIS weighs 27.3965 troy
grains and is 916.637 fine, leaving weight 25.088524 troy grains
pure gold, which if divided by the weight of the pure gold in
the United States dollar gives $1.0804, or $1.08, as the par of
exchange between the United States and Portugal.
THE BRAZILIAN GOLD MILREIS weighs gross 13.8374 troy
grains and is 917-thousandths fine, thus making the weight
of the pure gold therein 12.67642 troy grains, which if divided
by the weight of the pure gold in the United States dollar gives
54.592 cents or 54.6 cents, as given by the director of the United
States mint.
THE EGYPTIAN POUND of 100 piastres weighs 131.1749 troy
grains gross and is 875-1000 fine, and therefore contains
114.778088 troy grains pure gold, which if divided by the weight
of the pure gold in the United States dollar (23.22) gives the
mint value of $4.943.
THE TURKISH POUND, OR MED.TIDIE, of 100 piastres weighs
gross 111.3598 troy grains and is 917-1000 fine, and there-'
fore contains 102.079887 troy grains pure gold, which if divided
by the weight of the pure gold in the United States gold dollar
(23.22) gives $4.396 as given by the director of the United States
mint.
The mint par of exchange between the United States
and countries having gold units, other than the countries above
named, are as follows:
Belgium, the franc of 100 centimes (gold) 19.3 cents.
Switzerland, the franc of 100 centimes (gold) 19 . 3 cents.
Italy, the lira of 100 centesimi (gold) 19 . 3 cents.
Greece, the drachma of 100 lepta (gold) 19.3 cents.
Spain, the peseta of 100 centimes (gold) 19.3 cents
Finland, the finmark of 100 penm, (gold) 19. 3 cents.
130
FOREIGN EXCHANGE TEXT BOOK
Japan, the yen of 100 sen (gold) 49 . 8 cents.
Costa Rica, the colon of 100 centavos (gold) 46. 5 cents.
British Honduras, the dollar of 100 cents (gold) $1 . 00.
Argentine Republic, the peso of 100 centavos (gold) 96. 5 cents.
Chile, the peso of 100 centavos (gold) 36 . 5 cents.
Canada, the dollar of 100 cents (gold) $1 . 00.
Ecuador, the sucre of 100 centavos (gold) 48 . 7 cents.
Mexico, the peso of 100 centavos (gold) 49. 8 cents.
Peru, the libra (gold) $4 . 866i.
Turkey, the piaster of 40 paras (gold) 4 . 4 cents.
Uruguay, the peso of 100 centavos (gold) $1 . 034.
Panama, the balboa (gold) $1 . 00.
Venezuela, the bolivar of 20 centavos (gold) 19.3 cents.
New Foundland, the dollar of 100 cents (gold) $1 . 014.
Algeria, the franc of 100 centimes (gold) 19.3 cents.
Philippine Islands, the peso of 100 centavos (gold) 50 cents.
Liberia, the dollar of 100 cents (gold) $1 . 00.
Hayti, the gourde of 100 cents (gold) 96 . 5 cents.
Colombia, the dollar of 100 cents (gold) $1 . 00.
The mint par of exchange between the United States and
countries having silver monetary units fluctuates according to
the price of silver, but for general information we give below
the mint pars of such countries, us declared by the director of
the United States mint on July 1, 1908, which are valued by
their pure silver contents, at the average price for silver for the
three months preceding July 1, 1908.
JIndia, the rupee of 16 annas (silver) 32.44^ cents.
Guatemala, the peso of 100 centavos (silver) 39.3 cents.
Honduras, the peso of 100 centavos (silver) 39.3 cents.
Nicaragua, the peso of 100 centavos (silver) 39.3 cents.
Salvador, the peso of 100 centavos (silver) 39.3 cents.
Bolivia, the boliviano of 100 centavos (silver) 39.3 cents.
Persia, the kran of 20 shahis (silver) 7.2 cents.
Amoy tael (silver) 64 . 4 cents.
Canton tael (silver) 64 . 2 cents.
Chefoo tael (silver) 61.6 cents.
Chin Kiang tael (silver) 62.9 cents.
Fuchau tael
Haikwan tael
(Customs)
Hankow tael
Kong Kong*
British*
China-j Mexican*
(chopped)
Nankin tael
Niuchwang tael
Ningpo tael
Peking tael
Shanghai tael
Swatow tael
Takau tael
Tientsin tael
Kiaochow tael
(silver) 59 . 5 cents,
(silver) 65 . 5 cents.
(silver) 60.2 cents.
(silver) 42.3 cents,
(silver) 42 . 3 cents,
(silver) 42.7 cents.
(silver) 63.7 cents.
(silver) 60.4 cents,
(silver) 61.9 cents.
(silver) 62.8 cents,
(silver) 58 . 8 cents,
(silver) 59 . 5 cents,
(silver) 64.8 cents,
(silver) 62.4 cents,
(silver) 62.4 cents.
JThe sovereign is the standard coin of India, but the rupee is the
money of account, current at 15 to the sovereign.
* Dollar.
PARS OP EXCHANGE 131
PARS OF EXCHANGE BETWEEN GREAT BRITAIN AND
OTHER COUNTRIES.
The mint par of exchange between Great Britain and other
countries is arrived at by comparing the quantity of pure gold
or silver in the standard coin of the one country with that of
another, as in the case between the United States and other
countries.
The pure gold contained in the British pound sterling or
sovereign is equivalent to the pure gold contained in 25 francs
22J centimes of France, therefore the par of exchange between
Great Britain and France is said to be francs 25.22J. The par
of exchange between Germany and Great Britain is 20 marks
43 pfennigs, and between Great Britain and the United States
S4.8665, or in other words the pure ^old in the British sovereign
is equal to the pure gold in 20 marks 43 pfennigs, German
money, or $4.86 and a fractio* t United States money.
The par of exchange between Great Britain and Belgium,
Greece, Italy, Switzerland and Spain is the same as between
Great Britain and France, i. e., the pure gold contained in
25 and 22 J- 100 of the units of these countries is equal to
the pure gold contained in the British pound sterling, although
it is customary in quoting the par of exchange between Great
Britain and Spain to name the British pence to the duro or
silver dollar of 5 pesetas of the latter country.
The mint par of exchange between Great Britain and
Norway, Sweden and Denmark is 18 kroner 16 ores to the
pound; with Holland 12 florins 11 cents to the pound; with
Russia, the mint par is quoted at so many rubles to 10 pounds
sterling; with Austria-Hungary 240 kronen to 10 pounds
sterling.
The mint par of exchange between Great Britain, China,
and South American countries which are still on a silver monetary
basis, fluctuates, as is the case between those countries and
the United States, same being governed by the price of silver.
The gold bullion, or specie points, as explained elsewhere,
limit the variation in rates of exchange above and below par
during normal times. The French exchange gives a good
illustration of this. As stated above the mint par of exchange
between Great Britain and France is 25 francs 22 centimes to
the pound sterling. If the indebtedness of France to Great
Britain exceeds that of Great Britain to France, the demand
in Paris for drafts or bills on London will be greater than the
demand in London for drafts and bills on Paris, and according
to the extent of this indebtedness and the urgency of the case,
the French debtor will offer a higher amount than the mint par
(francs 25.22) until the rate reaches say francs 25.33 per pound,
or 10J centimes per pound over the mint par, which is equiva-
lent to four pounds per mille (per 1,000 pounds), or sufficient
132 FOREIGN EXCHANGE TEXT BOOK
to pay the freight, insurance, packing, etc., of 1,000 pounds
shipment of gold from Paris to London. Therefore, rather than
pay a higher rate, the debtor in France would transmit gold to
London.
In France, silver 5-franc pieces are legal tender same as
gold, and therefore possess a value in home trade which cannot
be said of the silver coins of Great Britain. On this account
gold is at a slight premium in France, and on some occasions
gold has not been exported notwithstanding the bullion points
named above were reached and the rate would continue rising
until it covered also the premium on gold, before exports would
commence.
In the event of Great Britain being indebted to France, the
competition for drafts and bills on Paris compels English debtors
to offer more English money (or in view of the rate of exchange
between these countries being expressed in francs) to take less
French money for the pound, until the exchange rate drops to
say francs 25. 12^ per pound, beL
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FOREIGN COMMERCIAL FORMS 145
Exhibit "D"
Reduced Specimen Copy of
LETTER OF CREDIT GUARANTY.
-190-
Received from the AMERICAN EXPRESS COMPANY its Letter
of Credit No dated 190
in favor of Mr ,
of amounting to
Pounds Sterling(/ )
in consideration whereof, we agree to reimburse the American Express
Company on demand, the above amount or such portion thereof as may
be drawn upon such Letter of Credit, together with exchange, interest
and charges.
We further agree that in case such Letter of Credit be stolen or
otherwise lost, the American Express Company in New York, London
or Paris shall be immediately notified thereof by telegraph, and we here-
by authorize the American Express Company to send its usual circular
to its correspondents notifying them of the loss or theft and also to
take all such precautions as it may deem advisable for the prevention
of fraud, we agreeing to pay all the expenses attending same.
Signature of Purchaser.
Signdture of Guarantor.
1-46 FOREIGN EXCHANGE TEXT BOOK
Exhibit "E
Reduced Specimen Copy of
Purchaser's Agreement for Letter of Credit,
-190-
Having been furnished with an AMERICAN EXPRESS COMPANY'S
Letter of Credit No dated 190
or the sum of Pounds Sterling
( ), and to expire on 190
in consideration thereof I agree that in case such Letter of Credit be
stolen or otherwise lost, the American Express Company in New York,
London or Paris shall be immediately notified thereof by telegraph,
and I hereby authorize the American Express Company to send its
usual circular to its correspondents, notifying them of the loss or theft,
and also to take all such precautions as it may deem advisable for the
prevention of fraud, and I agree to pay the expenses attending same.
Signature of Purchaser.
Address
(1)
Specimen signature of Purchaser of Letter of Credit No.-
(2)
Specimen signature of Purchaser of Letter of Credit No.-
(8)
Specimen signature of Purchaser of Letter of Credit No.-
FOREIGN COMMERCIAL FORMS 147
Letter of Indication.
A letter of indication is sometimes used in connection with
circular letters of credit. Such letter is simply a letter of
introduction of the holder to the foreign paying correspondents,
bearing the signature of the holder for identification. This
letter (see Exhibit "F") in substance states that a certain circular
letter of credit, giving the number, date, etc. (not the amount)
has been issued to such a person (naming holder) and requests
that same be duly honored.
Where such letters are used the purchaser's name will not
appear upon the circular letter of credit, so in case the latter is
lost, or, for that matter, the letter of indication, it would be
of no use to the finder, for a bank abroad would not pay either
unless both were presented together. Purchasers are requested
to carry the letter of credit separately from the letter of indi-
cation to avoid both being lost together. This letter of indica-
tion is used simply to diminish the risk attending the issuing
of circular letters of credit in the case of their loss. (See
Exhibit " G," showing circular letter of credit having letter of
indication feature.)
148
FOREIGN EXCHANGE TEXT BOOK
Exhibit "F"
Specimen Copy of Form of
LETTER OF INDICATION.
COMMERCIAL NATIONAL BANK
OF CHICAGO
Chicago, U.S.A.,
To our Correspondents as listed herein :
This serves to introduce to you
M ,
the bearer of our Circular Letter of Credit
No dated ,
a specimen of whose signature is at the foot
hereof.
COMMERCIAL NATIONAL BANK
OF CHICAGO
SIGNATURE:
LIST No
This Letter of Indication generally appears on the first page of
book containing list of Foreign Correspondents.
FOREIGN COMMERCIAL FORMS
Exhibit "G"
Reduced Facsimile Specimen Copy of
CIRCULAR LETTER OF CREDIT.
Used with Letters of Indication.
0000
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150 FOREIGN EXCHANGE TEXT BOOK
Foreign Drafts or Checks.
Foreign drafts or checks (see Exhibits "H" and "I")/
payable on demand for any amount desired, are issued by
nearly all banks, bankers and financial institutions. Some of
the banks and bankers in the larger cities keep funds deposited
with banks at the principal foreign cities, against which these
drafts are drawn direct, while most banks, bankers and foreign
exchange dealers issue drafts through an arrangement with
concerns having foreign accounts. (See Jobbers of Exchange.)
They are usually issued in the currency of the country
where payable, that is, for so many pounds, shillings and pence
on England, or so many marks and pfennigs if on a place in
Germany, etc. In lower left corner a space is provided for enter-
ing the name of the bank or banker abroad who will cash the
draft upon presentation. Nearly all foreign drafts are payable
under an "advice" system, as follows: At time of issuance of
draft a form of notice or advice giving number of draft, date
of issue, amount and name of payee (person who should receive
the money) is sent by first outgoing mail to the bank or banker
abroad whose name appears on draft as paying correspondent,
requesting- that the draft be honored upon presentation; such
advices bear the known signature of an official of the bank
issuing same. In cases where issuing bank does not have its
own foreign accounts the "acivice" of issuing bank is at once
mailed to the jobbing bank or concern through whom the
selling bank has arranged for issuance of such paper, accom-
panied by check for net amount due jobber, whereupon the
jobbing bank immediately mails "advice" to foreign bank.
FOREIGN COMMERCIAL FORMS
151
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152
FOREIGN EXCHANGE TEXT
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FOREIGN COMMERCIAL FORMS 153
Travelers' Cheques.
While there are several kinds of travelers' cheques, all quite
similar in form and intended for the same purpose, we shall only
undertake to describe the travelers' cheques of the American
Express Company, >ince that company was the originator of
the system and its cheques are best known throughout the
world'. (See Exhibit "J.")
These cheques are designed for use and convenience of
travelers and tourists in the United States and all foreign
countries, and are accepted or cashed as readily as would be
the currency of the country where traveling, and are safer to
carry than gold or currency by reason of provisions for refunding
on lost, stolen or destroyed cheques. These cheques might be
properly termed "International Money" or "Universal Currency"
by reason of their being accepted in every civilized country
of the world at the values expressed in print on *heir face.
They are issued in fixed denominations of $10, $20, $50,
$100 and $200 each, in American money, and have printed
thereon the equivalent values in the moneys of the various
foreign countries, thus enabling holders to know the exact
amount they should receive. .For illustration: Take a cheque
of 820.00 denomination as per Exhibit "J." Upon the face it
reads: "When countersigned below with this signature (mean-
ing holder's or purchaser's signature) the American Express
Company will pay to the order of (space for entering name of
bank, hotel, etc., cashing cheque) $20.00. In the United States
aud Canada, $20.00. In England, Ireland and Scotland,
4 Is 8d. In France, Belgium and Switzerland, 102 francs,
50 centimes. In Germany, 83 marks 30 pfennigs. In Italy,
(gold) 102 lire 50 centesimi. In Norway, Sweden and Denmark,
73 kronors, 39 ores. In Holland, 49 florins 2 cents. In Austria-
Hungary, 98 kronen. In Russia, 38 rubles 46 kopecks." Below
this is the printed signature of the treasurer of the company
and space for counter-signature of holder.
With the exception of the purchaser's signature, which
must be affixed in the upper left corner at the time of pur-
chase, the spaces for date, place of payment, to whom payable
and counter-signature of holder, are left blank to be filled out
at the time of use. These spaces are then filled out just as you
would write your personal check; and by writing your signature
thereon in the presence of the cashier or person paying, your
identification is established, no other identification being required.
These cheques are sold at the face value plus a commission
of .V of 1 per cent or 50 cents per $100, upon same terms as
for circular letters of credit, namely, for cash, under guaranty
of purchaser for reimbursement, and against deposit of collat-
eral security. See form of Guaranty, Exhibit " K," and form
of Collateral Security Contract, Exhibit " L."
154
FOREIGN EXCHANGE TEXT BOOK
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FOREIGN COMMERCIAL FORMS
Exhibit U K"
155
Reduced Specimen Copy of American Express Co.
Travelers Cheque Guaranty.
Received from the American Express Company its Travelers Cheques,
as follows-
No.
DENOMI-
NATION.
CHEQUES NUMBERED
FROM
TO INCLUSIVE
$10
$20
$50
$100
$200
airiounting to.
.dollars ($.
-J.
in consideration Whereof we hereby -agree to reimburse the American
Express Company on demand for any and all of such Cheques paid by
the Company or its Correspondents, together with usual interest and
charges.
In case such Cheques or any of them should be lost or stolen we
hereby authorize the American Express Company to send its usual
circular to its correspondents notifying them of the loss or theft, and
also to take such precautions as it may deem advisable for the preven-
tion of fraud, we agreeing to pay any expenses attending the same.
156
FOREIGN 7 EXCHANGE TEXT BOOK
Exhibit "L"
Reduced Specimen Copy of American Express Co,
Travelers Cheque
COLLATERAL SECURITY CONTRACT.
/ 630 \
U. 1> /
Received from the American Express Company its Travelers Cheques,
as follows:
NO.
DENOMI-
NATION.
CHEQUES NUMBERED
FROM
TO INCLUSIVE
$10
$20
$50
$1OO
$2OO
-dollars ($.
amounting ^
in consideration whereof 1 hereby agree to reimburse the American
Express Company on demand for any and all of such Cheques paid by
the Company or its flgents, with interest thereon at the rate of five per
cent, from date same are used, together with a commission of one-half
of one per cent., having deposited with the said Company as security for
payment of above named Cheques, the following property, viz.
(Enter Description of Securities in detail.)
In the event of no other provision being made by me for payment
of these Cheques, the American Express Company is hereby authorized to
sell in such manner as it may- deem proper, without notice or demand,
at any Broker's Board or at public or private sale, the whole or any
part of said securities, and apply the proceeds to pay any, either or all, of
said Cheques, subject to a broKerage charge of one-quarter pf 1 per cent.
The above-mentioned securities
were handed me thin day.
Acent American Express Co.
FOREIGN COMMERCIAL FORMS 157
Cable Transfers of Money to Foreign Countries.
Cable transfers of money to foreign countries are made in
much the same manner as are telegraphic transfers of money
between points in the United States. To economize in expense
for telegraphic or cable charges, and as a matter of safety,
banks and financial institutions in performing such service use
a telegraphic cipher code containing private test words. By
the use of these codes a whole phrase, representing amount to
be paid, instructions to pay, etc., is often contained in a single
code word. Where money is frequently cabled to the same
person, company or firm at a certain address abroad, it is cus-
tomary to have such names and address registered with the
foreign correspondent at place of payment so that a single
word would represent the name and address of payee. We
give under this heading a sample cablegram in cipher requesting
payment of money abroad as an illustration of the use of cipher
codes for such purpose.
Cable transfers must necessarily be effected by or through
banks or financial concerns who have special arrangements
for such service and who have balances (money or credit) with
banks abroad where payment is to be made. An order to
have a sum of money paid to a person, say in London, given
to a bank or foreign exchange house in Chicago, by 9:00 a. m.
would usually be paid in London the same day, notwithstanding
the difference in time between these two cities is six hours, or
in other words, when it is 9:00 a. m. in Chicago it is 3:00 p. m.
in London.
It is customary to charge a higher rate of exchange for a
cable transfer than for a draft or check of like amount and the
sender is expected to pay the cost of telegraph and cable charges.
Form of Cipher Cablegram Requesting Payment of Money Abroad.
ILLUSTRATION. The firm of H. J. Meyerfield & Co. of
Chicago wish to have two thousand five hundred pounds sterling
paid to Johnson, Gladstone & Co., 153 Threadneedle St. (E. C.),
London, England, for their account.
The message given to telegraph company for transmission
would be as follows (cipher words are fictitious) :
NATIPROV, LONDON, MURTIER, MYERSON, MARDADIE.
Translated, these cipher words would mean:
(XATIPROV) To the National Provincial Bank of England, Ltd.
(LONDON) London, England.
(MURTIER) Pay to the person(s) named in this cablegram.
(MYERSON) Johnson, Gladstone & Co., 153 Threadneedle St.,
(E. C.) London, for account of H. J. Meyerfield & Co., Chicago, 111.,
U. S. A. (Registered).
(MARDADIE) ( 2,500) Two thousand five hundred pounds sterling.
NOTE. Each bank and financial concern transacting business of
this kind uses different cipher words and as a rule have a different system
of test words, the above illustration being given to show only the general
method used in the transfer of money by cable.
158 FOREIGN EXCHANGE TEXT BOOK
Foreign Postal Remittances.
One of the most popular and satisfactory methods of
remitting money to places in Russia, Italy, Norway, Sweden,
Denmark, Austria-Hungary, Finland, and to some sections of
other European countries, is by what is known as the Foreign
Postal Remittance, or Bank Post Money Order (see Exhibits "M ''
and " N"). This is a system intended to provide for payment
of money at smaller places where there are no banks, but by reason
of its convenience it is very often used even though there are
banks at point of payment. Among the less educated foreign
classes it is used almost exclusively for remittance to the coun-
tries named, since the sender has only to furnish the address
of the person abroad to whom it is desired the money should
be paid and the payment is arranged for and effected by the
bank or dealer selling the exchange. A foreign postal remittance
blank usually comprises four stubs: the first being the selling
bank's record or memorandum of the transaction; the second,
the advice of the bank or dealer, containing the complete name
and address of sender, amount in foreign money to be paid,
and name of sender, which is either sent to the jobber in this
country through whom selling bank or dealer transacts its
foreign remittance business or is sent direct abroad by the
sellers to their own correspondents with whom they keep an
account. The third stub is a form of receipt which is given
to the sender to keep, and the fourth (not always used) is a
stub upon which is printed in all the various foreign languages
a notice to the payee to the effect that a certain sum of money
had been sent to them and in case it is not received within a
reasonable length of time they should communicate with a
certain bank or agency named to whom was intrusted the
forwarding of the money.
When money is sent by this method the purchaser or sender
is not given a draft or check to mail to payee, but instead the
sender relies upon the selling bank or dealer to effect payment,
which is done in following manner:
The selling bank or jobber, upon receipt of the advice
form giving address of payee, amount, etc., sends this "advice"
to its nearest principal bank correspondent in the country in
which the payment is to be made. The foreign bank corre-
spondent encloses in an envelope the exact amount in currency
of country where payable and registers the package of currency-
direct to address of payee through the postoffice, and it is
FOREIGN COMMERCIAL FORMS 159
then delivered by the local postmaster or mail carrier at the
place payable, just as letters or packages are sent by registered
mail in this country.
The convenience of this system lies in the fact that payee
is not obliged to take a check to a bank and be identified before
he can obtain his money, and where the payee is unfamiliar
with banking methods, as is often the case with the poorer
classes of people, it is far more satisfactory to have the exact
amount in the currency of the country delivered to him at his
residence or place of business.
In the sale of foreign postal remittances it is customary
to charge, in addition to the market rate of exchange for amount
in foreign money, a postage fee for registration abroad, usually
10 to 15 cents for each remittance.
It is always of great importance in transactions of this nature
that the name and address of the payee be very complete and
accurate.
160 FOREIGN EXCHANGE TEXT BOOK
Exhibit "M"
Reduced Facsimile of American Express Co.
FOREIGN POSTAL REMITTANCE.
00
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FOREIGN COMMERCIAL FORMS
161
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FOREIGN EXCHANGE TEXT BOOK
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FOREIGN COMMERCIAL FORMS 163'
Foreign Postal Money Order.
The United States Government issues at postoffices in
principal towns and cities an international money order, limited
in amount to $50.00 or the equivalent in foreign money, which
is payable in principal foreign countries. These orders are
sold at a fixed rate of exchange plus a fee (see Exhibits "P"
and "Q")- A receipt bearing duplicate number and also con-
taining name and address of payee is given to the purchaser to
keep (see Exhibit "Q").
164
UNITED SXAXECS OK AMtCKICA.
Chicago, Illinois J^s 243114
The ADVICE sent to Exchange Office at
Country of Pay
(Write jHfove " Bussla," or " Italy," etc.)
INTERNATIONAL
MONEY ORDE
)REIGN MONEY
3 O
-, U
S o
2
I I-
1;
1 1
& i
TE INTERNATIONAL.
The Postmaster at
L' 'Agent des Posies A
Pays
Pay to the person named in my
Payez h. la iersontu nommie d,
this number, the sum of
e muniro, la somine de
should compare amount in order and receipt.
Postmaster.
(P^e of issue.)
INSTRUCTIONS TO REMITTERS.
If payable in France, Algeria, Great Britain, or a British Colony, send this order
to payee, who should present it for payment at office drawn on.
If payable in any other country, the amount will be paid on another form, issued
by the country of payment.
Received the amount of the above Order.
Rc(v It montant du tttandai ci-desfus.
Stamp of paying office.
REMITTER SHOULD KEEP THIS RECEIPT.
Chicago, Illinois Jfe 243114
The ADVICE &BOrt*tahange Office at
M
Grec," or "Ittlj/'ete.)
ECEIPT
POM
INTERNATIONAL
MONEY ORDER.
**\ RKCU D'UN
ftf DE P08TE JNTERHATIOHAL
REIGN MONEY
Payable at )
Payable a } _
/ Country \
\ Pays )
For the sum of
Iffigtter should compare amount in order and recei
FEfi 2 6 1906
Postmaster.
Department, Province or Count j
Dtparttmettt, Province ou Cajfof} ,
Name of Remitter
No*t de L ' E .xptditeur
166 FOREIGN EXCHANGE TEXT BOOK
Foreign Commercial Bill of Exchange.
The basis of a foreign commercial bill of exchange is, as
its name implies, a commercial transaction of international
character, which consists in the purchase of goods or commodities
in one country for export to another country. The "draft"
represents the money value of the goods which is due the
exporter. The bill of lading is the contract between the trans-
portation company and the shipper for the carrying of the
goods and also serves as the order for their delivery. The
insurance certificate is the certification of the Marine Insurance
Company of reimbursement in case goods are lost by fire or
accident while enroute on the ocean. These three documents
the draft, bill of lading and insurance certificate comprise
what is termed a foreign commercial bill of exchange. They
are almost invariably issued in duplicate, for fear one set may
be lost in its transmission abroad by mail; one of each set
being marked original and the other duplicate, or sometimes one
of the drafts will read First of Exchange and the other Second
of Exchange.
Foreign commercial bills of exchange are also known as
documentary bills of exchange by reason of the bill of lading
and insurance certificate accompanying the draft. It is cus-
tomary to send the originals of the three documents by first
steamer, the duplicates or seconds by following steamer. If
the original set is lost the duplicate serves the same purpose,
and vice versa.
The process by which a foreign commercial bill of exchange
drawn against commodities exported is created and handled
and reaches its destination may best be illustrated by an actual
transaction; and for such purpose the illustration will be given
of a commercial bill of exchange drawn against a shipment
of flour, flour being one of our chief exportable commodities.
The shipment of flour in question, destined to Liverpool,
Eng., was delivered to the Soo Freight Line at Minneapolis,
Minn., operating over the Minneapolis, St. Paul & Sault Ste.
Marie and Canadian Pacific Railways, and a "through" bill
of lading in duplicate was obtained. This through bill of
lading is a form of contract issued by virtue of special arrange-
ments with connecting ocean lines, by the term of which it is
agreed, under conditions printed thereon, to transport the
shipment through to destination at foreign port (Liverpool).
It states the number of packages, how they are marked, their
contents, the particular grade or brand of flour and the name
and location of the party for whom goods are intended. It is
negotiable only by endorsement of the exporter, to whose order
it is drawn. (See Exhibit "R.")
Upon presentation of this evidence of shipment a marine
insurance company has issued a certificate of insurance, under
FOREIGN COMMERCIAL FORMS 167
the terms of which they agree to reimburse the owner of the
goods in case of the loss of the shipment by fire or accident
while enroute on the ocean. This shipment, as is the usual
custom, is insured for about 20 per cent in excess of its billed
value. (See Exhibit "S.")
The exporter then attached to these documents a draft
for the amount for which flour was sold, namely 457 12s lOd.
Had this shipment been destined to a point in Germany, the
draft would have been drawn in marks; if to France, in francs,
etc.; usually in the money of the country to which it is going,
but very often it is drawn in English, French or German money
although destined to some other countries, by reason of exchange
on countries named being preferred. (See Exhibit "T.")
In this case the exporter agreed to allow the buyer sixty
days' time in which to pay draft, after its presentation. The
original draft reads: "Sixty days after sight of this first of
exchange (second unpaid) pay to the order of ourselves 457
pounds, 12 shillings and 10 pence, against Soo Line through
B-L. No. 1548, dated May 16, 1901, for 2,000 sacks flour,
branded 'Dakota,'" and is signed "Northwestern Consolidated
Milling Co., by H. E. Kent, Cashier," the latter being termed
the "drawers." In the lower left-hand corner it reads: "To
James Corwith & Co., Liverpool, Eng.," they being the buyers,
or, as we term them, the "drawees."
Now these three documents drawn to the order of the
exporters (Northwestern Consolidated Milling Co.) comprise a
commercial bill of exchange. (See Exhibits "R," "S" and "T.")
Upon the same day that these documents were issued and
practically before the flour had started on its long journey, the
exporters offered this bill of exchange for sale. It was sold
to the Security Bank of Minnesota, Minneapolis (they being
the highest bidders) at the rate of $4.84 per pound, who in turn
resold it to the American Express Company at S4.84J per
pound. The endorsements on back of draft upon its return
from abroad read:
"Northwestern Consolidated Milling Co., by H. E. Kent,
Cashier."
"Security Bank of Minnesota, by Thomas F. Hurley,
Cashier."
"Pay to the order of National Provincial Bank, Liverpool,
American Express Co., by James F. Fargo, Treas."
The latter indorsement shows the papers to have been
sent to Liverpool for collection. The bank at Liverpool notified
James Corwith & Co. to call and accept draft, which they did
by writing "accepted" and the date over their signature.
About fifteen days afterward the flour arrived by slow
steamer, and, being in immediate need of it Corwith & Co., in
order to obtain the bill of lading had to pay the draft, the
168 FOREIGN EXCHANGE TEXT BOOK
instructions stamped on draft reading: "Surrender documents
upon payment only." Now, as Corwith & Co. paid this draft
forty-five days before it was due, the bank, as is customary,
allowed them the prevailing rate of discount applicable to that
class of bilis, which was 2 per cent (or 1 3s 5d). The differ-
ence, 456 7s 5d was placed to the credit of the American
Express Co. by the bank, which closed the transaction. Had
the instructions on draft read "Surrender documents upon
acceptance of draft," the bill of lading would have been delivered
to Corwith & Co. when draft was accepted, thus enabling Corwith
& Co. to obtain goods at once and pay the draft sixty days after-
ward, or at its maturity.
The method of determining the value of this commercial
bill of exchange, that is, what could be paid for it, was based
upon: 1st, the price demand exchange on Liverpool could be
sold for; 2d, the cost of revenue stamps to be affixed when
draft was accepted abroad; 3d, the interest for the number
of days for which draft was draw r n plus three days of grace
(63 days). To better illustrate the method of buying this
particular bill, or rather, of determining w r hat could be bid for
same and allow a reasonable profit, the following figures are
given :
Rate per at which exchange on Liverpool could be
sold upon date of purchase 4 . 8655
Cost of revenue stamps pe/ which had to be affixed
to draft when accepted (1-20 of 1% of rate, or Is
per 100 or fraction) 0024
Interest per for 63 days at 2% (discount rate) 0167 . 0191
Net worth of bill after being discounted per S4.8464
PROFIT TO PURCHASERS:
The Security Bank of Minn, paid $4. 84 per and sold same at 4.84J
per , or i cent higher, which on 457. 12s. lOd. netted them for
their endorsement of the draft and trouble SO . 57
The American Express Company paid $4. 84 .J per and sold demand
draft(s) against same on same day payable in Liverpool at rate
of $4.8655 per , which on 457 12s lOd netted them for
their endorsement, investment of $2215.56 (cost) and trouble of
collecting, $2. 29, or $ cent per pound profit.
Frequently shippers attach to the other documents an invoice
of the shipment, which was done in the case above cited. (See
Exhibit " IT.")
FOREIGN COMMERCIAL FORMS
Exhibit "R"
Reduced Facsimile of a Foreign
THROUGH BILL OF LADING.
169
IT is HEREBY AGREED, that any loss <
IT IS HEREBY AGREED, that any loss or claim under this Certific
the Company, , n Liverpool, at the rate of Four Dollars and ninety-fiv
Jnsuran adjusted according to the usages of Lloyds, but subject to
NOTICE. To conform with the Revenue Laws of Great Britain, in
must be stamped within ten days after its teceipt in the United Kingdo
ate, shall be paid in Sterling, at the
cents (*4flfi,) Gold to the Pound
the conditions of the Policy and Co
offices of
Sterling.
:t of
order to collect a claim under this Certificate,
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172
FOREIGN EXCHANGE TEXT BOOK
Exhibit "U"
Reduced Facsimile of
INVOICE OF SHIPMENT
To a Foreign Country
FOREIGN COMMERCIAL FORMS 173
Commercial Letters of Credit.
A commercial letter of credit, or, as sometimes called,
a mercantile letter of credit, instead of being designed for use
in obtaining funds to meet expenses of travel, as is the case
with a circular letter of credit, is intended for use of mercantile
houses desiring to import goods, in obtaining credit in the
purchase of goods in a foreign country. (See Exhibit "V.")
It is not necessary for the purchaser of a commercial letter
of credit to present same in person. Should he desire to make
purchases or obtain credit with a foreign merchant he can
forward credit to the merchant for that purpose. Through
these credits goods can be purchased in any part of the world,
either for cash or upon 30, 60, 90 days and often six months
time, according to agreement.
Upon presentation of proper evidence of shipment of
goods, comprising bill of lading, certificate of marine insurance
and sometimes certificates of analysis or inspection, depending
upon nature of shipment, a foreign bank at point goods are
snipped from would purchase the shipper's draft for value of
shipment, drawn on the bank or concern named on face of credit,
at the buying rate for that class of commercial paper. That
is, if credit and draft were drawn in pounds sterling "(English
money) on London the local bank would buy draft at the
market rate of exchange for that class of paper on London
and reimburse itself by sending the draft and accompanying
documents for credit or collection to London as instructed on
credit or by reselling same in the open market.
In the use of these credits, the foreign merchant is usually
required under oath, before an American consul, to make out
an invoice of the goods shipped.
Commercial letters of credit are issued in pounds sterling
on England, in francs on France or in marks on Germany,
according to request of purchaser, but more often are issued
in pounds sterling for the reason they are more easily and
advantageously negotiated throughout the world.
Commercial letters of credit are usually issued in four
parts. One is sent to the exporter abroad, one to the bank
named on face of credit in London, Paris or Berlin, as case
may be, as their authority to accept drafts drawn against same,
one copy is given to purchaser or importer here, and the fourth
copy is retained by the seller of the credit. On the back of
the copies held by the purchaser and selling bank or concern
issuing same, is a form of agreement as per Exhibit " W."
Not infrequently sellers of commercial letters of credit
exact from the purchaser a trust receipt in form as per Exhibit
"X," the object being to enable the seller of the credit to retain
legal title to the goods shipped until drafts drawn for cost of
goods are paid.
174 FOREIGN EXCHANGE TEXT BOOK
Commercial letters of credit are extensively used by mer-
chants in the purchase of goods in foreign countries, since it
would be very difficult if not impracticable for a foreign mer-
chant to keep close track of the financial standing of a customer
located in a distant land.
The terms of issue of these credits vary according to the
length of time drafts are drawn payable, to the financial re-
sponsibility of applicants for credit and to numerous conditions
too variable to explain.
FOREIGN COMMERCIAL FORMS 175
Exhibit "V"
Reduced Facsimile of
COMMERCIAL LETTER OF CREDIT.
COPY
} /wxt Js>,j/ri7s/s sit
I ; *fc^ ^ AMERICAN EXPRESS COMPANY AT .
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176 FOREIGN EXCHANGE TEXT Boos
Exhibit "W"
Reduced Specimen Copy of Agreement for
COMMERCIAL LETTER OF CREDIT.
.190-
1o the AMERICAN EXPRESS COMPANY,
New York, N. Y.
Gentlemen:
Having received from you the, Commercial Letter of Credit of which
a true copy is on the reverse, J e hereby agree to its terms, and in consider,
ation thereof bind rseivea to reimburse you
the Bills drawn in virtue thereof, at the current rate of exchange for prime
Bankers Bills.
It is understood that the commission under this Credit shall be
per cent -
Should e anticipate the payment of any portion of the amount pay-
able, interest at the rate of per cent per annum is to be allowed.
we hereby give you a specific claim and lien on all goods and merchandise,
and the proceeds thereof, for which you may have paid or obligated your-
selves under this Credit, and on all policies of insurance, which ,f. e hereby
agree to effect on such goods and merchandise to an amount sufficient to
cover your advances or engagements under this Credit. W K further agree
that the title to all bills of lading covering merchandise shipped under this
Credit shall be and remain in you until payment of all obligations incurred
by you thereunder, notwithstanding such bills of lading may have been
previously endorsed by you. we further give you full power and authority
to take possession of the said merchandise and to dispose thereof at your
discretion for your reimbursement as aforesaid, at public or private sale,
and to charge all expenses, including commission for sale and guarantee;
and we also agree to give you any additional security that may be demanded,
we hereby guarantee upon your executing the aforesaid Letter of
Credit, that you shall not be held responsible for the correctness of the signa-
tures of the documents representing shipment or shipments under said
Credit, nor for the quality or genuineness of the merchandise declared in
said documents, notwithstanding such bills of lading may have been pre-
viously endorsed by you covering such shipments.
In case we should hereafter desire to have, this Credit confirmed, altered
or extended by cable (which will be at "r expense and risk), we hereby agree
to hold you harmless and free from responsibility for errors in cabling on
the part of the cable or telegraph companies.
we further authorize you to cancel this Letter of Credit at any time to
the extent that it shall not have been acted upon when notice of revocation
is received by the user.
This obligation is to continue in force, and to be applicable to all trans-
actions, notwithstanding any change in the composition of the firm, firms.
Company or Corporation, parties to this contract, or of the user of this
Credit.
FOREIGN COMMERCIAL FORMS 177
Exhibit "X"
Reduced Specimen Copy of Trust Receipt for
COMMERCIAL LETTER OF CREDIT.
from the American Express Company the follow-
ing merchandise, their property, specified in the Bill of Lading per
dated marked and numbered as follows:
nd in consideration thereof, part, or of the non-fulfill-
ment of any obligation, or of the non-payment at maturity of any accept-
ance made under said Credit, or under any other Credit issued by
the American Express Company on [our) account, or of the non-pay-
ment of any indebtedness on (J,V) part to said Company, all obligations,
acceptances, indebtedness and liabilities whatsoever shall thereupon (with
or without notice) mature and become due and payable.
ewe, further agree to keep said merchandise while in ffir} hands fully
insured against loss by fire.
Dated.
CHAPTER X,
TERMS AND EXPRESSIONS USED IN
FOREIGN EXCHANGE
TRANSACTIONS.
Terms and expressions are frequently used in foreign
exchange transactions, as in other lines of trade, which, naturally
are not clearly understood except by those thoroughly familiar
with the business. In this chapter we shall undertake to explain
in as comprehensive a manner as possible the use and meaning
of the terms and expressions most frequently used.
ACCEPTANCE. The common title given to drafts and bills
of exchange after they have been accepted. A formal agree-
ment by signature to pay a draft or bill of exchange according
to its terms. The acceptance of a draft, bill of exchange or
other document consists of writing the word "accepted" on the
face thereof, over the date and signature of the acceptor, who
in the case of a draft is the drawee, or his agent.
Drafts drawn against exports are frequently made payable
say, 30, 60 or 90 days AFTER SIGHT, which means after they are
sighted by the drawee; hence the importance of immediately
presenting drafts for acceptance. The acceptor of a draft
admits the obligation and acknowledges he is liable for the
debt. Should the drawee refuse to accept a draft, the maker
(drawer), or indorser, may proceed bylaw to collect amount
due without waiting the maturity of the draft. When a draft
is accepted by other than the drawee or his authorized agent,
it is called ACCEPTANCE FOR HONOR.
An acceptance of a draft or bill of exchange is considered
"general" when not qualified by word "special" and made pay-
able at a specified time and place. The acceptance is termed
"qualified" when accepted for a sum less than named on face
of bill, and for honor or "supra protest" when accepted by a
person other than the drawee.
ACCEPTANCE FOR HONOR. Where a draft, bill of exchange
or other document has been accepted for the honor of the
drawee or an indorser, after it has been protested for non-
acceptance.
If a drawee of a bill declines to accept it when presented,
or to pay it after acceptance, any person may accept or pay it
for the honor of the drawer, or of an indorser, by going before the
notary public who protested the bill and making declaration
that he accepts or pays the bill FOR HONOR. It should be stated
179
180 FOREIGN EXCHANGE TEXT BOOK
for whose honor bill is accepted or paid and the notary public
should make note thereof.
ADVICE. When used in connection with foreign exchange
transactions, refers to the notice or letter from the issuer (drawer)
of a draft or bill of exchange to the bank or correspondent
abroad upon which the bill is drawn, asking that the draft or
bill be duly honored upon presentation, and generally instructs
as to the manner of reimbursement or disposition. Nearly
all foreign drafts issued are payable only upon receipt by the
bank or correspondent upon which draft is drawn of the advice
of issuance, which contains the number, date, amount, name
of issuer and payee of the draft. It is always very important
that the advice be forwarded by mail upon the same steamer
carrying the draft, otherwise it might result in delay in pay-
ment of draft.
AFTER SIGHT. After presentation or after acceptance of
a draft or bill of exchange. Drafts are drawn payable "at sight"
or a certain number of days "after sight." If at sight it would
be payable upon presentation, provided no days of grace are
allowed by the terms of the contract; if, say, 30 days after sight,
it would be due and payable 30 days after the draft was accepted,
plus days of grace, if any.
ALLONGE. Is the term given to a piece of paper attached
to a draft to receive indorsements when the draft itself has not
sufficient space thereon to receive same.
BILL OF EXCHANGE. Usually refers to a draft drawn pay-
able in a foreign country. If drawn for the value of goods
exported, and the bill of lading and insurance certificate are
attached, it is termed' a "documentary bill of exchange." If no
documents accompany same it would be called a "clean bill of
exchange." Bills of exchange are usually drawn in duplicate,
the originals being sent abroad by first outgoing steamer, the
duplicates by following steamer. (See Commercial Bills of
Exchange.)
There is practically no difference between a bill of exchange
and a draft, but the term bill of exchange is commonly applied
to an order for payment of money in a foreign country.
A drawer of a bill of exchange is primarily liable on it until
it is accepted. The liability of the indorsers follows in the
order in which they appear on the bill. After a bill of exchange
is accepted the acceptor becomes the person v;ho is liable and
the drawer and indorsers' liability follow in their order. The
holder of a bill of exchange may, in the event of non-payment,
proceed against the drawer, acceptor or indorsers, irrespective
of their liability or the order in which their names appear on
the paper.
The drawer of a bill of exchange guarantees to the indorsers
or holder that the drawee will accept and pay same, and in the
TERMS AND EXPRESSIONS 181
event the drawee does not pay, the drawer warrants to do so
providing the bill is properly presented and protested.
It is the duty of a holder of a bill of exchange to promptly
forward same for acceptance by the drawee and after its accept-
ance to have same duly presented for payment. If drawee
refuses to accept the bill or refuses to pay after acceptance,
the drawer and indorsers must at once be notified of the fact
and the bill duly protested, otherwise the drawer and indorsers
will be released from liability.
It is not unusual in the drawing of bills of exchange in
sets for the drawer or purchaser to send the first of exchange
(original) to the point upon which drawn for acceptance and
to sell the second of exchange (duplicate) upon the market, thus
putting same into circulation. This second of exchange will
bear the name and address of the party holding the first or
accepted bill, but before payment in such cases, the first and
second are attached, thus becoming one bill. The reason
for sending the first of exchange in advance for acceptance
is to shorten the running time of the bill, since the 30, 60 or 90
days, as the case may be, which the bill has to run before it
is due, does not commence until it is presented to payee for
acceptance. In selling the second of exchange a higher price
can be commanded if the first has been forwarded for accept-
ance a week previously. But ordinarily, the original is mailed
at once, the duplicate by next steamer, and the triplicate, if
any, is held by the purchaser. The object of sending the
duplicate by mail by a different steamer is to avoid delay in
payment in case original is lost. A bank may pay either the
original, duplicate or triplicate of a bill of exchange if the others
have not been presented and paid. A bill of exchange may
be PAID any number of times before it is due and be put into
circulation between each payment, but once it is paid by the
ACCEPTOR on its becoming due, it cannot again be put into
circulation, nor can any action be brought upon it.
CONTINENTAL EXCHANGE. Continental exchange or a
continental bill is one payable on the continent of Europe, or
elsewhere in Europe than Great Britain.
CURRENCY OF A BILL. Means the time between date of
acceptance and the date it is due and payable.
D-A and D-P are abbreviations used to signify the words
"Documents for Acceptance" and "Documents for Payment."
In drawing time drafts against shipments exported (see
Commercial Bills of Exchange) and the same are accompanied
by bills of lading, it is customary, when not drawn direct upon
bank or bankers, to instruct as to whether the bill of lading
shall be delivered at time the draft is accepted (see Acceptance),
or if payment of draft be required before delivery of bill of
lading. If the former, the term " documents for acceptance " is
182 FOREIGN EXCHANGE TEXT BOOK
used; and if the latter, documents for payment. Where drafts
are drawn direct on bankers, it is understood the documents
(bill of lading, insurance certificate and sometimes weight
certificate) may be delivered upon acceptance of draft.
DEMAND EXCHANGE. Drafts, checks or other negotiable
paper drawn payable at sight or on demand by bank upon
which drawn.
DIRECT AND INDIRECT EXCHANGE. Drafts or other nego-
tiable paper drawn with the intention that they shall be pre-
sented only at the particular place upon which drawn, would be
termed direct exchange. If a check were, for example, drawn
payable at London but remitted to a payee at Liverpool for
use by him there, it would be termed indirect exchange.
It is a common practice, though not always desirable, to
draw checks and drafts payable at principal trade centers such
as London, Paris, Berlin, Vienna, etc., which are intended for
payment at interior places in the various countries. This is
generally due to the fact that the bank or institution issuing
same have no arrangement for payment of the paper at the
place to which it is to be sent, but expects the payee to nego-
tiate same with some local bank to best advantage. There are
also instances where a check or draft can be negotiated to
better advantage if drawn payable at a principal trade center
instead of upon a bank at point to which remitted. Such cases
would be called indirect exchange.
DOLLAR EXCHANGE. Means drafts, checks, etc., drawn for
an amount expressed in United States dollars.
DOMESTIC EXCHANGE. Means drafts, checks or other
exchange drawn payable within the country in which issued
sometimes called inland exchange. Domestic exchange is
calculated in only one kind of money, while foreign exchange
is calculated in two kinds of money at least.
DOMICILED. A term used to signify a certain place at
which a draft, check, bill of exchange, etc., is made payable;
that is, if made payable at a certain place it is domiciled at
that place.
DRAFT. A written order to pay at sight (on presentation)
or at some future fixed time (after sight) a specified sum. The
one who issued or signs the draft is termed the drawer, the one
to whom it is addressed is termed the drawee. A draft is
generally payable or collectable through a bank or other finan-
cial agency. Unlike a check, which is drawn upon a bank in
which the drawer has funds to his credit, a draft may be drawn
for the collection of an account due the drawer, or against the
value of goods sold to the drawee, which have been received
or are to arrive at some future date.
A draft may be drawn payable to bearer or to the order
of a person at sight (on presentation). If drawn payable after
TERMS AND EXPRESS T ON 183
sight it is customary to present draft to the drawee at earliest
possible moment for acceptance, since the running time of
the draft dates from the time it is accepted, and not from date
of draft.
A draft is dependent for its payment upon its acceptance
by the drawee or one upon whom it is drawn, and if the drawee
refuses to accept same, or does not pay it when due, no criminal
proceeding can be instituted against drawer.
When acceptance of a time draft is refused it is customary
to protest same (see Protest). A draft is a piece of paper
representing not money but a credit or value of the drawer in
the hands of the drawee and is of little value to the drawer
unless accepted by drawee.
There is practically no difference between a draft and a
bill of exchange, although the term draft is commonly applied
to an order for money payable within the United States, while
the term bill of exchange is applied to an order for money
payable in a foreign country.
After a draft is accepted it becomes practically a promise to
pay on the part of the acceptor and he can be held thereon as
on a note.
The word draft is frequently applied to checks as well as
bills of exchange.
FIRST, SECOND AND THIRD OF EXCHANGE. It is customary
in drawing drafts for the value of goods exported to issue the
drafts in duplicate, and sometimes in triplicate. One of the
drafts is called the first of exchange or original; the other the
second of exchange or duplicate; and the third, if issued, the
third of exchange or triplicate. The object of drawing drafts
on foreign countries in duplicate or triplicate is to mail the
first on the first outgoing steamer and the second on the following
or a different steamer, so that if one is lost or delayed the other
will serve the purpose, as whichever is first presented will be
paid. If a third is issued, it is usually held as a memorandum.
The payment of any one of the three bills cancels the others.
When drafts or bills of exchange are drawn in sets they
are marked or printed as follows: First of exchange (second
and third unpaid) ; second of exchange (first and third unpaid) ;
third of exchange (first and second unpaid). Or in this manner:
Original (duplicate and triplicate unpaid); duplicate (original
and triplicate unpaid); triplicate (original and duplicate
unpaid).
GOLD EXPORTING AND IMPORTING POINTS. When the
rates for drafts, checks or bills of exchange on foreign countries
are so high or so low that gold can be exported or imported
equally cheap, foreign exchange is said to have reached the
gold exporting or the gold importing point.
The term specie point is sometimes used instead of gold
184 FOREIGN EXCHANGE TEXT BOOK
point, but the term gold point is most commonly employed
because, strictly speaking, specie means any kind of metal
money, while there is but one meaning 'to gold.
Under normal conditions the rates for foreign exchange
fluctuate between what are termed gold exporting and gold
importing points, which means the actual cost of the gold plus
the cost of transporting it from one point to another. For
example: If you wish to remit, say to London, the equivalent
of 50,000 (or approximately $250,000) and you found that
the cost of the gold coin or bullion and the expense of freight
charges, insurance, commission, etc., would be considerably
less than the cost of a draft or check for the amount on London,
then you would ship gold in preference. If, however, the cost
were equal or greater for shipping gold, then you would remit
by check, as it would be more convenient and attended with
less risk.
When the rate for demand sterling exchange gets doAvn
to, say, $4.83f to $4.84 per pound, a person here desiring to
obtain a large sum of money from London would find it more
profitable to have the debtor ship gold to America at his expense,
as the gold would bring him more money. This would be
the gold importing point. When such exchange reaches,
however, as high as $4.89 to $4.89^ per pound, then gold can
be exported equally cheap. This would be the gold exporting
point.
IN CASE OF NEED. An expression frequently written or
stamped on drafts drawn against exportations to foreign coun-
tries, which is intended as a notice to bankers or others abroad,
through whose hands the draft may pass, that they must not
protest draft for non-acceptance or non-payment; that in
case of need, that is, in case it is not accepted upon presenta-
tion to drawee or paid at maturity, the holder must call upon
a certain bank, banker or person (usually agent of the drawer)
designated for reimbursement. The expression is usually
used, for example, in this way: "In case of need with Dresdner
Bank, Berlin, Ger." The use of the expression is to avoid
exorbitant protest fees.
MATURITY. The time fixed for the payment of a draft or
bill of exchange, or, in other words, when it is due to be paid.
A draft drawn, payable, at, say, 60 days after sight, would
mature 60 days after the draft was accepted by the drawee.
If drawn payable 10 days after date the draft would mature
at the expiration of 10 days. In most countries a certain
number of days grace (usually three) is allowed by law. Where
so allowed payment cannot be exacted until expiration of the
period for which draft is drawn plus the number of days grace.
No PROTEST. A term frequently used on drafts or other
paper sent for collection to indicate that the paper must not
TERMS AND EXPRESSIONS 185
be protested (see Protest) if not paid or accepted, and is, there-
fore, not subject to protest fees usually charged by banks or
collection agencies. When no instructions are given as to
protesting it is customary for banks to protest same according
to legal requirements, for which service a fee of about $2.50
is exacted, and must be paid by the sender of the collection.
Where drafts, notes and other papers for collection have words
"no protest" thereon, it is a notice that the expense for pro-
testing shall not be incurred.
NOTIXG. Is evidence in writing by a notary that presenta-
tion of a bill of exchange for acceptance or payment was made
to drawee. This act reserves the formal protest act in due
course of time.
PER MILLE. This means per 1,000. The term is in general
use abroad and not infrequently in this country in connection
with foreign exchange transactions. It is often applied to
premium and discount. For example: A premium of one
per mill would mean one for each thousand, equivalent to
1-10 of 1 per cent. In saying that the premium for gold
in France is one per mille (French) it would mean one franc
on each 1,000 francs. In speaking of the cost of revenue stamps,
which have to be affixed to time drafts or bills of exchange
in Germany, we say one-half per mill, which means one-half
murk (50 pfennigs) on each 1,000 marks. If a bank in Ger-
many were to charge a premium of one per mill, it would be
one mark on each 1,000 marks, or 1-10 of 1 per cent.
PROTEST. In McMaster's "Irregular and Regular Com-
mercial Paper," published by the McMaster Co., 69 Wall St.,
New York City, the following is given under head of "Protest:"
"The protesting of a dishonored instrument an act which is per-
formed by a notary public, but which under certain circumstances can be
performed by another person is an act done to prevent the release of
the indorsers of all negotiable instruments and also the drawers of bills
of exchange and checks, as such parties are discharged if the instrument
is not protested when protest is required.
"On the day of maturity of all negotiable instruments, and on the
day when a bill of exchange should be presented for acceptance, the
notary, with the instrument in his possession, must present it at the
place where it is drawn payable, and demand acceptance or payment, as
the case may be, and on failure to receive acceptance or payment thereon,
he is required to notify, by mail or in person, the indorsers and drawers
of the demand and non-payment, and formally protest the instrument.
"If no place of payment is mentioned in the instrument it must be
presented to the place of business of the person required to pay the
drawee of the bill or the maker of the note and if there is no such
place of business, then at his residence. If the instrument is lost it can
be presented and protested by copy or description. The demand should
be made personally of the party required to pay or accept, and if he be not
present, then of some person in charge of the office or premises. If no
person is present the demand can be made of 'whom it may concern.' "
"The notary must then, that day, note on the instrument the fact
that on that date he had protested the instrument for non-acceptance or
186 FOREIGN EXCHANGE TEXT BOOK
non-payment, as the case may be. Then and in any case not later than
during business hours of the next day, or not later than the last outgoing
mail of such day, notice of demand, non-acceptance or non-payment
and of protest must be mailed to each of the parties to the instrument.
If affixed to any name is a postoffice address, the notice must be mailed,
postpaid, to that address. If no such address is given, then inquiry
must be made as to the business place or residence of the parties and the
notice sent there. If no address can be found, a notice for such party
or parties must be mailed to the owner or last indorser. Where there is
doubt as to the postoffice address of a party, it is customary, as a pre-
cautionary measure, to mail several notices to different places or enclosed
to different persons. If any of the parties are dead, inquiry must be made
as to their personal representatives and notice be sent to such representa-
tives, and if no personal representative be found, notice must be sent
to the last residence or place of business of the deceased.
"There is no particular form of notice required; it is only necessary
that it conveys information sufficient to acquaint the party of the demand
and non-payment of the particular instrument. It will be sufficient to
have the notice read, for instance:
CANISTEO, N. Y., Sept. 1, 1902.
"N. C. TAYLOR,
Canisteo, N. Y.
Please take notice that a promisory note made by Tillotson
& Vorhis, dated July 1, 1902, due this day, for one thousand
dollars, and indorsed by you, has this day been protested for
non-payment, and that the holders look to you for payment
thereof, payment of the same having been duly demanded and
refused.
JOHN D. MOORE,
Notary Public.
"Notice of protest can be delivered personally, and oral notice may
be sufficient.
"At any subsequent time the notary issues a certificate of protest,
under his hand and seal, to which is attached the instrument or a copy
thereof, or both.
"The certificate must specify the time and place of presentment, the
fact of presentment and the manner thereof, the cause or reason for
protesting the bill, the demand made and the answer given, if any, or
the fact that the drawee or acceptor could not be found.
"Protest may be made by: A notary public, or by any respectable
resident of the place where the bill is dishonored, in the presence of two
or more credible witnesses."
REBATE RATES. A term used in connection with docu-
mentary commercial bills of exchange and means. the rate per
cent that will be rebated or allowed if the draft or bill is paid
before maturity or before due. For example, if a sixty-day
draft drawn against commodities exported w y ere paid by the
drawee abroad, say, thirty days after the draft w r as accepted,
the drawee would be entitled to a rebate from face amount of
draft, at the prevailing rate per cent applicable to such bills
for a period of thirty days.
Rebate rates apply only to time commercial bills of exchange
drawn on firms where documents are for payment; that is,
where bill of lading is delivered only upon payment of the
draft.
TERMS AND EXPRESSIONS 187
SELLING RATES. The rate at which foreign exchange is
sold by dealers in foreign exchange.
SHORT BILLS. A term usually applied to foreign bills of
exchange which are drawn payable thirty days or less after sight
or acceptance. The term "short dated bills" is sometimes used.
SIGHT BILLS. Or SIGHT CHECKS, or SIGHT DRAFTS, mean
those payable at sight, on demand or on presentation.
STERLING EXCHANGE. Means drafts, checks or bills of
exchange drawn in the money of Great Britain pounds sterling.
USUANCE. The time which is allowed by custom or usage
for the payment of bills of exchange drawn on a distant country.
The length of the usuance varies in different places, from four-
teen days to six months after the date of the bill, and the bills
may be drawn at usuance, half-usuance, double usuance, etc.
In recent years a four-months' usuance has been established
for India, China and Japan.
WITH EXCHANGE. When the words "with exchange" are
endorsed on a draft for collection, or are appended thereto,
it means that whatever charge there is for converting the money
into a foreign money or the collecting of same, shall be borne
by. the drawee. In other words, the full face amount of draft
plus the cost of exchange, must be paid by the drawee (one
upon whom drawn).
In drawing drafts upon South American points where
exorbitant charges are usually exacted by banks for collecting,
it is customary to draw such drafts "with exchange," thus
requiring the drawee to pay the cost of exchange between the
country in which the draft is paid and the country to which the
proceeds of the draft have to be remitted.
In the purchase of commercial bills of exchange drawn
against commodities exported to remote countries where bank-
ing facilities are not very good it makes a great difference in
net proceeds realized whether the drafts are drawn with exchange
or not. ,
WITHOUT RECOURSE. The words "without recourse" written
before an indorsement on the back of a note, check, draft or
bill of exchange, absolves the person^so signing from any legal
process by the holder in case payment at maturity is not made.
In other words, the indorser is a mere assignor of the title to
the paper, and is relieved from responsibility for its payment.
Indorsements, without recourse, are frequently made merely
for purposes of identification of payee or genuineness of previous
indorsements.
INDORSEMENTS.
An indorsement is anything written on a note, draft,
check, bill of exchange or other negotiable commercial paper,
pertaining to the payment thereof. The indorser is one who
188 FOREIGN EXCHANGE TEXT BOOK
makes the indorsement by writing his name, usually on back
of the instrument. The following are the principal forms of
indorsement:
IN BLANK. Where the indorser writes his name only,
without making it payable to anyone or naming conditions
of payment or making other notations. For example: S. S.
JONES.
IN FULL. When indorsed payable to some particular
person or persons and thus limiting payment to such persons.
For example: Pay to the order of Brown, Smith & Co. S. S.
JONES.
XOTE. This form of indorsement is generally adopted as being
safest, since if paper is lost or stolen the holder could not negotiate same
without securing indorsement of the payees, Brown, Smith & Co.
QUALIFIED INDORSEMENT. Is one which is intended to
release the indorser from all responsibility in relation to pay-
ment. For example: Pay to the order of Brown, Smith & Co.,
without recourse to me. S. S. JONES.
The words "to me" are sometimes omitted.
NOTE. Qualified indorsements are also used to LIMIT the liability
of the indorser, as for example, when the words "Agent," "Cashier,"
"Secretary," "Treasurer," etc., arc placed after the signature. The
use of these titles limits the responsibility Of the indorser to that pertain-
ing to his official position.
RESTRICTIVE INDORSEMENTS. Are intended to restrict
payment to person or persons to whom made payable and to
also stop further negotiation or transfer of the paper. For
example: Pay to Brown, Smith & Co., only. S. S. JONES.
XOTE. If paper is sent for collection and credit, indorsements would
be made thus:
Pay to First National Bank for my account. S. S. JONES.
CONDITIONAL INDORSEMENTS. Those naming certain con-
ditions to be complied with before payment is made to holder.
For example: Pay to Brown, Smith & Co. upon delivery of
10 shares U. P. stock. S. S. JONES.
WAIVING PROTEST. Where the indorser waves protest
and thus remains responsible to the holder of the paper, without
receiving notice of protest in event of non-payment. For
example: Protest and notice of protest waived. S. S. JONES.
XOTE. When paper is sent for collection and it is not desired to
have same protested in event of non-payment when due, the words "no
protest" are usually indorsed thereon.
REMARKS. Your name should always be indorsed on
back of drafts, checks, notes, bills, etc., just as the same appears
on the face of the paper; that is, if wrongly spelled on face,
it should be indorsed just the same on the back, but in addition
you should correctly indorse your name underneath.
CHAPTER XL
BUYING FOREIGN COMMERCIAL BILLS
OF EXCHANGE.
The b'uying of foreign commercial bills of exchange is the
principal medium of bankers and foreign exchange dealers in
placing funds to their credit in banks abroad, against which
they issue checks, drafts, letters of credit, etc. It is the founda-
tion of most of our foreign exchange transactions. It is the
principal source of profit in the business. It enables manufac-
turers to sell their goods abroad for cash in advance.
The buying of commercial bills of exchange can not be
safely undertaken except by those thoroughly familiar with
that business. It is practically equivalent to loaning money
upon securities you have not seen. If the drawer of the bill
has unquestionable responsibility, that of course eliminates
the principal risk of loss; but if great care is not exercised in
examining bills purchased, a slight imperfection or error might
cause a long delay in adjusting the mistake, thereby causing
loss of interest. If through a misunderstanding, or for other
cause, goods are not accepted, they have to be sold to best
advantage for account of owner of the bill, and proceeds of
sale are applied toward payment of the draft. If there is a
deficiency it is collected of the drawer of the bill, the exporter.
The buyers of commercial bills should know the market
value of the goods exported; the financial standing of the
drawer or exporter; should see that the bills of lading are
correctly dated, correspond with shipments made; are duly
signed by agent or proper official of railway or freight line;
that they correspond with the insurance certificates in the
various particulars; that if more than two copies were issued,
you have them all; that there are no printed or stamped con-
ditions thereon that would be likely to render them valueless
under possible emergencies. If goods are perishable, see that
they are routed by fast freight lines and fast steamers. If bill
of lading only covers shipment to the seaport, as is sometimes
the case where goods are shipped from some small inland place
where through bills of lading are unobtainable, arrangements
must be made through your own agent to have same exchanged
for ocean bill of -lading at the seaport. Any error or incom-
pleteness of the documents will cause delay in payment, or
expense for cablegrams to adjust them.
Foreign commercial bills of exchange vary as to conditions
of payment abroad. If conditions of sale between buyer and
189
190 FOREIGN EXCHANGE TEXT BOOK
seller were that the goods were to be paid for upon delivery, the
instructions accompanying the bill would say, DOCUMENTS FOR
PAYMENT, meaning not to deliver bill of lading (which would
enable drawee to get goods) until draft had been paid. If
instructions read, DOCUMENTS FOR ACCEPTANCE, it would mean
bill of lading could be delivered when draft was ACCEPTED,
thus enabling drawee to obtain goods at once, and pay draft
any time before maturity. (See page 171.)
It is the custom of large buyers of commercial bills of
exchange to exact of exporters what is termed a HYPOTHECA-
TION CERTIFICATE. This certificate, after describing the nature
of the shipment and the documents in question, states in effect,
that the bill of lading is lodged as collateral security for the
acceptance and payment of the draft; that, in case the drawee
declines to accept draft or it is not paid at maturity, the owner
of the bill is authorized to place the property described in the
hands of brokers for sale for account of whom it may concern,
and apply proceeds toward payment of draft and expenses
incurred; and that in case of a deficiency the seller (drawer)
agrees to pay amount on demand. Sometimes exporters give
a general hypothecation certificate, to apply to any and all
bills of exchange purchased of them. (See page 210.)
CERTIFICATE OF INSURANCE on shipments exported are
usually for a sum from 10 to 20 per cent in excess of the stated
value of the goods. They should be carefully examined to
see that there is no clause which would render insurance void
in event of shipment not going forward within a specified period
or that it would expire before arriving time of goods, in case
of delay, or by reason of any of the possible emergencies likely
to arise. (See page 170.)
The buyers of foreign commercial bills of exchange must be
familiar with the revenue laws and commercial customs of all
the foreign countries as well as the various rates of discount upon
the several classes of paper, as they change from day to day.
What are known as REBATE RATES apply only to time com-
mercial bills of exchange drawn on firms where the documents
are for payment; that is, where bill of lading is delivered only
upon payment of the draft. This rebate rate is an allowance
made to drawee from face amount of draft, if paid before
maturity or before due, and such rebate is usually 1 per cent
below the Bank of England official minimum discount rate.
THE BANK OF ENGLAND OFFICIAL MINIMUM DISCOUNT RATE
is fixed by the directors of the Bank of England at their meet-
ing upon Thursday of each week; and their decision usually
appears in the financial columns of our daily papers, reading
thus: "Bank of England minimum discount rate unchanged;"
or, "Bank of England increased (or reduced) its minimum dis-
count rate to 3 per cent/' etc.
BUYING FOREIGN COMMERCIAL BILLS OP EXCHANGE 191
The PRIVATE DISCOUNT RATE is the rate at which PRIVATE
banks those in Great Britain other than the Bank of England,
those in Germany other than the Imperial Reichsbank, those
in France other than the Bank of France, those in Holland
other than the Bank of the Netherlands, those in Italy other
than the Bank of Italy, etc., etc., which banks act in the capacity
of fiscal agents for their respective Governments will discount
bills of exchange for account of owners or last indorsers; and
this discount is governed by the Government banks' discount
rate, and also by the supply of bills in the market for discount.
Foreign commercial bills of exchange drawn by exporters
without documents (bill of lading and insurance certificate),
known as clean bills, are generally upon their own house or
branch abroad, and are against funds which have accumulated
to their credit from payments for shipments previously made.
Exporters, before selling their own clean bills of this kind,
generally wait until the rates for exchange here are high. Such
bills are discountable at the private rate of discount.
Documentary commercial bills of exchange drawn upon
firms in Great Britain, where DOCUMENTS ARE FOR PAYMENT,
can not be discounted upon the market as in the case of such
bills where DOCUMENTS ARE FOR ACCEPTANCE; for the reason
banks abroad to whom bills are sent for collection will not
undertake to discount commercial bills unless they are what
are called CLEAN BILLS that is, those having no documents, or
bills which permit of the documents being delivered when
drafts are accepted by drawee. Commercial bills of exchange
drawn upon bankers are always for acceptance, and the dis-
count rate applying to such bills is the PRIVATE DISCOUNT RATE
of the day.
CLEAN BILLS OF EXCHANGE are those having no bill of
lading attached, although they may have attached the insur-
ance certificate and an invoice of shipment. If these clean
bills are drawn upon firms they are usually subject to a dis-
count rate of of I per cent above the private discount rate of
the day; but, if drawn upon bankers, they will be discounted
at the private discount rate.
A documentary bill of exchange (commercial bill of
exchange) accompanied by instructions from the exporter or
drawer to deliver documents (bill of lading, etc.) only upon
payment of draft by the importer or drawee, which is draw r n
upon a firm, is subject to a discount rate of 1 per cent below
the Bank of England official minimum discount rate, but if
the instructions are to deliver documents upon acceptance of
drafts, the same rate of discount applies, unless the drawee
is of very good financial standing, in which case the bill may
be discounted by the holder (bank) at \ of 1 per cent above
the PRIVATE discount rate of the day.
192 FOREIGN EXCHANGE TEXT BOOK
Bankers and financial concerns in selling commercial bills
of exchange (documentary) sometimes stamp on the draft,
"In case of need, with the National Provincial Bank of Eng-
land," or the name of some other correspondent bank.
This is done to avoid a charge by intermediate banks for
endorsing or protecting drafts, which charge is frequently very
exorbitant. When so stamped it is a notice to all holders
of the draft they may call upon the bank named if draft is
not promptly accepted or honored, for relief, therefore there is
no necessity for protesting, since the bank named on the draft
will, by previous arrangement, always honor such drafts and
charge to account of bank endorsing such notation thereon.
BANKERS' REIMBURSE BILL is where the drafts are drawn
against a shipment exported, upon a banker, the documents
being for acceptance. When buying such bills, you should
keep a record showing names of endorsers and keep close wateh
of the drawer or shipper until bill is paid. The shipper should
be responsible and if buying a considerable amount of such
bills on the same drawee, you should ascertain through your
correspondents abroad the responsibility of the drawee and be
sure you do not buy more bills against a single drawee than his
ordinary business requirements would indicate he needed.
Foreign Commercial Bills of Exchange are divided into
two classes, namely, commercial bills, which are drawn
against commodities exported, and bankers' bills which are
drawn by bankers against balances to their credit abroad,
which may have resulted from the payment of commercial bills
or against securities. Commercial bills are usually drawn pay-
able at sight, or 3, 30, 60 or 90 days after sight, while bankers' bills
may be drawn payable in 60, 70 or 90 days, or on demand (sight)
although demand bills are generally termed checks. Cable
transfers are also made, which of course are paid immediately.
There are times when GOLD is shipped to foreign countries
as an article of merchandise by reason of a special demand for
it. Bankers' bills are drawn against same just as for a shipment
of goods; BUT such cases are not frequent, and drafts would
be drawn payable in the shortest time possible to save interest.
In buying foreign commercial bills of exchange it is neces-
sary to keep advised daily of the market rates for demand
checks on foreign cities or countries and also the rebate and
discount rates abroad, both of which fluctuate according to
market conditions, the former nearly every day.
In buying bills on countries other than Great Britain,
France, Germany and Holland, and especially those drawn on
other than the principal large trade centers, it is necessary to
take into account the cost of having bills collected by bankers
and the expense of having the funds transferred to the trade
centers.
BUYING FOREIGN COMMERCIAL BILLS OF EXCHANGE 193
It is customary for most jobbers and large dealers in foreign
exchange to keep credit balances in London, England; Paris,
France; Berlin and Hamburg, Germany; and Amsterdam,
Holland, upon which cities the demand for exchange is large
as compared with that on other foreign cities; and the very
large jobbers also keep balances in banks at Christiana, Norway;
Copenhagen, Denmark; St. Petersburg and Warsaw, Russia;
Antwerp, Belgium; Zurich, Switzerland; Genoa and Rome,
Italy; Hong Kong, China; Manilla, Philippine Islands; Mexico
City, Mexico; and Yokohama, Japan. An arrangement is
made with banks at these points for a fixed charge or rate per
cent for collecting commercial bills at their main as well as
branch banks at interior points, which charge must be figured
in buying commercial bills. The class of goods exported,
against which the commercial bills are drawn, also cuts quite
a figure in the value of the bills, as for illustration: Bills against
shipments of meat, where DOCUMENTS ARE FOR PAYMENT, com-
mand a higher price than flour bills, because meat, being perish-
able, is shipped on fast steamers, and the bills are discounted
or rebated almost immediately upon arrival of shipment, it
being necessary for consignee (drawee) to pay draft in order
to obtain the bill of lading with which to obtain goods;
whereas flour, not being perishable, is usually forwarded on
a slow steamer to secure lower freight rates and very often
the drawee does not pay the draft until it is due, perhaps
30 or 60 days after acceptance, thus leaving goods in ware-
house. This, of course, depends upon whether the consignee
(drawee) is in immediate need of the flour. A draft drawn,
say 60 days after sight, would mature or be due 60 days
from the date it was accepted by drawee abroad not 60 days
from date of draft. If the laws of the country allowed days of
grace, usually three days, then the draft would be due in 63
days from date of acceptance. The number of days of grace
allowed in the United Kingdom, 3; in most of the states of the
United States, 3; in South America, 6 to 15; in Mexico, 24
hours; in Russia, 36 hours on bills payable at sight and 10 days
on bills drawn payable after date.
In buying commercial bills of exchange, the rates quoted
are always so much per pound sterling if drawn in L English
money. If drawn in French money, the rate quoted would be
the number of francs and centimes per United States dollar,
as for example: Francs 5.15f, meaning they would pay $1.00 for
each 5 francs 15f centimes. If drawn in German money, the
rate would be per 4 marks (see Chapter IV, "Quotations on
Foreign Exchange.")
PARTIES TO A BILL OF EXCHANGE AND THEIR RESPONSI-
BILITY. The party who draws the bill is the drawer.
The party to whom the order to pay is addressed is the drawee,
194 FOREIGX EXCHANGE TEXT BOOK
until he gives his assent to the transaction by writing his
name across the bill, when he becomes the acceptor. The
party to whom the bill is made payable is the payee. The
drawer and the payee may be the same person. When any
holder of a bill writes his name on the back of the bill for the
purpose of transferring his interest in it to some other person
he is the indorser.
The drawee upon accepting a bill (either in person or by
his authorized agent) becomes primarily liable for it, but if he
refuses to accept it when presented to him, or cannot pay it
when due, he is said to dishonor it, and the drawer and any
of the indorsers become immediately liable to the holder upon
receiving notice from the holder that it has been dishonored,
accompanied by a request to pay the amount.
If the drawer pay the amount, then the indorsers are
discharged from their liability to the holder, but, if the last
indorser is compelled to pay the amount of the bill, the drawer
and those indorsing previous to the holder are still liable, for
the last indorser can sue them for the amount he has paid the
holder for the bill.
There is considerable competition among large jobbers of
foreign exchange in buying foreign commercial bills of exchange,
since they use these bills to place funds to their credit abroad,
against which they sell, at wholesale or retail, letters of credit,
drafts, checks, etc. Therefore when large exporters have bills
for sale they call upon bankers. or jobbers for bids, which, if
not limited, would apply to bills of any amount. The jobber
offering the highest price of course gete the bills. It is not
unusual for large jobbers to buy bills to the value of S500.000
in a single day.
To give examples showing the process by which the value
of commercial bills of exchange of all classes and upon all
countries are determined in buying, would consume too much
space, therefore we shall only undertake in this edition to
furnish illustrations for the purchase of bills of the several
classes on Great Britain, France, Germany and Holland, to
\vhich countries over 62 per cent of all merchandise exported
from the United States is consigned. It may be said, how-
ever, that in. the purchase of bills draw r n upon countries other
than those named the process is practically the same, but of
course ?, different rate of exchange and different rate of interest,
etc., would apply.
Buying Bills of Exchange on Great Britain.
EXAMPLE No. 1.
ILLUSTRATION. A commercial bill of exchange on London,
England; draft drawn payable 60 days after sight; documents
(bill of lading and insurance certificate) for delivery upon pay-
BUYING FOREIGN COMMERCIAL BILLS OF EXCHANGE 195
merit of draft; Bank of England minimum discount rate on
date of purchase, 4 per cent; market rate for DEMAND check
on London, on date of purchase, $4.88 per pound sterling.
OPERATION:
Market rate for demand check on London $4 . 88
Cost per pound for revenue stamps abroad
(Is per 100) 0024
Interest per pound, 63 days, 3% (1% below
Bank of England rate) (see table) 0251
Profit, 1 cent per pound (varies according
to conditions) 01 . 0375
Purchasing price per pound (or say $4.84) $4 . 8425
NOTE. The item of profit (1 cent per ) is used merely for illustra-
tion. It is customary for buyers to figure from to 2 cents per pound
according to circumstances, competition, etc. If this bill had been
drawn upon some other city in Great Britain it would be customary to
deduct about \ of a cent per additional for collection and cost of trans-
ferring funds to London. The item of interest is taken from printed
tables figured out to show interest per single pound for various periods
at the different rates per cent. (See page 197.) The English Government
requires that revenue stamps to the value of 1 shilling per 100 or fraction
thereof be affixed at time of acceptance of drafts drawn payable at
more than five days after sight. This is equivalent to 1-20 of 1% of the
rate per single pound, which in this case ($4.88 per ) would be .00244,
but for convenience $0.0024 per is generally figured. In quoting pur-
chasing or selling price for a bill of exchange, draft or check, it is ;>lways
per single pound, franc, mark, etc., as the case may be, and never for the
total amount for which the bill is drawn. It will be noted that the
interest or discount rate used in this example is 1% below the Bank of
England minimum discount rate (see page 191) which always applies
where documents are for payment instead of for acceptance.
EXAMPLE No. 2.
ILLUSTRATION. A commercial bill of exchange on London;
draft drawn payable 90 days after sight; documents for delivery
upon acceptance of draft by drawee abroad; PRIVATE rate of
discount on date of purchase, 2J%; market rate for demand
check on London on day of purchase, $4.88 per pound.
OPERATION:
Market rate for demand check on London. . . $4.88
Cost per pound for revenue stamp abroad
(Is per 100) 0024
Interest, 93 days, 2i% (private rate) 0309
Profit 1 cent per pound (varies according
to conditions) 01 .0433
Purchasing price per pound $4.8367
NOTE. Sterling exchange quotations are usually raised or lowered
either by eighths of a cent per or by 5-100 of a cent per , whichever
is nearest to figures, therefore the purchasing price for this bill would
196 FOREIGN EXCHANGE TEXT BOOK
be quoted as $4.8365 per . Attention is directed to use in this example
of the PRIVATE rate of discount which applies in all cases where the
documents are for acceptance instead of for payment. (See page 191.)
(See also note under Example 1.)
EXAMPLE No. 3.
ILLUSTRATION. A commercial bill of exchange on London;
draft drawn payable 3 days after sight; no documents attached;
private rate of discount upon date purchased, 3%; market
rate for demand check on London on date of purchase, $4.88
per pound. . .
OPERATION:
Market rate for demand check on London $4 . 88
Cost per pound for revenue stamp (1 penny)
NOT FIGURED 0000
Interest 6 days (3 days grace), 3% (private
rate) * 0024
Profit 1 cent per pound (varies according
to conditions) 01 .0124
Purchasing price per pound $4.8676
This rate would be quoted as $4.86f per pound.
NOTE. Bills of this class are known as clean bills by reason of there
being no documents. (See also note under Example 1.)
EXAMPLE No. 4.
ILLUSTRATION. A commercial bill of exchange on London;
draft drawn payable 10 days after sight: documents (bill of
lading, etc.) for delivery upon acceptance of draft by drawee;
private rate of discount, 2 7-16%; market rate for demand
check on London on date of purchase, $4.88 per pound.
OPERATION:
Market rate for demand check on London $4.88
Cost per pound for revenue stamps (Is per
100) 0024
Interest per pound, 13 days (3 days grace)
2 7-16% (private rate) 00421
Profit \ cent per pound (varies according
to conditions) 0025 .00911
Purchasing price per pound $4 . 87089
Or say $4.87 per pound. (See Note under Examples 1,
2 and 3.)
Stamp Tax.
The stamp tax in England on bills of exchange above
three days' sight is as follows:
BUYING FOREIGN COMMERCIAL BILLS OF EXCHANGE
197
Up to 5 1 penny
5 to 10 2 pence.
10 to 25 3 pence.
25 to 50 6 pence.
50 to 75 9 pence.
75 to 100 1 shilling.
over 100 1 shilling for every 100 or fraction thereof.
In figuring English bills of exchange the cost of revenue
stamps is calculated at so much per 100, therefore, as the
English shilling is worth 24 3-10 cents in United States
money, the cost per pound would be figured as .0024 cents per
pound, or nearly cent.
Sterling Exchange Interest Table.
Showing interest per pound sterling for use in purchasing
bills of exchange drawn payable 3, 10, 30, 60, 70, 90 and 120
days after sight.
(Computed at $4.85 per pound, and 365 days per year,
which is applicable to any rate.)
NOTE. The interest for a given number of days per pound sterling
at a given rate per cent is determined by multiplying the rate per by
the rate per cent and dividing the result by the number of days in u year.
Interest or
Discount Rate
3
days
sight
10
days
sight
33
days
sight
(3 days
grace)
63
days
sight
(3 days
grace)
73
days
sight
(3 days
grace)
93
days
sight
(3 days
grace)
123
days
sight
(3 days
grace)
cents
cents
cents
cents
cents
cents
cents
1-16 of 1%...
.00002
.00008
.00027
.00052
.00061
.00077
.00102
1-8 ofl%...
.00005
.00017
.00055
.00105
.00121
.00154
.00204
3-16 of 1%. ..
.00007
.00025
.00082
.00157
.00182
.00232
.00306
1-4 ofl%.. .
.00010
.00033
.00110
.00209
.00243
.00309
.00409
5-16 of 1%...
.00012
.00042
.00137
.00262
.00303
.00386
.00511
3-8 ofl%...
.00015
.00050
.00164
.00314
.00364
.00463
.00613
7-16 of 1%...
.00017
.00058
.00192
. 00366
.00424
.00541
.00715
1-2 ofl%...
.00020
.00066
.00219
.00419
.00485
.00618
.00817
9-16 of 1%. ..
.00022
.00075
.00247
.00471
.00546
.00695
.00919
5-8 ofl%...
.00025
.00083
.00274
.00523
.00606
.00772
.01022
1 1-16 of 1%..
.00027
.00091
.00301
.00576
.00667
.00850
.01124
3-4 ofl%...
.00030
.00100
.00329
.00628
.00728
.00927
.01226
13-16 of 1%..
.00032
.00108
.00356
.00680
.00788
.01004
.01328
7-8 ofl%...
.00035
.00116
.00384
.00733
.00849
.01081
.01430
15-16 of 1%..
.00037
.00125
.00411
.00785
.00909
.01159
.01532
1%..
.00040
.00133
.00439
.00837
.00970
.01236
.01634
* /v
2%..
.00080
. 00266
.00877
.01674
.01940
.02472
.03269
3%..
.00120
. 00399
.01316
.02511
.02910
.03707
. 04903
4%..
.00160
.00532
.01754
. 03349
.03880
. 04943
.06538
5%..
.00199
.00664
.02193
.04186
.04850
.06179
.08172
~ /v
6%..
.00239
.00797
.02631
.05023
.05820
.07415
.09807
198 FOREIGN EXCHANGE TEXT BOOK
To above figures, the cost per pound sterling for internal
revenue stamp, should be added, namely, .0024 cents.
EXAMPLE. Find interest and cost of revenue stamp per
pound on 60 days' sight bill of exchange at 2 7-16%.
OPERATION:
Interest, 63 days (3 days grace) at 2% = .01674
Interest, 63 days (3 days grace) at 7-16% = .00366
Cost of revenue stamp per pound = . 0024
ANSWER Total 02280
Notes on English Bills of Exchange.
The commercial signs used for expressing the different denominations
of English money are: for pound sterling, placed before the figures,
thus 5, 100, etc. Shillings are designated by "s" or a stroke /
following the figures: 10s. or 10/. Pence by "d" (the initial letter of the
latin word "denarus") placed after the figures:- 5d, lOd, etc. Put to-
gether the correct way of writing the above denominations is 5. 10s. 2d,
or 5. 10/2d, or simply 5-10-2.
The discount rate for short time bills, 3, 10, 15 or 18 days sight,
is higher than for 30 or 60 days' sight bills, for the reason English bankers
hesitate re-discounting short time bills. The seemingly high ratio of
difference between 60 and 90 days' sight "payment" bills as compared
with 30 days' sight, is due to the element of chance of loss on account of
adverse course of the discount rates. As a rule, however, 90 days' sight
bills are drawn "FOR ACCEPTANCE," and this type of bills naturally take
a higher rate of discount.
Bills of exchange drawn on England outside of London are generall}'
worth 1-4 cent per pound less to cover collection charges and transfer of
proceeds to London. Bills on Ireland and Scotland are usually worth
1-4 cent per pound less than bills on London.
Bills of exchange on English colonies bearing the clause "With
exchange and all stamp duties for negotiating bills on London" added
are usually on a par with bills drawn on London.
Bills of exchange on Denmark, Sweden and Norway drawn in English
money are generally worth about one cent per pound less, and bills on
Italy, Gibraltar, Sicily and Malta, 2 cents per pound less; provided,
however, such bills do not bear the clause "Payable in London," or "In
London Exchange." If they do, they are usually worth par with bills
drawn on London, plus any extra cost for postage and commissions.
All endorsements of bills, documents and other paper must be signed
or countersigned in ink, as English bankers do not recognize stamped
endorsements. The titles "Miss, Mrs. or Mr." should not be made a part
of an endorsement. A check drawn to the order of Mrs. Mary Jones,
should be endorsed "Mary Jones;" a draft drawn to order of Mrs. John
Jones should be endorsed "Mary Jones," wife of John Jones, etc.
A CROSSED STERLING CHECK is one payable either to bearer or order,
having the name of a banker or two parallel lines and the abbreviation
"& Co." written or printed across the face, thus: = ===== & Co.
The effect is to direct the bank upon whom it is drawn to pay same only
when coming to them through some other bank. It is intended as an
additional safeguard against wrong payment.
In most foreign countries it is the custom of bankers and others in
the cashing of checks, whether drawn payable to order or bearer, to pay
to the person presenting same, and under the laws existing in these
countries, the paying bank or banker would not be held liable for wrong
payment. As a reason for this seemingly risky method, it is claimed that
BUYING FOREIGN COMMERCIAL BILLS OF EXCHANGE 199
on account of the very severe penalty imposed for forgery under their
laws, the requiring of strict personal identification, as exacted by banks
in the United States, is found unnecessary.
As an additional precaution against wrong payment, the laws of
Great Britain require that where a check is crossed, as explained above,
while not requiring personal identification, it must be cashed through
some bank other than the one upon which it is drawn.
Notwithstanding the requirements under the laws, we presume a
reasonable amount of care is exercised by banks to prevent losses by
incorrect payment, and we are informed that in some countries, strangers
presenting checks drawn to their order, are required to make affidavit
that they are the person named, for which affidavit the paying bank
exacts a small fee.
Buying Bills of Exchange on France-
Ex AMPLE No. 1.
ILLUSTRATION. A commercial bill of exchange on Paris,
France; draft drawn payable 30 days after sight; documents
(bill of lading and insurance certificate) for delivery upon
payment of draft; discount rate 3%; market rate for demand
checks on Paris on date of purchase, francs 5.16^.
OPERATION:
Market rate for demand checks on Paris Fr. 5. 1625
Interest (or rebate) 30 days at 3% (see table) . . .0130
Cost of revenue stamp, 1-20 of 1% of rate, or 50
centimes per 1,000 francs .0026
Profit ^ of 1% of rate (varies according to con-
ditions) .0129
Purchasing price per Si. 00 Fr. 5 . 1910
Or 5.18| francs minus 1-16 of 1%.
NOTE. The item of J of 1% profit is used merely for illustration.
It is customary for buyers to figure from 1-16 to J of 1% according to
conditions, competition, etc. If this bill had been drawn upon a city in
France other than Paris, from 1-10 to 1-16 of 1% additional would be
deducted for cost of collecting draft and remitting proceeds to Paris.
The item of interest is taken from printed tables figured out to show
Interest for various periods at the different rates per cent. The French
government requires that revenue stamps^jto, the value of 50 centimes
per 1000 francs, be affixed to drafts at time of acceptance, which is
equivalent to 1-20 of 1% of rate, which in above case (rate francs 5. 16J)
would be franc 0.0026. It will be noted that the higher the quotation
for francs per $1.00 the lower is the rate.
EXAMPLE No. 2.
ILLUSTRATION. A commercial bill of exchange on Mar-
seilles, France; draft drawn payable 60 days after sight; docu-
ments (bill of lading and insurance certificate) for delivery upon
acceptance of draft; discount rate 1\% ; market rate for demand
checks ON PARIS upon date of purchase, francs 5.16i minus
1-32 of 1%.
200 FOREIGN EXCHANGE TEXT BOOK
OPERATION:
Market rate for demand checks on Paris, francs
5.16i-l-32 fFr.5.16406
Interest 60 days at rate 2f% (see table) .02382
Cost of revenue stamps (1-20 of 1% of rate) . . . .0026
Profit i of 1% of rate (see note under Ex. No. 1). .0129
Cost of collecting and sending funds to Paris
(1-16 of 1%) .00324
Purchasing price per $1.00 Fr. 5 . 20662
Or francs 5.20f minus 1-64 of 1%.
See Fractional French rates.
fNoTE. See note under Example 1. Where the rate is supplemented
by fractional quotations such as minus or plus 1-32, 1-16, 3-32, , etc.,
of 1% the equivalent of the fraction so used is added or deducted, as
case may be, to the rate (see fractional French rates). For illustration:
1-32 of 1% of francs 5.16| (5. 1625) = . 00156, which added to rate
5.1625 gives 5.16406 or 5. 1 6 J 1-32. Francs 5.20674 per $1.00, the
purchasing price in above example, not being a regular commercial
quotation (see quotations on foreign exchange, Chap. IV.), it is necessary
to supplement a regular quotation such as 5.20 or 5.20|, etc., with a
fractional quotation, plus or minus 1-64, 1-32, etc. In this case the
nearest quotation would be minus 1-64 of 1%. For illustration:
5.20^=5.20625
1-64 of 1% of 5.20|= .00078 See fractional French rates
Total, 5. 20703 or francs 5.-20| 1-64
EXAMPLE No. 3.
ILLUSTRATION. A commercial bill of exchange on Paris,
France; draft drawn payable 3 days after sight; with or with-
out documents; discount rate 3%; market rate for demand
check on Paris upon date of purchase, francs 5.16^ plus 1-32
of 1%.
OPERATION:
Market rate for demand check on Paris (5.16^
+ 1-32 Fr. 5 . 16094
Interest 3 days (no days of grace) at 3% 0013
Cost of revenue stamp . 0026
Profit i of 1% of rate (see note above) .0129
Purchasing price per $1.00 Fr. 5 . 17774
Or francs 5.17J minus 1-16 of 1%.
NOTE. See note under Example 1. Where the rate is supplemented
by fractional quotation, such as francs 5. 16J plus 1-32 of 1%, as in this
case, the equivalent fraction so used is added or deducted added if
minus or deducted if plus to the rate. In the example above 1-32 of
1% of 5. 1625=. 00156 (see fractional French rates) which deducted
from 5. 1625=5. 16094. As the purchasing price in this example (francs
BUYING FOREIGN COMMERCIAL BILLS OF EXCHANGE 201
5. 1777) is not a regular rate (see quotations on French exchange, Chap. IV),
the nearest regular rate would be francs 5.17 minus 1-16 of 1%, or
francs 5.1750 plus .00313 (see fractional French rates) which makes
francs 5. 1781, the nearest regular quotation.
EXAMPLE No. 4.
FRENCH EXCHANGE BILLS ON BELGIUM AND SWITZERLAND.
ILLUSTRATION. A commercial bill of exchange on Antwerp,
Belgium; draft drawn payable 90 days after sight; documents
(bill of lading, etc.) to be delivered upon acceptance of draft;
discount rate 3%; market rate for demand checks ON PARIS
upon date of purchase, francs 5.16^.
OPERATION:
Market rate for demand checks on Paris ....... Fr. 5 . 1625
Interest 60 days at 3% ...................... . 0260
Cost of revenue stamp (1-20 of 1% of rate) .... 0026
Profit of i- of 1% of rate (5.16i) ................ 0129
Cost of collecting and transferring funds to
Paris (3-16 of 1%) ....................... .0097
Purchasing price per $1.00 .................. Fr. 5.2137
Or francs 5.2 H minus 1-64 of 1%.
NOTE. In buying bills of exchange drawn upon cities in Belgium
and Switzerland, it is usually necessary to have the funds collected at
point payable and remitted to Paris, for which service the collecting
hanks charge about 3-16 of 1%. The purchasing price in above
example (5.2137) not being a regular commercial rate the nearest rate
is used by supplementing to same a fractional rate. For example:
5.21J minus 1-64 of 1%, which is 5.2125 plus .00078 = 5.2133 (see
fractional French rates).
Fractional French Rates.
In buying and selling commercial bills of exchange drawn
in French money, where the rates quoted or offered are supple-
mented with the FRACTIONAL quotations of plus or minus 1-64,
1-32, 1-16, 3-32 or 1-8 of 1 per cent, it is necessary to apply
these fractions to the rate in figuring the value of the bills.
We, therefore, give the decimals of these fractions for adding
to or deducting from the regular rates, as the case may be,
together with illustrations as follows:
If fraction is minus 1-64 of 1% ADD decimal .00078 to rate
If fraction is plus 1-64 of 1% DEDUCT decimal .00078 from rate
If fraction is minus 1-32 of 1% ADD decimal .00156 to rate
If fraction is plus 1-32 of 1% DEDUCT decimal .00156 from rate
If fraction is minus 1-16 of 1% ADD decimal .00313 to rate
If fraction is plus 1-16 of 1% DEDUCT decimal .00313 from rate
If fraction is minus 3-32 of 1% ADD decimal .00469 to rate
If fraction is plus 3-32 of 1% DEDUCT decimal .00469 from rate
If fraction is minus 1-8 of 1% ADD decimal .00625 to rate
If fraction is plus 1-8 of 1% DEDUCT decimal .00625 from rate
202
FOREIGN EXCHANGE TEXT BOOK
EXAMPLES:
Francs 5.15| 1-32
Francs 5.16J+1-32
would be francs
and decimal
Or francs
would be francs
less decimal
Or francs
5. 15625
.00156
5.15781
5.1625
.00156
5.16094
EXPLANATION. 1-32 of 1% of $1.00=. 03125 cents, and in order
to reduce same to centimes, multiply this amount by . 05 (there being
5 centimes to 1 cent) which gives decimal .0015625, or .00156 as used
in above table.
French Exchange Interest Table.
Showing interest per $1.00 for use in purchasing bill of
exchange drawn payable 3, 10, 30, 60 and 90 days after sight.
(Computed on basis of francs 5.20 per $1.00, and 360 days
per year.)
Interest or
Discount Ra*.e
3
Days Sight
10
Days Sight
30
Days Sight
60
Days Sight
90
Days Sight
1-16 of 1%
Centimes
.00003
Centimes
.00009
Centimes
.00027
Centimes
.00054
Centimes
.00081
1-8 of 1%
3-16 of 1%...
.00005
.00008
.00018
.00027
.00054
.00081
.00108
.00162
.00162
.00244
1-4 of 1%..
.00011
.00036
.00108
.00217
.00325
5-16 of 1%
3-8 of 1%...
.00014
.00016
.00045
.00054
.00135
.00162
.00271
.00325
.00406
.00487
7-16 of 1%.. .
.00019
.00063
.00190
.00379
.00569
1-2 of 1%
9-16 of 1%
.00022
.00024
.00072
.00081
.00217
.00244
.00433
.00487
.00650
.00731
5-8 of 1%
11-16 of 1%...
.00027
.00030
.00090
.00099
.00271
.00298
.00542
.00596
.00812
.00894
3-4 of 1%
13-16 of 1%
7-8 of 1 % ...
.00032
.00035
. 00038
.00108
.00117
.00126
.00325
.00352
.00379
.00650
.00704
.00758
.00975
.01056
.01137
15-16 of 1%
1%..
.00041
.00043
.00135
.00144
.00406
.00433
.00812
.00867
.01219
.01300
2%..
.00087
.00289
.00867
.01733
.0->600
3%..
00130
00433
01300
02600
. ( 13900
4%..
.00173
.00578
.01730
.03467
. ( )5200
5%..
00217
00722
0?167
04333
.06500
6%
.00260
.00867
.02600
.05200
.07*00
To above figures the cost per SI. 00 for internal revenue
stamps should be added, namely, .0026 centimes.
BUYING FOREIGN COMMEKCIAL BILLS OF EXCHANGE 203
EXAMPLE. Find interest and cost of revenue stamps per
$1.00 on 30 days sight bill of exchange at 3J%.
OPERATION:
Interest, 30 days at 3%= .013
Interest, 30 days at J% = .00217
Cost of revenue stamp = . 0026
ANSWER Total .01777
(This amount should be added to demand rate, NOT
DEDUCTED.)
Notes on French Bills of Exchange.
Documentary payment bills can be discounted with banks under the
Bank of France rate, which is not customary in England. In discounting
acceptance bills, banks usually calculate the last 5 days at the official
Bank of France rate, and the balance of time at the private discount rate.
Discountable bills on first class commercial firms are discounted ai
the open market rate.
On bills which have matured (become due) the law grants grace until
12 o'clock noon the day following day of maturity.
The internal revenue stamp tax on all bills of exchange is 1-20 of 1%,
or 50 centimes per 1,000 francs, with minimum of 10 centimes.
Checks drawn payable in France must ALWAYS be dated in words,
otherwise they are subject to a tax. For example: February tenth, 1906.
The reason for same is this: The law requires that a check be paid within
eight days from date of issue, otherwise it is considered a bill of exchange.
If the checks were dated in figures, changes in the date to bring it within
the limit could easily be made and thus the tax would be evaded. A
change in the written date can be detected more readily, and hence the
requirement.
Buying Bills of Exchange on Germany.
EXAMPLE No. 1.
ILLUSTRATION. A commercial bill of exchange on Berlin
or Hamburg, Germany; draft drawn payable 90 days after
sight; documents (bill of lading, etc.) for delivery upon accept-
ance of draft; discount rate, 4f%. Market rate for demand
checks on Berlin or Hamburg on date of purchase, 95 3-16
cents per 4 marks.
OPERATION:
Market rate for demand checks on Berlin
at rate 95 3-16 cents 951875
Interest, 90 days at 4f% (per 4 marks) .01098
Cost of revenue stamps (per 4 marks).. . .0005
Profit \ of 1% (varies according to con-
ditions) 00238 .013860
Purchasing price per 4 marks .938015
Or 93 13-16 minus 1-64 of 1%.
204 FOREIGN EXCHANGE TEXT BOOK
NOTE. For item of interest or discount and revenue stamp see table,
page 205. The item of profit is used merely for illustration. It is cus-
tomary for buyers to figure from i-16 to $% according to conditions,
competition, etc. Bills drawn on Hamburg or Berlin are generally at
same rate. If bills are drawn on cities in Germany other than Berlin or
Hamburg, the cost of collecting and remitting to these cities must be con-
sidered, usually 1-16%. The cost of revenue stamp is figured thus: 50
pfennigs per 1,000 marks is equivalent to 1-20 of 1% of rate per 4 marks;
1-20 of 1% of 95 cents equals .000475; or, as generally figured, .0005 cents.
EXAMPLE No. 2.
ILLUSTRATION. A commercial bill of exchange on Hamburg,
Germany; draft drawn payable 30 days after sight; documents
for delivery upon payment of draft; discount rate on date of
purchase, 3J%: market rate for demand checks on Hamburg
and Berlin on date of purchase, 95^ 1-32, or 95J cents per
4 marks, minus 1-32 of 1%.
OPERATION:
Market rate for demand checks on Ham-
burg, 95^1-32 9547
Interest, 30 days at 3*% (per 4 marks) . . . 00278
Cost of revenue stamps (per 4 marks).. . .0005
Profit i of 1% (varies according to con-
ditions)... 00238 .00566
Purchasing price per 4 marks .94904
Or 94 13-16 plus 3-32 of 1%.
NOTE. As the commercial quotations are by 16ths, 8ths, or multiples
of same, the fractions 1-64, 1-32, 1-16, 1-8, 3-32, etc., plus or minus, are
used when necessary. (See quotations on German Exchange, Chap. IV.)
94 13-16 expressed decimally would be .948125
3-32 of 1% of 95 cents = .000893
Total .949018 or 94 13-16+3-32
Fractional German Exchange Quotations.
In buying and selling commercial bills of exchange, where
the rates quoted or offered are supplemented with the FRAC-
TIONAL quotations of plus or minus 1-64, 1-32, 1-16, 3-32 or
1-8, etc., it is necessary for convenience in figuring to apply
these fractions to the rate to determine value of the bills. We
therefore give below the decimals of these fractions, pointed
off as in dollars and cents, for adding to or deducting from
the regular rates, as the case may be, together with an illus-
* rat ion of their use.
BUYING FOREIGN COMMERCIAL BILLS OF EXCHANGE
205
If fraction is minus 1-64 of 1%, deduct from rate decimal .000149
If fraction is minus 1-32 of 1%, deduct from rate decimal .000298
If fraction is minus 3-64 of 1%, deduct from rate decimal .000446
If fraction is minus 1-16 of 1%, deduct from rate decimal .000595
If fraction is minus 5-64 of 1%, deduct from rate decimal .000744
If fraction is minus 3-32 of 1%, deduct from rate decimal .000893
If fraction is minus 1-8 of 1%, deduct from rate decimal .001191
NOTE. When fractional quotation is PLUS add the decimals.
EXAMPLE. Express decimally the rate 95 3-16 plus 3-64 of 1%.
OPERATION. 95 3-16= .951875
3-64 of 1%= .000446
ANSWER
.952321 cents
German Exchange Interest Tables.
Showing interest per 4 marks for use in purchasing bills
of exchange drawn payable 3, 10, 30, 60 and 90 days after sight.
(Computed on basis of 95 cents per 4 marks, and 360 days
per year.)
Interest or
Discount Rate
3
Days Sight
10
Days Sight
30
Days Sight
60
Days Sight
90
Days Sight
1-16 of 1%...
Cents
.00001
Cents
.00002
Cents
.00005
Cents
.00010
Cents
.00015
1-8 of 1%
.00001
.00003
.00010
.00020
. 00030
3-16 of 1%
.00001
.00005
.00015
.00030
.00045
1-4 of 1%..
.00002
.00007
.00020
.00040
.00059
5-16 of 1%
.00002
.00008
.00025
.00049
.00074
3-8 of !%...-.
.00003
.00010
.00030
.00059
.00089
7-16 of 1%...
.00004
.00012
.00035
.00069
.00104
1-2 of 1%..
.00004
.00013
.00040
.00079
.00119
9-16 of 1%
.00004
.00015
.00045
.00089
.00134
5-8 of 1%...
.00005
.00016
.00050
.00099
.00148
11-16 of 1%
.00005
.00018
.00054
.00109
.00163
3-4 of 1%
.00006
.00020
.00059
.00119
.00178
13-16 of 1%
7-8 of 1%...
.00006
.00007
.00021
.00023
.00064
.00069
.00129
.00139
.00193
.00208
15-16 of 1%
.00007
.00025
.00074
.00148
.00223
1%..
.00008
.00026
.00079
.00158
.00237
2% .
.00016
. 00053
.00158
.00317
.00475
3%..
00024
.00079
.00238
. 00475
.00712
4%..
.00032
.00106
.00317
.00633
.00950
5% .
. 00040
.00132
.00396
.00792
.01187
6%..
.00047
.00158
.00475
.00950
.01425
To above figures, the cost per 4 marks for internal revenue
stamps, should be added, namely, .0005 cents.
206 FOREIGN EXCHANGE TEXT BOOK
EXAMPLE. Find interest and cost of revenue stamps per
4 marks on 60 days' sight bill of exchange at 4%.
OPERATION:
Interest 60 days at 4% = . 00633
Interest 60 days at f % = . 00099
Cost of revenue stamps = . 0005
ANSWER Total . 00782 cents
Notes on German Bills of Exchange.
The rate for demand checks is usually the same whether on Hamburg
or Berlin.
The German Government requires that revenue stamps to the value
of 50 pfennigs per 1,000 marks be affixed to drafts drawn for 1 day's sight
and over, at time of acceptance of drafts.
Three days' sight letters of delegation are not subject to stamp duty;
three days' sight and all other time drafts are taxed approximately .0005
cents for every 4 marks, or say $1.00. The rate of stamp tax is equivalent
to 1-20 of 1%.
The following is schedule of stamp duty:
On amounts up to 200 marks, 10 pfennigs.
On amounts of 200 to 400 marks, 20 pfennigs.
On amounts of 400 to 600 marks, 30 pfennigs.
On amounts of 600 to 800 marks, 40 pfennigs.
On amounts of 800 to 1,000 marks, 50 pfennigs.
Over 1,000 marks, 50 pfennigs per 1,000 marks or fraction thereof.
IMPORTERS IN GERMANY will not accept drafts against importations
until the duplicate documents (duplicate draft, bill of lading, etc.) are
presented, and in order to have the original draft accepted immediately
upon its arrival, banks in this country when forwarding such bills for
acceptance and collection will attach to the original draft a memorandum
agreement to the effect that the duplicate of bill of lading is in their pos-
session, and their correspondents (banks) are requested to guarantee the
acceptors (importers) that the duplicate documents will be delivered to
them as soon as received, which guarantee also gives the number and
amount of draft, the name of drawer and the signature of a proper official
of the bank or financial institution forwarding same.
Buying Bills of Exchange on Holland.
On account of the large export business from the United
States to Holland (the Netherlands) amounting to nearly
5 per cent of our total exports the greater part of which is
to Amsterdam and Rotterdam, the Holland business may be
classed as next in importance after the German and French.
Owing, however, to the comparatively small demand in the
BUYING FOREIGN COMMERCIAL BILLS OF EXCHANGE 207
United States for remittances to Holland the surplus of money
accumulated to the credit of American bankers necessarily
has to be transferred to other centers, such as London, Paris,
Berlin, etc., which can usually be done through arbitration, as
explained in Chapter VIII. The method of buying bills of
exchange on Holland is as follows:
EXAMPLE No. 1.
ILLUSTRATION. A commercial bill of exchange on Amster-
dam, Holland; draft drawn payable 3 days after sight; docu-
ments for delivery upon payment of draft; discount rate, 3f%;
market rate for demand checks, on date of purchase 40^ cents
per gulden (guilder or florin).
OPERATION:
Market rate for demand check on Amster-
dam .4025
Interest (or rebate) 3 days at 3f % 00012
Cost of revenue stamp, none required. . . .0000
Profit 1-16 of 1% (varies according to
conditions) 00025 .00037
Purchasing price per gulden .40213
Or rate, 40.20 cents per gulden.
EXAMPLE No. 2.
ILLUSTRATION. A commercial bill of exchange on Rotter-
dam, Holland; draft drawn payable 10 days after sight; docu-
ments for delivery upon acceptance of draft; discount rate
3f%; market rate for demand checks on Rotterdam on date
of purchase, 40 3-161-32 of 1% per gulden.
OPERATION:
Market rate for demand checks on Rot-
terdam . 401751
Interest, 10 days at 3|% 00037
Cost or revenue stamps (1-20 of 1 %) ... .0002
Profit 1-16 of 1% (varies according to
conditions) 00025 .00082
Purchasing price per guiden .400931
Or rate, 40.10 cents per gulden.
208 FOREIGN EXCHANGE TEXT BOOK
EXAMPLE No. 3.
ILLUSTRATION. A commercial bill of exchange on Amster-
dam, Holland; draft drawn payable 60 days after sight; docu-
ments for delivery upon payment of draft; discount rate 3 7-16%;
market rate for demand checks on Amsterdam upon date of
purchase, 40 5-16+1-64 per gulden.
OPERATION:
Market rate for demand checks on Am-
sterdam .403187
Interest 60 days at rate 3 7-16% 00229
Cost of revenue stamp (1-20 of 1%) 0002
Profit | of 1% (varies according to con-
ditions) 0005 .00299
Purchasing price per gulden .400197
Or rate, 40+3-64 per gulden.
Holland Exchange Fractional Quotations.
In buying and selling bills of exchange, drawn in the money
of Holland, where the rate quoted or offered is supplemented
with a fractional quotation such as minus or plus 1-64, 1-32,
3-64, 1-16, 1-8, etc. of 1 per cent, it is necessary for convenience
in figuring to apply these fractions to the rate. We, therefore,
give below the decimals of these fractions pointed off as in
dollars and cents, for adding to or deducting from the regular
rates, as case may be, together with an illustration of their use:
If fraction is minus 1-64 of 1%, deduct from rate decimal .000062.
If fraction is minus 1-32 of 1%, deduct from rate decimal .000124.
If fraction is minus 3-64 of 1%, deduct from rate decimal .000186.
If fraction is minus 1-16 of 1%, deduct from rate decimal .000248.
If fraction is minus 5-64 of 1%, deduct from rate decimal .000310.
If fraction is minus 3-32 of 1%, deduct from rate decimal .000372.
If fraction is minus 7-64 of 1%, deduct from rate decimal .000434.
If fraction is minus 1-8 of 1%, deduct from rate decimal .000496.
NOTE. When fraction quoted is PLUS the above decimals should be
added to rate.
EXAMPLE. Express decimally the rate, 40 5-16-|-l-64.
OPERATION-. 40 5-16=. 403125
+ 1-64%= .000062
ANSWER .403187
BUYING FOREIGN COMMERCIAL BILLS OF EXCHANGE 209
Holland Exchange Interest Tables.
Showing interest per gulden (guilder or florin) for use in
purchasing bills of exchange drawn payable in 3, 10, 30, 60 and
90 days after sight.
(Computed on basis of 40 cents per gulden, and 360 days
per year.)
Interest or
Discount Rate
3
Days Sight
10
Days Sight
30
Days Sight
60
Days Sight
90
Days Sight
1-16 of 1%. ..
Cents
.00001
Cents
.00001
Cents
.00002
Cents
. 00004
Cents
.00006
1-8 of 1%
.00001
.00001
.00004
.00008
.00013
3-16 of 1%
.00001
.00002
.00006
.00012
.00019
1-4 of 1%...
.00001
.00003
.00008
.00017
.00025
5-16 of 1%
.00001
.00003
.00010
.00021
.00031
3-8 of 1%..
.00001
.00004
.00013
.00025
.00038
7-16 of 1%
.00001
.00005
.00015
.00029
.00044
1-2 Of l/ r .
.00002
.00006
.00017
.00033
.00050
9-16 of 1%
.00002
.00006
.00019
.00037
.00056
5-8 of 1%
.00002
.00007
.00021
.00042
.00063
11-16 of 1%
.00002
.00008
.00023
.00046
.00069
3-4 of 1 %
.00002
.00008
.00025
.00050
.00075
13-16 of 1%
.00003
.00009
.00027
.00054
.00081
7-8 of 1 %
.00003
.00010
.00029
.00058
.00088
15-16 of 1%
.00003
.00010
.00031
.00063
.00094
1%..
.00003
.00011
.00033
.00067
.00100
2% .
.00007
.00022
.00067
.00133
.00200
3%..
.00010
.00033
.00100
.00200
.00300
4%..
.00013
.00044
.00133
.00267
.00400
5%.,
.00017
.00055
.00167
.00333
.00500
6%
.00020
.00066
.00200
.00400
.00600
To the above figures the cost per gulden for revenue stamps
should be added, namely, .0002 cents.
EXAMPLE. Find interest and cost of revenue stamp per
gulden on 60 days' sight bill of exchange at rate 3 7-16%.
OPERATION:
Interest, 60 days as 3% = . 002
Interest, 60 days at 7-16%= .00029
Cost revenue stamp = . 0002
ANSWER Total
.00249 cents
210 FOREIGN EXCHANGE TEXT BOOK
Exhibit "Y"
Reduced Facsimile of Specimen Copy of
HYPOTHECATION CERTIFICATE.
BILLS OF EXCHANGE.
To the NATIONAL BANK OF THE REPUBLIC.
CHICAGO.
GENTLEMEN :
Having in contemplation transactions with you fr"m time to time in the sale of Bills of Exchange
with Shipping Documents for goods or produce attached as collateral security, which documents are to be held by
you for the due payment of the same, we hereby declare that upon the sale by us to you of any such Bills of
Exchange our agreement with you is understood to be as follows :
You may insure any goods forming the collateral security (if not already insured, and the policy or policies
deposited in your hands), from sea risk, including loss by capture, and from fire on shore, and add the premiums
and expense thereof to the amount chargeable in respect of the said Bills, but it shall not be imperative upon_ you
to effect any such Insurance.
You may sell any portion of the said goods which you may deem necessary for payment of such premiums
and expenses, freight, or duties, and take such measures generally, and make such charges for commission, and are
to be accountable in such manner, but not further or otherwise as in ordinary cases between a Merchant and his
Correspondent.
You may take conditional acceptance to such Bills to the effect that on payment thereof at maturity or under
discount the documents handed to you as collateral security shall be delivered to the Acceptors, and this shall
extend to acceptances for honour
In case default be made in acceptance of the said Bills on-presentation, we agree immediately on receiving
notice from you that >ou have been advised by telegraph of such non-acceptance, and without waiting for or
requiring the protest of the said Bills, that we will pay to you the amount thereof, with all charges of every
description incurred by you in consequence of the non-acceptance of the said Bills, or give you a margin which
shall be satisfactory to you, either in cash or Securities, and notwithstanding that the goods or produce against
which the said Bill is drawn, or the Documents thereof remain in your possession in the Unifed Kingdom or else-
where; and we hereby agree that your account of the disbursements, commission and charges, incurred by you in
consequence of the non-acceptance of the said Bills shall be received by us as sufficient evidence of the amount of
such disbursements, commission and charges, anJ shall not be open to objection of any kind
In case default be made in acceptance or payment of any of the said Bills, or if the Drawees or Acceptors should
suspend payment, or be adjudicated Bankrupt, or execute any Deed of Arrangement, Composition, or Inspectorship
or take any other steps whatsoever towards effecting a compromise or arrangements with their creditors during the
currency of the said Bills, you may at any time after either of the aforesaid events taking place, sell the goods or
any part thereof without notice .to or the concurrence of any person whomsoever without waiting for the maturity
of the said Bills, and either by public auction or private sale, and you may act in all respects as if you had been
the direct consignee of the goods, charging such commission as is usual between a Merchant and his Correspondent
in ordinary cases, and shall apply the net proceeds of my sale, after deducting any payment made under the powers
herein contained, with interest thereon and the usual commission and charges, in payment of the Bills wilh interest,
re-exchange and other charges, and may retain the balance (if any) towards liquidation of any debt or liability of
ours to you whether or not the same be then payable or ascertained, it being hereby agreed that the goods them-
selves until sale shall be liable for and be charged with the payment of all such Bills, with commission, interest,
re-exchange, and other charges, debts, or liabilities, and we agree that all account sales and accounts current
furnished by you in respect of the said goods shall be received by us as sufficient evidence of the accuracy of the
transactions to which they refer, and shall not be open to objection of any kind.
We further authorize you, in case the net proceeds of the sale of such goods shall be insufficient to pay the
amount of the said Bills, with disbursements, interest, re-exchange and charges, to draw upon us at the exchange of
the day lor the amount of such deficiency, and we engage to honour such drafts on presentation, or even without
such drafts being sent, to pay you the amount of such deficiency on your informing us of the amount
In case the aforesaid Power of Sale shall not have arisen during the currency of the said Bills, you may accept
payment from the Drawees or Acceptors thereof, and on payment deliver the said Bills of Lading and Shipping
Documents to such Drawees or Acceptors.
. In case the Drawees or Acceptors should wish to take delivery of any portion ol the Goods held as collateral
security against the said Bills before maturity thereof, you are authorized (hut not so as to be binding on you) to
make such partial deliveries on receiving paymeni of a proportionate pa't of the said Bills
The delivery to you as aforesaid of the above mentioned collateral securities is not to prejudice any of your
rights on the said Bills in case of dishonour, nor shall any proceedings taken ihereon prejudicially affect your title
to the said securities.
All rights, powers, and authorities hereinbefore given to you shall extend to and may be exercised by the"
holders for the time being of the said Bills and Shipping Documents.
It is understood that in the event of Bills being paid under discount, rebate of interest shall be allowed a?
follows :
At one-half per cent per annum above the advertised rale of interest for short deposits allowed by the leading
London Joint Stock Banks, if the Bills are taken up in ihe United Kingdom of Great Britain and Ireland. ..
At the current minimum rate of Discount of the National Banks of France, Italy, Belgium and Gernany
respectively if taken up in either of those Countries.
APPENDIX.
212 FOREIGN EXCHANGE TEXT BOOK
The Use of the Cable in Foreign Exchange Transactions.
The large increase in our trade with foreign countries is
almost wholly due to the increased facilities afforded by the
cable, which, in connection with land lines, has united almost
every commercial center of the world.
The operations in foreign commercial bills of exchange are
more satisfactorily and effectively conducted, and upon a
much closer margin. Instead of having to wait for mail advices
of any change in the market, such information can be obtained
immediately, and the risks formerly necessary to assume are
removed. There was always that possibility of some unfore-
seen event which would entirely upset calculations, and exchange
operations had to be conducted with greater caution and upon
much larger margin to avoid possible loss. This condition
naturally restricted the volume of business.
There are now in active operation over 300 submarine
cable lines, varying in length from 14 to over 17,000 miles,
and aggregating about 148,500 miles. In addition there are
about 1,150 submarine cable lines aggregating nearly 20,000
miles owned by the various governments, Great Britain alone
having nearly 250 of a length of nearly 4,000 miles.
With the facilities now afforded by the cable, the markets
of the world are brought into close touch. The bankers and
financial institutions are advised from day to day of any finan-
cial or other change likely to affect the market. They can
calculate with almost exactness the cost of any exchange in
which they desire to operate. The cable has brought about a
most marvelous change in the method of operating in foreign
exchange. For at least a portion of the day transactions
between New York, Boston, Chicago and London and other
foreign cities can be executed simultaneously an order to
buy in one city being executed in the other.
Notwithstanding submarine cable lines have been in
successful operation since 1866, it is only recently that the
laying of a line across the Pacific Ocean was commenced, and
until this line is finished cable messages to the Philippines,
China and Asiatic points have to go by way of London, Suez,
Bombay, Singapore, Cochin China, Hong Kong, and thence to
Manilla, a distance of 14,000 miles, at a cost of about $2.35 per
word.
The reason of there being no line, heretofore, across the
Pacific Ocean may undoubtedly be accounted for from the fact
that until the United States annexed Hawaiian Islands and
acquired the islands of Guam, Wake and the Philippines, no
single Government controlled landing places within suitable
distance from each other to insure its successful working, since
submarine cable lines cannot be operated successfully at a
FOREIGN EXCHANGE BROKERS 213
distance of more than 3,500 to 4,000 miles, without an inter-
mediate station where messages can be repeated.
This obstacle being removed, we can now look for a cable
line between San Francisco and the Philippines and China in
the very near future, to be operated by an American corpora-
tion. From San Francisco to Hawaii, 2,089 miles, it is already
laid, and the remaining distance, Hawaii to Wake Island, 2,040
miles, from Wake Island to Guam, 1,290 miles, from Guam to
Manilla, 1,500 miles, and from Manilla to Hong Kong, 630
miles a total distance of 7,569 miles will soon be in operation.
With this new line in operation, we can look for a great
increase in trade and foreign exchange transactions between
the United States and the Philippines, China, Japan, India,
as well as w r ith Australia, New Zealand and the East India
Islands.
214
FOREIGN EXCHANGE TEXT BOOK
FOREIGN EXCHANGE BROKERS.
At the principal cities will usually be found one or more
individuals or firms engaged exclusively in the buying and
selling of foreign exchange, including commercial and bankers'
bills of exchange, cable transfers, etc., for the account of banks,
exporters, importers and others, and in transacting such busi-
ness do so upon a commission basis. Upon large transactions
their commission is as small as 1-32 of 1 per cent of the amount,
and sometimes as low as 1-64 of 1 per cent. These brokers
keep their patrons fully informed of the fluctuations in the
rates of exchange during the day as well as the general market
conditions and have the confidence of those for whom they
transact business of this class.
The following table gives the brokerage on sums of $5,000
to $100,000, at 1-64, 1-32, 1-16 and 1-8 of 1 per cent:
Amounts
Brokerage at
1-64 of 1%
Brokerage at
1-32 of 1%
Brokerage at
1-16 of 1%
Brokerage at
1-8 of 1%
$ 5,000
$ 78
$ 1.56
$ 3 12
$ 6 25
10,000
1 56
3. 12
6 25
12 50
15,000
2 34
4 69
9 37
18.75
20,000
3 12
6 25
12 50
25.00
25,000
3 91
7 81
15 62
31 25
30,000
4 69
9 37
18 75
37 50
35,000
5 47
10 94
21 87
43 75
40,000
6 25
12 50
25 00
50 00
45,000
7 03
14 06
28 12
56 25
50,000
7 81
15 62
31 25
62 50
55,000
8 59
17 19
34 37
68 75
60,000
9 37
18 75
37 50
75 00
65,000
10 16
20.31
40 62
81 25
70,000
10 94
21 87
43 75
87 50
75,000
80,000
11.72
12 50
23.44
25 00
46.87
50 00
93.75
100 00
85,000
13 28
26 56
53 12
106 25
90,000
14 06
28 12
56 25
112 50
95.000
100.000
14.84
15 62
29.69
31 25
59.37
62 50
118.75
125 00
JOBBERS OF FOREIGN EXCHANGE 215
JOBBERS OF FOREIGN EXCHANGE.
In the United States there are comparatively few jobbers
of foreign exchange, a few banks and bankers in New York,
Chicago, and one or two other cities in the United States, and
the American Express Co., comprising the principal ones.
Their method of conducting the business is to furnish to
banks and sellers of foreign exchange a list of their correspond-
ents abroad, together with the blanks necessary in transacting
the business with the public, consisting of blank forms of checks
(see Foreign Checks, page 152), bearing name of selling bank,
and also forms for effecting payment for delivery by postoffice
in foreign countries at points where there are no banks (see
Foreign Postal Remittance Blanks, page 161). Jobbers then
quote to banks or sellers of exchange, as frequently as the
market rates change, net prices at which they will sell to them
exchange on the various foreign countries. The retailers to
derive a profit add to these rates whatever amount they can
obtain from purchasers in competition with other sellers of
exchange. The checks issued, which are drawn for an amount
in foreign money payable by one of the correspondents named
in the list, are given to purchasers to mail abroad. The retailer
IMMEDIATELY notifies the jobber giving number of check, date
of issue, amount in foreign money, place of payment, etc., on
a printed "advice" form, on stub of check, and encloses a
check payable to jobber for amount due based upon the net
rates quoted to retailer. The jobber thereupon requests his
correspondent abroad to pay the check upon presentation,
which the foreign bank correspondent does, and either charges
amount against the jobbers' account, or, in case it is at a small
city or town where the jobber' does not keep funds on deposit,
the paying bank, by previous arrangement, will send the check
for credit or collection to some other bank in the vicinity where
the jobber keeps an account.
The method of handling of foreign postal remittances by
retailers through jobbers is fully explained on page 158.
It is of the greatest importance that banks or others selling
foreign exchange in this manner deal only with jobbers having
an unquestionable financial standing, since in the sale of forms
of drafts or checks to the public bearing their name, they must
assume the responsibility to the customer of correct payment,
and to do so for the comparatively small margin of profit they
derive on such transactions, they cannot afford to run any risk
of failure of jobber to arrange for and cause correct payment
of these checks.
On next two pages will be found a sample of the usual form
of net quotation sheets furnished by jobbers to retailers of for-
eign exchange. (Exhibits "Z" and " Z" continued.)
216
FOREIGN EXCHANGE TEXT BOOK
Exhibit "Z.
AMERICAN EXPRESS COMPANY.
Treasurer's Office, 65 Broadway, New York.
BANKS AND BANKERS SETTLEMENT RATE SHEET, No.. 1, JAN. 11, 1905
FOR SALE OF CHECKS ON FOREIGN COUNTRIES.
lile of Specimen Copy of
i JOBBERS' QUOTATIONS.
I tor Checks
| under $50
$*> to $500
$500 to 410,000
Pounds Sterling
$4.87/2
$4.87
$4.863^
Turkish Pounds on Harpoot,
4.A8
4.47
4.47
Turkish Pounds on Turkey, .
4,52
4.51
4.50
Francs, - .
19.48 Cts.
19.45 Cts.
19. 42 Cts.
Lei on Roumariia,
19.62 "
19.52 "
19.42 "
Kronen on Austria-Hungary,
2035 "
20.32 "
20.30 "
Finmarks on Finland
19.40 "
19.37 "
19.35 "
Lire, paper, on Italy
19.48 "
19.45 "
19.42 "
Marks on Germany, , ~
23.90 "
23.87 "
23.85 "
Kroner on Norway .Sweden and Denmark,
26.88 '
26.85 '
26.83 "
(iulden on Holland. ....
40.30 "
40.27 "
40.25 "
Pesos on Mexico, . .
5200 "
5i 75 "
51.50 "
Pesos on Manila,
50.50 "
50.25 "
50.10 "
Dollars (Local Currency) on Hong Kong, .
51.00 "
50.75 "
50.50 "
Yen (Local currency) on Yokohama, .
51.00 "
50.75 "
50.50 "
Rubles on Russia and Poland,
51.75 "
51.60 "
51.50 "
Rupees on India,
33.70 "
33.45 '
33.35 "
Checks in U. S. DOLLARS, on Central and South America, Mexico, U'est Indies^.
Cape l''erde Islands, Hawaii, and Philippine Islands, % of j% premium. Minimum
charge for a Check 25 Cents.
NOTE. These rates are net, including all charges, and are subject to change at any
lime by notice from the 'freasitrer's Office oj the Company.
Important Checks should be advised by telegraph, if there is any likelihood oj advice
reaching Treasurer after mailing of Checks abroad.
Foreign Remittances at above rates, adding thereto postage charges af 10 cents for
Great Britain, Germany, Austria, Norway and Sweden, and 15 cents, for all other-
countries.
Cable Transfers at the rates and cost for telegraphic and cable service mentioned vr
referred to on back hereof
FOR PURCHASE OF FOREIGN EXCHANGE.
Kor Checks
under $5(10
For Checks
$500 to$ 10,000
Sixty Day Bills
HP tosro.oco
Pounds Sterling,
$4.81
S4.85K
$4.82
Francs,
5.21K
5.I7K
5.21'^
Marks on Germany.
.94
94
.94
FOR PURCHASE AND SALE OF FOREIGN MONEY.
We purchase.
We sell
OULD
NOTES
GOLD
NOTKS
Pounds Sterling (Sovereigns (except King Georpe)
& Bank of Enplane! Notes).
$485
S4.84H
$4.87
$4.87
Francs (Bank ol franco Notes. F 100 and under),
19.25 CIS
19.20 Cts.
19.55 Cts.
19 40 Cts.
Marks, (Government Notes, M. 100 and under).
23.65
23.65 "
23.82 "
23 80 "
Lire, (Notes of 100 and under}, .
19.25 "
1945 >
Rubles, (Notes of 100 and under).
51,10 "
4900 ."
51.40 ".
51.35 "
26.95 -
Kroner, (Government Notes),
26.50 "
Kronen, (Notes of 100 and under).
20.25 "
20.45 "
Canadian Bank Notes, . . .
Discount \i of 1%
1 :
JOBBERS OF FOREIGN EXCHANGE
217
Exhibit "Z" Continued
IMPORTANT. In drawing checks the Index of Countries in Company's
.latest List of Foreign Paying Agencies should be consulted to determine in what
standard of money and under what special conditions the checks are to be drawn.
Wherever present instructions require that checks be drawn at " Exchange
on "London," "Paris," "Berlin," "New York," or "Manila," change the phrase
to read "At buying rate for checks on "London," "Paris," "Berlin,"
"New York" or "Manila "
Drawing Checks in
Dollars Local Currency, Pesos, Yen and Rupees.
The following should be observed in filling out the amounts of Checks
mentioned above :
I -CHECKS ON HONG KONG, CHINA. -DRAWN IN DOLLARS LOCAL CURRENCY.
1 Dollar 100 Cents.
Three Hundred and
ords " Local Currency " must be entered after the
Dollars" and "Loc. Cur." in the square as shown.
2-CHECKSON MEXICO AND MANILA. PHILIPPINE ISLANDS. -DRAWN IN PESOS
-CHECKS ON YOKOHAMA, JAPAN. -DRAWN IN YEN.
1 Yen 100 Sen.
Kinety and 8 Ten
4.-CHECKS ON INDIA (BRITISH).-DRAWN IN RUPEES
1 Rupee 16 Annas. 1 Anna 12 Pies.
Th'rte Hundred Rupees, Twelve A nnas. Seven pie.
TRANSFER OF MONEY BY CABLE.
The settlement rate of exchange for Cable Transfers is usually '/t per cent, above that for Foreign Checks
quoted on opposite side, minimum 50 cents, to which should be added the actual cost of the cable service/ *
Banks and Bankers are requested to kindly telegraph or write for special rates on large Transfers.
The full name and address of payee must always be furnished Cable Transfers payable to Bank*. Bankers,
etc . sh"u1d state "for whose account" the transfers are made Transfers sent to a person In care of any one.
else will be paid to the payee only. A Registered address must not be used unless same has been previously
arranged with the Treasurer.
Following Is a list of Cities to which this Company can cable direct through exclusive Agents or
Banking Houses
CABLE CHARGES PER WORD FROM NEW YORK.
Alexandria. Egypt
Amsterdam. Holland...
Antwerp. Belgium
Athens, Greece
Barbadoes, West Indies
Belfast, Ireland t
Berlin, Germany
Bremen, Germany
Buenos Ayres, Argentine
S A
80
25
9!
20
1 no
Florence, Italy
Genoa, Italy
Georgetown, Br.Guia
c.lasgow, Scotland. . .
Guatemala, Guatem:
C.A
Hamburg, Germany..
Hamilton, Bermuda
Havana, Cuba... :...
Havre, France
... 31
... 31
la 1.44
... -SB
la.
... 5S
... 25
.. 42
... 15
... 25
London, England 25
Managua, Nicaragua.C. A 7ft
Manila. Phil. Islands. ..1. lit
Marseilles. France 25
tMexico City, Mexico. . 1 75
Montevideo. Uruguay,
S. A 1.00
Munich, Germany 25
Naples. Italy ;.. 81
Nassau, Bahamas 35
SanJuan.PortoRico.W.I. 7S
San Salvador, San Salva-
-dor.C. A n
Santiago, Chili, S. A. ...1.25
Santiago, Cuba 20
Southampton, England.. 25
Stockholm, Sweden... : 38
Tegucigalpa, Honduras.
C. A.... &
Valparaiso. Chili, S. A. ..1.25
Cairo, Egy pt
Christiania, Norway....
Copenhagen. Denmark.
Cork, Ireland
Dresden, Germany
Dublin Ireland . .
50
3f>
V,
V,
V>
2.">
Hong Kong, China...
Honolulu, Hawaii Is
juneau, Alaska ....
Kingston, Jamaica, V
Larnaca. Cyprus
Lima, Peru, S. A
...1.2*
... 47
. . .2.70
/. I 48
... 68
...1.25
Paris, France , *5
Panama 17
Rome. Italy SI
Rotterdam, Holland. ... 25
Santo Domingo, W. I... 1.3*
St. Petersburg, Russia.. 4-1
Venice Italy 81
Vienna, Austria S
Warsaw, Russia 43
Wiborg, Finland .'....
Wilna. Russia 45
Edinburgh, Scotland...
26
Liverpool, England. .
... 25
San Jose. CoataRica, C.A. 75
Zurich. Switzerland 30
For ten words or less in Text ; 24 cents for each additional word.
fFor ten words or less in Text ; 1* cents each additional word.
Cable Transfers for places not on above list will be forwarded by mall froi
especially instructed. Transfers will be forwarded by telegraph beyond points <
that all charges are to be borne by the remitter or payee.
It is usual to figure on nine words to each message, but that, of course, depends entirely upon the length of the
Payee's address By a system of registration of the address, the cable charge on succeeding Trausf crs to same party
nay be reduced considerably.
the nearest point unless otherwise
above list upon the understanding
218
FOREIGN EXCHANGE TEXT BOOK
Exhibit "AA"
Reduced Facsimile of
EXPRESS MONEY ORDER.
FOREIGN EXCHANGE PROFIT TABLE
2! 9
rOREIGN EXCHANGE RETAILERS' GUIDE TO PROFIT.
Table for figuring profit 011 sales of foreign exchange or money, cf any country, where the rate quoted is per single
unit, i. e., so many cents per franc, mark, kronen, kronor, gulden, ruble, etc. Figures at left margin represent the quantity
from 10 to 10,000, francs, marks, etc. Figures across the top show number of points to add to cost rate. Example:
Customer wants draft for 700 kronor. Cost rate is 26. 90 cents per kronor. Follow along line opposite 700 until you reach
the amount of profit you want, say 50 cents, the figures at top above 49 cents, show you should add 7 points to cost rate,
making selling rate 26. 97 cents. This table cannot be used for francs per $1 . 00 or marks, per 4 marks or pounds sterling.
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220
FOREIGN EXCHANGE TEXT BOOK
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S8
17.75
7.85
4.45
3.95
1.95
1.60
.80
.40
.20
.15
.10
20 Crowns gold
1 Ducat gold ....
10 Crowns gold
5 Crowns silver
2 Florins, silver
1 Florin, silver
1 Crown, silver
\ Florin, silver
20 Kreutzers, silver . .
10 Kreutzers, silver . .
Norway-Sweden.
20 Crowns, gold
5.36
2.68
1.34
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.07
.03
1. 2.
11.
5. 6
2. 3
1. 2
7
6
4
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27.75
13.85
6.95
2.80
1.40
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.55
.35
.15
22.50
11.25
5.65
2.30
1.15
.55
.45
.30
.15
26.40
13.20
6.60
2.65
1.35
.65
.55
.35
.15
13.35
6.65
3.35
1.35
.65
.30
.25
.15
.05
20.00
10.00
5.00
2.00
1.00
.50
.40
.25
.10
10.40
5.20
2.60
1.05
.50
.25
.20
.15
.05
10 Crowns, gold ....
5 Crowns gold . ...
2 Crowns silver
1 Crown, silver . .
50 Ores, silver
40 Ores, silver
25 Ores, silver
10 Ores, silver
Russia.
Imperial (15 R), gold.
10 Rubles, gold. .....
7.72
5.15
3.86
2.57
.52
.26
.13
.10
.08
.05
.03
1.11. 9
1. 1. 2
15.10
10. 7
2. 2
1. 1
7
5
4
3
2
40.00
26.70
20.00
13.30
2.70
1.35
.65
.50
.40
.25
.15
32.40
21.65
16.20
10.80
2.20
1.10
.55
.40
.35
.20
.15
38.00
25.35
19.00
12.65
2.55
1.30
.65
.50
.40
.25
.15
19.20
12.80
9.60
6.40
1.30
.65
.30
.25
.20
.10
.05
28.80
19.20
14.40
9.60
1.95
.95
.'50
.35
.30
.20
.K
15.00
10.00
7.50
5.00
1.00
.50
.25
.20
.15
.10
.05
Jimp. (7J R),gold. . .
5 Rubles gold
Ruble, silver
Half Ruble, silver . . .
25 Kopecks, silver . . .
20 Kopecks, silver . . .
15 Kopecks, silver .. .
10 Kopecks, silver . . .
5 Kopecks, silver ....
224 FOREIGN EXCHANGE TEXT BOOK
FRACTIONS EXPRESSED DECIMALLY.
English, French, German, Holland and sometimes Italian
exchange quotations are frequently expressed in fractions of the
unit, which must be converted to the decimal in order to figure
same, and unless one is constantly using such fractions it is
quite confusing to the mind to immediately determine what the
decimal of a fraction is. We therefore give below the fractions
of 100 by sixty-fourths, with the decimal of same.
1-64=. 015625
1-32=. 03125
3-64=. 0468? 5
1-16=. 0625
33-64=. 515625
17-32=. 53125
35-64=. 546875
9- 16=. 5625
5-64=. 078125
3-32=. 09375
7-64=. 109375
1-8 =.125
37-64=. 578125
19-32==--. 59375
39-64=. 609375
5-8 =.625
9-64=. 140625
5-32=. 15625
, 11-64=. 171875
3- 16=. 1875
41-64=. 640625
21-32=. 6562^
43-64=. 671875
11- 16=. 6875
13-64=. 203125
7-32=. 21875
15-64=. 234375
1-4 =.25
45-64=. 703125
23-32=. 71875
47-64=. 734375
3-4 =.75
17-64=. 265625
9-32=. 28125
19-64=. 296875
5-16=. 3125
49-64=. 765625
25-32=. 78125
51-64=. 796875
13-16=. 8125
21-64=. 238125
11-32=. 34375
23-64=. 359375
3-8 =.375
53-64=. 828125
27-32=. 84375
55-64=. 859375
7_8 =.875
25-64=. 390625
13-32=. 40625
27-64=. 421875
7- 16=. 4375
57-64=. 890625
29-32=. 90625
59-64=. 921875
15- 16=. 9375
29-64=. 453125
15-32=. 46885
31-64=. 484475
1-2 =.50
61-64=. 953125
31-32=. 96875
63-64=. 984375
1=.100
ILLUSTRATION:
(per 4 marks).
Express decimally the rate 94 15-16
ANSWER .949375 cents.
BROOKS FOREIGN EXCHANGE TEXT BOOK 225
In the preparation of this work, it has been the con-
stant aim of the author to present the subject matter in
a readable manner free from all technical terms and
phrases, and he hopes that his efforts in this direction may
attain and merit success.
The chief object has been to place before the public
an elementary work embracing the essentials requisite to a
thorough understanding of the basic principles upon which
foreign exchanges are built. He has purposely omitted
furnishing data relative to opening and conducting ac-
counts in the books of foreign bankers for the reason
that the student and layman would find this to be a sub-
ject in a class by itself, very ably treated upon in Margraff's
International Exchange, which we are pleased to recom-
mend to those desiring a more advanced knowledge of
the intricacies of Foreign Exchange.
INDEX.
Abassi see money of Persia 41
Abyssinia money of 46
Acceptance for honor 179
Acceptance meaning of 179
Actual rate of exchange 121, 122
Advice meaning of 180
Afghanistan money of 38. 69
African countries money of 43-46
After sight meaning of 180
Agreement for circular letter of credit 146
Agreement for commercial letter of credit 176
Alaska money of 49
Algerian exchange conversion of 112
Algeria money of 12, 43
Allonge meaning of 180
Alphonsino see money of Cuba 57
Altilik see money of Turkey 31
American Express Co., Travelers' Cheques 153-156
Amsterdam florins quotations for 119
Andora money of 12, 69
Anguilla money of 55
Anna see money of British India 32
Antiguay money of 9
Antwerp francs quotations for 1 19
Appendix 211
Arabia money of 69
Arbitration of exchange with examples 135-138
Argentine Republic exchange conversion of Ill
Argentine Republic money of 59
Argentina see money of Argentine Republic 60
Ascension money of 9
Asiatic countries money of 32
Aspes see money of Turkey 30
Atlantic Ocean Islands money of 55
At see money of Siam 41
Australian exchange conversion of Ill
Australia money of 8, 46
Austria-Hungary exchange conversion of 93
Austria-Hungary money of 21
Austria-Hungary exchange quotations 116
B
Bahama money of 55
Balboa see money of Panama 53
Baluchistan money of 38
Bani see money of Roumania 26
Bankers' reimburse bills 192
Bankers' sight drafts quotations for. . : 117, 118
Bankers' 60 and 90 day sight drafts quotations for 117
Bank notes 5
Bank of England official minimum discount rate 190
Bank post remittances 158-161
Barbadoes money of 55
226
INDEX 22?
B continued
Bat see money of Siam 44
Becklik see money of Turkey 31
Belgium exchange conversion of 81
Belgium buying bills of exchange on 201
Belgium money of 10, 12
Berlin exchange quotations 120
Berlin reichsmarks quotations for 118
Bermuda Islands money of 55
Bill of exchange foreign commercial 166-172
Bill of exchange meaning of 180
Bill of exchange parties to and their responsibility 193
Bills of exchange buying of 163, 189-210
Bills of exchange drawn on outside English points 198
Bill of lading through 169
Bolivar see money of Venezuela 68
Bolivia exchange conversion of Ill
Bolivia money of 60
Boliviano see money of Bolivia Ill
Brazilian exchange conversion of 102-105
Brazil money of : . . . 61
British Guiana money of 60
British Honduras exchange conversion of '. . . 112
British Honduras money of 52
British India exchange conversion of. 101, 202
British India money of 32
British possessions 9
Brokerage table 214
Brokers -foreign exchange 214
Bulgarian exchange conversion of 106
Bulgarian exchange quotations 114
Bulgaria money of : 15
Bullion standard 69, 70
Burmah money of 32
Buying bills of exchange on Belgium and Switzerland 201
Buying bills of exchange on France 199-203
Buying bills of exchange on Germany 203-206
Buying bills of exchange on Great Britain 194-199
Buying bills of exchange on Holland 206-209
Buying foreign commercial bills of exchange 189-210
c
Cable the use of, in foreign exchange transactions 212
Cable transfers of money ,._, 157
Cable transfers quotations for 118
Canada money of 47
Candareen see money of China 34
Cape Colony exchange conversion of 112
Cape Colony money of 55
Cape of Good Hope money of 8, 9
Cape Verde Islands money of 55
Cash see money of China 34
Cause of fluctuation in rate of exchange 123
<2entavo (cents) see money of Philippines, Mexico, British
Honduras, Gautemala, Honduras, Nicaragua, Salvador,
Cuba, Ecuador, Peru, Uruguay, Venezuela, Argentine
Republic, Bolivia and Chile. (For page numbers see
countries named.)
Centesimi see money of Italy 14
228 FOREIGN EXCHANGE TEXT BOOK
C continued
Centimes see money of France, Belgium, Switzerland and
Algeria. (For page numbers see countries named.)
Centime see money of Spain, Costa Rico and Cuba. (For page
numbers see countries named.)
Central American countries money of 52
Central American exchange conversion of 112
Central American exchange quotations 116
Cents see money of Holland, China, Ceylon, Indo-China,
Canada, United States, Alaska, New Foundland, Haiti,
Porto Rico, Colombia, Santo Domingo. (For page num-
bers see countries named.)
Certificates of deposit for gold rnd silver 5, 190
Certificate of insurance 170
Ceylon money of 38
Chais see money of Persia 41
Checks crossed sterling 198
Checks foreign 150-152
Checks foreign limited 162
Channel Islands money of 9
Cheques travelers' 153, 154
Chile money of 62
Chilean exchange conversion of Ill
China money of 34
Chinese exchange conversion of 98
Circular letter of credit 139-146
Circular letter of credit agreement for 141, 146
Circular letter of credit draft drawn against same 139, 144
Circular letter of credit facsimile of 142, 149
Circular letter of credit guaranty : 141, 145
Circular letter of credit used with letter of indication 147-149
Clean bills 191
Clearing houses 3
Coinage of gold -. . . 70
Coinage sixteen to one meaning of 69
Coins gold and silver how value is fixed 6
Coins value of per ounce 70
Coins weights of United States coins 49
Collateral security contract 156
Colombia money of 63
Colombian exchange conversion of Ill
Colon see money of Costa Rico 53
Commercial bill of exchange 166-172
Commercial forms foreign 139-177
Commercial letter of credit 173-177
Commercial letter of credit agreement for 176
Commercial letter of credit trust receipt 177
Commercial par of exchange 132, 133
Commercial sight drafts quotations for 118
Comora Islands money of 12
Conditional indorsements 188
Condor see money of Chile and Colombia 63, 64
Congo Free State money of 46
Congo States money of 69
Continental drafts quotations for 118
Continental exchange meaning of 181
Conto see money of Portugal and Brazil 25, 62
Conversion of foreign money into United States money and vice
versa 75
Copecks see money of Russia 22
INDEX 229
C continued
Costa Rico exchange conversion of 112
Costa Rico money of 53
Cowries see money of Siam . 41
Credit balances abroad 193
Crossed sterling check 198
Crown see money of Great Britain, Norway, Sweden, Den-
mark, Austria-Hungary and Portugal. (For page numbers
see countries named.)
Cuba money of 57
Currency of a bill meaning of 181
Cypress money of 9
D
D-A and D-P meaning of abbreviations 181
Danish money conversion of 92
Danish exchange quotations 116
Dating French checks and bills 203
Days of grace foreign countries 193
Decimals for fractional French rates 201
Decimals for fractional German rates 204
Decimals for fractional Holland rates 208
Decimals of fractions 224
Decimo see money of Colombia 64
Demand exchange meaning of 182
Denmark money of 20
Dime see money of the United States 47
Dinar see money of Servia 28
Dinero see money of Peru 66
Direct and indirect exchange meaning of 182
Director of the United States mint 6, 127
Discount rates at London, Paris, Berlin, etc 119, 123
Discount rates on English bills 198
Discount rate Bank of England 190
Discount rate table French exchange 202
Discount rate table German exchange 205
Discount rate table Holland exchange 209
Discount rate table Sterling exchange 197
Discount rates how they affect rates here 124
Discount rates private 191
Documentary bills of exchange ' 166
Documents for acceptance 190, 191
Documents for acceptance meaning of 181
Documents for payment. . . 190, 191
Documents for payment meaning of 181
Documents for payment quotation for 118
Dollar see money of China, Canada, United States, New
Foundland, Santo Domingo, Porto Rico, Alaska, and
Colombia. (For page numbers see countries named.)
Dollar exchange meaning of 182
Dollars local currency see money of Hong Kong, China, and
Philippines. (For page numbers see countries, named.)
Domestic exchange meaning of 182
Dominica money of 9
Domiciled meaning of 182
Doubloon see money of Guatemala etc., Cuba, and Chile.
(For page numbers see countries named.)
Drachma see money of Greece 17
Draft drawn against circular letter of credit 144
230 FOREIGN* EXCHANGE TEXT BOOK
D continued
Draft drawn against foreign shipment 171
Draft explanation of 182
Draft foreign 150-152
Ducat see money of Austria-Hungary 21
Dull exchange 117
Dutch East Indies exchange conversion of 112
Dutch East Indies money of 39, 46
E
Eagle see money of the United States 47
East Indies Islands money of 39
Ecuador exchange conversion of Ill
Ecuador money of 64
Ecus see money of France 12
Egyptian exchange conversion of, 112
Egyptian pound see money of Egypt 43
Egypt money of 43
English bills of exchange indorsements of 198
English checks crossed 198
English exchange quotations for 113-116
English money conversion of 75-80
English money table of 75
Eritrean dollars see money of Abyssinia and Eritrea 46
Eritrea money of 46
Escudo see money of Chile. 63
European countries money of 7
Exchange arbitration of 135-138
Exchange centers of foreign countries 3
Exchange direct and indirect 182
Exchange firm, steady, strong, weak and dull 117
Exchange first, second and third of 181, 183
Exchange mint par of 127
Exchange pars of 127
Exchange quotations for 113
Exchange rates 121
Exchange transactions 179-187
Exchanging of money between countries 179-187
Exporters competition with foreign manufacturers 3
Exporters how interested in foreign balances 2
Exports value of in 1905 2
Express money orders 218
F
Falling rate of exchange 121
Farthing see money of Great Britain 7
Fen see money of China 34
Fiji Islands money of 24
Finland money of 24
Finmark see money of Finland 24
Finnish exchange conversion of 108, 109
Finnish exchange quotations for 116
Firm exchange 117
First of exchange 181, 183
Fixed rate of exchange 121
Florin see money of Great Britain and Holland 9, 19
Fluctuating rate of exchange 121
Foreign check facsimile of 151, 152
Foreign checks or drafts 150-152
INDEX 231
F continued
Foreign commercial bill of exchange 166-172
Foreign commercial bill of exchange buying of 166, 189, 210
Foreign commercial forms 139-177
Foreign discount rates 119
Foreign drafts against shipments abroad 171
Foreign drafts and checks 150-152
Foreign exchange between countries 3, 4
Foreign exchange brokers 214
Foreign exchange business extent of 1-4
Foreign exchange centers 3
Foreign exchange conversion book 115
Foreign exchange definition of the term 1,4
Foreign exchange how exporters are interested how indebted-
ness between countries is paid 2, 3
Foreign exchange jobbers 215-217
Foreign exchange jobbers' quotations 216-218
Foreign exchange Margraff's definition of 4
Foreign exchange newspaper quotations for 116-119
Foreign exchange quotations for 113-120
Foreign exchange rate of exchange 121, 122
Foreign exchange retailers' profit table 219
Foreign exchange retailers' profit table English 220
Foreign exchange system 1-4
Foreign exchange transactions comprising same 1
Foreign exchange trade between countries 2, 3
Foreign limited checks 162
Foreign money conversion of 75
Foreign money value of 6
Foreign postal money order. 163-165
Foreign postal remittances 158-161
Fractional French exchange rates 201
fractional German exchange rates 204
Fractional Holland exchange rates 208
Fractions of 100 by 64ths expressed decimally 224
Franc see money of France 10
France buying bills of exchange on 199-203
France money of 10
French exchange interest tables 202
French checks and bills dating of 203
French exchange quotations ' 116
French gold 11
French Guiana money of 65
French money examples in conversion of 81-85
French stamp taxes -_^ - 203
Fuang see money of Siam ". 41
Fun see money of China 34
G
Gambia money of 9
Guadelupe money of 12
Genoa lire quotations for 119
German East Africa money of 45
German exchange interest tables 205
German exchange fractional quotations 204
German exchange quotations 91, 113
( Icnnan money conversion of 85-91
German stamp taxes 206
Germany buying bills of exchange on 203-206
232 FOREIGN EXCHANGE TEXT BOOK
G continued
Germany money of 18
Gibralter money of g
Gold 5
Gold and silver coins value of in other countries 221-223
Gold bullion 69, 70
Gold Coast money of 9
Gold coins or bars 5
Gold coins or bullion 70
Gold coinage of 70
Gold exporting and importing points 124, 183
Gold monetary units of countries 72, 73
Gold shipped as merchandise 192
Gold standard adoption of , . 71
Gourde see money of Haiti 56
Government notes 5
Great Britain buying bills of exchange on 194-199
Great Britain money of 7
Great Britain exchange conversion of 75-80
Great Britain table of weights of money 7
Greece money of 10, 17
Grecian exchange conversion of 110
Grecian exchange quotations 114
Grenada money of 9
Groat see money of Bermuda Islands 55
Guaranty letter of credit 145
Guaranty travelers' cheque . . , 155
Guatemala exchange conversion of 112
Guatemala money of 54
Guiana money of 12
Guilder or gulden see money of Holland 19
Guinea see money of Great Britain 7
Gulden or guilder see money of Holland 19
H
Haiti money of 56
Hawaii (Islands) money of 46
Heller see moi.ey of Austria-Hungary and German East Africa 21, 46
Himalaya States money of 60
Holland buying bills of exchange on 206-209
Holland exchange conversion of 94, 95
Holland exchange fractional quotations 208
Holland exchange interest tables 209
Holland exchange quotations 116
Holland money of 19
Honduras exchange conversion of 112
Honduras money of 54
Hong Kong exchange conversion of 98
Hong Kong exchange quotations 116
Hong Kong money of 9
Holy Land money of 31
Hungary see Austria-Hungary 21
Hypothecation certificate 190, 210
Imperial see money of Russia
Importers in Germany 206
Imports value of in 1905 2
In case of need meaning of 184-192
INDEX 233
| continued
Indebtedness between countries .......................... ... 3
India money of .......................................... 32
Indian (British) exchange conversion of .................... 101, 102
Indorsements in blank .................................... 188
Indorsements in full ....................................... 188
Indorsements various forms of ............................ 187, 188
Insurance certificates .................................... 170, 190
Interest tables French exchange .......................... 202
Interest tables German exchange .......................... 205
Interest tables Holland exchange .......................... 209
Interest tables sterling exchange .......................... 19
Internal revenue stamp taxes France ....................... 203
Internal revenue stamp taxes Germany ..................... 206
Internal revenue stamp taxes Great Britain ................ 196
Invoice of foreign shipment ................................ 172
Ireland money of ...................................... . 32
Italian exchange conversion of ........................... 96, 97
Italian exchange quotations .............................. 113
Italy money of ........................................... 10, 114
J
Jamaica exchange conversion of .......................... Ill
Jamaica money of .................. .................... 9, 55
Japanese exchange conversion of ........................... 99
Japanese exchange quotations ............................ 116
Japan money of ......................................... 37
Jobbers of foreign exchange ............................... 215-217
K
Kopecks see money of Russia ............................. 22
Korea money of ......................................... 69
Korona see money of Austria-Hungary ..................... 21
Kran see money of Persia ................................. 40
Kreutzer see money of Austria-Hungary .................... 21
Krone see money of Norway, Sweden, Denmark and Austria-
Hungary ............................................. 20, 21
Labuan money of ........................................ 9
Lagas money of ......................... ............... 9
Latin Union countries ........................ . ............ 10
Lei see money of Roumania ............................... 26
Legal tender silver ........................................ 5
Lepta or Lepton see money of Greece ...................... 17
Letter of credit circular ................................... 139-146
Letter of credit circular agreement ........................ 141, 146
Letter of credit circular facsimile of ....................... 142, 149
Letter of credit circular guaranty ......................... 141, 145
Letter of credit circular used with letter of indication ....... 141, 146
Letter of credit commercial ............................... 173-177
Letter of credit commercial agreement .................... 176
Letter of credit commercial trust receipt .................. 177
Letter of credit why drawn on London ..................... 7
Letter of indication ................................ ....... 147-149
Lev see money of Bulgaria ................................ 15
Lew see money of Bulgaria .............................. 15
Li see money of China .................................... 34
234 FOREIGN EXCHANGE TEXT BOOK
L continued
Liang see money of China 34
Libra see money of Peru 67
Limited checks foreign 162
London exchange quotations 120
London financial center of the world 7
Lot see money ot Siam 41
Luxemberg money of 69
IY1
Mace see money of China 34
Madagascar money of 12, 46
Malta money of 8, 9
Manilla exchange conversion of 100, 101
Manilla exchange quotation 116
Margraff's International Exchange 4, 225
Mark see money of Germany 18
Markkaa see money of Finland 24
Martinique money of : 12, 59
Maturity meaning of 184
Mercantile letter of credit .' 173
Mexican exchange conversion of 99, 100
Mexican exchange quotations 116
Mexico money of 49
Milan d'Or see money of Servia 28
Milreis see nioney of Portugal and Brazil 25, 61
Minor coins 5, 6
Mint director of 6
Mint par of exchange between United States and other countries 127-130
Mint par of exchange between Great Britain and other countries 131
Mohur see money of British India 33
Monetary systems of the world 5
Monetary units gold of countries 72, 73
Money conversion of 75
Money exchanging of 4
Money forms of 5
Money of foreign countries 5
Money markets of the world 119
Money value of in other countries 221-223
Money order bank post 165
Money order express 218
Money order foreign postal 163-165
Money transferred by cable 157
Montenegro money of. 69
Montserrat money of 9
N
Natal exchange conversion of 112
Natal money of 8-9, 45
Netherlands (The) exchange conversion of 94, 95
Netherlands (The) money of 19
Nevis money of 9
New Foundland money of 52
New Guinea money of 9
Newspaper quotations for foreign exchange 116-119
New York exchange 125
New York exchange quotations for 120
New Zealand exchange conversion of Ill
New Zealand money of ,. . 8, 46
INDEX 235
N continued
Nicaragua exchange conversion of 112
Nicaragua money of 54
Nominal exchange 127
No protest explanation of 184
Norway money of 20
Norwegian exchange conversion of 92
Norwegian exchange quotations for 116
North American countries money of 47
Noting explanation of 185
o
Obok money of 12
Ochr-el-guerches see money of Egypt 43
Onza see money of Guatemala, etc., Bolivia and Cuba 5458, 60
Orange Free State exchange conversion of 112
Orange Free State money of 45
Ore see money of Norway, Sweden and Denmark 20
Orient (The) money of 45
P
Pacific Ocean Islands money of 46
Panama exchange conversion of 112
Panama money of 53
Papal silver coins see money of Italy 15
Paper money 5
Paper money value of 7
Par of exchange commercial 132, 133
Par of exchange in the United States 133
Para see money of SerVia and Turkey 28, 30
Paraguay exchange conversion of Ill
Paraguay money of 65
Paris exchange quotations for 120
Paris francs quotations for 118
Pars of exchange 127-132
Pars of exchange between Great Britain and other countries. . 131
Pars of exchange how determined 127
Parties to a bill of exchange and their responsibility 193
Patacoe see money of Paraguay 67
Payment of indebtedness between countries 3
Pence see money of Great Britain 7
Penebat see money of Persia 40
Penni see money of Finland 24
Penny see money of Great Britain 7
Per mille meaning of ._. 185
Persia money of . , 7^r.~r7TrrT7 40
Peru exchange conversion of Ill
Peru money of 66
Peseta see money of Spain 29
Peso see money of Philippines, Zanzibar, Mexico, British Hon-
duras, Panama, Guatemala, Honduras, Nicaragua, Salva-
dor, Cuba, Argentine Republic, Chile, Paraguay and
Uruguay. (For page numbers see countries named.)
Pfennig see money of Germany 18
Philippine Islands exchange conversion of 100, 101
Philippine Islands money of 42
Piastre see money of Turkey Indo-China and Egypt 30-39, 43
Pice see money of British India 32
Pie see money of British India 32
236 FOREIGN EXCHANGE TEXT BOOK
P continued
Pitjes see money of China 34
Porto Rico money of 59
Portugal money of 25
Portuguese exchange conversion of 105
Portuguese India money of 26
Posted rates 122
Posted rates quotations 118
Postal money order foreign 163-165
Postal remittance foreign 158-161
Pound Egyptian see money of Egypt 43
Pound sterling see money of Great Britain 7
Pound Turkish see money of Turkey 30
Private discount rates 191
Profit tables for retailers of foreign exchange 219, 220
Protest explanation of 185
Purchasers' agreement letter of credit 146
Q
Qualified indorsements 188
Quotations for foreign exchange 1 13-120
Quotations jobbers 215-217
R
Rate of exchange 121, 122
Rate of exchange causes of fluctuation 123-125
Rate of exchange establishing of 122
Rates between countries 121
Rates for foreign exchange jobbers 216, 217
Rates meaning of 71
Real exchange 127
Real see money of Ecuador and Paraguay 64, 65
Rebate rates 190
Rebate rates explanation of 186
Reichsmark see money of Germany 18
Reimburse bills- bankers 192
Reis see money of Portugal and Brazil 25, 61
Restrictive indorsements 188
Retailers of foreign exchange profit table 219
Retailers of English exchange profit table 220
Reunion money of 46
Rin see money of Japan 37
Rising rate of exchange 121, 122
Rixdaler see money of Holland 1>J
Roumanian exchange conversion of 106, 107
Roumanian exchange quotations 116
Roumania money of
Ruble see money of Russia
Rupee see money of British India, Ceylon and German East
Africa 32-38, 45
Russian exchange conversion of 93
Russian exchange quotations 113, 1 16
Russia money of
s
Saint Helena Island money of '. 9, 55
Saint Lucia money of
Saint Petersburg rubles quotations for
Salvador exchange conversion of 112
Salvador money of 54
Salung- see money of Siam 41
INDEX 237
S continued
Santo Domingo money of 59
Sapecks see money of Indo-China 39
Scandinavian exchange conversion of 92
Scandinavian exchange quotations for 113
Scandinavian Union money of 20
Scotland money of 32
Second of exchange 181, 183
Seignorage meaning of ' 79
Selling rates meaning of 187
Sen see money of Japan 37
Senegal money of 12
Servian exchange conversion of 108
Servian exchange quotations for 114
Servia money of 28
Shabis see money of Persia 40
Shilling see money of Great Britain 7
Shoe see money of China 34
Short bills meaning of 187
Siam money of 41
Sierre Leone money of 9, 45
Sight bills meaning of 187
Silver and gold coins value of in other countries 221-223
Silver bullion 69
Silver coins 6
Silver coins purchasing power of 6
Silver coins value of 6 7
Sin see money of China 34
Sixteen to one coinage 69
Sol see money of Peru 66
South African Republic exchange conversion of Ill
South African Republic money of 45
South American exchange conversion of Ill
South America money of 59
South American exchange quotation for 116
Sovereign most universally recognized coin 7
Sovereign see money of Great Britain 7
Spain money of 29
Spanish exchange conversion of 107, 108
Standard bullion 69, 70
Steady exchange 117
Sterling exchange interest tables 197
Sterling exchange meaning of 187
Sterling quotations '..... 118
Stockholm kronors quotations for 119
Stotinki see money of Bulgaria 15
Straits Settlements exchange conversion of Ill
Straits Settlements money of 9
Strong exchange meaning of 117
Subsidiary silver 48
Subsidiary silver coins 5
Sucre see money of Peru 64
Sweden money of 20
Swedish exchange conversion of 92
Swedish exchange quotations 161
Swiss exchange conversion of 81
Switzerland buying bills of exchange on 201
Switzerland money of 10, 13
Sycee see money of China 34
Syria money of 30, 3 1
238 FOREIGN EXCHANGE TEXT BOOK
Table for figuring profit on sales foreign exchange 219, 220
Table of English money 75
Table of decimals of 100 by 64ths 224
Tael see money of China 34
Tanga see money of Portuguese India 26
Tasmania exchange conversion of Ill
Tasmania money of 46
Term foreign exchange 1
Terms and expressions used in foreign exchange transactions. . 179-187
Thaler see money of Germany and Austria-Hungary 18, 21
Third of exchange 183
Through bill of lading 169
Tical see money of Siam 41
Tobago money of 9
Toman see money of Persia 40
Tourists see French silver coins 11
Tourists see travelers' guide 221-223
Trade between countries 3
Trade centers 3
Trade with foreign countries 2, 3
Transfer of money by cable 157
Transvaal exchange conversion of 112
Transvaal money of 9, 45
Travelers' cheques 153-156
Travelers' cheque facsimile of 154
Travelers' cheque guaranty 153, 155
Travelers' cheques collateral security contract 153, 156
Travelers' guide value of money in other countries 221-223
Trinidad money of 9
Tristan money of 9
Trust receipt commercial letter of credit 177
Tsein see money of China 34
Tunis money of 12, 46
Turkey money of 30
Turkish exchange conversion of 1 10, 1 1 1
Turkish exchange quotations for 116
Turks Island money of 9
u
United States money of 47
Units of money of countries gold 72, 73
Uraguay exchange conversion of Ill
Uruguay money of 67
Usuance meaning of 187
V
Value of foreign coins as declared by the director of the United
States mint 6, 127-130
Value of foreign money 6
Value of gold and silver coins in other countries 221-223
Value of standard gold coins and bullion 70
Venezuela exchange conversion of .. Ill
Venezuela money of 68
Vienna kronen quotations for 119
Virgin Islands money of 9
INDEX 239
W
Wales money of 32
Waving protest meaning of 188
Weak exchange 117
Weights of coins of the United States 49
West Indies Islands money of 55
With exchange meaning of 187
Without exchange meaning of 187
Y
Yen see money of Japan 37
Yenliang see money of China 34
Yentzu see money of China 34
Z
Zanzibar money of 46
Zurich francs quotations for 119
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Brooks' Foreign Exchange
Figuring Book
A PUBLICATION containing tables convert-
ing foreign money into United States money
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Tables converting French, Belgian and Swiss money
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For convenience and information of Banks, Bankers,
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