r
on foreign-exchange-bankers' operations, but the fact that bills of
this kind constitute so important a part of the bankers' long bills to
be had in the market, necessitates their classification in this place.
Every time a banker here starts to use his credit abroad for the
purpose of raising money--and there are times when the privilege is
pretty freely availed of--he does it by drawing sixty or ninety days'
sight drafts on his correspondents abroad. Finance bills, it may be
said without question, are one of the most interesting forms of foreign
exchange banking--at the same time one of the most useful and one of
the most abused of privileges coming to the domestic banker by reason
of his having strong banking connections abroad.

CHAPTER V

THE FOREIGN EXCHANGE MARKET

The foreign exchange market is in every sense "open"--anyone with bills
to buy or sell and whose credit is all right can enter it and do
business on a par with anyone else. There is no place where the trading
is done, no membership, license or anything of the kind. The "market,"
in fact, exists in name only; it is really constituted of a number of
banks, dealers and brokers, with offices in the same section of the
city, and who do business indiscriminately among themselves--sometimes
personally, sometimes by telephone, by messenger, or by the aid of the
continuously circulating exchange brokers.

The system is about as follows: The larger banks and banking houses
have a foreign exchange manager, or partner, taking care of that part
of the business, whose office is usually so situated as to make him
accessible to the brokers who come in from the outside, and whose
telephoning and wiring facilities are very complete. These larger
houses have no brokers or "outside" men in their employ. The manager
knows very well that plenty of chance to do business, buying or
selling, will be brought in to him by the brokers and that his wires
keep him constantly in touch with his fellow bankers.

Next come the big dealers in exchange, some of whom do a regular
exchange business of their own, the same as the bankers, but who also
have men out on the street "trading" between large buyers and sellers
of bills. Such houses are necessarily closely in touch with banks,
bankers, exporters, and importers all over the country, and have always
large orders on hand to buy and sell exchange. Some of the bills they
handle they buy and use for the conduct of their own