Excerpt from Foreign Exchange: A Study of the Exchange Mechanism of Commerce This small volume, also published as Part I of my International Trade and Exchange, deals chiefly with the subject of Foreign Exchange, though it also contains two introductory chapters on Laws of Money and The Nature of Banking, which, in my judgment, make possible a clearer understanding of the economic theory of foreign exchange operations. In these and the following chapters, I have endeavored to analyze, more fully than is usually done, the interrelations of different persons, buyers and sellers, et al., in the credit mechanism of exchange, - to show who are the ultimate creditors when bank checks and bank notes are used in trade and when bills of exchange (especially "long bills") are used. Thus, after the explanation of the nature of banking, the reader is led, in Chapter III, The Nature and Method of Foreign Exchange, to an appreciation of the international nature of the credit relations...