The Wonder Book of Knowledge / The Marvels of Modern Industry and Invention, the Interesting Stories of Common Things, the Mysterious Processes of Nature Simply Explained

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Ermine (Mustela Erminea)

Like many other species of this genus, the ermine has the faculty of ejecting a fluid of a musky odor.

Its fur is short, soft and silky; the best skins being brought from Russia, Sweden and Norway and Hudson Bay territories. Its fur was formerly one of the insignia of royalty, and is still used by judges. When used as linings of cloaks the black tuft from the tail is sewed to the skin at irregular distances.

What is the Principle of “Foreign Exchange”?

Exchange, in commerce, is a transaction by which the debts of people residing at a distance are canceled by a draft or bill of exchange, without transfer of any actual money.

A merchant in New York who owes $1,000 worth of goods in London, gives a bill or order for that amount which can be negotiated through banking agencies or otherwise against similar debts owing by other parties in London who have payments to make in New York. This obviates the expense and risk of transmitting money.

The process of liquidating obligations between different nations is carried on in the same way by an exchange of foreign bills. When all the accounts of one country correspond in value with those of another, the exchange between the countries will be at par, that is, the sum for which the bill is drawn in the one country will be the exact value of it in the other.

Exchange is said to be at par when, for instance, a bill drawn in New York for the payment of $1,000 in London can be purchased there for $1,000. If it can be purchased for less, exchange is under par and is against London. If the purchaser is obliged to give more, exchange is above par and in favor of London.

Although the thousand circumstances which incessantly affect the state of debt and credit prevent the ordinary course of exchange from being almost ever precisely at par, its fluctuations are confined within narrow limits, and if direct exchange is unfavorable between two countries this can often be obviated by the interposition of bills drawn on other countries where an opposite state of matters prevails.