Boon's Lick times. [volume] (Fayette, Mo.) 1840-1848, 1841-12-11
EXCHANGE.
gone.


There are many persons in the commune
ty, especially among the gentler sex, who
know but little of the nature of Exchange
operations. They are aware that money
is transmitted from one part of the country,
to another, or from one country to another,
by means of Bills of Exchange--but the
precise nature of the operation, Or the mode
of establishing the "rate of Exchange" is
still a mystery in their eyes. Since Presi-
dent Tyler's uetoes, great deal has been
said in relation to Exchange-curiosity has
been reused, and wish to solve the mystic
ny has been excited. With a view to graft
fly this laudable curiosity, we now lay be-
fore our readers the following explanation
of Exchange, written by that practical
man, William Cobbett:-- Boston Journal.
"What is that thing called the Exchange?
One man draws bill on another man; a
third man buys this bill of the first, and
sends to the second for payment. That
which the second man pays to or takes
! from, the first man, Orer and above or less
than, the amount of the bill, is what is call.
ed the exchange, and when he gives neither
the exchange is what is called at par, Just
as our money is, when we get twenty shil
lings in exchange for sovereign.
Let us take an illustration and let it be al
home, where the money has the same name
in all places. Sharpshins, a Bristol man
draws bill on Londoner for hundred
pounds that the Londoner owes him. An.
other man, whose name shall be Broadbrim
who owes hundred pounds in London
comes to him, and bugs this bill. Now, il
there be fen persons in Bristol who have
any thing due to them in London, and who
can draw upon London, and a great man,
persons at Bristol who want to transmit
money to London; and as bill is a much
more convenient thing than bag of gold tc
send to London, Shaipshins says to Broad
brim, l will not let you have my hundred
pound bill, unless you will give me some.
thing over, which Broadbrm will do in or.
der to get the bill, which is most safe and
convenient mode of conveying money
Then, that which Broadbrim gives for the
bill, over and abeve the hundred pounds, is
called the rate of exchange; and this ex
change is said to be IN favor of London, be.
cause bill on London will fetch more mon
ey than the sum that it is drawn for. But
when the contrary is the case; when there
are many persons who want to sell bill.
on London, and fen persons in Bristo
who want to buy such bills, then Sharp
shins must sell his hundred pound bill fol
less than hundred pounds, or else Broad
brim will not have it, seeing there are so
many who want to sell bills on London; anC
now the exchange is in favor of b. istol
seeing that Bristol man can pay Lon.
don debt of 100 pounds with less than lOC
pounds; seeing that the London people owe
the Bristol ones more than those of Bris
tol owe those of London. Sometimes the
dealings and debts between the two place.
are SO, that each owes as much to the othe
as this other owes to it. Then the on,
hundred pound bill will sell for hundred
pounds and no more. And then the ex
change is said to be at par; or on paral
lel
1t is the same with regard to two ma
tons; but here comes in the circumstance
of different denominations of money to &C
count or reckon by. Ours is pound ster
ling, the French have their franc, the Ital
ans their form, the Spanish their dol
lars, the Dutch some beastly thing tina
does not now occur to me. Let us TAX
the French franc; 25 francs (leaving on
the fraction) are equal in intrinsic value t
an English pound. Therefore, if owe
) man in France Gl00, must send him bi
of $500 francs, if the exchange be at pal
but, as in the Bristol and London cas-
above stated, / may have to give more, O
to give less, than GlOO for bill $50
francs, according as the debts due from on
country to the other, affects as we hav
Il L.. r. l.