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497. The exchange value, in United States money, of the pound sterling of Great Britain is that of its former legal value, or $ 4f = $ 4.44|, which is considerably below either its intrinsic or commercial value. The commercial value is generally about 9 per cent, more than this exchange, or nominal par value.

Thus, nominal par value being = $ 4.44§-
Add premium at 9 per cent. = .40

The commercial par value will be = $ 4.84£.

Therefore, when the nominal exchange between the United States and Great Britain exceeds 9 per cent, premium, it is above true par; when less, it is below true par.

498. The quotations of the rates of exchange of the United States on England have always reference to the old par value of the pound sterling in United States money. The course of exchange of the United States on France is so many francs and centimes payable in France for a dollar paid here; on Holland it is so many cents a guilder (of Netherlands); on Hamburg, so many cents a mark banco; on Bremen, so many cents a rix dollar; and so on.

Note 1. — The course of exchange of London on France is so many francs and centimes payable in France for l-£.; on Amsterdam, it is so many florins for 1^£.; on Hamburg, so many schillings for 1£.; on Vienna and Trieste, so many florins and creutzers; on Spain, so many pence paid in England for 1 dollar of plate ( = 8| reals plate) payable in Spain; on Lisbon, so many pence for 1 millrea; on Naples, so many pence for 1 ducat; and so on.

Note 2. — The value of 1£. sterling from 7 to lof premium on the old par value of $ 4.44|, is shown in the following

Table.

7 per cent. premium, S4.756! 9 per cent. premium, $4,844

Note 3. — In this country the quotations of foreign exchanges are usually for bills payable 60 days after sight, and of inland or domestic exchanges, for bills payable at sight.

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499i To compute foreign exchange.

Ex. 1. What should be paid for the following bill at 9£ per cent. premium? Ans. $ 486.666.

Exchange for £ 100. Philadelphia, May 21, 1857.

Sixty days a fter sight of this, my first Bill of Exchange, (second and third of the same date and tenor unpaid,) pay to Langdon Shannon, or order, one hundred pounds sterling, value received, with or without further advice.

William P. Brown. To Messrs. Peabodt & Co., Bankers, London.

OPERATION.

100 X V = $444.44; $444.444 X 1.095 = $486,666.

2. What is the cost at Amsterdam of a hill on New York for $ 340.67, exchange being at $0.38 to the guilder?

Ans. 896.50 guilders.

OPERATION.

340.67 H- 38 = 896.5 = 896 guilders 50 cents.

3. What must be paid in Boston for a bill on Paris for 3676 francs, exchange being 5 francs 20 centimes to the dollar?

Ans. $706.92^.

4. What is the value of a bill on Hamburg for 3000 marks 10 schillings, exchange being at $ 0.35 to a mark banco?

Ans. $1050.21$.

5. How large a bill can be purchased on Liverpool for $ 81727.75, exchange being at 9£ per cent. premium?

6. Paid $14400.12 for a bill on Havre for 79000 francs; how much was exchange below par? Ans. 2 per cent.

7. What is the cost of a draft on St. Petersburg for 5763 rubles 75 kopecks, exchange being at 74 cents a ruble?

Ans. $4265.175.

8. What must the face of a bill on Lisbon be which costs $ 550.66, exchange being at $ 1.10 a niillrea?

Ans. 500 millreas 600 reas.

9. What is the cost at Berlin of a draft on Philadelphia for $ 10000, exchange being at $ 0.68 a thaler?

Ans. 14705 thalers 26 groschen 5-f-f-f- pfennings.

10. How much must be paid in Chicago for a bill on Stockholm amounting to 400 specie rix dollars 12 skillings?

Ans. $ 424.265.

11. What is the value in St. Louis of a draft on Dantzic for 300 thalers 20 groschen 10 pfennings, exchange being at $0.69 a thaler? Ans. $ 207.47f£.

12. "What must be the face of a draft on Calcutta which costs in Boston $ 5694, when exchange is at $ 0.40 a company rupee? Ans. 14235 rupees.

13. How much must be paid in Naples for a draft on Baltimore amounting to $ 615.6O, the value of a ducat in exchange being $0.80? Ans. 769 ducats 5 carlini.

14. There was paid in New Orleans $7300 for 1500£. draft on Liverpool; at what per cent. of premium was it purchased? Ans. 9 J per cent.

15. What must be the face of a draft on Paris that can be bought in London for 868£. 17s. 6d., exchange at 23 francs 60 centimes a pound sterling? Ans. 20505 francs 45 centimes.

16. How much must be paid in Genoa for a bill on New York whose face is $2640, when exchange is at $0.18 a lire? Ans. 14666 lire 66§ centesimi.

17. When a bill on Paris for 88128 francs costs $ 17280, at what per cent is the rate of exchange above par?

18. Robert Anderson, of Cincinnati, has consigned a cargo of pork, valued at 17000£., to Richard Arkwright & Son, Liverpool. Robert S. Davis & Co., being about to import an invoice of books, have purchased of Anderson a bill of exchange, at 8£ per cent, premium, for the value of the said cargo. What should they pay for the bill? Ans. $ 81977.777.

ARBITRATION OF EXCHANGES.

500i Arbitration of Exchanges is the process of finding the proportional exchange of two places by means of one or more given intermediate exchanges.

Exchange effected thus, through one or more intermediate exchanges, is called circular exchange.

The exchange when made through a single intervening exchange is called simple arbitration, and when through two or more intervening exchanges is called compound arbitration.

501. Since the actual course or rate of exchange between any two places is almost always, from various circumstances, different from the arbitrated course, the object of arbitration is to enable an individual in one place to ascertain whether he can most advantageously draw and remit directly between his own place and another, or circuitously through other places.

502. Exchange of merchandise, and the different weights and measures of different countries, may be arbitrated in the same manner as bills of exchange and currencies.

503. The value, in the standards of the United States, of the principal weights and measures of the most important commercial places, is shown in the following

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Trieste. Value. i

Pound, 1.231b. |

100 pounds, 123.601b.

Eimer of wine, 15gal.'

Staro of grain, 234bu.

Ell for silks, 25.20in.

Ell for woollens, 26.60in.

Constantinople.

Quintal. 124.451b.

Alma for liquids, 1.37gal.

Kisloz of grain, .94bu.

Pik, commercial, 27in.

Calcutta.

Maund, 74.661b.

Bazaar maund, 82.181b.

Guz, 36in.

Russia.

Pound, .901b.

Pood = 40 pounds, 361b.

100 pounds, 90.261b.

Wedro of wine, 3.25gal.

Sorokovy = 40 wedros, 130gal.

Chetwert of grain, 5.95bu.

Arsheen, 28in.

Sashen, 7ft.

Prussia.

Pound, 1.031b.

100 pounds, Dantzic, 103.31b.

Quintal = 110 pounds, 113.421b.

Eimer of wine, 18.14gal.

Ahm, 39.66gal.

Scheffel of grain, 1.52bu.

Last of grain, 91bu.

Berlin Ell, 25.5in.

Prussian Ell, 26.28in.

Portugal.

Pound or arratel, 1.011b.

Arroba = 22 arratels, • 22.261b.

Quintal = 4 arrobas, 89.051b.

100 pounds or arratels, 101.191b.

Almude of wine, 4.37gal.

Tonelado = 52 almude, 227.25gal.

Moyo, 23.03bu.

Vara, 43.20in.

Spain.

Pound, 1.011b.

Arroba = 25 pounds, 25.381b.

Quintal = 4 arrobas, 101.521b.

Cautaro or arroba of oil, 3.75gal.

Value.

Cantaro or arroba of wine, 4.25gal.

JIovo of wine = 16 arrobas, 68gal Bofta = 38ar. of wine = 38£ar..

of oil, 127.5gaL

Fanega of grain, 1.57bu.

Cahiz = 12 fanegas, 18.91bu.

Vara or yard, 33.37in. Cuba.

Quintal, 101.751b.

Arroba of wine, 4.1gal.

Fanega of grain, 3bu.

Vara, 33.34in.

Naples.

Rottolo, 1.961b. Cautaro grosso=100 rottolo, 196.501b.

Cantaro piccolo, 1061b.

Salmaofoil, 42.75gal.

Carro of wine 264gal.

Cairo of grain, 52.20bu.

Canna, 83in.

Sicily.

Cantaro grosso, 192.501b.

Cantaro sottile, 1751b.

100 Sicilian pounds, 701b.

Tonna, 9.38gaL

Salma grossa,' 9.48bu.

Salma generale, 7.62bu.

Conna or yard, 3S.40in. .

Genoa.

Cantaro grosso, 76.871b.

Cantaro sottile, 69.891b.

Mezzarola, 39.25gal.

Mina of grain, 3.50bu.

Canna picco'a, 87.50in.

Canna grossa, • 116.70in.

Venice.

100 pounds, pesso grosso, 105.181b.

100 pounds, pesso sottile, 66.421b.

Miroofoil, 4.02gal.

Anfora of wine, 1.37gal."

Staja of grain, 2.27bu.

Moggio = 4 staji, 9.08bu.

Braccio for silks, 24.84in.

Braccio for woollens, 26.64in.

China.

Cattv, 1.331b.

Peciil, 133.331b.

Covid, 14.62m.

Note. — The weights and measures of Mexico, Central America, and of the republics of South America are the same generally as those of Spain; of Brazil, the same as those of Portugal; of the British North American Provinces, the same, in general, as in England; and of Hayti, the weights are the same as in the United States, except about 8 per cent. heavier, and the measures the same as in France.

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