es possible to use the cheaply obtainable exchange to buy gold on
the other side.

In a following chapter a more detailed description of the New York
exchange market is given, but in passing, it is well to note how the
whole country's supply of commercial exchange, with certain exceptions,
is focussed on New York. Chicago, Philadelphia, and one or two other
large cities carry on a pretty large business in exchange, independent
of New York, but by far the greater part of the commercial exchange
originating throughout the country finds its way to the metropolis. For
in New York are situated so many banks and bankers dealing in bills of
exchange that a close market is always assured. The cotton exporter in
Memphis can send the bills he has drawn on London or Liverpool to his
broker in New York with the fullest assurance that they will be sold to
the bankers at the highest possible rate of exchange anywhere
obtainable.

2. The second source of supply is in the sale abroad of stocks and
bonds. Here again it will be evident how the supply of bills must vary.
There are times when heavy flotations of bonds are being made here with
Europe participating largely, at which times the exchange drawn against
the securities placed abroad mounts up enormously in volume. Then again
there are times when London and Paris and Berlin buy heavily into our
listed shares and when every mail finds the stock exchange houses here
drawing millions of pounds, marks, and francs upon their correspondents
abroad. At such times the supply of bills is apt to become very great.

Origin of bills from this source, too, is apt to exert an important
influence on rates, in that it is often sudden and often concentrated
on a comparatively short period of time. The announcement of a single
big bond issue, often, where it is an assured fact that a large part of
it will be placed abroad, is enough to seriously depress the exchange
market. Bankers know that when the shipping abroad of the bonds begins,
large amounts of bills drawn against them will be offered and that
rates will in all probability be driven down.

Announcements of such issues, as well as announcements that a block of
this or that kind of bonds has been placed abroad with some foreign
syndicate, are apt to come suddenly and often find the exchange market
unprepared. For the supply of exchange originated thereby, it must be
remembered, is not confined to the amount actually drawn against bonds
so