What Is Foreign Exchange?

Foreign Exchange means the payment of an obligation in a specific point in one country by the transfer of a credit from a specific point in another country with a bill of exchange as between New York and London.

A New York dealer usually pays for goods bought in Paris or London with a bill of exchange or draft purchased from a bank or banker in New York. This is payable by the bank's correspondent in London or Paris. It is payable in French or English money as required.

Bills payable on demand or sight are called sight bills; bills payable in ten to thirty days are called short bills; bills payable in sixty days or in a longer p0eriod are called long bills. There are also cable transfers by which money or a credit may be transferred by cable, usually referred to as cables. Bills drawn by home banks or bankers against their correspondents or credits abroad, are called bankers' bills. They include letters of credit. Bills drawn against shipments of commodities or manufactures are called commercial bills. Grain bills are drawn against grain shipped, and cotton bills against cotton shipped.

What Are Foreign Port Stocks?

They are stocks of grain in warehouses at the leading ports of Europe.

What Are Fractional Orders Or Lots?

The units of speculation on the leading stock exchanges and the Chicago Board of Trade, are 100 shares of stock and 5,000 bushels of grain. Orders for smaller amounts are called fractional lots.

What Is A Franchise?

A franchise is a privilege conferred by grant from a national, state or municipal government to a corporation or an individual, giving the right to construct a railroad from one point to another, to operate the same over a given period of years, constitutes a franchise. A privilege given to a street railway, gas or electric light company, water company or telephone company to operate on certain streets or within certain limits for a given period, constitutes a franchise. Franchises in modern times are very largely capitalized.

What Is A Free Port?

A port of entry where cargoes of foods can be landed free of customs duties.

What Is The Meaning Of Frozen Out?

If a marginal trader is sold or closed out, owing to refusal or being unable to put up more margin, he is referred to as "frozen out."

What Is Funded Or Funding?

When floating debts are converted into a permanent loan or bonds, payable at a future time with interest, they are said to be funded.

What Is A Funded Debt?

The "funded debt" of a corporation usually is one running many years and represents one or more issues of bonds. It is distinguished from the "floating debt" chiefly by its relatively permanent character. A floating debt may represent capital which has been borrowed for permanent uses, but a "funded debt" is nearly always for such a purpose. "Funded debt" is applied to the liabilities of the British government, such as have been issued in the form of permanent long-dated securities. The "floating debt," which is in the form of exchequer bonds and treasury bills is regarded as temporary. Such a distinction, however, is not always intelligent, as the English War Loan issued in 1900, and payable in 1910, is classed a floating debt, but should be called a funded debt.

What Is A Funding System?

A system of public finance which has for its purpose converting floating indebtedness into a funded debt.

What Are Futures?

Almost all speculation in stock, grain and cotton is on futures. Men who buy cash grain protect themselves against loss by selling a specified amount for future delivery in a general market. Contracts of this kind are called "futures" as they do not terminate until a future month. In an active speculative market these futures may pass through many hands before they expire.