Elements of Foreign Exchange: A Foreign Exchange Primer

An educational publication written in the early 20th century. The text serves as a comprehensive guide to understanding the intricacies of foreign exchange markets, aiming to demystify this financial realm for those without prior knowledge. The subject matter centers around the mechanisms of foreign exchange, the types of obligations that create demand and supply, and the factors influencing exchange rates. The opening of the primer sets the stage for a clear explanation of foreign exchange, detailing how obligations between international creditors and debtors are settled through drafts and bills of exchange. Escher outlines the different ways merchants and banks facilitate international trade through these instruments, emphasizing the core economic principles that drive the foreign exchange market. He establishes that the fluctuating rates of exchange are influenced by varying demands and supplies, driven by trade activity, capital flows, and international investment practices. The text aims to provide readers with a solid foundation in foreign exchange while making the potentially complex subject accessible and interesting.