These forces of supply and demand exert their influence over foreign exchange so quickly that rates are quite uniform all over the world. Thus in a sense there is a foreign-exchange market which is international in scope. It is composed of the world's financial centers, such as New York, London, Paris, and Berlin.

Statement Showing the International Balance op the United States on October 1, 1921. * [In millions of dollars]

* Federal Reserve Bulletin (1921), p. 1263. 1 Definite figures not available.

2 May be increased to $3,408,000,000 (see Bulletin, p. 1263).

They are closely bound to one another by cable and wireless communication, and each in turn is supported in its foreign-exchange operations by other cities in the same country having a smaller volume of business. Thus Boston, Chicago, St. Louis, New Orleans, and San Francisco are continually transmitting orders for the purchase and sale of foreign exchange to New York City.

Here, as in any other foreign-exchange market, buyers and sellers consist of business firms, investment houses, commercial banks, and brokers. The first group includes export and import houses handling goods, while the second is composed of investment concerns trading in stocks and bonds on an international scale, and so both groups buy and sell exchange as a subsidiary part of their regular activities. More directly interested in foreign exchange are the various classes of banking institutions engaged in financing international commerce. A bank trades in exchange both directly and indirectly. It deals directly with its customers, which include firms in foreign trade and correspondent banks without their own foreign department. However, most foreign-exchange operations are not transacted directly between buyers and sellers of bills, but indirectly through brokers who act as intermediary agents between merchants and bankers and between bankers themselves.