A knowledge of the moneys of account, or monetary systems, of the various foreign countries is one of the first things necessary to a clear understanding of foreign-exchange transactions.

Paper moneys, such as government and bank notes and certificates, are, as a rule, intended solely for circulation within the country in which issued, and are not legal tender outside of the country from which they emanate. Of course, paper money is often accepted in small amounts for its full face value in other countries, but it is always optional with the creditor to accept it.

Silver and minor coins are also intended for domestic use, and when accepted in other countries it is at their actual value rather than at their face value. For illustration: The purchasing power of the silver dollar of the United States within this country is as great for small sums as that of the gold dollar, but in other countries it would be accepted only for its bullion value. The Mexican dollar, which passes for its face value in Mexico, is worth less than fifty cents in this country.