It is therefore satisfactory to know that, so long as the banker looks after his profits, gold will move by the most direct route. Let us suppose the United States to be exporting a large quantity of cotton to England at a time when little merchandise is being imported here from England, but when much is being imported from France. If the volume of exports to England and of imports from France were large enough, we might conceivably be importing gold from England in payment of our produce, and exporting it to France in payment for her luxuries; but, in practice, gold does not move that way. Every morning, the New York exchange banker learns by cable the Paris market rate for demand bills on London. When, therefore, he finds a large volume of bills on London offered for sale, and little demand for such bills, while there is large demand for bills on Paris and little supply, he determines, instead of drawing from New York against his purchases of London bills, to let his Paris agent draw against these purchases, placing the proceeds to his credit in Paris; against this credit in Paris, the New York banker draws his bill in francs, having thus supplied via London the New York demand for bills on Paris. He knows how many dollars each pound sterling costs him in New York, and the Paris rate for bills on London tells him how many francs each pound sterling will net him in Paris, and so he can calculate how many cents each franc will cost him. Moreover, he is not the only banker in New York that receives cable quotations; and so with a large volume of London bills offered and little direct demand for such bills, and large demand for Paris bills with little direct supply, we get a situation where New York bankers, competing with each other to buy the London bills for use via Paris, prevent the price of sterling from falling to the gold import point; and then, as a result, these same bankers, competing with each other to supply the demand for Paris bills, by their competition prevent the Paris rate from rising to gold export point. Lastly, they compete with each other in Paris, where all are sellers of bills on London against their New York purchases of London bills, and by that competition they reduce the rate for London bills in Paris to the point, at which, other things being equal, gold will go from London to Paris. What has happened, therefore, is that instead of our importing gold from London, and then exporting it to Paris, it has gone direct from London to Paris. COMPLICATIONS IN THE DETERMINATION OF GOLD POINTS