IT has been explained in outline how foreign bills feed the foreign currency balances of the banks, and how the exchange trader operates on those balances at rates which are fixed by the factors ruling in the foreign exchange market. Before we proceed to analyse these factors, 1 it is best to complete our mental picture of the foreign exchange world by examining in detail some of the more important credit operations between bankers and merchants centreing round the foreign bill. This chapter is accordingly devoted to the detailed procedure for dealing with foreign bills.