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Arbitrage  transactions  are  the  sales  and
purchases  of  stocks  which  are  effected  by  letter,
telegram  and  telephone  between  the  Stock
Exchanges  of  different  countries.  In  these
international  dealings  the  level  of  the  respective ­
  quotations  at  any  two  centres  is  determined ­
  by  the  current  rate  of  exchange  between
them.  The  rate  of  exchange  becomes  the
arbiter  of  value—hence  the  term  arbitrage.
For  instance  :  Paris  quotes  Turks  in  francs,
and  it  is  therefore  necessary  to  work  out  the
French  franc-quotation  by  the  rate  of  exchange
into  its  equivalent  in  English  money  before
an  arbitrage  dealer  can  determine  whether  it
is  possible  to  buy  or  sell  Turks  more  advan-,
tageously  through  his  agent  on  the  London
market  than  he  can  buy  and  sell  them  on  his
own  Bourse.  It  is  the  constant  rush  on  the
part  of  arbitrageurs  to  buy  stocks  in  the
market  where  quotations  are  low,  and  to  sell
them  in  the  market  where  quotations  are  high,
which  keeps  internationally-dealt-in  stocks  at
a  uniform  price  at  the  various  centres.
In  these  international  securities,  of  course,
the  most  powerful  centre  determines  the  quotation. ­
  Thus,  if  the  Paris  public  is  more
interested  in  Turks  than  Berlin,  Paris  is  able
to  absorb  or  supply  larger  quantities  of  stock,
and  it  is  then  the  Paris  market  which  controls