A E B A R B 311 and committed suicide. The dynasty founded by Arbaces lasted till its overthrow by Cyrus, 559 B.C. This account of the Median empire rests on the authority of Ctesias, as alven in Diodorus (ii. 24, 34), and cannot be reconciled with what is stated by Herodotus, who is probably re ferring to another event. Arbaces, the Mede, is to be distinguished from the satrap of the same name who commanded a division of the army of 1 Artaxerxes in his war with his brother Cyrus. ARBELA (TO. "Ap(3-rja), now Arbil or Erbil, a small town in the province of Shehrezur, situated to the west of the Tigris, in the plain between the Greater Zab (Lycus) and the Lesser Zab (Caprus), and on the route between Mosul (Nineveh] and Baghdad, about 40 miles from the former. The greater part of the town, which seems at one time to have been very large, is built on an artificial hill about 150 feet high. Arbela has given its name to a battle fought (331 B.C.) between Alexander the Great and Darius Codomannus, though, in fact, the scene of the conflict was Gangumela, and it was only in the subsequent pursuit that the conquerer arrived at Arbela, where Darius had left his baggage and treasure. It became the seat of the Eyubide Sultan Saladdin, in 1184, was bequeathed in 1233 to the caliphs of Baghdad, was plundered by the Mongols in 1236 and in 1393 by Timour, and was taken in 1732 by the Persians under Nadir Shah. The popula tion, which varies from 2000 to GOOO, is chiefly composed of Koords. ARBITRAGE (from the French arbitrer, in the second ary sense of comparing and settling accounts, derived in its turn from the primary sense of arbitrating disputes), is a term that is applied both to a calculation and to a trade : 1st, To the calculation of the relative simultaneous values at any particular moment of any particular merchan dise, on one market, in terms of the quotations on one or more other markets, taking, of course, the exchanges into account ; and 2d, To the business founded on such calculations, of buying (or vice versa) wholesale in the cheapest market for the time being, and simultaneously reselling (or vice versa) equal amounts in the dearest market, or if not simultaneously, at least as nearly simultaneously as post and telegraph will permit. Arbitrage proper is a separate, distinct, and wefl-defined business, with three main branches. Two of these, viz., arbitrage or arbitra tion in bullion and coins, and arbitration in bills, also called the arbitration of exchanges, fall within the busi nesses of bullion dealing and banking respectively. The third, arbitrage in stocks and shares, is arbitrage properly so called, and so understood, whenever the word is mentioned without qualification among business men, and it is strictly a Stock Exchange business. A few of the great financial firms outside the Stock Exchange combine the three arbitrations ; they are dealers in bullion, in bills, and in stocks and shares all over the world ; but, as a rule, the arbitrage properly known as such, is the business of an arbitrageur, who is almost always a member of a Stock Exchange or " Bourse," and his arbitrations with very few exceptions are neither in bullion nor in bills, but in Government and other stocks and shares. In this strict and accurate sense, arbitrage may be defined to be a traffic, consisting in the purchase (or sale) on one Stock Exchange, and simultaneous or nearly simultaneous, re-sale (or re-purchase) on another Stock Exchange, of the same amount in the same stocks or shares, which at any moment are found, on telegraphic or other advices, to be quoted and negotiable on two or more markets at a difference in price (arising from whatever temporary cause), sufficient to cover the cost of transmission, commission, interest, insur ance, and leave an adequate profit over and above to be divided by the operators at both ends. The benefit to the various communities at large resulting from the operations of the arbitrageur consists first, in the general and constant process of equalisation, equilibration, and the consequent stability in the prices of a large number of stocks and shares, and of an enormous amount of capital throughout the world; and second, in the greater inducement thus afforded for the economy of idle capital, by means of temporary investment in interest-bearing securities with a minimised risk of fluctuation. The great Government loans are, in the first instance, the natural subject-matter of arbitrage ; and then, in a minor degree, a variety of other securities. British Consols, however, form one great excep tion to the rule, inasmuch as, from one cause or another (but mainly because they are almost entirely held in one country), no arbitrage business is done in these Consols, notwithstanding that they can be now dealt in "To Bearer." On the other hand, there is an enormous arbitrage business in the new French Five per cents., which, with the United States " Five-Twenties," covering between them a round Jive hundred millions sterling, probably stand first in the present list of arbitrage stocks. Indeed, but for the system of arbitrage, it is not easy to see how the great French loans of 1871-72 could have been carried at all without convulsing the financial world. Arbitrage, however, by making the new security universally negotiable, enabled all the great bankers and capitalists of the world Euro pean, American, and East Indian to join hands simul taneously in concluding an operation gigantic even for modern times. Next to "French Fives" and " U. S. Five-Twenties," on the arbitrageur s list would come, in various order, according to the men and the circumstances, "Turkish," "Egyptian," "Italian," "Spanish" "Russian," some South American stocks, and to a very considerable extent, the shares and obligations of the great Lombardo- Venetian Railways. And these stocks, if we add some East Indian securities, cover perhaps the widest area of international arbitrage. But a vast variety of minor securities constitute financial flora, so to speak, with minor and local areas of distribution, known only to particular localities, or to financial specialists. It has been stated above that some great financial houses do each kind of arbitration themselves. Similarly, one or two great firms of arbitrageurs do their own bill-broking; but although arbitrage business is carried on by a considerable number of the leading Stock Exchange firms, there are perhaps only two that arbitrate their own bills this arising from certain regulations that were passed by the London Stock Exchange in 1829 not having a retrospective effect. With these exceptions, the arbitrageurs do not undertake the banking part of the business themselves, but pay their bankers a margin to do it for them. The details of the system of arbitrage, and all the combinations with other business that may arise, constitute a special profession. The literature of the subject is extremely meagre. Mr Gosclien s Theory of Foreign Exchanges, London, 1866, is general and theoretical, but throws great light upon particular aspects of the philosophy of arbitrage, without touching specially on the details of the subject itself. The principal other works are Kelly s Cambist, 1811, 1835 ; Otto Swoboda, Die Kaufmdnnischc Arbitrage, Berlin, 1873, and Borsc und Acticn, Cologne, 1869 ; Coquelin et Guillaumin, Dictionnaire dc I Economic poliliquc, Paris, 1851-53 ; Ottomar Haupt, London Arbitrageur, London, 1870; Charles le Touze, Traits TMorique el Pratique du Change, Paris, 1868 ; Tate, Modern Cambist, London, 1868; Simon Spitzer, Ueber Miinz- und Arbitragcnreehnung, Vienna, 1872; J. W. Gilbart, Principles and Practice of Banking, London, 1871. ARBITRATION, a term derived from the nomenclature of the Roman law, and applied to an arrangement for taking, and abiding b} T , the judgment of a selected person in some disputed matter, instead of carrying it to the established courts of justice. Arrangements for avoiding the delay
and expense of litigation, and referring a dispute to friends