A theory is given for three closely related effects involving a nonmagnetic electron-tunneling barrier separating two ferromagnetic conductors. The first is Jullieres magnetic valve effect, in which the tunnel conductance depends on the angle between the moments of the two ferromagnets. One finds that discontinuous change of the potential at the electrode-barrier interface diminishes the spin-polarization factor governing this effect and is capable of changing its sign. The second is an effective interfacial exchange coupling -J cos between the ferromagnets. One finds that the magnitude and sign of J depend on the height of the barrier and the Stoner splitting in the ferromagnets. The third is a new, irreversible exchange term in the coupled dynamics of the ferromagnets. For one sign of external voltage V, this term describes relaxation of the Landau-Lifshitz type. For the opposite sign of V, it describes a pumping action which can cause spontaneous growth of magnetic oscillations. All of these effects were investigated consistently by analyzing the transmission of charge and spin currents flowing through a rectangular barrier separating free-electron metals. In application to Fe-C-Fe junctions, the theory predicts that the valve effect is weak and that the coupling is antiferromagnetic (J<0). Relations connecting the three effects suggest experiments involving small spatial dimensions. © 1989 The American Physical Society.