The Reichsbank, 1876-1900 (Volume 5615) (Paperback)

Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: CHAPTER III. NOTE ISSUE. NOTES THE MOST IMPORTANT LIABILITY OF THE REICHS- BANK. Bank notes are the most important liabilities of the Reichsbank. Through these the Bank receives its special character, with these all other liabilities are connected, and by these the assets are determined. The right to issue notes is a privilege which has given rise to the exhaustive legal provisions regulating the Bank's business activity and to the participation of the Empire in the administration and in the division of the net proceeds. The fact that bank notes are obligations which fall due daily and have the same importance for the national economic system makes them closely related to transfer accounts (Giroguthaben). Transfers, which, next to notes, are the most important liabilities of the Reichsbank, have thus been stimulated and materially increased. If bank notes are to fulfill their functions and not cause more harm than good, it is necessary that banks employ only for short credit the notes issued in excess of their stock of metal, so that a quick reflux of funds from their investment will meet demand liabilities. For this reason the Bank Act restricts the assets of the Reichsbank to short-term grants of credit. The economic importance of the Reichsbank, like its constitution and its business activity, depends in the firstplace on the right to issue notes. This right puts the Bank in a position to adapt, within certain limits, the monetary circulation to the fluctuating demands for money; it makes the Bank the last source of money for the German economic system, gives it a certain influence over the money market and its transactions, and enables it to regulate both the domestic and the foreign demands on the German monetary system. LEGAL REGULATIONS CONCERNING NOTE ...