The Washington herald., 1908-05-31
GERMANY'S Big BANK
Institution Enjoys Unique
Position in FatherlaDd.
SUBJECT TO CHARTER LAW
Exempt from National Commercial
Regulations and Free from Pri-
vate Interests-COntrOI Ii Vested
In Central Committee Represent
ing StOckhOIders-Reser Fund.

consul William 9. Teichmann, OF Eib-
enstock. furnishes the following informa-
tion. compiled from German publication.
and also facts which he secured concern
ing the development Of the leading fnan-
cial institution Of Germany:
The Relchsbank is not government in
stitution; on the contrary. it is a stock
company. whose shares can be traded on
the stock exchange. like those OF any
other corporation, but IL holds an excep-
tional and privileged position. in so far
as II is exempt from German commercial
law, being subject solely to the banking
law of March IA, 1876, by which it was
created
Control of the bank Is confined by law
to the supervision Of a central committee
as an advisory and consultant body to a
board OF directors and its president. The
central committee represents the stock
holders, and the directors and its presi-
dent are appointed by the government
The bank Is free from the influence OF any
private interests. even that Of the stock
holders. save as their committee Is con-
suited by the board OF directors. The i'm
perial chancellor has the right TO supreme
control but practically the responsibility
for its management rests with the board
OF directors, and most OF all with its pres
ident.
Presidents Salary $3.50.
The president receives an annual salary
OF 10000 marks Css,52O). with the privilege
Of residing In the bank building. rent free
The vice president receives a salary OF
1900 marks (S4.2S4) per annum. and each
of the other seven members OF the direc-
torate from 1900 to 1900 marks (S2,l42 to
$3.50 per annum. with an allowance OF
$50 each for rent. AS the income OF
managers OF private banks, because OF
extra percentage remuneration. largely
exceeds the Reichsbank salaries. the d.
rectors repeatedly resign their positions
TO take offices In private banks.
The capital Of the Reichsbank is $42 S40,-
0O0 and notwithstanding that no interest
on deposits Is paid its deposits at the
close OF 1907 amounted 10 65S. 600, 900 marks
| Sl56. 604, 600. It's business has increased
TO such proportions that $50 branches have
been established In that number OF com
munities throughout the empire.
| The Reichsbank has the right to issue
/ bank notes according 10 its needs, but Is
| compelled to hold as a reserve IN its
/ treasury. as security for its circulating
|
money equal to one-third OF the notes
issued. This German money means gold.
silver. nickel. and copper coin. the thalers
issued by the former independent German
states. gold in bars, or foreign coin, the
remainder 70 consist Of discounted promis-
/ sorry notes. with maturity limited TO three
months and guaranteed by responsible
/ solvent creditors.
How Reserve IL Constituted.
The reserve fund OF the bank includes
as security for its notes legal tender In
doing so the legislators took into consid-
Grafton the noneirculating and aonlnter-
est-bearing gold held in reserve by the
government In the Julius Tower, at Span
dau, near Berlin. amounting 10 ZOO. 900
marks Cs2s. .5sO.OO0). The volume of legal
tender uncovered by metal which has been
issued by the government as ''Reichskas-
| senscheine'' amounts 10 the value Of the
gold reserve at Spandau which is sup
posed 10 represent the metal reserve for
this legal tender, although there is no le-
gal stipulation 10 this effect, hence It's
! classification in the assets OF the Reichs-
| bank. The Reichsbank is required TO cash
Immediately upon presentation al the Cen
/ trail Bank at Berlin all its notes in Ger
man money recognized as current and all
notes presented at its branch institutions
so far as the cash supplies and money
needs Of the branches permit.
! The issue Of bank notes above the fixed
| legal limits involves tax OF per cent on
all notes not covered by metal. and neces-
\ states a raise in discount whenever such
an emergency arises. The total amount
thus paid by the bank 20 the government
as note taxes since 1898 up TO January l,
1907, was 100000 marks ga 046, ,0O0). The
banks metal reserve and legal tender on
January l. 1905 covered Il 1-2 per cent of
the bank notes issued. the legal minimum
Of the reserve being 80 Is per cent.
| The annual dividend OF the bank Is 3 l-2
per cent. the remainder Of the profits be-
Ing divided between the imperial treasury
and the stockholders. the first receiving
/ three-fourths and the latter one-fourth
thereof. Including the regular dividend
OF IL per cent, each share yielded a to-
tai profit of So per cent In 1906.