The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1910-04-07

also deposit funds with us as pri-
vate firm or bank might do. II they
withdraw or their credit runs low, we
usually purchase from them treasury
hills, creating their account with the
proceeds.
%. What rate do they bear?-A.
They do not bear fixed rate, but are
discounted as any other bills.
g. Is there an exception made in
the rate to the government "A. No.
g. To any other institution or per-
son?-A. No.
%. What are the relations Of the
German government to the bank in
the conduct of its business? What is
required Of the bank?-A. First, the
bank has to regulate the circulation
of money, and, second, 1t has to handle
the giro or transfer business and to
make payments for the government,
as we'll as to receive the sums due
to the same, wherever branches of the
Reichsbank exist.
@. Does the government deposit in
the different branches of the Reichs-
bank?-A. Yes. Every department or
the government has its own account
and is treated the same as any other
customer. The Reichsbank is the
fiscal agent of the Imp al govern
ment. and they do ever 'eax that is
required without compens.. . n. sth-
out being obliged, the Re-, VII.
might head syndicate for To- Hc
over government loan" 1c
On the question of the contingent
nj SoH fox> 4PP P3x,a
per cent, which has attracted so much
attention in the United States, the
policy of the bank in supplying the
market with the amount of notes re-
qnired, without regard to the discount
rate to the public, was discussed be-
tween Senator Aldrich and his as
sociates OH the one side and the bank
officers on the other. as follows:
@. Do you always charge higher
rate of discount for bills when you
have a large amount of taxed notes
outstanding?-A No. On occasions the
Reichsbank has not increased its rate
of discount above five per cent. At
times we have discounted even at
three per cent, when we have had
to pay tax of five per cent.
g. 1t has been suggested to us as
"a matter of policy in times of stress
that it would be better for you to add
the five per cent tax to the rate of
discount.-A The .Reichsbank must be
considered in the first place as pub
lie institution which has to take care
of the public interest, and that 1t is
secondarily a money making institu-
tion.
@. Is there any connection between
the rate of discount and the issue Of
taxed notes; in other. words, could
there be q condition of affairs where
the rate was six and one-half per cent
standing?-A. Yes. That has happen
ed. The fact Of the Reichsbank hav-
ing to pay tax at certain times does
not in itself influence the rate of dis
count. The directors decide whether
in their judgment the conditions war
rant or require the raising of the
rate"
It was further explained by the Of
ficers Of the Reichsbank that foreign
bills Of exchange could be used as
part of the security for note issue, but
the notes we're never treated as an
asset. !'non this point the following
colloquy occurred:
~. According to your weekly state
ment you carry none Of your own
notes as an asset?-A. No.
@. They are merely held here and
in your branches in store ami only
regarded as issued when paid out?-
A. Yes; they are considered as issued
only when ou: Of our possession.
20 But note in the hands of the
Deutsche bank would be an issued
note:-A. Yes.
20. What is the system of booh-
keeping, if man deposits today
Reichsbank note Of 100 mark?-A.
The Reichsbank would credit the man
100 marks and deduct 100 mark from
circulation.
@. The item, Issues of other
banks'-are those the notes Of the
four other banks of issue?-.A. Yes"
Upon the measure which is relied
upon so largely by the European
banks to protect the gold stock of the
country, the question, what steps
were taken at the time of the panic of
1902" led to. the following discussion:
@. You must have taken some
steps to add to your gold at that time.
What steps did you take?-A. We ~
creased the rate of discount. We con-
slider that this measure is the only
effective one.
@. How high was the rate at that
time?-A. Seven and one-half per
cent.
@. If this increase had not been
sufficient. you would have further in
creased the rate?-A. Yes.
@. Do you also loan money with
out interest to people who are i'm
porting gold?-A. Yes; that is done.
We make advances without interest to
importers for the time the gold is in
transit. We do that even in times
when the ordinary gold import point
is not reached. .
%. Are there any other steps taken
to increase the import?-A. Well, be-
sides granting loans without interest
on gold imports. we may raise at such
times our tariff for the purchase of
foreign gold coins. as the Bank of
ENGLAND does.