The Salt Lake herald-Republican. [volume] (Salt Lake City, Utah) 1909-1918, 1910-07-18
MONEY SYSTEM OF
GERMANY REVISED
Many of IeutOn's Difficulties
Like Those in the United
States.
EXPERT REVIEWS CHANGES
MONETARY COMMISSION FUR
NIsHEs ERUDITB REPORT.

est % given 90 the translation OF nc
Imperial German banking laws. when
has been prepared under The authority
OF the National monetary commission.
b1 the fact that % contains an intro
duction written ~ Dr. T. Koch. who
oriy recently resigned as governor OF
the Imperial banS. and has long been
considered the foremost monetary
authority IN Germany
The laws themselves include the
original bank act Of March IA. 1875.
which brought unity out Of the heter0-
Eoneous mass Of notes and systems OF
different types in Germany and the
subsequent laws by which the charter
Of the Imperial bank has been amend
cd af Intervals of 10 years. Among the
latter are included the law OF June
j. 1909. which resulted from the spec
Sal inquiry instituted by the German
imperial government during the year
Doctor Koch in hts Introductory re-
view Of these laws declares that the
conditions which prevailed in Germany
not much more than generation ago
with regard 20 circulation-c0iu. paper
money. and bank notes-"afforded a
striking picture Of our political confu-
sion Efforts 20 secure uniform
COMA 20 system by cooperation among
TIE German states. Including Austria.
had brought no satisfactory results.
PAPER money had been issued By the
governments 81 several OF the states.
which could DC passed beyond the lin
its Of the states which issued them
only with difficulty and loss.
Pru-sIa'S had Plight.
Paper which was more acceptable.
although not considerable in amount.
was Issued also upon special conCcs-
sions By railroad companies. municipal
sizes and other corporations. Practical
u In Prussia only. were conditions
toierabic where the Bank OF Prussia
" hich vested with the unlimited
right OF note issue IN 1856. had been
.H.H H.
man commerce in the crises Of 1857
1895 and 1870. and had developed into
central note bank for the greater
part Of Germany. There were STILL
however nine private note banks in
the old provinces OF Prussia. and other
German sovercigns made very liberal
use Of their authority OF granting the
privilege 81 note issue. and often on
81 scale quite exceeding the amount re-
Quired by the extent 81 their states.
The effort Of Prussia 90 protect her
scff BY forbiddin- the circulation OF
these foreign notes was unsuccessful
especially in middle Germany. because
Of the varied and changing business
relations Of the territories The cir
culation which was uncovered by bull
lion. excluding Bavaria. Increased. ac-
cording 90 the monthly records. from
about $4,000. 600 marks fS3.515.000). az
. the beginning Of The fifties. % an aver
axe ~ 2o2 2q6 600 marks In 1857 and
20 fO0.2si00O marks (s95.000.o0o) In
The men Of far-reaching genius who
had brought about the political union
~ Germany soon br,o3u1ght them TO r..
longer endured. Already tho -consti-
tuition OF the North German confcder-
alton Of July %. 1857. had provided for
Fubiecting such matters 60 the super
vision Of the confederation. Further
issues Of notes by the states were sus-
pended. except with the authority OF n
federal law. Tho coinage reform was
first taken NJ as n preliminary TO the
uriccation of the banking laws
Gold Standard Adopted.
Bv the law Of July @. 1878. the gold
standard was adopted and n coinage
provided for all or Germany uniform
ir character and denomination. al
90 bear the distinctive stamp OF the
local rovcrcign.
government set about the reform OF
the banking system on lines which
suggest In some respects the financial
history q the United states Provision
was made for reducing the circulation
OF government paper. and n committee
Jcct % uniform and more careful re-
rfricfione uuon the banks The issue
OF notes below 80 marks (fl2) was pro-
banks were required to publish month
4 bin e=nbodying further reforms. in
Guiding duty Of 4 per cent on uncov-
cred notes above certain amount. was
submitted 90 the ReichstaE on Novern-
her 3. 1874. The discussions on the sub
the general desire for an imperial bank
90 bc established in the public interest.
50 strong was this sentiment that the
discussion was adjourned until a bill
could be prepared establishing the
Ttcichsbank and providing FOR SIS grad
nal absorption Of the nofc-issuing
function throughout Germany. This bill
bcrnmc law on March "a. 1875 and.
with some modification I'm 1889. 1899.
and 1909. ls still tho fundamental bank
ing law OF the empire.
Compromise Hank system.
This act rested. according to the an
afvEis o. Doctor Koch. on n comnro-
mise % the central bank system with
the system u plurality Of banks.
which latter had its root IN the exist
Ing conditions. First Of all. ~ created
for number Of years a transitional
rG gc freed from the most pressing
evils. in order that ultimately expert
cncc would lead 10 the adoption Of an
adequate uniform system New note
privilege could be granted only by
Imperial legislation. The Rcichsbank
thus appears. though in "a moderate
sense. as the central note bank Of Ger
many The economic and political posi-