El Paso herald. (El Paso, Tex.) 1901-1931, 1910-04-06

complaints by private banks. The loves
bank rate was still higher than the rat
| of the other banks 49,
20. Is the Reichsbank disposed t.
| favor every application for discount o.
| loans IL the character of the Offering
| be satisfactory? A. Tt is their duty Il
| listen to everyone who comes for ac-
| commodation, whether he has an &C
count or not. The principle of the
Reichsbank is not to serve a part o.
| the community, but the whole. The
| Reichsbank is for everybody
| How Government Aids.
| How the government is aided with
! temporary accommodation to tide ovei
| periods of deficient revenue was set
| forth as follows:
| The government deposits treasury
! bills with us for safekeeping. They alsc
| deposit funds with us as private firm
| or bank might do. If they Withdraw
or their credit runs low, we usually
| purchase from them treasury bills, cred
ting their account with the proceeds
60 What rate do they bear? A. They
do not bear a fixed rate. but are dis
1 counted as any other bills.
%. Is there an exception made in
| the rate to the government? A. No.
90 To any other institution or per-
| son? A. No.
20. What are the relations of tie
| German government to the bank in
the conducts of its business? What
is required of the bank? 4. First, the
bank has to regulate the circulation
of money and, second it has to handle
the giro or transfer business and to
make payments for the government. as
well as to receive the sums due to the
same wherever branches of the Reichs-
ba2k exist.
20. Does the government desopit in
tho different branches of the ReichS-
bank? A. Yes. Every department of
The government has it's own account
and is treated the same as any other
customer The Reichsbank is the fisca /
agent of the imperial government. AMI
Trey &c everything that is required
without compensation. Without being
obliged, the Reichsbank might head a
syndicate for taking over a government
Loan
On the question of the contingent
note issue, under a special tax of per-
cent. which has attracted so much at
tention in the United States, the policy
OF the bank in supplying the market
with the amount of notes required,
without regard to the discount rate TO
the public, was discussed between SEN
ator Aldrich and his associates on the
one side and the bank Officers on the
other, as follows:
Discount for Bills.
20. Do you always charge a higher
rate of discount for bills when you have
large amount of taxed notes out
standing? A. No. On occasions the
Reichsbank has not increased its rate
of discount above 5 percent. At times
We have discounted even at percent.
when we have had to pay tax of
percent.
q. It has been suggested tosus as
matter of policy in times of stress that
it would be better for you TO add the
8 percent tax TO the rate Of discount.
a The Reichsbank must be considered
in the first place as public institu
tion which has to take care of the pub
lie interest, and that it is secondarily
a money making institution.
%. Is there any connection between
the rate of discount and the issue of
taxed notes; in other words. could there
be condition of affairs where the
rate was 611 percent and there were
no taxed notes outstanding? A. Yes
That has happened. The fact of the
Reichsbank having to pay a tax at GER
tain times does not in itself influence
the rate Of discount The directors de-
eide whether in their judgment the
conditions warrant or require the rails
ing Of the rate
1t was further explained by the off
GERS of the Reichsoank that foreign
bills of exchange could be used as a
part of the security for note issue. but
the notes were never treated as an as
set. Upon this point the following col
loquy occurred:
20. According to your weekly state
ment you carry none OF your own notes
as an asset? A. No.
20. They are merely held here and
in your branches in store and only re-
garded as issued when paid out? A
Yes; they are considered as issued only
when out Of our possession.
20. But 8 note in the hands of the
Deutsche bank would be an issued note?
A. Yes.
Bookkeeping System.
20. What is the system of bookkeep-
ing, II man deposits today Reichs-
bank note of 100 marks? A. The
Reichsbank would credit the man 100
marks and deduct 100 marks from cir
culation.
20. 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 coun- |
try, the question, What steps were |
taken at the time of the panic of
1902" led TO the following discussion: |
20. You must have taken some steps
to add to your gold at that time. What |
step did you take? A. We increased |
the rate of discount. We consider that |
this measure is the only effective one |
20. How high was the rate al that |
time? A. Seven and onehalf percent
20. If this increase had not been suf- |
ficient, you would have further in !
creased the rate? A. Yes.
20. Do you also loan money without
interest to people who are importing /
gold? A. Yes; that is done We make |
advances without interest ito importers
for the time the gold is in transit. We
do that even in times when the ordi- |
nary gold import point is not reached
20. 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 Eng
and does.
20. Pay a higher price? A. Yes; but
his is not important. The real remedy
s to raise the rate of discount, besides
selling a certain amount Of foreign
bills"