The Clarksburg telegram. [volume] (Clarksburg, W. Va.) 1874-1926, 1910-06-23
In Regulation of the German
Money Market is Told in
Monograph.

WASHINGTON, d. c., June 21,-
An exposition OF the part which the
Reichsbank, or Imperial Bank of
Germany. plays in the regulation Of
the German money market is made
in the interesting monograph on pc
velcpment of the German banking
system" by Robert Franz, editor of
Der Deutsche oekonomist," which has
tust been made public by the Nation
al Monetary Commission in a volume
entitled Miscellaneous Articles on
German Banking. one of the strik-
ing facts brought out is the part
which the Reichsbank really pplays as
"a clearing house, through the transfer
of funds between its clients al its
many branches and between the joint
stock banks, which keep accounts at
the Reichsbank for the purpose OF
clearing and rediscounts. The total
volume OF bank transfers (gro trans
actions) is recorded in Germany and
shows a remarkable growth within re-
cent years. In 1883 the amount OF
such transfers reached 63.S25 million
marks $15,5OO,00O, OO0). The amount
increased BY about so per cent in the
next seven years. standing for 1895 at
93,69S million marks. The next five
years developed growth up to 1900
of 1862 million marks. The year
1905 witnessed further development
to 922,l37 million marks; 1906, 245.-
622 million marks; and 1907, 26O, G57
million marks (albout s63,OOO,O 0O.-
O00). This amount was only about IS
per cent less than the clearlngs at
New York In the same year and only
about IS per cent less than the clear
ings at New York in the year 1908.
In addition to these facilities Of
settling transactions through the
Relchsbank. clearing houses existed
in Germany, but their operations are
less Important than in some countries
by reason of the operations through
the central bank. In reference to the
character of these transfer nc counts
kept at the Relchsbank, Herr Franz
declares that statistical investigation
demonstrates considerable Increase
in the volume Of transfer transact
tions within the more recent years.
accompanied by a larger use of the
deposits on the part OF the giro de-
posltors. It appears particularly that
the average of balances on giro ac-
count has Increased far less than the
average volume OF transfers from and
to these accounts. The Reichsbank,
therefore, during the fail Of 1906. felt
compelled to adopt new requirements
for It's minimum deposits. 1t was
shown that while the average amount
of giro deposits had increased - per
cent within the decade 1S9S-19o7. the
volume OF transfers on account Of
these deposits had grown IS per cent
during the same period.
1t is true that the bank pays no in
terest on these deposits, regarding the
free use of them as the equivalent for
the expense caused by the transfer
operations on account of these depos-
its. But with the growth in volume
OF these oPoIdllpus inc expenses OF
the bank also increase, and the re-
quirement of the bank Of an adequate
minimum limit OF deposits seems
therefore fully justified. Another.
though less important, reason which
made the change desirable was that
by increasing these minimum require
ments the operating basis Of the bank
was strengthened in the se,,se that
an increase Of giro deposits vas tan
tamount 10 strengthening Of its cash
reserves, which in turn enabled IT toI
increase It's note circulation by the