Evening star., 1924-07-17

lized once more on the population. re-
ceiving a fresh stimulus from the
altered condition of things to make
provision for old age out of current
so on. Reservoirs of this sort are
thus once more feeding the steam
of credit
A further source Of money avail.
able for credits is to hand in the in
creased cash surpluses which in many
places have accompanied the stabil-
ization. and which are loaned out on
the money market for the time they
are not needed. The public money
held by the post, railway and finance
departments. etc, may be mentioned
by way of example.
Compared in Importance with the
Reichsbank and the Rentenbank these
domestic sources of credit occupy a
subordinate position. The home sup
ply of credit has been set upon an
entirely new basis. and facilitated to
| quite an important degree, by the
formation of the Rentenbank.
Funds of the Rentenbank.
The Rentenbank is set up as VOL
| unfairly assumed liability Of the
| money making classes. such as agri-
and so on, and on the basis Of this
liability rentenbriefe (warrants of
| trading revenueD have been made out
| by the Rentenbank. These revenue
| warrants are mobilized in aid Ct the
currency by giving the Rentenbank
authority to print renten (revenue)
| bank notes up to the amount of its
holding in revenue warrants and to
| issue them as legal tender. The total
! capital of the revenue bank (Rentcn-
bank) amounts to 5000 :0OO: 600 renten
marks, of which S00.00O,000 form the
reserve, while 2,400. 100000 are devoted
| to government credits. by which the
| Reichsbank has been relieved of the
| role it has hitherto played in supply
| ing credit to the reich. The balance
| of 1,200,0 900 is loaned out. half to
agriculture and half to the other
wealth producing Industries and
| trades.
These loans and advances are made
almost exclusively through the me-
dunn of the Reichsbank, which con-
| trolls the credit policy in its capacity
| as the central note issuing. 1nstltu-
| tion now as it did formerly. There Is
| no legally fixed standard of value
| between the renten mark and the
| paper mark, but it has been found
possible by the aid of this institu-
| ton of the renten mark to maintain
an actual parity of 1,000,000,00O paper
| marks to one renten mark or one
gold mark for the past six months.
Value Behind All LoanA
In addition to that the Reichsbank
| naturally retains it's privilege in the
| matter of note issue and also carries
on it's paper mark credit business as
| it formerly did. But in view Of the
! consideratio that any excess in the
granting of credit can conjure up
| the greatest dangers to the stability
| of the German currency the Reichs-
bank is persistent in it's resolution,
in spite of the undeniable need for
capital, to restrict to the narrowest
limit both its renten mark and its
paper mark credits. The Reichsbank
is absolutely clear upon the point
that no supply of credit by the bank
of emission can keep pace with the
monstrous depreciation of property
| values in Germany. Such supply of
credit can be based, precisely as in
normal times, only on one necessary
condition of production, and that is
that every grant of credit must have
for its counterpart a corresponding
creation of real values in new goods.
If we find the view put forward
occasionally both at home and abroad
that on the basis of the principles
just sketched the Reichsbank has
already gone too far with its credits,
the fact is overlooked that such a
widely extended tranquilization has
been effected in the interchange of
circulating medium by the introduc-
tion of the renten mark that once