though it actually was, it would have been intolerable but
for the precautionary measures adopted in July and the ingenious
devices applied by the Reichsbank immediately after. The first step
taken was to substitute short-terms credit for long. The gold in the
Reichsbank increased steadily, and from 1,009,000,000 marks on July 7,
1913, it rose to 1,356,000,000 by July 7, 1914. The war treasure
hoarded in the Julius-Tower was doubled, so as to enable the Imperial
Bank to issue 720,000,000 marks on the strength of it, whereby its
gold cover was augmented from 1,253,000,000 to 1,447,000,000. A
further considerable reserve of silver was laid by, which proved
extremely useful later on. One result of this policy was that on the
fatal 31st July, no less than 4,500,000,000 marks in banknotes could
be issued without exceeding the limits prescribed by the law.[109] A
network of Loan Banks was also created throughout the country in which
every one, possessed of property of any description, could obtain
credit to any amount, provided the pledges warranted the advance.

[109] One-third gold cover is the amount fixed. Cf. Professor
J. Plenge, _Der Krieg und die Volkswirtschaft_.

Nor were the large groups of business men neglected who had no pledges
to offer yet sorely needed credit. For their behoof War Credit Banks
were instituted, which transacted business on curious lines. A city or
town subscribed a third or even more of the shares of the borrowing
company, and the Imperial Bank conferred the right of rediscounting
bills of exchange up to an amount equal to three times the value of
the capital, and sometimes even more. Institutions were opened for
advancing money on house property, and for assisting special branches
of industry. The Hansa-Bund, for instance, founded a War Credit Bank
for "the Middle Classes" which, with the authorization of the
Reichsbank, rediscounts bills of exchange drawn by individuals for
whom the Commune vouches. Associations were constituted in the country
and in towns, and the nature of their work is evidenced by the 18,000
rural Savings and Credit Banks and 16,000 urban and trade
associations.[110] For farmers and struggling landowners, a Central
Board, for the purchase of machines, was created, which also
superintended the equitable distribution of orders among industrial
firms.

[110] These figures are drawn from statistics published in
July 1914. Cf. Dr. Karl Hildebrand, _Ein stark