man banks, including those of banks
established to do business in other countries, as South America and the Far
East, and of the Bank of Germany, are about L133,000,000, with further
resources, including deposits, notes and mortgage bonds, amounting to fully
L414,000,000. The amount of the capital compares very closely with that of
the capitals of the banks of the United Kingdom. The deposits are
increasing. The deposits, however, are not the whole of the resources of
the German banks. The banks make use, besides, of their acceptances in a
manner which is not practised by the banks of other countries, and the
average note circulation of the Reichsbank, included in the statement given
above, is between L60,000,000 and L70,000,000.

A large and apparently increasing proportion of the resources of the German
banks is employed in industrial concerns, some of which are beyond the
boundaries of the empire. The dangers of this practice have called forth
many criticisms in Germany, among which may be quoted the remarks of Caesar
Strauss and of Dr R. Koch, the president of the Reichsbank. Dr Koch
especially points out the need of the development of powerful banks in
Germany unconnected with speculative business of this kind. The object of
employing their funds thus is the higher rate of interest to be obtained
from these investments than from discounting bills or making loans at home.
But such an employment of the resources of a bank is opposed to all regular
rules of business and of banking tradition, which abstains from making
fixed investments of any large part of the resources of a bank. On the
other hand, Dr Koch observes that the risks of the one "reserve system"
mentioned by Bagehot are not to be feared in Germany.[5] The recent
movement in favour of concentration among the banks has been described by
Dr E. Depitre and Dr Riesser, who give particulars of the business done by
these banks, which does not correspond with banking as practised in the
United Kingdom, being more of an industrial character.

There are also many private banking firms in Germany which do a
considerable amount of business.

The Reichsbank, by far the most powerful banking institution in Germany, is
managed by the bank directory appointed by the chancellor of the empire.
The shareholders join in the management through a committee, of which each
member must be qualified by holding not less than three shares. The
government exercises complete powers o