iginally
L12,500,000, increased to L14,811,450 by the lapse of the issues of other
banks allowed to it, has been extended by these and by the act of the 5th
of June 1902 to L23,641,450. Against the notes thus issued which are not
represented by specie, treasury notes (_Reichskassenscheine_, the legal
tender notes of the [v.03 p.0344] empire)[6] and notes of the issuing banks
which are allowed to be reckoned as specie or discounted bills, must be
held--maturing not later than three months after being taken--with, as a
rule, three, but never less than two, good indorsements. There is also a
provision that at least one-third of the notes in circulation must be
covered by current German notes, money, notes of the imperial treasury, and
gold in bullion or foreign coin reckoned at L69, 12s. per pound fine. The
Reichsbank is bound by law to redeem its notes in current German money. It
is stated that this may be gold coin or silver thalers, or bar-gold at the
rate of 1392 marks (L69, 12s. reckoning marks as 20 = L1) the pound fine of
gold. In practice, however, facilities have not always been given by the
Reichsbank for the payment of its obligations in gold, though the
importance of this is admitted. In the balance-sheet for 1906 the bills
held amounted to L67,000,000, and the loans and advances to L14,200,000.
The notes issued averaged for the year L69,000,000. The gold held amounted,
30th December 1906, to L24,069,000. If the condition of business requires
that the notes in circulation should exceed the limits allowed by the law,
the bank is permitted to do this on the payment of 5% on the surplus. In
this respect the German act differs from the English act, which allows no
such automatic statutory power of overpassing the limit of issue. Some good
authorities consider that this arrangement is an advantage for the German
bank, and the fact that it has been made use of annually since 1895 appears
to show that it is needed by the business requirements of the country. Of
late years the excess of issue of the Reichsbank has been annual and large,
having been L25,267,000 on the 29th of September 1906 and L28,632,000 on
the 31st of December of the same year. The amount of the duty paid on the
excess issue in the year 1906 was L184,764, and the total amount paid thus
from 1876 to 1906 was L839,052. The increase of the uncovered limit
(untaxed limit of issue called in Germany the "note reserve") has not been
sufficient to obviate the n