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61ST CONGRESS )

2d Session

}

SENATE

/ DOCUMENT

I

No. 574

NATIONAL MONETARY COMMISSION

German
Imperial Banking Laws
EDITED BY

D R . R. KOCH
Former President of the Reichsbank

Together with the
German Stock Exchange
Regulations

Washington : Government Printing Office : 1910




NATIONAL MONETARY COMMISSION.

NELSON W. ALDRICH, Rhode Island, Chairman.
EDWARD B . VREELAND, New York, Vice-Chairman.
J U L I U S C. BURROWS, Michigan.
E U G E N E H A L E , Maine.
PHILANDER C. K N O X , Pennsylvania.
THEODORE E . BURTON, Ohio.
J O H N W . DANIEL, Virginia.
H E N R Y M. TELLER, Colorado.
HERNANDO D . MONEY, Mississippi.
J O S E P H W . BAILEY, Texas.




J O H N W. W E E K S , Massachusetts.
ROBERT W . BONYNGE, Colorado.
SYLVESTER C. SMITH, California.
LEMUEL P . PADGETT, Tennessee.
GEORGE F\ BURGESS, Texas.
A R S E N E P . P U J O , Louisiana.
ARTHUR B . SHELTON, Secretary.

A. PIATT ANDREW, Special Assistant to Commission.

CONTENTS.
P A R T I.—BANKING LAWS.
Page.

Introduction by Doctor Koch
Notes to the introduction

2

1-27
9~33

BOOK O N E .

I. Bank act of March 14, 1875*.
Chapter I.—General provisions
35-38
II.—The Reichsbank
38-53
III.—Private note issuing banks
53-60
IV —Penal provisions
60-62
V.—Final provisions
62-64
Notes on the bank act
65-89
Appendix to section 9
91
I I . The Reichsbank statute of May 21, 1875
93-103
Forms of Reichsbank certificates of stock
105-108
Notes on the statute
109-112
I I I . Treaty between Prussia and the German Empire concerning
the transfer of the Bank of Prussia to the German Empire. 113-119
Notes on the treaty
,.
121
IV. Law of June 7, 1899, concerning changes in the bank act__ 123-127
V. Law of February 20, 1906
128
VI. Law of June 1, 1909, concerning changes in the bank act__ 128-134
BOOK T W O .

I. General provisions concerning business relations with the
Reichsbank
135
II. Purchase of bills of exchange:
A. Purchase of bills on Germany
135-138
B. Purchase of bills and checks on foreign countries,_* 138-153
I I I . Sale of bills and checks on foreign countries
153-157
IV. Purchase of redeemable bonds
157-158
V. Loans on pledges:
A. Provisions
158-165
B. Classification of securities which may be hypothecated in the Reichsbank
165-171
VI. Deposit and transfer of bank-accounts transactions (Giroverkehr):
A. Unlimited giro transactions
171-176
B. Limited giro transactions
176-178




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Page.

V I I . Clearing houses and their members
179-182
VIII. Transfer to accounts and remittances:
A. Domestic banks
183-186
B. Foreign countries
189
I X . Business on commission
187-191
X. Mortgage transactions
192-195
X I . Acceptance of noninterest-bearing deposits
196
X I I . Sealed deposits
— 197-201
X I I I . Open deposits of securities:
A. General provisions
203-204
B. Conditions for safe-keeping of open deposits
204-213
C. Conditions for the safe-keeping of deposits of wards
and minors
213-217
XIV. Collection of bills by means of checks
218

PART II.—STOCK EXCHANGE REGULATIONS.
I. Stock Exchange law, as amended May 8, 1908
221-252
I I . Regulations for the Berlin Exchange of December, 1908
253-276
I I I . Announcement concerning the listing of securities on the
Exchange, Berlin, 1896
277-286
IV. Provisions concerning brokers on the Berlin Exchange, July,
1906
287-298
V. Regulations of the Clearing Association for investments in
futures on the Berlin Stock Exchange, February, 1909
299-310
VI. Regulations of the clearing office of the Berlin Kassen-Verein
for investments in futures on the Berlin Stock Exchange,
February, 1909
311-318
Index to German Banking Laws
319-328




IV




PART I
German Banking Laws




GERMAN IMPERIAL BANKING
LAWS.a
INTRODUCTION.
By

Dr.

R.

KOCH,

Former president of the Reichsbank.

The conditions which prevailed in Germany, not much
more than a generation ago, with regard to the media of
circulation—coins, paper money and bank notes—afforded
a striking picture of our political confusion. The constant
effort towards a uniform coinage system brought no
satisfactory result. The Vienna Monetary Convention
of the 24th of January, 1857, which was a result of the
Dresden Monetary Convention of the States of the Zollverein of July 30, 1838, had indeed adopted the single
silver standard, at that time the prevailing one in Germany, and had introduced for the contracting States
(the Zollverein and Austria, including Liechtenstein)
the Zollverein pound of 500 grams as the standard
coinage weight. But within these limits there were
still three distinct standards: the thaler standard in
North Germany (with various subdivisions of the thaler),
the 523^-gulden standard in South Germany, and the
45-gulden standard in Austria (including Liechtenstein). In addition there were the earlier coinage
a The English translation has been prepared for the National Monetary
Commission by Frank F . Rosenblatt, A. M., of Columbia University.




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standards of the country in the States not belonging to
the Zollverein. Thus, up to the year 1871 Germany had,
together with the French standard of Alsace-Lorraine,1
seven coinage systems. The situation was no better with
regard to the paper money system. Of all the German
States only six of the smallest (Lippe-Detmold, Lauenburg, Liibeck, Bremen, Hamburg, and Alsace-Lorraine)
had issued no paper money. In the States of the North
German Confederation there were outstanding in the year
1870, 40,652,742 thalers, 2 besides the paper money of the
Grand Duchy of Oldenburg, which had been issued to the
amount of 2,000,000 thalers by the Oldenburg Landesbank.
In all the States of the German Empire, according to the
reports of the Federal administrations of October, 1872,
there were in circulation 61,374,600 thalers of state paper
money of different kinds.3 The objection against the
so-called "wild bills" (wilde Scheine) which could be
passed beyond the limits of the States which issued
them only with difficulty and loss, and which no one
could help accepting, was general. We must also take
into account the more acceptable, though not considerable, amount of paper money which was issued upon
special concessions 4 by railroad companies, municipalities, and other corporations. The amount of circulating
paper money constantly increased, after the middle of
the fifties, through the development of bank notes. Thus
the Bank of Prussia,5 which in 1846 had grown out of
the former Royal Bank (a pure state bank), was vested
with the unlimited right of note issue in 1856, and,
as a result of its services during the great crises of




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1857, 1866, and 1870, it developed into a central
note bank for the greater part of Germany. On
considering the importance of this bank, the nine private
note banks in the old provinces of Prussia, with their
privilege of note issue, limited always to 1,000,000 thalers,
must sink into insignificance. At the same time, the other
German sovereigns made very liberal use of their authority of granting the privileges of note issue, and often
on a scale quite exceeding the amount justified by the
extent of their State. The effort of Prussia to protect
itself by forbidding the circulation of such foreign notes 6
was unsuccessful, especially in middle Germany, because
of the various and changing business relations of the
territories. Thus, disregarding Bavaria, the circulation
of uncovered notes—that is, uncovered by bullion—in
Germany increased, according to the monthly records,
from about 15,000,000 marks at the beginning of the
fifties to an average of 202,296,000 marks in 1867, to
342,543,000 marks in 1870, and to 400,284,000 marks in
1873.7 At the end of 1870 the uncovered note circulation
in Germany, including Bavaria, amounted to 448,159,000
marks; and at the end of 1873 the total note circulation
was 1,352,548,000 marks, of which 426,808,000 marks
were uncovered.8 More than 140 kinds of paper certificates (bank notes and paper money in its different
denominations) were in circulation in the German Empire
in 1873.9
The newly united Germany soon realized that such
conditions could not be endured any longer, and the constitution of the North German Confederation, of the 26th




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of July, 1867,10 had already provided, in article 4, for enactments subjecting such matters as the following to the
supervision and legislation of the Confederation:
" S E C . 3. The regulation of the measure,monetary, and
weight systems, as well as the provisions for the emission
of funded and unfunded paper money.
" S E C . 4. General provisions regarding banking.''
These provisions were repeated in the constitution of
the German Confederation,11 which went into effect on the
1st of January, 1871, and in the constitution of the
German Empire of the 16th of April, 1871.12
The first step in the direction of preventing a further
voluntary increase of bank notes and paper money was
taken by means of a law passed on the 27th of March,
1870,13 concerning the issue of bank notes. This law,
which lasted only until the 1st of July, 1872, made the
acquisition of the right of issue dependent on a federal law
(sec. 1). This right was to be granted upon the recommendation of the state administration. 14 The same requirement was introduced for the extension of the existing
privileges (sees. 2 and 3).15 At the same time the recall
of the latter was made easier (sec. 4).16 Similarly, the
law of the 16th of June, 1870,17 concerning the issue of
paper money subjected the further issue or the granting
of authority for such issue to federal legislation, upon the
recommendation of the state administration (sec. i).
The act allowed the replacement of paper money by new
certificates of the same or higher denominations (sec. 2)
only after the old bills circulating at that time had been
withdrawn.




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After these precautions were taken the Empire definitely
turned its attention to coinage reforms. According to
the treaty of the 13th of June, 1867,18 the coinage treaty
with Austria and Liechtenstein was brought to a close at
the end of the year 1867. In June, 1870, the Bundesrat
decided to institute, through a committee, "an investigation into the conditions connected with the regulation of
the coinage." At the same time all considerations and
questions which purported to give information regarding
the leading points of view on the recent coinage reform
were collectively published.19 The war which broke out
in July, 1870, checked this activity. In October, 1871,
the Imperial Chancellor placed before the Bundesrat "a
bill concerning the coinage of the imperial gold coins/'
together with a preamble (Motiven). This bill came before the Reichstag, after a few changes, on the 5th
of November, 1871,20 and resulted in the passing of a
law concerning the coinage of imperial gold coins, which
was published on the 4th of December, 1871.21 It contained decisive measures in regard to the gold standard,
involving the coinage of imperial gold coins of 10 and 20
marks, as well as the withdrawal of the former gold coins,
and authorizing the Imperial Chancellor to withdraw the
former large silver coins of the Federal States; it forbade
the further coinage of other gold as well as of all large
silver coins; it also made the new imperial gold coins
legal tender at the ratio of 1 5 ^ to 1. By this law the
Empire itself assumed the coinage of gold coins in place
of the Federated States, in accordance with the decision
of the Bundesrat or the Imperial Chancellor.22 On the




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ist of February, 1873, the coinage bill, together with the
preamble, went to the Bundesrat, and on the 18th of
March, 1873 (under a new title), to the Reichstag, where
it was accepted 23 with numerous changes, and was thereafter published as the " Coinage Law of the 9th of July,
1873." u Its purpose was, according to the preamble,25
''to supplement the law of the 4th of December, 1871; to
provide for the coinage of coins of the mark system other
than gold; to regulate the whole coinage system of Germany on the basis of the imperial gold standard and the
mark system; and to direct the transition in such wise
that the new coinage system should come into operation
as soon as possible." In the Reichstag an article (2) was
appended according to which, in addition to the crown
and double crown, a gold 5-mark piece was to be coined
and subjected to the regulations applying to the former
coins. Furthermore, the law ordered the coinage of
imperial subsidiary coins (namely, silver coins of 5, 2, and
1 mark, 50 and 20 pfennigs; nickel coins of 10 and 5
pfennigs, to which, by the law of the ist of April, 1886,26
another nickel coin of 20 pfennigs was added; and copper
coins of 2 and 1 pfennig27). The subsidiary nature of these
coins was made evident in their limited acceptability in
private business, as well as in the compulsory circulation
ordered by the Empire. Besides the federal gold coins, a
series of state coins of German coinage had been provisionally admitted as legal tender, and these, together with
a number of 1-thaler pieces, were later withdrawn from
circulation at the expense of the Empire, while the prohibition of the coinage of other than imperial coins was




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made general. With respect to the replacement of the
coins, the system established by the law of the 4th of
December, 1871, was maintained. The coinage of gold
coins (double-crowns), however, was permitted for private
account on payment of a moderate seigniorage. This private coinage has since attained great proportions in the
Reichsbank. The permanent maintenance of full value
is secured by the provision that gold coins which have
fallen below the legally established weight as the result of
long circulation and wear, and imperial subsidiary coins
which in the same manner have declined considerably in
weight or recognizability, shall be withdrawn at the
expense of the Empire. Foreign coins can not only be
demonetized by the Bundesrat, but their circulation can
be entirely forbidden, as has happened in several exceptional cases (for example, in 1888) with respect to some
foreign subsidiary coins.
A supplement to the coinage law followed, even before
the establishment of the imperial standard, in the law of
April 20, 1874, which dealt with the change of article 15
of the coinage law of the 9th of July, 1873.28 That regulation exempted the Austrian union thaler (Vereinstaler)
from the provision of the coinage law which abolished, after
the introduction of the imperial standard, the legal-tender
power of coins not specially provided for in article 15.
These union thalers amounted to 31,115,849 thalers
(93>347>547 marks) at the end of the year 1867, and were
found almost exclusively in Germany. The thaler was
temporarily given its previous standing in our money
system, and its demonetization could thereafter be effected




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only by means of legislation The Bundesrat was authorized, however, by the law of the 28th of February, 1892,
to order the demonetization of the Austrian thaler in
Germany, and to enact the necessary regulation. This
demonetization took place by order of the Imperial Chancellor issued on the 8th of November, 1900, after a period
of notice for redemption lasting till the 31st of March,
1901.29 In Austria-Hungary the demonetization of the
Austrian union thaler and double thaler followed the
regulation of the 12th and 19th of April, 1893.
According to the treaty between Austria and the German Empire concluded on the 20th of February, 1892, the
former accepted for melting, during the years 1892, 1893,
and 1894, Austrian union thalers to the amount of
26,000,001 marks, in three instalments of 8,666,667 marks
each, the total of which was paid for in Austrian notes,
the thaler calculated at i^" florins, Austrian standard.
Matters were still further advanced by the passing of
the law of the 6th of January, 1876, which dealt with the
change in article 15 of the coinage law of the 9th of July,
1873.30 a n ( l which authorized the Bundesrat to provide
that the 1-thaler pieces of the German coinage, as well as
the above-mentioned Austrian union thaler before its
demonetization, be accepted only in lieu of imperial silver
coins, at the ratio of 3 marks to the thaler. Thus, instead
of demonetization, the middle course of reducing the
thaler to a subsidiary coin could be taken. As a result of
this division of authority the coinage reform made no
progress. Since May, 1879, the sale of silver coins for
the account of the Empire has been suspended, owing to




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the continually falling value of silver in the world market
(the rest of the silver bullion was later disposed of). Our
standard remained therefore a crippled one ("etalon
boiteux"), inasmuch as the existing thalers as well as
the imperial gold coins are unlimited legal tender.
Although £he reforms of the coinage law have on the
whole proved successful, experience revealed some deficiencies which the law of the ist of June, 1900,31 "concerning changes in the coinage system,'' sought to remove
by introducing several amendments. Among other things
it provided for the removal of the gold 5-mark pieces, the
20-pfennig silver pieces, and the 20-pfennig nickel pieces,
coins which have not been widely adopted in exchange.
It also provided for the raising of the maximum amount
of imperial silver coins from 10 to 15 marks per capita, for
the renewal of the permission to coin silver medals, and
for the repeal of the particular coinage weight. By far
the most important of these regulations is the increase of
the per capita quota of silver coins. Experience had
shown that the existing imperial silver coins were not
sufficient to meet business exigencies, and that in exchange
people were quite often compelled to accept thalers.
The thaler, however, is legal tender in spite of its decline
in value, which is somewhat less than the depression of
the imperial silver coins caused by the fall in the price of
silver.32 Because of this situation and the lack of relation
of the thaler to the prevailing decimal system, it forms
an anomaly in our coinage system, which, owing to former
coinage laws, could disappear only gradually. The new
law (article 4, section 3), however, prescribes that only




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state silver coins—that is, only thalers—may be used to
increase the coinage up to the new per capita quota.
This accelerates the withdrawal of the thaler to such an
extent that within a few years it will no longer be circulated or found in the Reichsbank stock.
The coinage reform can be considered as completed only
after this last law had been passed.33 Undoubtedly Germany's credit would rise in foreign countries, if not only
the greater part, but the whole metal stock of the Reichsbank—except the necessary amount of subsidiary coins—
should, like that of the Bank of England, consist of gold,
and if it were made impossible by law, and not, as formerly, only in obedience to haphazard custom, to redeem
notes and fulfill obligations in silver—that is, in thalers.
Yet the bill was severely attacked in the Reichstag and
this opposition succeeded in changing the proposed law
in at least one point of considerable importance. Article
4, section 3, of the bill, which was approved in the Reichstag commission, proposed to withdraw as many thalers
as would be gained by the new coinage. Thereby not
only a debasement of the total circulation (rise of the
coinage debt) would be avoided by the withdrawal of the
equivalent value of circulating thalers, according to the
coinage law of 1873, but there would also be offered the
opportunity to buy gold to equal the amount of the earnings accruing from the recoinage of thalers into imperial
silver coins (of 10 per cent less value). This purchase of
gold would thus cause no loss to the imperial treasury, and
would strengthen, even though in a small degree, the gold
reserve against the bank notes. Both of these schemes




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were discarded by the Reichstag. An excessive increase
of the silver circulation might be the result, if the plan
given into the hands of the imperial administration should
not prescribe a maximum of silver coins. In any case,
according to the present form of section 3, each new issue
of coins increases, after deducting the cost of recoinage,
the face value of the silver circulation by 11 \ per cent of
the recoined thaler stock.
The plans considered by the administration for changing the proportion of silver and alloy of the 50-pfennig
pieces,34 and for giving this coin a more practical shape,
were rejected by the Reichstag, which substituted a plan
for a new coinage of 3-mark pieces (as subsidiary coins)
to be used in lieu of the generally accepted thaler. Such
a measure had never before been suggested since the
beginning of the coinage reform, and one of the many
objections against it was that it did not conform with the
practical decimal system which formed the basis of the
German coinage. The Bundesrat rejected this scheme,
which, however, led to an inquiry in business circles,
instituted by an imperial treasury officer. This inquiry
showed a strong majority against the coinage of 3-mark
pieces.
A resolution of the Reichstag recommended a smaller
imperial eagle on the 50-pfennig pieces, in order to render
them more distinguishable.
Since the middle of January, 1905, 50-pfennig pieces
have been issued with the one-half mark designation and
with a sharper edge.
The coinage of gold coins has made great progress in the
last few years.
83702—10




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According to the latest "Review of the Coinage and
Withdrawal of Imperial Coins up to the End of March,
1903," 35 prepared by the Reichstag according to section 11
of the law of the 4th of December, 1871, the figures for the
coinage of imperial gold coins up to the former date were
as follows:
Fine gold on imperial account, including 2,216.8 kilograms
from 6,226,015 marks of gold coins no longer fit for circulation
Fine gold for private account
Total of fine gold

Kilograms,
475,312.4
938, 872. 9
1,414, 185.3

According to the published report of January, 1905,
there, were coined until the end of December, 1904:36
Marks.

Double-crowns
Crowns
Half-crowns

3, 377, 892, 020
684, 875, 550
27, 969, 925

Total

4,090,737,495

Of this, 2,765,101,580 marks were coined for private
account.
There have been withdrawn—
Marks.

Double-crowns
Crowns
Half-crowns

13, 556, 800
28, 684, 260
24, 249, 855

Total

66, 490, 915

There remain in circulation—
Marks.

Double-crowns
Crowns
Half-crowns

3, 364, 335, 220
656, 191, 290
3, 720, 070

Total

4,024, 246, 580

The coinage of crowns, like the coinage of small gold
coins in almost all countries with a similar coinage system,




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is much smaller not only because of the greater cost and the
increased abrasion, but also because the crowns are being
constantly kept in circulation, and thus lessen the banknote reserve of the Reichsbank. Nevertheless, in agreement with the proposition of the commission, a resolution
was accepted by the Reichstag in 1900 by which the Imperial Chancellor was requested to secure an increased
coinage of crowns in the new issues of gold coins. This has
since been effected.
From the date of its foundation to the 31st of December,
1904, the Reichsbank acquired gold partly in foreign coins
and partly in bullion:
Marks.

From private individuals
From the Empire

2, 844,040, 714. 20
315, 509, 943. 47

Total

3, 159, 550, 657. 67

For the coinage of imperial silver coins there were given
to the mints until the end of March, 1903, in state silver
coins—i. e., thalers—and in bullion from such coins,
3,125,776.6 kilograms of fine silver, besides 150,444.2
kilograms which were realized in the process of recoinage,
from the melting of 30,173,300 marks of 20-pfennig pieces
and from 1,001,108 marks of other imperial silver coins
which were no longer fit for circulation.
After the withdrawal of 31,464,710 marks of the various
kinds of coins, there remained in circulation at the end of
December, 1904:
Marks.

5-mark pieces
2-mark pieces
i-mark pieces
50-pfennig pieces
20-pfennig pieces

202, 851,480
224, 345, 488
228, 716,032
71,411,753
5,466, 604

Total




. , „ 732,791,357
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Of the nickel coins issued till the end of December, 1904,
4,720,428 marks were withdrawn and there remained in
circulation:
Marks.

20-pfennig pieces
10-pfennig pieces
5-pfennig pieces

542,044
48, 283, 377
23, 821, 461

Total

72,646,882

Of copper coins 16,795,163 marks were coined and
3,520 marks withdrawn, leaving a balance of 16,791,643
marks in circulation.
The imperial stock of bullion, which at the end of 1883
still amounted to 188,9361%% pounds fine, was either
sold or consumed.
The imperial mark-standard has been introduced into
the German colonies, with certain modifications, by various ordinances of the governors, since 1886, and in 1905
it was uniformly established in all the colonies except
German East Africa and Kiautschou. In German East
Africa the rupee standard exists on a gold basis, while
the Chinese money system has remained unchanged in
Kiautschou.
In its final provision (art. 18) the coinage law prepared the way for the further reform of bank notes and
paper money. With regard to state paper money, it was
stipulated that its circulation should be stopped not later
than the ist of January, 1876, and should be publicly
recalled at least six months before that time. On the
other hand, a motion made to exchange all state paper
money for bank notes, which in general have many advantages, was not carried.38 The law ordered instead the




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issue of imperial paper money according to a special stipulation, which also purported to give detailed provisions
regarding facilities to be afforded to the individual States
for the purpose of withdrawing their paper money.
To render operative the promise herein contained, a
law concerning the issue of imperial treasury notes
(Reichskassenscheine) was passed on the 30th of April,
1874.39 I n this law the provision is repeated that no
federal State is permitted to issue paper money or to grant
its issue except by imperial edict (sec. 8). The imperial
paper money (imperial treasury notes), which no one is
compelled to accept in private business, was issued in
lieu of the former state paper money, in a cautiously
limited amount, in denominations of 5, 20, and 50 marks,
and was distributed according to population among the
States in the proportion in which the latter bear the
burdens of the Empire. The sum issued was 120,000,000
marks, corresponding with the amount in the imperial
war treasury.40 From this total were to be deducted the
advanced sums received by the States for the purpose of
withdrawing their excessive paper money, which sums
were to be returned not later than December 31, 1890.
According to the latest published report concerning the
execution of the law,41 by the end of March, 1892,
183,148,967 marks, out of a total of 184,298,529 marks of
state paper money, had been withdrawn and destroyed.
Of the maximum amount of 54,889,941.72 marks allowed
by section 3 for advance payments, 54,123,567.14 marks
had been reported by the imperial treasury as paid back
by the 31st of December, 1890 (the legally designated




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term). As a result of these repayments, 54,123,565 marks
of imperial treasury notes were withdrawn and destroyed.
In the meantime new notes were issued in the years 1882
and 1883, and the notes of the old issue were withdrawn,
with the exception of small arrears, in regard to which the
law of the 21st of July, 1884,42 provided that they should
be redeemed after the 21st of July, 1885, only by the
Royal Prussian comptroller of state paper money. The
denomination of 50 marks of the new emission has been
replaced since 1899 by another type. The so-called
Wilcox paper, used for replacing imperial treasury notes
(and in fact Reichsbank notes also), is protected against
counterfeit by the law of the 26th of May, 1885.43
The regulation of bank notes marked the close of the
great reform. The operation of the above-mentioned law
of the 27th of March, 1870, was extended by the law of
the 16th of June, 1872,44 to the 30th of June, 1873; further by the law of the 30th of June, 1873,45 to the 31st of
December, 1874; a n d , finally, by the law of the 21st of
December, 187446 (art. 1), to the 31st of December,
1875. The last-named law contained still further provisions. The above-mentioned article 18 of the coinage
law of the 9th of July, 1873, had already stipulated that
all bank notes which were not made out in the imperial
standard were to be withdrawn before the 1st of January,
1876, and that after that date only such bank notes were
to remain in circulation, or were to be issued, which were
of not less than 100-mark denomination in the imperial
standard. This provision was extended also to notes
issued by corporations. For the execution and partial




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Banking

Laws

improvement of these provisions, a gradual withdrawal
of notes of small denominations was ordered by the law
of the 21st of December, 1874, prohibiting the issue of
bank notes not exceeding 50 marks after the 1st of July,
1875. The banks were also required to inform the Imperial Chancellor not later than the 30th of June, 1875,
whether they had taken all necessary steps for the proper
withdrawal of such of their notes as did not correspond
to the provision of section 18. Furthermore, they were
to publish monthly reports concerning the circulating
notes, the notes in the banks as well as those destroyed
after redemption.47 With these measures the preliminary
preparations for the Bank Act were concluded. The bill
for such a law was drawn up in the Imperial Chancellor's
office and published in July, 1874. Disregarding the
formation of a Reichsbank (central note bank), this bill
aimed at a gradual establishment of a rational form of
note banking, solely by subjecting the existing note banks
to a complex system of standard statutes (Normalstatuten).
It also recommended an annual note tax of 1 per cent on
all uncovered notes, in addition to a duty of 4 per cent
on all uncovered notes issued above a certain fixed
amount. Although this scheme was keenly opposed in
the press and in other public discussions on the subject,
it was submitted to the Reichstag in almost unchanged
form, together with the preamble, on the 5th of November, 1874.48 But the discussions held from the eleventh
to the thirteenth meetings (from the 16th to the 18th of
November)49 compelled recognition of the general desire
for the Reichsbank as an institution to be established




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Monetary

Commission

in the public interest. The commission to which the
matter was referred adjourned, claiming that there was
no necessity of deciding about the Bank Act before a
conclusion had been reached concerning the formation of
a Reichsbank. Discussions were not resumed until, upon
the suggestion of the federated governments, one of the
members of the commission formally proposed the
revised bill for the Bank Act, which was finally
accepted with some changes. After the presentation of
a comprehensive report by the commission,50 the full
assembly discussed the bill at the second reading,51 from
the fifty-second to the fifty-fifth meetings (from the 25th
to the 28th of January, 1875), modified it in some particulars, and accepted it with an important majority 53
on the 30th of January, at the fifty-seventh (final) meeting of the session. The bill was then published as the
"Bank Act of the 14th of March, 1875." 53
This act rested on a compromise of the central-bank
system with the system of a plurality of banks, which
latter had its root in the existing conditions. First of all,
it purported to create for a number of years a transitional
stage, freed from the most pressing evils, in order that ultimately experience should lead to the adoption of an adequate uniform system. New note privileges could be
granted only by imperial legislation (sec. 1). The Reichsbank appears, though in a limited sense, as the central
note bank of Germany. The economic and political position on which its special rights and duties rest 54 is shown
not only in the classification of its public duties (Bank
Act, sec. 12), but also in the close connection indicated by




18

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Imperial

Banking

Laws

its name with the institutions of the Empire. Its management must not be governed solely, or even chiefly, by
considerations of gain. Therefore, in order that the public
welfare should be safeguarded, it must be subject to the
"supervision and direction of the Empire." Since the
Reichsbank protects the monetary standard of the Empire,
its circulating medium (imperial coins and imperial treasury notes) is supplemented by the elastic device of bank
notes. Thus, owing to its capital and the network of
branches acquired from the Bank of Prussia in virtue of
the authority given to it by the Bank Act (sec. 6i), 55
which secured the immediate support of the whole Empire,56 the Reichsbank forms, especially in bad times, the
stronghold for the credit of the country. It aids the
whole system of exchange, not only by the purchase of
short-time bills and other paper, but also by its collection,
deposit and disbursement business, and chiefly by its
enormously developed giro transactions (Giroverkehr) ,57
Because of the limitation of uncovered notes, this latter
branch of business was especially profitable to the Reichsbank in affording it the extensive means necessary for the
fulfillment of its legal functions. In fixing its discount
rate the bank takes into consideration, on the one hand,
the relations of the money market, from whose effects it
can never free itself; but, on the other hand, this rate is
not without its influence on the price of money, because
the other money institutions generally follow it. In its
role of a central money custodian, a significant one for the
economic life of the Empire, the Reichsbank stands distinctly apart not only from ordinary banks but also from the




19

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Monetary

Commission

"private note-issuing banks." 58 Under this latter name
the law allowed the other note banks to exist provisionally
along with the Reichsbank. The use of their notes for
payments, as well as the carrying on of banking business
outside the State chartering them, are subject, however,
to certain limitations which, in the main, apply also to the
Reichsbank, both with regard to the right of note issue
and to the other forms of business. The "private noteissuing banks" are, furthermore, subject to the supervision of the Imperial Chancellor. Twenty-seven of the
thirty-two private note banks have gradually lost their
right of issue either by relinquishment or because of the
expiration of the fixed period; the others, except one (the
Brunswick Bank), have submitted to these limitations.59
Of the provisions of the Bank Act applying to all note
banks, those concerning the following should be mentioned:
the exclusion of forced currency and the denomination of
bank notes (sees. 2 and 3); the redemption and acceptance
of notes in payment (sec. 4); compensation for damaged
notes (ibid.); prohibition of the reissue of damaged or
soiled notes (sec. 5); the issue and withdrawal of notes
(sec. 6); prohibition of certain transactions (sec. 7);
and the obligation to issue required publications (sec. 8).
The note business is, furthermore, subject to another important limitation, i. e., to the imposition of a note tax
(sees. 9 and 10). In order to avert an excessive increase
of note circulation the law has, in the interest of the gold
standard, as well as on other economic grounds, adpoted
the system of the so-called indirect limitation (indirekte
Kontingentierung) of bank notes. A certain amount of




20

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Imperial

Banking

Laws

notes not covered by bullion was apportioned to each
bank. In this apportionment the future note circulation
was greatly underestimated (by about i billion marks).
For the notes above the quota the banks have to pay to
the imperial treasury a tax of 5 per cent per annum for the
time in which the tax-free limit has been exceeded. The
Reichsbank's share of uncovered notes has long been regarded as insufficient, even though the notes procured by
the Reichsbank through the relinquishment of the right
of issue by other banks raised this share by January, 1894,
to 293,400,000 marks. Notwithstanding the increase of
capital of the Reichsbank which is due to its greatly
developed giro business, by frequently exceeding the tax
limit, the bank, instead of making money dearer by raising
the discount rate, has worked without gain and even at
a loss.60
The exercise of the right of issue by the Reichsbank
and by the note banks which made themselves subject
to the limitations of the act is also conditioned by the
so-called "reserve of one-third" (Dritteldeckung) (sees.
17 and 44, par. 3; sec. 50, par. i). 61 The redemption of
notes of these banks is guaranteed by special regulations,
as well as by the general provision of section 4 (sees. 18
and 44, par. 4; sec. 50, par. 3). Each note bank is also
required to exchange its notes for those of other note banks
(sees. 19 and 44, par. 5).62 All these banks, moreover, are
restricted in their negotiations, since they may transact
only legally specified business, (sees. 13 and 44, par. 1),
and must accumulate a reserve fund amounting to onefourth of the capital (sees. 24, par. 2, and 44, par. 2).




21

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Monetary

Commission

The ist of January, 1891, was fixed in various provisions as the date when the uniform note-bank system, as
well as the Reichsbank and the private note banks, could
be discontinued (sees. 41 and 44, par. 7).
In spite of a lively agitation, no real change was instituted at that time. The imperial administration limited
itself to the introduction of a bill, suggesting that the share
of profits of the Empire in the Reichsbank should be somewhat increased.63 This bill was passed after a lively
debate 64 in the Reichstag. No further change was made,
"because it was considered advisable—at least during the
first period—to maintain the present organization of the
Reichsbank, which could boast of its many favorable experiences, and to leave it as a bank with private capital, but
under the management and direction of the Empire." The
change of section 24 of the Bank Act, which was made in
this bill after it had been accepted at a special meeting of
the stockholders of the Reichsbank, was published as a
law on the 18th of December, 1889.65 In this law the
Reichstag agreed to an extension of the privilege of the
Reichsbank for another period of ten years. (See sec. 41,
par. 3.) As little use of the right of recall was made by
the Empire in regard to the "private banks," which were
also allowed to retain their privileges for a new term of
ten years, while the privileges of only a few of the insignificant (Prussian) note banks lapsed according to the
provisions of their statutes.
More positive were the changes at the expiration of the
second ten-year period. As early as the year 1899, in
January—that is, almost two years before the expiration
of this period—a bill concerning the changes of the Bank




22

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Banking

Laws

Act of the 14th of March, 1875,66 was placed before the
Reichstag. This bill contained various, and not unimportant, provisions suggested by business experiences.
The preamble argued that the organization of the
Reichsbank had indeed fulfilled its task perfectly, and
that it would be inexpedient to change radically the fundamental provisions of the Bank Act, both for the Reichsbank and for the " private-note banks.'' But, taking into
consideration the progressive development of German
economic conditions, it urged the advisability of an
increase in the capital of the Reichsbank to an amount
which would enable it to satisfy the greatly augmented
demands of business in the future. For this purpose the
bill recommended an increase of 30,000,000 marks as well
as a gradual increase of the reserve fund to 60,000,000
marks, at the same time pointing a warning against the
overestimation of the effect of this regulation. The bill
further proposed to increase the tax-free note limit to
400,000,000 marks, because of the frequent excesses over
the present limit due to the increased need for media of
exchange. To guard against unfavorable experiences, the
bill also sought to secure a uniform discount policy by
exacting that the rate of discount of the "private-note
banks" should not be lower than that of the Reichsbank.
It strove also to increase the share of the Empire in the
business earnings of the Reichsbank, as well as to extend
the capacity of the latter for making loans on pledges,
and to regulate the relation of the Reichsbank to the
notes of the Prussian banks still in circulation. Various
efforts were made in the Reichstag to change the Bank




23

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Monetary

Commission

Act,67 especially the provisions relating to the organization of the Reichsbank, in a much more decisive way.
Another attempt was made to turn the Reichsbank into
a pure state bank and to exclude private capital. Some
proposed that such a change should be brought about
gradually by letting the Empire acquire the new bank
shares or by fixing a moderate maximum dividend.
These efforts met with unanimous opposition on the part
of the state governments as w^ell as on the part of a great
majority in the Reichstag. Various other plans proceeding from fundamentally different points of view proved
not more successful. They aimed at a far greater immediate increase of capital; at the removal or limitation of
the tax-free note regulation; at an important reduction of
dividends on the capital of the bank; at the legal prohibition of t h e ' ' private discount'' of the Reichsbank; and either
at the extended freedom of the "private-note banks" or
at their complete discontinuation. After a thorough discussion of well-nigh all questions of bank legislation and
bank policy, the government bill, containing certain concessions to all the divergent views, was accepted. Thus
it was decided that by the 31st of December, 1905, the
sum of 30,000,000 marks be added to the capital, making
a total of 180,000,000 marks; that the share of the Reichsbank in the total amount of tax-free note circulation be
increased by 50,000,000 marks, thus making 450,000,000
marks, and that after the payment of dividends at the
rate of 3 ^ per cent, and the endowment of the reserve
fund, the distribution of the surplus net profit of the
bank should begin immediately at the proportion of 3 to 1.




24

German

Imperial

Banking

Laws

The original bill proposed that the surplus profit be
divided equally between the Empire and the stockholders
until a dividend of 5 per cent has been reached and that
thereafter three-fourths should go to the imperial treasury and one-fourth to the stockholders. After a long
struggle fostered by particular interests, the private discount rate of the Reichsbank was maintained alongside of
its official discount rate, and as long as the latter did not
fall below 4 per cent the private note banks were bound
to the official rate of the Reichsbank. In other cases,
however, they were allowed a maximum limit of reduction of one-fourth of 1 per cent below the official rate
and of one-eighth of 1 per cent below the private rate.
In this form the bill was published on the 7th of June,
1899, as the "Law Concerning the Change of the Bank
Act of the 14th of March, 1875," after it had been accepted at the special meeting of the bank stockholders on
the 18th of May, 1899. The principles of our note-bank
constitution were thereby secured for another period of
ten years in a somewhat extended form. These principles would have been seriously endangered had their
opponents, who agree with the opponents of our legal
monetary standard, been as influential as they were vigorous in their agitation in the press, in clubs, and in parliaments; and, although casual objections are being
raised even now, the bank constitution is too well adapted
to need any real change.
The report issued on the occasion of the twenty-fifth
anniversary of the Reichsbank by its board of directors
contains a record of the activity of the former during the
first twenty-five years.68




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Monetary

Commission

The report of the management of the Reichsbank for
1904 shows an increase from 36,700,000,000 in 1876 to
221,600,000,000 in 1904 in the total transactions of the
Bank. The giro business alone, in which the imperial and
state treasuries participate to a large extent, rose to
195,500,000,000 marks in 1904. The bills purchased in
1904 amounted to over 8,500,000,000 marks. The banknote circulation reached in the same year an average of
1,288,500,000 marks; the metal stock, including 682,200,000
in gold, an average of 926,666,000. The difference between the highest and the lowest amount of uncovered
notes reached 663,800,000 marks. These figures, as well
as the increase of bank offices from 201, at the beginning of
the year 1876, to 415 on the 1st of January, 1905, show the
invaluable services rendered by the Reichsbank to German
commerce, explaining at the same time the fact of the
higher discount rate prevailing in Germany as a result of
its enormous and earliest industrial development.69 No
one can deny that, as regards the securing of a safe and
uniform bank-note system, we are making rapid progress,
thanks to our Bank Act.
Further development will show to what extent the stillexisting private note banks will have to limit their sphere
of operations. Should this limitation not take place, there
would still be no adequate reasons for renouncing the complete unity of the German bank-note system which was
provided for in the Bank Act of 1875.
The monetary system produced by the foregoing reform laws, though not an ideal one, is perfectly sound,
and is substantially different from the one which existed




26

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Imp erial

Banking

Laws

not more than three decades ago—so much so that the
recollection and proper understanding of the conditions
of that period are beginning to disappear. We must bear
in mind that the progressive development of checks and
book-account transfers (in giro business), which took
place under the Reichsbank, precludes a too excessive increase of circulating medium which would imperil national
prosperity. For the last twenty years an important advance has been made by the Reichsbank in this direction
by the establishment of clearing houses. The weekly
records of the Reichsbank, published in the monthly reports, show the steady progress which is being made these
last years owing to the methods of clearings, whereby
enormous amounts of money obligations are discharged
without a pfennig of coin and without bank notes or
paper money—simply by balancing accounts and transferring the balance to the Reichsbank giro account.70
Thus has our monetary system approached perfection
from all sides. Divergent as the views may be in regard to
future reforms, they all coincide in one point, namely,
that there is no need of retrogression.

83702—10




3

27




NOTES TO THE INTRODUCTION OF DOCTOR KOCH.
i. Cf. the preamble of a bill concerning the coinage of imperial gold
coins; publications of the Reichstag, No. 50. (Stenographic Report I,
session of 1871, vol. 2, p. 123.) Besides these coinage systems there is
also the Hamburg Bank standard.
2. Cf. report in publication of the Reichstag, No. 73. (Stenographic
Report, session of 1870, vol. 3, p. 303.)
3. Cf. the review in proposition 1 of the preamble of the bill concerning the issue of imperial treasury notes; publications of the Reichstag, No.
70. (Stenographic Report II, Legislative Period I, session of 1874, vol. 3,
p. 265.)
4. For example, the certificates of the Leipzig-Dresden Railroad Company
and of the city of Hanover. (According to Adolph Wagner, " ZettelbankPolitik," p. 725, they amounted to about 1,770,000 marks in the years
1870-1873.)
5. Cf. bank ordinance of the 5 th of October, 1846 ("Gesetz-Sammlung
fur den Preussischen S t a a t , " p. 435); Treaty of the 28th-3ist January,
1856, and the law of the 7th of May, 1856.
6. Cf. the law of the 14th of May, 1855 ("Gesetz-Sammlung fur den
Preussischen S t a a t , " p. 308), the 25th of May, 1857 (ibid., p. 440), and
the 22d of April, 1869 (ibid., p. 561), all with reference to foreign paper
money.
7. Cf. Soetbeer, "Deutsche Bankverfassung" (1875), p. 4 : Thorwart,
"Die Entwicklung des Banknotenumlaufs in Deutschland," v. 1851-1880,
in Conrad's "Jahrbucher fur National-Oconomie," vol. 41, pp. 193 ff.
8. Cf. review in Soetbeer, p. 2a.
9. Cf. ibid., p. 5.
10. Cf. " Bundes-Gesetzblatt," p. 1.
11. Cf. "Bundes-Gesetzblatt," 1870, pp. 627, 650, 654; 1871, p. 9.
12. Cf. "Bundes-Gesetzblatt," p. 63.
13. Cf. " Bundes-Gesetzblatt," p. 51. In the North German Confederation the law went into operation on the 29th of March, 1870 (sec. 6). I t was
declared an Imperial Law by article 80, section 1, of the constitution of
the German Confederation, and by section 2 of the law of the 16th of
April, 1871 ("Bundes-Gesetzblatt," p. 63), and went into operation in
Baden, South-Hesse, Wurttemberg, and Bavaria on the 1st of January,
1872, according to their agreement and the law of the 22d of April, 1871
("Bundes-Gesetzblatt," p. 87). The law was not introduced in AlsaceLorraine, where the Bank of Prussia had already suspended operations in
the summer of 1871. (See law of the 4th of July, 1871.)
14. Cf. section 1, paragraph 1, of the Bank Act of the 14th of March,
1875.




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Monetary

Commission

15. Cf. ibid., sections 47 and 40, No. 1.
16. Cf. ibid., sections 44, No. 7; 46, paragraph 1.
17. "Bundes-Gesetzblatt," p. 507. The law went into operation in the
North German Confederation on the 19th of August, 1870, and was later
proclaimed as a Federal Law, as was also the law of the 27th of March,
1870. I n Baden and South-Hesse, however, it went into effect on the 1st of
January, 1871, and in Wiirttemberg and Bavaria on the 1st of January,
1872. The suggested temporary limitation of the law was rejected, thus
varying in this respect from the bank-note law of the 27th of March, 1870.
The limitation was to terminate "after the legal establishment of the principles concerning the issue of paper money (art. 4, No. 3, of the Federal
Constitution)."
18. " Gesetz-Sammlung fur den Preussischen S t a a t , " 1867, p. 1801. The
administration accepted only a conditional responsibility for the redemption of the Austrian Vereinstaler (union thaler).
19. Cf. Soetbeer, "Deutsche Muntzverfassung," 1874, p. 9.
20. The first discussion took place a t the nineteenth and twentieth
meetings of the Reichstag, on the n t h and 13th of November, 1871; the
second a t the twenty-third and twenty-fourth meetings, on the 17 th and
18th of November; the third and final discussion a t the twenty-sixth and
twenty-eighth meetings, on the 21st and 23d of November. (Stenographic
Report I, Legislative Period II, second session of 1871, Vol. I, pp. 226 ff,
251 ff, 317 ff, 34i ff, 418 fl, 453 fL)
21. " Reichsgesetzblatt," p. 404. The law was introduced in AlsaceLorraine by the law of the 15th of November, 1874 (ibid., p. 131).
22. Cf. Soetbeer, opus cit., pp. 1 ff; Helfferich, "Reform des deutschen
Geldwesens," Leipzig, 1898, Vol. I, pp. 156 ff. With respect to the testing
and the stamping of gold coins, see section 12 of the Ordinance of the 27 th
of December, 1884. The extreme limits of the deviations to be permitted
in public exchange are defined in the proclamation of the Imperial Chancellor of the 27th of July, 1875, section 1. (" Reichsgesetzblatt," p. 263.)
23. The first discussion took place a t the tenth and eleventh meetings, on
the 28th and 29th of March, 1873; the second, a t the seventeenth, twentieth, and twenty-first, on the 2 2d, 25th, and 26th of April; the third a t
the twenty-eighth, twenty-ninth, and fifty-ninth meetings, on the 6th of
May, the 8th and the 23d of June, 1873. (Stenographic Report I, Legislative Period IV, session of 1873, Vol. I, pp. 117 ff, 316 ff, 343 ff, 521 ff,
557 ff; Vol. I I , pp. 1352 ff.)
24. " Reichsgesetzblatt," p. 233. The law was also introduced in AlsaceLorraine. Cf. Soetbeer, opus cited, pp. 67 ff.
25. Official Document No. 15 in the Stenographic Report of the Reichstag, Vol. I l l , pp. 70 ff.
26. "Reichsgesetzblatt," p. 67.
27. Cf. note 31 below.
28. " Reichsgesetzblatt," p. 35. Cf. note 18 above. The question as to
how these coins were to be finally excluded from German circulation was




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Banking Laws

left open a t t h a t time. Cf. Stenographic Report of the Reichstag, pp. 757
ff; Soetbeer, opus cit., pp. 174 ff; Helfferich, " D i e Folgen des DeutschOsterreichischen Munzvereins von 1857," Strassburg, 1894, pp. 53 ff.
29. "Reichsgesetzblatt," p. 1013.
30. " Reichsgesetzblatt," p. 3.
31. " Reichsgesetzblatt," p. 250. Bill No. 403, publications of the Reichstag, 10; Legislative Period I, session 1898-1900. The first discussion
took place a t the one hundred and fifteenth meeting, on the 4th of December, 1899; the second a t the one hundred and sixty-fifth meeting, on the
12th of March, 1900; the third discussion, a t the two hundred and first
meeting, on the 20th of May, 1900. (Stenographic Report, pp. 3201 ff,
4608 ff, 8733 ff.)
32. At the ratio of 3 marks to 1 thaler, and a t the rate of 80 marks per
kilogram of silver, there was a difference of about 13 pfennigs on the two
kinds of coins.
33. Cf. Helfferich, " D e r Abschluss der deutschen Munzreform," Berlin,
1899. The vote of the Reichstag a t the third reading decided, however, to
table the question of the standard. (Cf. Stenographic Report, pp. 5743 ff.)
34. Bill. See No. 280, publications of the Reichstag, session 1903 and
1904.
35. Resolution No. 10 for the "tibersicht der Reichsausgaben und
-einnahmen fur das Rechnungsjahr 1902."
36. I n the first edition of the " Reichsanzeiger" of the n t h of January,
1905, No. 9.
37. This sum has not been altered since the middle of March, 1878.
38. Cf. Nasse in ' ' Preussisches Jahrbuch," vol. 63, pp. 512 ff.
39. ' ' Reichsgesetzblatt," p. 40. The first discussion in the Reichstag took
place a t t h e twenty-fourth meeting, on the 26th of March; the second, at
the twenty-sixth and thirty-fifth meetings, on the 28th of March and the
18th of April; the third, a t the thirty-eighth meeting on the 2d of April,
1874. (Stenographic Report I I , session of 1874, Vol. I, pp. 597 ff; Vol. I I ,
pp. 923 and 1026 ff.)
40. The law of the n t h of November, 1871. ("Reichsgesetzblatt," p .
409.)
41. Report of the Imperial Debt Commission of the 16th of May, 1893,
I X , Legislative Period I, session of 1893, publication No. 16.
42. "Reichsgesetzblatt," p. 172.
43. "Reichsgesetzblatt," p. 165.
44. " Reichsgesetzblatt," p . 169.
45. "Reichsgesetzblatt," p . 159.
46. "Reichsgesetzblatt," p . 193.
47. This last provision is still binding. The complete exclusion of
smaller notes, in contrast to those of other large state note banks, is
perhaps capable of modification in the interests of the gold stock of the
Reichsbank without injury to our metallic standard.
48. Document No. 27. (Stenographic Report cited, Vol. I l l , p . 648.)




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Monetary

Commission

49. Stenographic Report I I ; Legislative Period I I , session of 1874, Vol.
I, pp. 149 ff, 175 ff, 203 ff.
50. Document No. 195. (Stenographic Report cited, Vol. IV, p p .
" 4 7 ff.)
51. Stenographic Report cited, Vol. II, pp. 1265 ff, 1291 ff, 1329 ff, 1364!?.
52. Stenographic Report cited, pp. 1435 ff.
53. Reichsgesetzblatt, p. 177. For details concerning the history of
the Bank Act, see Soetbeer, " Deutsche Bankverfassung," pp. 5 ff; W. Lotz,
"Geschichte und Kritik des Deutschen Bankgesetzes," v. 14, Marz, 1875,
Leipzig, 1888; Helfferich, "Reform des Deutschen Geldwesens," pp. 276 ff;
" D i e Reichsbank, 1876-1900," pp. 5 ff.
54. I t s chief duty (sec. 12) lies in the management of the imperial
treasury business (sec. 22) and the obligation to purchase gold bullion at
a fixed price (sec. 14). I t has the right to sell pledges (sec. 20) and the
privilege of limited exemption from state taxation (sec. 21).
55. Cf. Prussian Law of the 27th of March, 1875, " Gesetz-Sammlung fur
den Preussischen S t a a t , " p. 166; and the Treaty of the 17th and 18th of
May, 1875, "Reichsgesetzblatt," p. 215; Statute of the Reichsbank of the
2 i s t o f May, 1875, "Reichsgesetzblatt," p. 203.
56. Owing to the Law of the 27th of March, 1875 (sec. 2), seven branches
were established outside of Prussia as early as 1875. On the 1 st of January,
1876, there followed three new local main offices and a large number of
Reichsbank secondary offices.
57. The transactions in giro business amounted in the year 1876 to
16,711,245,214 marks; in the year 1904 to 194,563,000,000 marks. The
deposits, including the fluctuating transfers, formed an average of 70,573,000 marks in 1876; and in 1904, after the addition of the accounts of the
Empire and the larger states, the average was 534,789,000 marks; the
number of giro clients was at the end of 1876, 3,245 and at the end of
1904, 2 1 , 2 2 1 .

58. Like the former Bank of Prussia, the Reichsbank was founded on
private capital, and it is being separated from the Imperial Treasury as a
specific legal person. Yet in spite of its few similarities to a stock company, it is a public institution of the Empire, and is subject to a special
law (cf. Bank Act, sec. 12, notes 31 and 34).
59. Cf. Bank Act, section 9, note 26; section 45, note 159.
60. I n the discussion of the Bank Act this question was excluded (see
Stenographic Report of the Reichstag, 1874-75, pp. 1270 ff). The system
of indirect limitation of note issue had no decisive influence on the discount
policy of the Reichsbank, because it is not only a question of the amount,
b u t also of the nature of the demands for money (cf. K. Helfferich, " Das
Deutsche System der Kontingentierung des Notenumlaufs," in G. Schanz,
Finanz-Archiv X I I I , pp. 28,82 ff; Helfferich, " Z u r Erneuerung des Deutschen Bankgesetzes," Leipzig, 1899, pp. 90 ff).
61. See below, notes 64 and 144.




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62. The reissue of notes received in payment, in so far as they are not
notes of the Reichsbank, is forbidden.
63. Cf. publications of the Reichstag, 1889-1890, No. 43.
64. The first discussion took place a t the eleventh meeting, on the 8th of
November, 1889 (Stenographic Report, pp. 291-293); t h e second, concerning the oral report of the VII Commission, a t the twenty-sixth meeting
on the 29th of November, 1889 (Stenographic Report, pp. 577-598), and a t
the twenty-seventh meeting on the 2d of December, 1889 (Stenographic
Report, pp. 599-630); the third discussion a t the thirty-first meeting on
the 6th of December, 1889 (Stenographic Report, 713-730).
65. " Reichsgesetzblatt," p. 201 (cf. note 75 below).
66. No. 95 of the publications of the Reichstag, 10; Legislative Period I,
session of 1898-99.
67. The first discussion took place a t the twenty-seventh, twentyeighth, and twenty-ninth meetings on the 7th, 8th, and 10th of November,
1899; the second a t the seventy-third meeting on the 27th of April, 1899
the third a t the seventy-fourth meeting on the 28th of April, 1899 (Stenographic Report, pp. 693 ff, 721 ff, 749 ff, 1965 ff, 1993 ff). Report of the
V I I I Commission, No. 209 of the publications.
68. See " Die Reichsbank," 1876-1900, Berlin, 1901. Commission publication by Gustav Fischer, Jena.
69. The average discount rate of the bank rose from 3.12 per cent in
1894 to 4.22 per cent in 1904. From the 19th of December, 1899, until
the 12th of January, 1900, the discount rate was 7 per cent. In the neighboring countries, especially in France, the discount rate was lower because
of the different economic conditions, and it is absurd to ascribe, as others
frequently do, the French low rate to the so-called premium policy of the
note banks.
70. The deliveries a t the clearing houses amounted in the year 1884 to
12,130,196,000 marks; in t h e year 1904 to 32,635,273,000 marks.




33




BOOK ONE.

BANK ACT OF MARCH 14, 1875.1
We, William, by the grace of God, German Emperor,
King of Prussia, etc., ordain, in the name of the German
Empire, and with the consent of the Bundesrat and the
Reichstag, the following:
CHAPTER

I.—General provisions.

The right of issuing bank notes, as well as
of increasing the note issue granted by this Act, can be
acquired only by imperial law.2
All kinds of state paper money which a bank is allowed
to issue in order to strengthen its capital are treated in
this Act as bank notes.3
SEC. 2. No one is obliged to accept bank notes in payments which by law must be made in money; nor can
the state treasuries be ordered by state law to receive
bank notes in payment. 4
SEC. 3. Bank notes may be issued only in denominations
of 100, 200, 500, and 1,000 marks, or in a multiple of
1,000 marks. 5
SEC. 4. Each bank is obliged to redeem its notes at
full face value on presentation; and to accept them at
any time at full face value in payment, not only at their
main, but also at their branch offices.6
Banks must redeem damaged notes, if the bearer presents the greater half of the note or if he issues proof
SECTION I .




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Monetary

Commission

that the rest of the note of which he holds only the half
or a smaller part than the half is destroyed.7
Banks are not obliged to redeem destroyed or lost
notes.8
SEC. 5. Bank notes which are returned to the office of
the bank, to one of its branch institutions, or to one of
its established redemption offices in a damaged or soiled
condition are not to be reissued.9
SEC. 6. The notes of a bank, or a series of bank notes,
may be recalled and withdrawn only upon the order
or the consent of the Bundesrat.
The Bundesrat may order the recall and withdrawal,
if the greater part of the notes in circulation is in a damaged or soiled condition, or if the bank has lost the privilege of issue. It may give its consent to such recall and
withdrawal only when it is proved that counterfeits of
the outstanding notes are in circulation.10
In all cases the Bundesrat is to prescribe the manner,
the number, and the duration of the advertisements of
the notice of recall. It is also to determine the period
within which, and the places where, the notes shall be
redeemed; the measures by which the recalled notes are
still to be redeemed after termination of the interval
allowed for redemption; and all other regulations necessary for the security of the holders of the notes.
The regulations to be prescribed by the Bundesrat for
these purposes are to be published in the " Reichsgesetzblatt." 1 1
SEC 7. Note-issuing banks are prohibited from taking
part in the following transactions:




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Imperial

Banking

Laws

First. Accepting bills of exchange.
Second. Buying or selling, on time, merchandise or
negotiable paper for their own account or another person's,
or assuming t h e responsibility for such buying or selling. 12
S E C . 8. Note-issuing banks have t o publish in
Reichsanzeiger at their own expense:

the

First. A statement of assets and liabilities on t h e 7th,
15th, 23d, and t h e last day of every month, not later t h a n
on t h e fifth day after these dates. 13
Second. The balance of their assets and liabilities, as
well as t h e annual accounts of profits and deficits.
These are to be published not later t h a n three months
after t h e close of t h e business year.
The weekly publication must present—
(a) As liabilities: the stock, t h e reserve fund, t h e amount
of circulating notes, the daily maturing liabilities, 14
together with those for which notice must be given, 15
and other liabilities. 16
(b) As assets: the metal stock (the stock of German
currency and of gold in bullion or in foreign coins, the
pound a fine calculated at 1,392 marks) ;17 imperial treasury
notes (Reichskassenscheine);
notes of other b a n k s ; bills;
loans on pledges (Lombardforderungen);
securities ;18 other
assets. 19
The Bundesrat is t o specify which categories of assets
and liabilities are t o be stated separately in t h e annual
report. 2 0
T h e obligations connected with t h e p a y m e n t of domestic
bills of exchange 21 m u s t also be stated in b o t h the weekly
a n d t h e annual publications.
a The pound mentioned here is the German pound.




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SEC. 9. Banks whose note circulation exceeds their cash
and the amount allotted to them in proportion to their
stock, a must after the ist of January, 1876,22 pay to the
Imperial Treasury an annual tax of 5 per cent of the excess.
All kinds of German currency money,23 imperial treasury
notes, notes of other German banks,24 together with gold
in bullion or foreign coin, the pound 6 fine calculated at
1,392 marks,25 are considered as cash in determining the
tax.
If a bank loses the privilege of issue (sec. 49), its share
of uncovered tax-free notes is to be transferred to the
Reichsbank.26
SEC. 10. For the purpose of determining the tax, the
bank management has to ascertain the amount of cash
and circulating notes of the bank on the 7th, 15th, 23d,
and last day of each month,27 and report to the controlling authority. 28 On the basis of these reports, calculating five forty-eighths of 1 per cent of the taxable excess
of circulating notes as the tax to be imposed for the time
recorded, the controlling authority shall fix at the end
of each year the total tax which the bank has to pay to
the Imperial Treasury not later than the 31st of January
of the following year.29
SEC. 11. Foreign bank notes or other noninterestbearing bonds of foreign corporations, associations, or
private individuals, which are payable to bearer and
issued, either exclusively or together with another valuation, in the standard of the Empire or a German State,
are not to be circulated within the German Empire. 30
a See p. 91.




6

The pound mentioned here is the German pound.
38

German

Imp erial
CHAPTER

Banking

Laws

II.—The Reichsbank31

SEC. 12. The name "Reichsbank" is given to a bank
which is subject to the supervision 32 and direction 33 of
the Empire, and which possesses the right of a legal person.34 Its duty is to regulate the monetary circulation of
the whole Empire, to facilitate payments, 35 and to utilize
available capital.
The main office of the Reichsbank is to be located in
Berlin. It is authorized to establish branch offices in all
parts of the Empire.36
The Bundesrat may order the establishment of such
branch offices in certain places.37
SEC. 13. The Reichsbank may carry on the following
transactions: 38
1. To buy and sell gold and silver in bullion and coin.39
2. To buy, sell, and discount bills which mature within
a maximum period of three months 40 and which are
indorsed by three, and in exceptional cases by two, persons who are known to be solvent; also, bonds of the
Empire, of a German State, or of domestic municipal corporations,41 which become due at their nominal value
within the same maximum period of three months.42
3. To make interest-bearing loans for not longer than
three months (Lombardverkehr)43 on the following movable pledges:
(a) Gold and silver coined and uncoined.44
(6) Interest-bearing bonds of the Empire, of a German
State, 45 or of a domestic municipal corporation which are
payable to bearer and which mature not later than within
three months; interest-bearing bonds payable to bearer,




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Monetary

Commission

the interest of which is guaranteed by the Empire or by a
Federal State; fully paid-up original and preferred shares
and preferred bonds of German railroad companies whose
roads are engaged in active business.46 The bank may
also lend on mortgages of provincial, municipal, or other
German credit institutions 47 which are under the control
of the State, and on stocks of German mortgage banks to
the amount of three-fourths of their exchange value. To
these are to be added the bonds of the latter institutions
and banks, which are payable to bearer and which afe
issued on the basis of loans granted to a domestic municipal corporation or which are guaranteed by such a corporation.48
(c) Interest-bearing bonds of foreign states which are
payable to bearer, as well as state-guaranteed foreign
railroad preferred bonds, to the amount of 50 per cent of
their exchange value.49
(d) Bills guaranteed by persons known to be solvent at
a discount of at least 5 per cent from their market value.
(e) Merchandise stored in the country to the amount of
two-thirds of its value.
4. To buy and sell bonds of the kinds classified in 36.50
The business instructions for the board of directors of the
Reichsbank (sec. 26)51 will determine the proportion of
the bank's capital which may be invested in such bonds.
5. To procure payments for private individuals, officials, and institutions, as well as to make repayments of
deposits, and to issue checks or drafts on its branch offices
and correspondents.
6. To buy all kinds of securities and noble metals for
other persons, if a reserve against such purchases has been




40

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Banking Laws

previously deposited, and to sell them after they have
been delivered to the Reichsbank.52
7. To accept interest and noninterest-bearing money in
the deposit and book-account transfer transactions (Giroverkehr); the amount of the interest-bearing deposits53
must not exceed the capital and reserve fund of the bank.
8. To accept valuable goods for safe-keeping.54
SEC. 14. The Reichsbank is required to exchange its
notes for gold bullion at the fixed rate of 1,392 marks for
the pound fine.55
The bank has the privilege of having such gold tested
and analyzed by its experts at the expense of the person
presenting it.56
SEC. 15. The Reichsbank is to publish from time to
time the rates at which it discounts (sec. 13, 2) and those
at which it makes interest-bearing loans (sec. 13, 3).57
The weekly accounts are to be drawn up according to the
books of the Reichsbank board of directors, and those of
the branch institutions which are directly subordinate to
the latter.58
SEC 16. The Reichsbank has the right to issue59 bank
notes to meet all its business contingencies.60 The preparation and issue,61 as well as the withdrawal and destruction, of these notes are to be entrusted to the imperial debt
commission.62
SEC. 17. The Reichsbank must keep in its vaults a
reserve against its circulating notes,63 of which at least
one-third shall be secured in money of German currency,
imperial treasury notes, gold in bullion or in foreign coins,
the pound fine calculated at 1,392 marks,64 and the balance




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Monetary

Commission

in discounted bills which mature not later than within
three months and which are indorsed by three, and in
exceptional cases by two, persons who are known to be
solvent.
SEC. I8. The Reichsbank is required to redeem its notes
to bearer in German currency: 65
(a) At the main office in Berlin, and
(b) At its branch offices as far as the cash and money
exigencies of the latter permit.66
SEC. 19. The Reichsbank is required to accept at full
face value the notes of those banks which are announced
by the Imperial Chancellor, according to section 45 of this
Act, not only in its main office in Berlin, but also in its
branch offices either in cities of more than 80,000 inhabitants 67 or in the city where the bank which has issued
the notes is located,68 as long as the issuing bank punctually fulfills its duty of note redemption. The bank notes
accepted in this manner may be presented either for
redemption or as payments to the same bank which issued
them, as well as payments in the city where the latter
has its principal office.
The Reichsbank is empowered to make arrangements
with other German banks concerning the relinquishment
by the latter of their right of issue.69
SEC. 20. If a pledge (sec. 13, 3) is in arrears, the Reichsbank has the right to sell it publicly through one of its
officials or through one of the authorized auctioneers, without judicial proceedings or cooperation. If the pledge has
a fixed price on the exchange or in the market, it may be
sold privately through one of its officials or through a com-




42

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Imperial

Banking

Laws

mercial broker. In the absence of such a person it may
be sold at the current price through an official auctioneer.
From the sale the Reichsbank is to compensate itself for
its capital, interests, and costs. The bank retains this
right even when there are other creditors, as well as in
case of the bankruptcy of the pledger.70
SEC. 21. The Reichsbank and its branch offices are
exempt from income and property taxes levied by the
States throughout the Empire.71
SEC. 22. The Reichsbank is required to accept payments
for the account of the Empire and to make disbursements,
according to the amount of the imperial deposit, without
compensation.72 It has also the right to assume this
responsibility for the Federal States.73
SEC. 23. The capital of the Reichsbank is to consist of
180,000,000 marks, comprising 40,000 shares of 3,000 marks
each and 60,000 shares of 1,000 marks each.74 Of the
latter, 30,000 shares are to be sold by the 31st of December, 1900, and 30,000 shares by the 31st of December,
1905. The provision of section 38 of the law of the 22d
of June, 1896, does not apply to this sale.
The shares are to be registered in the names of the
owners.
The shareholders are not personally responsible for the
liabilities of the Reichsbank.75
SEC. 24. The net annual profit of the Reichsbank is to
be divided at the close of each year in the following manner:
1. In the first place, a regular dividend of 3 X percent
of the capital is to be distributed among the shareholders.

83702—10




4

43

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Monetary

Commission

2. Twenty per cent of the remainder is to be transferred
to the reserve fund, if the latter has not reached the amount
of 60,000,000 marks.
3. Of the balance which still remains one-fourth is to
be allotted to the shareholders and three-fourths to the
Imperial Treasury.
If the net earnings are less than 3 ^ per cent of the capital, the difference is to be made up from the reserve fund.
The premium gained on the sale of Reichsbank shares is
to be added to the reserve fund.76
Back dividends having a four-year standing after maturity are canceled in favor of the bank.77
SEC. 25. The Empire is to exercise its supervision over
the Reichsbank through a board of trustees (Bank-Kuratoriwn), consisting of the Imperial Chancellor, as chairman, and four members. One of these members is to be
appointed by the Emperor,78 the other three by the
Bundesrat.
The board of trustees is to meet four times a year. At
these meetings reports are to be presented concerning the
condition of the Bank, and a general account is to be rendered of all the business operations of the Bank.
SEC. 26. The Empire is to direct the Bank through the
Imperial Chancellor, and the subordinate Reichsbank
board of directors. In case the Imperial Chancellor is prevented from exercising his duty, the latter is to be assumed
by a deputy named for that purpose by the Emperor.79
The Imperial Chancellor is to direct the whole bank
management according to the provisions of this Act and the
statute to be enacted (sec. 40). He is to ordain the busi-




44

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Imperial

Banking

Laws

ness instructions for the Reichsbank board of directors and
for the branch offices,80 as well as the rules and instructions
for the officials of the Bank; and he alone can authorize the
necessary changes in the existing business regulations and
instructions.
SEC. 27. The Reichsbank board of directors is the managing and executive authority, as well as the official representative, of the Reichsbank.
It is to consist of a president and the necessary number
of members.81 Its orders are to be sanctioned by a majority vote, and subjected to the instructions and directions of
the Imperial Chancellor.
The president and the members of the Reichsbank board
of directors are appointed for life by the Emperor, on the
nomination of the Bundesrat.
SEC. 28. The officials of the Reichsbank have the rights
and duties of imperial functionaries.82
The salaries, pensions, and other remuneration for service, as well as the pensions of the surviving heirs of the officials, are to be paid by the Reichsbank. The salaries and
pensions of the Reichsbank board of directors are to be
fixed annually in the Imperial Budget;83 the salaries of the
other officials are fixed annually by the Emperor, in conjunction with the Bundesrat, on the recommendation of
the Imperial Chancellor.84
No official of the Reichsbank may hold shares of the
same.
S E C 29. Tfie accounts of the Reichsbank are to be
audited by the court of accounts of the German Empire.85




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Commission

The form in which the annual report is to be made out is
to be prescribed by the Imperial Chancellor, whose directions are to be communicated to the court of accounts.86
SEC. 30. The stockholders are to take part in the management of the Reichsbank through their general meetings; 87 also through a standing central committee elected88
from among their members according to the following provisions :
SEC. 31. The central committee is to be the permanent
representative of the stockholders in connection with the
management. It must consist of fifteen members, together
with whom fifteen deputies are elected. The members and
the deputies are to be elected by the stockholders at a general meeting from among those whose registered shares
amount to 9,000 marks minimum. All the members and
deputies must have their domicile in the German Empire,
and at least nine members and nine deputies in Berlin.
One-third of the members are to resign every year, but
remain eligible for reelection.89
Meetings of the central committee must take place at
least once a month, and shall be presided over by the president of the Reichsbank board of directors; extraordinary
sessions may be called by the latter at any time. The
quorum is to consist of at least seven members. The rules
and instructions shall determine in what cases and in what
order the deputies must be called.90
SEC. 32. A report is to be made each month to the central committee regarding the following weekly items: 91
the discounts; the bill and loan transactions; the note circulation; the cash on hand; the deposits; the sale and




46

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Banking

Laws

purchase of gold and bills; the distribution of the funds
among the branch institutions; the results of the ordinary 92
and the extraordinary revisions of the accounts. The
report is also to contain the opinions and suggestions of
the Reichsbank board of directors concerning the general
progress of business and the necessary regulations.
The suggestions of the central committee should receive special consideration in questions concerning the
following:93
(a) The balance and the profit accounts Which are to be
drawn up at the close of the business year by the Reichsbank board of directors and which must be indorsed by the
central committee before it is turned over to the Imperial
Chancellor for final approval. These accounts are reported
to the stockholders at their general meetings.94
(b) The changes in the salary and pension budget (sec.
28).

(c) The appointments to vacancies in the Reichsbank
board of directors, with the exception of the office of president, before the Bundesrat has decided upon a successor
(sec. 27).
(d) The maximum amount which the bank may use for
loans on pledges (Lombarddarlehen) .95
The bank may purchase securities for its own account
only in amounts sanctioned by the central committee.96
(e) The discount rate and the loan interest rate, 97 as
well as changes in the principles and the terms on which
credit is to be given.
(/) Agreements with other German banks (sec. 19),98
together with principles to be observed in the business




47

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Commission

relations with those banks and which must be approved
by the central committee.
General business directions and instructions are to be
communicated to the central committee as soon as they
are issued (sec. 26).
SEC. 33. The members of the central committee are to
draw no salary.
If a member of the committee betrays a bank secret
(sec. 39) divulged to him through his capacity as officer,
or if he otherwise loses public confidence or imperils the
interests of the institution, he may be dismissed from the
committee by the general meeting of the stockholders."
A bankrupt member of the committee, or one who has
either not attended meetings for six months or has lost
his eligibility through failure to comply with the above
provisions (sec. 31), shall be deprived of his office.
SEC. 34. The permanent special control over the management of the Reichsbank is to lie in the hands of three
members elected for the term of one year 10° by the central committee, which at the same time elects three
deputies. The business instructions shall determine when
and in what order the deputies are to be called.101
The elected supervisors may attend all sessions of the
Reichsbank board of directors where they are privileged
with an advisory voice.102
They are further authorized and required to study the
course of business and to examine the books and portfolios of the bank during the ordinary business hours and
in the presence of a member of the Reichsbank board of
directors. They must also be present at the ordinary,




48

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Imp erial

Banking

Laws

as well as the extraordinary, revisions of the accounts.
Reports of their activity must be given at the monthly
meetings of the central committee.
Should the situation anticipated in section 33, paragraph 2, arise, a supervisor may be dismissed by the central committee before the decision of the general meeting
of the stockholders.
SEC. 35. Business may be carried on with the financial
administration of the Empire or of a German State only
so far as allowed by the provisions of this Act and of the
bank statute. 103 In case of necessary deviations from
the general business course of the bank all new plans
must first be submitted to the supervisors,104 and, at the
suggestion of only one of them, must be referred to the
central committee. The business must not be transacted
if the consent of a majority of the quorum of the committee can not be secured.
SEC. 36. Besides the chief office of the bank, Reichsbank
local main offices0 are to be established in the larger
cities,105 designated by the Bundesrat. These offices are
to be under the supervision of a board of at least two
members and of a bank commissioner (Bank-Kommissarius) appointed by the Emperor.106
After the list of stockholders of each local main office
of the Reichsbank has been closed, a district committee 107
is to be appointed by the Imperial Chancellor. Its members are to be selected from the lists of the stockholders
living in the city where the local main office is located or
a In translating the expression "Reichsbankhauptstelle" the word local
has been inserted that they may be clearly distinguished from the central
main office, and they are called Reichsbank local main offices.—Translator.




49

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Monetary

Commission

in its immediate neighborhood,108 which lists are made
out by the bank commissioner and the central committee.
The condition of the business of the local main office and
the general regulations enacted by the central administration are reported to the committee at its monthly sessions. Plans which are suggested by the district committee but are not within the competence of the directors
of the local main office are to be referred by this board to
the Imperial Chancellor.109
The permanent special control over the business of the
local main offices of the bank, according to the provisions
of section 34, is to be exercised, in so far as it is possible
without interference with the daily course of business, by
two or three deputies chosen by the district committee
from among its members.110 If there is no district committee,111 the deputies are appointed by the Imperial
Chancellor, as indicated in paragraph 2.
SEC. 37. Other branch institutions may be established
either by the Imperial Chancellor,112 if they are to be
directly subordinate to the Reichsbank board of directors,113 or, if they are to be subordinate to another branch
institution, by the Reichsbank board of directors.
SEC. 38. The Reichsbank is responsible in all cases, even
where the law demands especial authorization, for the
signature of the board of directors of the Reichsbank or
of a Reichsbank local main office, whenever two members
of the board of directors of the Reichsbank or of the local
main office or two officials vested with the right of representation of the latter have affixed their signatures.114
The Imperial Chancellor is to determine and make
special announcement under what conditions and in what




50

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Banking

Laws

form t h e signatures of the local bank offices115 are to constitute an obligation for the Reichsbank. 116
All charges against the main and t h e subordinate local
offices of t h e Reichsbank 1 1 7 regarding their conduct of business may be brought before the court of the place where
t h e branch office is located. 118
SEC. 39. All persons connected with t h e management
of the Bank as officers, members of the committee, or
deputies are pledged to silence concerning t h e business
of t h e Bank and especially concerning its business with
private persons and t h e amount of credit extended t o
t h e latter. The supervisors of t h e central committee
and their deputies, as well as those of t h e local main
offices, are t o be pledged to secrecy b y a formal handclasp
in lieu of an oath before entering upon their duties. 119
SEC. 40. The S t a t u t e of the Reichsbank is t o be decreed
by t h e Emperor, with the assent of t h e Bundesrat, according to t h e provisions contained in t h e foregoing sections
12 t o 3 9 . 1 2 0
This S t a t u t e must contain special provisions on the following points:
1. The form of the certificate of stock of t h e Reichsb a n k and of t h e dividend coupon and talon (dividend
warrant) attached to it.121
2. The rules to be observed in t h e transfer or mortgage
of certificates of stock. 122
3. The invalidation (Mortifikation) of lost or destroyed
certificates of stock, as well as t h e proceedings with regard to lost dividend certificates and talons (dividend
warrants). 1 2 3




51

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Commission

4. The rules to be followed in the preparation of the
annual report of the Reichsbank.124
5. The terms and the methods of paying dividends.125
6. The form of notice for the general meeting of the
stockholders, as well as all that relates to the exercise of
the right of vote by the latter. This right, however,
need not be conditioned by the possession of more than
one certificate of stock, nor may one person have more
than 300 votes. A share of 3,000 marks confers,3 votes;
a share of 1,000 marks 1 vote.126
7. The method of electing the central committee with
its deputies, and the district committees of the local main
offices of the Reichsbank and their deputies.127
8. The forms to be observed in the announcements
issued by the Bank, and the question of official newspapers 128 in which these are to be published.
9. The liquidation which may take place in case of
revocation of the privilege of the Reichsbank (sec. 41).129
10. The method of securing the cooperation of the
shareholders, or of their representatives, in effecting an
increase of capital which may be determined by an imperial law.130
11. The provision for security to be demanded by the
Bank, if it undertakes to buy or sell negotiable papers
not for its own account.131
SEC. 41. The Empire reserves the right of option on
January 1, 1891, and thereafter at the expiration of every
ten-year period: (a) of discontinuing the Reichsbank
established by this Act and acquiring its property on the
basis of the book values, or (b) of acquiring the total




52

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Laws

stock of the Reichsbank at valuation.132 One year's
notice is to be given, and preliminary announcement to
be made,133 by the Imperial Chancellor to the Reichsbank
board of directors. The announcement is to be issued
upon the imperial decree, with the approval of the Bundesrat, and is to be published by the Reichsbank board
of directors.
In either case the reserve fund, in so far as it is not required to defray losses, is to be equally divided between
the shareholders and the Empire.
The extension of the period designated in the first
paragraph of this section can be granted only by the
Reichstag.
CHAPTER

III.—Private note-issuing banks.

SEC. 42. Banks which, in virtue of this Act,135 are vested
with the right of note issue are prohibited from carrying
on banking business, either through branch offices or
agents, or as partners in banking houses, outside of the
State which has granted them this right.136
SEC. 43. The notes of a bank to which this Act gives
the right of issue 137 may not be used for payment outside
of the State which has granted this privilege.138 Such
notes, however, may be exchanged for other bank notes,
paper money, or coins.
SEC. 44. The restrictions of section 43 do not apply to
those banks which by the ist of January, 1876, act in
accordance with the following:
1. The bank may invest its capital only in such transactions which are designated in section 13, articles 1 to




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4,139 and, furthermore, only one-half of its capital and
reserve fund may be used for investments named in
article 4.140
The bank is to be allowed to bring its loans into conformity with the provisions of section 13, article 3,141
until the 1st of January, 1877.
The discount and the interest rates of the bank are to
be announced from time to time.142
2. From its annual net earnings above 4 ^ percent the
bank is to add at least 20 per cent to the reserve fund
until the latter reaches one-fourth of the stock.143
3. The bank is obliged to keep a reserve of at least 3 3 ^
per cent of the total amount of its outstanding notes in
German currency, imperial treasury notes, gold bullion,
or foreign coins, the pound fine calculated at 1,392 marks;
and the balance in discounted bills, which mature in three
months, and which are indorsed by three, and in exceptional cases by two, persons known to be solvent.144
4. The bank must agree to redeem its notes to bearer
in German currency, at its office, established in Berlin or
Frankfort (Main), with the approval of the Bundesrat.
Notes must be redeemed before the close of the day
following the 'day of presentation.145
5. The bank must also accept in payment at their full face
value German bank notes which are permitted to circulate throughout the Empire; such notes, as long as the
bank which has issued them punctually fulfills its duty of
redemption, shall be redeemed at its main office or at its
branch offices which are located in cities of more than
80,000 inhabitants. 146 The notes accepted by the bank,




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except Reichsbank notes, may be used only in one of the
following ways: for redemption, for making payments
to the bank which issued them, or for making payments
in the city where the latter bank has its principal office.147
6. The bank is to forego all claims which may eventually arise either against the granting of the privilege of
the right of issue to other banks,148 or against any act by
which a German State cancels its obligation to accept
bank notes in lieu of cash payments to the public treasury.149
7. The bank must consent to the revocation of its
right of issue granted for the period indicated in section
41, when ordered by the state government or by the
Bundesrat, and must forego all claims to compensation.150
The bank must be given one year's notice.
The Bundesrat may revoke the right of issue only with
a view of securing greater uniformity in the note-bank
system, or else, when, in the opinion of the Bundesrat,151
a note bank has not conformed to the provisions of this
Act.
A bank which has complied with the requirements contained in the foregoing articles 1 to 7 may be allowed by
the Bundesrat 152 to carry on banking business through
branch institutions or agencies153 outside the province
indicated in section 42, at the request of the administration of the State in which this bank is located.154
Banks are not subject to the requirement stated under
(2), if by January 1, 1876, they can prove that the
amount of note issue granted to them in their statute or
charter does not exceed the stock which they had on the




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ist of January, 1874.155 They also have the right of carrying on banking business throughout the Empire by
means of branch offices or agents, and of circulating
their notes throughout the Empire.156 The Bundesrat,
furthermore, reserves the right of extending to these
banks the temporary and revocable privilege, and of
establishing the proper regulations, of issuing certain
loans which are excluded by provision (1), if the banks
were accustomed to issue such loans and if the latter are
demanded by business exigencies.157
SEC. 45. Banks which desire to avail themselves of the
provisions in section 44 have to prove to the Imperial
Chancellor—
1. That their statutes conform to the stipulations set
forth in section 44.
2. That the necessary offices for the redemption of
notes have been established.158
As soon as these proofs are presented, the Imperial
Chancellor is to make public announcement in the
" Reichsgesetzblatt, 159 " first, of the fact that the restrictions of sections 42 and 43, or of section 43 only, of this
Act are not applicable to the designated bank; and,
second, of the name of the city in which the notes of the
bank are to be redeemed.
SEC. 46. If the right of issue granted by a State or by
other public authority is subject to recall on notice, this
recall may, in virtue of this Act, become operative at the
earliest permissible date. This does not apply to those
banks which have limited their note issue to the amount
of their capital on the ist of January, 1874, and have




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complied with the provisions in section 44, under articles
1 and 3 to 7.160
Statutory provisions, by which the duration of the
right of issue of a bank or of its authority is made dependent on the existence of the note-issuing privilege of the
Bank of Prussia, are herewith made void.161
SEC. 47. Every change in the law, statute, or charter
of a bank possessing the right of issue, in so far as the
change may affect the capital, the reserve fund, the conditions of business, the reserve against the notes issued,
or the duration of the right of issue,162 must be approved
by the Bundesrat. This provision does not exclude the
regulations and concessions of the state laws which are
not contained in the present Act, and by which a bank is
subject to restrictions with regard to discount, loan,
securities, and deposit transactions.
The consent of the Bundesrat is to be requested by the
administration of the State in which the bank is located
after the other legal requirements have been fulfilled, and
it must be refused if the bank does not comply with the
provisions of section 44.
The Bavarian Government is authorized to extend to
the Bavarian Note Bank the right of increasing its notes
to the maximum amount of 70,000,000 marks, or to
grant this right to any other bank conforming to the provisions of section 44.163
SEC. 48. The Imperial Chancellor is authorized to ascertain at any time—if necessary, by having a committee
examine the books, transactions, and the treasury of the
note-issuing banks—whether these banks are observing
the conditions and limitations of note issue established by




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law or statute; whether they are fulfilling the stipulations of the law by which they are exempted from the
regulations of sections 42 and 43, or of only section 43 of
this Act,164 and whether the weekly and annual reports
published by them, as well as the records issued for the
purpose of calculating the taxes (sec. 10), correspond with
real facts.165
The right of the state governments to supervise the
banks is not affected by this provision.
SEC. 49. A bank loses the right of issue:
1. Upon the expiration of the term for which it was
granted.166
2. By relinquishment.167
3. If bankruptcy proceedings have been instituted
against it.
4. On the basis of a legal decision.168
5. By the enactment of a state government, according
to the provisions of the statute or charter.
SEC. 50. The right of issue can be withdrawn by legal
verdict on the charge of the Imperial Chancellor or of the
Administration of the State in which the bank is located:
1. When the provisions of the statute, of the charter, or
of this Act 169 concerning the reserve fund, have been violated, or when the note circulation has exceeded the limit
fixed by statute, charter, or law.170
2. When the bank carries on business prohibited in section 42, or outside the province designated in section 42,
before the issue of the proclamation of the Imperial Chancellor mentioned in section 45; or, if the bank sends, or
allows its notes to be sent, outside the province indicated
in section 43.171




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3. If the bank does not provide for the redemption of
notes presented—
(a). At its main office on the day of presentation.
(6). At its redemption office (sec. 44, art. 4), by the close
of the day following the day of presentation.
(c) At the other redemption offices mentioned in the
statute, by the close of the third day after the day of presentation.172
4. Whenever stock has been reduced by one-third
through losses.
The charge is to be conducted in a regular judicial
manner, and is regarded by the imperial and state law as
a commercial suit (Handelssache) .173 The decision is also
to contain an order for the withdrawal of the notes in
circulation.174
SEC. 51. The decision goes into effect only after it has
become legally valid. The court of procedure is to authorize its execution, and is to determine the period within
which the bank has to publish the announcement of the
notice of withdrawal of its notes.
Inasmuch as the bank has not become insolvent, the
court is to appoint a trustee (Kurator) to supervise the
withdrawal of the notes. If the bank does not fulfill the
proper requirements, the trustee is to demand the liquidation of the bank by the court.
Redeemed notes are to be delivered by the bank at an
office situated in the same city and announced by the Imperial Chancellor.
SEC. 52. Six months after the decision (sec. 50) has
become legally valid, the bank is to deposit with the office
83702—10




5

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named by the Imperial Chancellor a sum equal to the
amount of the notes which were not yet redeemed. The
office shall return to the bank its deposit upon its delivery
of the notes, and the balance, if there be any, after the
expiration of the period established by the Bundesrat for
the withdrawal of the notes.
SEC. 53. The notes delivered to the receiving office are
to be destroyed in the presence of the trustee of the receiving office and of the trustee appointed to take charge
of the withdrawal of the notes. A legal or notarial record
is to be kept of the destruction of the notes. The management of the bank may have two representatives witness
the destruction. The head of the receiving offices is to
give at least a week's notice to the bank of each date on
which the notes are to be destroyed. The destruction can
take place at one or at several successive periods.
SEC. 54. All those corporations which, though they are
not note-issuing banks, are vested by this Act with the
right of issuing notes or other noninterest-bearing bonds,
payable to bearer, and which on this ground avail themselves of the privilege of issuing and circulating paper
money, are subject to the provisions of sections 2 to 6,
inclusive, sections 43 and 47, article 1, of this Act, in so far
as these sections relate to the privilege of issuing paper
money, to the duration of this privilege, and to the reserve
against paper money.175
CHAPTER

IV.—Penal provisions.

SEC. 55. Whoever issues unauthorized bank notes, or
other noninterest-bearing bonds, payable to bearer, is to
be punished by a fine equivalent to ten times the amount




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of the paper money issued by him, and not less than 5,000
marks.178
SEC. 56. Whoever uses notes of domestic banks, or of
other money-issuing domestic corporations,177 for payments outside the province in which they are permitted
to circulate (sec. 43), is to be punished by a fine not exceeding 150 marks.
SEC. 57. Whoever, contrary to the prohibition in section
11, makes payments with foreign notes, or other noninterest-bearing bonds payable to bearer, of foreign corporations, associations, or private individuals, which are valued
in the imperial standard or in the standard of a German
State, is to be punished by a fine of from 50 to 5,000 marks.
If such practice is kept up as a trade, the penalty is to include imprisonment up to one year. The mere attempt
is also punishable.
SEC. 58. Whoever, acting as the head or the agent of a
branch office, transacts banking business for the account
of a bank, or enters into combination with banks as a
partner, contrary to the provisions in section 42, is to be
punished by a fine not exceeding 5,000 marks. The
same fine is to be imposed on the members of a bank
directorate who do not comply with the provisions of
section 7, or who disregard the provisions of section 42
(a) by establishing branch offices or agencies, and (b) by
going into partnership with other banks.
SEC. 59.178 The members of a bank directorate are
punishable (a) by imprisonment up to three months, if
they consciously misrepresent the condition of the business of the bank in the publications ordered by the pro-




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visions of section 8; (b) by a fine equal to ten times the
amount of the tax withheld, and not less than 500 marks,
if their report, ordered by section 10, subtracts from the
actual amount of circulating notes which are subject to
taxation; (c) by a fine equal to ten times the excess
amount and not less than 500 marks, if the bank notes
exceed the authorized issue.179
The penalty provided in the last case applies also to the
directors of such corporations which are authorized to
issue noninterest-bearing bonds, payable to bearer, if
the latter exceed the authorized issue.180
CHAPTER

V.—Final provisions.

SEC. 60. Sections 6, 42, and 43, as well as the penal
provisions relating to them and contained in sections 56
and 58 of this Act, are to go into effect on the ist of
January, 1876.181
SEC. 61. The Imperial Chancellor is authorized to form
a treaty with the Royal Prussian Government concerning
the transfer of the Bank of Prussia to the Empire,182 on
the following conditions:
1. After withdrawing its capital of 1,906,800 thalers,
together with one-half of the reserve fund, Prussia is to
cede the Bank of Prussia to the Empire on the ist of
January, 1876, with the rights and obligations of the
Bank on the conditions stated in the following articles,
2 to 6. The Empire will reorganize this bank into an
imperial bank, according to the provisions of this Act.
2. Prussia is to receive compensation of 15,000,000
marks for the surrender of the Bank. The sum is to be
covered by the Reichsbank.




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3. The former stockholders of the Bank of Prussia shall
have the right of demanding the exchange of their certificates for shares of the Reichsbank of the same nominal
value, provided they forego all their rights in favor of
the Reichsbank.
4. The Reichsbank is to refund the capital and the
share of the reserve fund to those stockholders of the
Bank of Prussia who demand such repayment, according
to the provisions of sections 16 and 19 of the bank ordinance of the 5th of October, 1846.
5. The Reichsbank shall pay to Prussia for the years
1876 to 1925, inclusive, an annual sum of 621,910 thalers
in semiannual installments on account of the obligations
assumed by the Bank of Prussia on the 28th~3ist of
January, 1856, with regard to the state loan of 16,598,000
thalers. If the privilege of the Reichsbank shall not be
extended, and no other bank shall assume the rights and
obligations of the latter, the payments shall be made by
the Empire, so that the income shall accrue undiminished
to the Prussian State Treasury until the time above
mentioned.
6. As regards the property of the Bank of Prussia, an
agreement is yet to be made between Prussia and the
Reichsbank.
SEC. 62. The Imperial Chancellor is authorized—
1. To sell those shares of the Reichsbank which are not
exchanged for shares of the Bank of Prussia, according
to section 61, article 3.183
2. To issue interest-bearing bonds, maturing not later
than on the 1st of May, 1876, which shall equal the amount




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of the unsold shares, in order to secure the capital required
by section 23.
SEC. 63. The preparation of the bonds (sec. 62, art. 2)
shall be undertaken by the Prussian administration of the
state debt. The Imperial Chancellor is to fix the rate of
interest. The amount of bonds may be extended by the
order of the Imperial Chancellor before the 1st of May,
1876, but only as a reserve against the bonds already in
circulation.
SEC. 64. The amounts necessary for the interest and
the redemption of these bonds must be taken from the
revenues of the Empire, and must be at the disposal of
the administration of the imperial debt at the time when
they are due.
SEC. 65. The bonds are to be issued through the
Imperial Treasury.
The interest accrued on the bonds is canceled after
four years', and the principal after thirty years' maturity, the date of which is to be given in each bond.
SEC. 66. The provisions of the " Handelsgesetsbuch"
concerning the entries in the Commercial Register and their
legal consequences are not applicable to the Reichsbank.184
Issued over our imperial signature and seal. Given at
Berlin, the 14th of March, 1875.
(Signed)
WIJXIAM.




PRINCE VON BISMARCK.

64-

NOTES ON BANK ACT OF MARCH 14, 1875.
1. The Bank Act treats of the reform of the note system, which was
instituted by imperial legislation, according to article 4 of the constitution
of the Empire. The way was prepared for the Act by the law which was
in force till the 31st of December, 1875; by the provisions of the so-called
" b a n k a c t " of the 27th of March, 1870 (" Burgerliches Gesetzbuch," p. 51);
further, by article 18 of the coinage act of the 9th of July, 1873; and,
finally, by the provisions for its execution in article 2 of the law of the 21st
of December, 1874 ("Reichsgesetzblatt," p. 193; see below, note 13). The
Bank Act went into effect throughout the German Empire on the 1st of
April, 1875, with the exception of the provisions indicated in section 60,
which were published on the i-st of January, 1876. (Cf. Constitution of the
Empire, art. 2.)
2. This provision is introduced in lieu of sections 1 and 2 of the law of
the 22d of March, 1870. (Cf. also Bank Act, sec. 44, par. 1; No. 6, par. 4;
and sec. 46, par. 1.) There is no need of a motion being made to that
effect by the Federal Government. This law is the first of its kind. Section 47, paragraph 3, contains a special provision limiting section 1, paragraph 1, with respect to Bavaria. The provisions concerning both the
absolute maximum amount of note issue and the limit fixed in relation to
the capital (sec. 44, par. 4) were contained in the previous statutes of the
individual note banks. In case the limit is exceeded, the right of issue
can be withdrawn (sec. 50, No. 1). With respect to the Reichsbank, cf.
section 16.
At the time of the publication of the Bank Act there were 33 note-issuing
banks in the German Empire. Of these, the Bank of Prussia and five others
had the unlimited right of note issue; the others had a more or less limited
right of issue.
Penal provisions for unauthorized note issue are contained in sections
55 and 59, No. 3. (Cf. also sec. 48.)
3. Section 1, paragraph 2, corresponding to the law of the 22d of March,
1870, relates to the Oldenburg Landesbank, which was granted the right
of issuing 2,000,000 thalers of Oldenburg state paper money in accordance
with the law for the Duchy of Oldenburg of the 12th of August, 1868,
dealing with the issue of paper money, and in accordance with a previous
agreement between the Grand Duchy administration and the founders
of the bank. The provision became superfluous after the relinquishment
by this bank of its right of issue (see below, note 26) and the subsequent
withdrawal of the paper money.
4. This excludes them from legal-tender as well as from compulsory
circulation. The imperial and state treasuries have only administrative




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powers. (Cf., e. g., for Prussia, the Proclamations of the Minister of Finance
of the 5th of January, 1876, and of the Minister of Justice of the n t h of
February, 1876 ) Concerning the bank treasury, cf. section 4, note 6,
and sections 19 and 44, paragraph 1, No. 5. Sections 2 to 6 apply also to
notes issued by corporations, etc. (Sec. 54.)
Concerning the right of the private note banks to protest, cf. section 44
paragraph 1, No. 6. Concerning protection, see law of the 1st of February,
1905, section 7.
5. Cf. the statistical reports of the German bank notes, periodically
published in the " Reichszentralblatt" from February, 1877, until the end
of November, 1880; and after t h a t time, the " N o t e s " to the " S t a t u s der
deutschen N o t e n b a n k e n " published monthly in the same journal since
September, 1875. By far the greatest amount has been issued in notes
of 100-mark denomination. Notes of 200 marks are no longer found,
while notes of 500 marks are issued only by the Bank of Saxony and the
Bank of Prussia (now by the Reichsbank; -see note 59). Notes of 1,000
marks are issued only by the Reichsbank. Notes of higher amounts were
never issued, and notes for smaller amounts than 100 marks had already
been forbidden by article 18 of the Coinage Law of the 9th of July, 1873.
(See note 1.) Concerning notes issued by corporations, etc., see section 54.
6. The bank note is an order to pay on demand to bearer. The place
of payment is at the main office (Hauptsitz) of the bank. The Reichsbank
alone has wider obligations (sec. 18b). Concerning the other redemption
offices of the private note banks, cf. section 44, paragraph 1, No. 4, and
section 45. In case of failure to redeem notes at the proper time, the right
of issue can be withdrawn by legal judgment, according to section 50,
paragraph 1, No. 3. Concerning the acceptance of the notes of other
banks, cf. section 19 and section 44, paragraph 1, No. 5.
7. Similarly, in the case of imperial treasury notes, according to the law
of the 30th of April, 1874, section 6, paragraph 2.
8. This provision contains no prohibition against the payment with
bank notes and demands no announcement of their invalidation. (Cf.
also " Biirgerliches Gesetzbuch," sec. 799, par. 1.) The recall mentioned
in section 6 is different. The assertion of claims (Vindikation) is subject
to the decision of civil law. (Cf. " Biirgerliches Gesetzbuch," sec. 1006.)
9. If the larger part is in such condition, the withdrawal of the notes
can be ordered. (Sec. 6, par. 2.)
10. The law distinguishes between an order (par. 2) and mere consent
(par. 3). The withdrawal and destruction of the imperial bank notes,
even in the case of section 5, are intrusted to the imperial debt commission.
(Sec. 16, par. 2.)
Concerning the withdrawal ordered by legal judgment, see section 50,
paragraph 3, and sections 51-53. The period within which the announcement is to be made is determined by the court.
Concerning the treatment of counterfeit imperial bank notes, the Bundesrat decided, on the 30th of November, 1876, to adopt the following
provisions:
66




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la. All imperial state treasuries must retain the counterfeit or false bank
notes which come into their possession. (Sees. 146-149 of the "Strafgesetzbuch.")
(b.) If a counterfeit note is recognized by an employee of the bank,
notice is to be given at once by the representative of the bank to the
judicial or public authority, to whom the counterfeit note and a written
statement of the circumstances of the transaction must be submitted.
(c.) If the genuineness of the note appears doubtful, the latter is to be
sent to the Reichsbank board of directors at Berlin, and the holder is to
be given a receipt for it. The board of directors will have the note examined, and (a) in case it proves genuine will remit its value through the
office which sent it to the bearer; (b) in case it proves spurious, the board
of directors will return the counterfeit note to the office in order that the
latter may proceed in accordance with provision b.
(d.) The Reichsbank board of directors is to be informed at once by the
proper justice or police authority of each investigation instituted in connection with counterfeit imperial bank notes; and as soon as it can be
done without disadvantage to the proceedings, the counterfeit note is to
be delivered to the board of directors.
The Reichsbank board of directors is to be kept informed of the progress
of the proceedings and their final result. For this purpose the documents
and the counterfeit notes are to be delivered to and retained by the board
of directors.
I I . The various imperial and state authorities are to be informed of the
provisions under No. I, with special reference to the provisions of the
"Strafgesetzbuch" contained in sections 146-149, 151-152, and 360, Nos.
4-6. Such information has been given. (Cf., e. g., the decree of the
Prussian Minister of Finance of the 13th of February, 1877.)
11. This was not made clear in the Federal Constitution. Such provisions have been ordered in respect to the notes of the Bavarian Hypotheken
und Wechsel-bank, on the 7th of June, 1877 ("Reichsgesetzblatt," p. 527);
of the Rostocker Bank, on the 19th of December, 1877 (ibid., p. 575); on
the 9th of April, 1878 (ibid., p. 11); on the 19th of October, 1878 (ibid.,
P- 35°); °f the former Preussische Bank, on the 15th of March, 1878 (ibid.,
p. 6), and on the 10th of April, 1878 (ibid., p. 12); of the Liibeck Komerzbank
on the 8th of August, 1886 (ibid., p. 259); of the Kolnische Privatbank, on
the 7th of July, 1887 (ibid., p. 286); of the Hannoversche Bank, on the 16th
of July, 1889 (ibid., p. 169); of the Bremer Bank, on the 25th of October,
1889 (ibid., p. 199); of the Leipziger Kassenverein, on the 4th of July,
1890 (ibid., p. 76); of the Magdeburger Privatbank, on the 9th of December,
1890 (ibid., p. 205), and on the 29th of April, 1893 (ibid., p. 153); of the
Provinzial-Aktienbank,
of the Grand Duchy of Posen, on the 9th of December, 1890 (ibid., p. 206); of the Danziger Prival-Aktienbank, on the 25th
of December, 1890 (ibid., p. 213); of the Chemnitzer Stadtbank, on the 3d
of February, 1891 (ibid., p. 12); of the Stadtische Bank zu Breslau, on the
19th of November, 1893 (ibid., p. 263); of the Frankfurter Bank, on the




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6th of July, 1901 (ibid., p. 262); of the Bank fur Suddeutschland, on the 5th
of June, 1902 (ibid., p. 225). All of these orders, with the exception of the
one to the Preussische Bank (cf., note 59), deal with the loss of the right of
note issue. (Sec. 6, par. 2; sec. 49.)
In accordance with section 6, there was also ordered the withdrawal of
the notes issued by the Provincial (Landstandische) Bank a t Bautzen,
which is not included among the note banks (see sec. 54). See proclamation of the 17th of August, 1903, " Reichsgesetzblatt," page 270.
12. This prohibition is aimed chiefly at contango transactions (Reportgeschafte).
Cf. the penal provision in section 58, paragraph 2. The reason for the
prohibition of blank credit is evident. The common-law provisions with
regard to the transactions named in section 7 remain unaffected.
The law of the 19th of June, 1893, which deals with the final provisions
concerning usury, has no application to the note banks, according to Article
2, section 4, paragraph 2.
13. The monthly " S t a t u s der deutschen N o t e n b a n k e n " (cf. note 5) is
based on these weekly reports. Concerning the Reichsbank, cf. section
50, sentence 2, section 32, paragraph 1.
The following provision of the law of the 21st of December, 1874, article
2 (see note 1), concerning the issue of bank notes, is also to be noted here:
"Sec. 4. The banks are further required to report to the Imperial Chancellor for the purpose of publication, not later than on the 7th day of each
month, the amount of the following items on hand on the last day of the
preceding month: (1) circulating notes; (2) notes in the bank vaults
(including affiliated offices, agents, and other branch institutions); (3)
notes destroyed after redemption. These notes are to be recorded separately according to their denominations."
Article 1 and the remainder of article 2 were of only temporary significance.
The first report of this kind was published according to the proclamation
of the Imperial Chancellor on the 15th of January, 1875 ("Zentralblatt fur
d a s Deutsche Reich," pp. 91 ff; cf. further ibid., 1875, pp. 132, 178, 190,278,
312, 352, 432, 460, 514, 664, 684, 730, 788; 1876, pp. 34 ff.). In the further
reports the precluded bank notes are also given. (Cf. idid., 1876, pp. 112,
172, 228 ff., etc.; 1877, p. 124.) In the following reports only the notes
in circulation or on hand were reported (Ibid., 1877, pp. 206, 216, 280,
etc.). Cf. also Bank Act, section 10.
14. For example, the giro deposits (Giroguthaben) (sec. 13, No. 7), and
deposits (fremde Gelder) payable on demand at the Reichsbank (sec. 22).
15. For example, deposits. (Sec. 13, No. 7.)
16. T h a t is, all kinds of debts recorded in the books, e. g., undivided
profits.
17. German currency consists of imperial gold, silver, nickel, and copper
coins, and the thalers, which are equivalent to gold coins (Coinage law,
arts. 14 and 15). The account need not contain such details as the par-




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ticular amounts of the gold and the silver coins and their denominations.
Following the method of the Bavarian note bank, however, it has been
the practice of the administration of the Reichsbank in their reports on
the 31st of December to give in the annual average these items, viz, gold
in bullion and foreign coins, German gold coins, thalers and subsidiary
coins. Information concerning the stock of metal at the end of 1898 is
contained in the report of the commission of the 14th of April, 1899, page 3.
Since 1902 it is also recorded at the January session of the central committee of the Reichsbank by the president, and then published in the
"Norddeutsche Allgemeine Zeitung."
The provision concerning the amount of gold corresponds to section 14
and section 9, paragraph 1.
18. This includes also short-time bonds (sec. 13, No. 2; sec. 32, par. 1),
e.g., imperial treasury notes. The suggestion to add the phrase " a t the
daily r a t e " was rejected as superfluous by the commission of the Reichstag
of 1874-75. (Cf. the "Handelsgesetzbuch" of the 10th of May, 1897,
sees. 40 and 261, as well as the statute of the Reichsbank, sec. 13, No. 1.)
19. For example, real estate, as well as advances on gold which are free
from interest, etc.
20. These provisions are contained in the announcement of the Imperial
Chancellor of the 15th of January, 1877, concerning the instructions with
regard to the assets and liabilities in the annual reports of the note banks.
Special instructions for the annual report of the Reichsbank in accordance with section 40, No. 4, are contained in section 13 of the statute of
the Reichsbank. Section 59, No. 1, of the Bank Act deals with penalties
for false returns in the weekly reports. The Imperial Chancellor verifies
the correctness of the returns (sec. 48).
21. The Reichsbank does not rediscount its domestic bills. Bills
issued by private note banks are frequently rediscounted, however, by the
Reichsbank.
22. This provision contains the important, but often disputed, principle of the so-called indirect limitation of note issue. (Cf. motivation of
the Bank Act of 1875, pp. 18 ff.) The tax-free note reserve—that is, the
surplus of bullion and of the amount of uncovered notes allotted to the
bank—is therefore an important factor in the bank policy.
The bill of 1898-99 retained the system as feasible, but proposed an
increase in the amount of notes which the Reichsbank could issue. This
privilege of increase was still further extended in the Reichstag. (See bill,,
art. 3; report of the commission, No. 209, 10, Legislative Period I, session
1898-99, pp. 29 ff.; Stenographic Report 1, discussion, pp. 696, 702,710,
etc.)
23. Cf. note 17.
24. The inclusion of these notes (cf. sees. 19, 44, par. 1, No. 5) distinguishes this provision from those dealing with the so-called "reserve of
one-third" (Dritteldeckung).
(See sees. 17 and 44, No. 3.)




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25. Cf. section 13, No. 1, and section 14. Gold loans (sec. 13, No. 30)
are not included.
26. Thirteen banks which had notes to the amount of 22,561,000 marks
have relinquished the right of note issue at the outset (cf. sec. 49, No. 2),
viz:
Die Ritterschaftliche Privatbank in Pomerania (Stettin).
Die Bank des Berliner Kassenvereins.
Die Kommunalstandische Bank fur Preussische Oberlausitz (Gorltz).
Die Leipziger Bank.
Die Weimarische Bank.
Die Oldenburgische Landesbank.
Die Mitteldeutsche Kreditbank in Meiningen.
Die Privatbank zu Gotha.
Die Anhalt-Dessauische Landesbank.
Die Thuringer Bank (Sonerschausen).
Die Geraer Bank.
Die Niedersachsische Bank (Buckeburg).
Die Liibecker Privatbank.
Then followed:
Marks.

Die Landgraflich hessische konzessionierte Landesbank in
Hamburg (No. 11)
Die Rostocker Bank (No. 21)
,
Die Kolnische Privatbank (No. 5)
Die Kommerz Bank in Lubeck (No. 32)
Die Hannoverische Bank (No. 10)
Die Bremer Bank (No. 33)
Der Leipziger Kassenverein (No. 16)
The five following banks lost right of issue at the expiration of
the period for which this authority was given (cf. sec. 49,
No. 1):
Die Dantziger Privataktienbank (No. 7)
Die Provinzial Aktienbank of the Grand Duchy of Posen
(No. 8)
Die Magdeburger Privatbank (No. 6)
Die Chemnitzer Stadt Bank (No. 17)
Die Stadtische Bank zu Breslau (No. 3)
Total

159,000
1, 155, 000
1,251, 000
959, 000
6, 000, 000
4, 500, 000
1, 440, 000

1,272, 000
1, 206, 000
* > 173, 000
441,000
1 > 283, 000
43, 400, 000

The Reichsbank's share of the circulation was thus increased to
293,400,000 marks.
This share was further extended by the enactment of the " Law concerning the Change of the Bank Act of the 14th of March, 1875," on the 7th
of June, 1899. (See below, note 74.) Article 5 of this law reads as follows:
" T h e total amount of tax-free uncovered note circulation to be apportioned to the Reichsbank, according to section 9 of the Bank Act, includ-




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ing the shares of the banks numbered 2 to 11, 15 to 17, 21 to 23, and 25 to 33,
which have accrued to the Reichsbank, is to be fixed a t 450,000,000 marks,
while the total note circulation for all the banks is to be raised to 541,600,000
marks."
Cf. above, note 22. The state governments had proposed an increase
of the share of the Reichsbank to 400,000,000 marks, and of the aggregate
amount to 491,600,000 marks. The commission approved of this a t the
first and second readings, b u t a t the third reading a compromise was made
resulting in an extension of 50,000,000 marks, or of 450,000,000 marks for
the Reichsbank and 541,600,000 marks for the total circulation. The
latter amendment was accepted without debate.
The provision went into operation on the 1st of January, 1901, according
to article 10.
Of the remaining seven banks, the following surrendered the right of
note issue:
Marks.

Die Frankfurter Bank (No. 12)
Die Bank fur Siiddeutschland (No. 20)

10, 000, 000
10, 000, 000

The share of the Reichsbank was thus increased to 470,000,000 marks.
The private banks still exercising the right of issue are:
Marks.

Die
Die
Die
Die
Die

Bayerische Notenbank (No. 13)
Sachsische Bank zu Dresden (No. 14)
Wurttembergische Notenbank (No. 18)
Badische Bank (No. 19)
Braunschweigische Bank (No. 24)
Total (tax-free uncovered notes)

^ 32, 000, 000
16,771,000
10, 000, 000
10, 000, 000
2, 829, 000
71, 600, 000

27. The data are taken from the weekly records. (Sec. 8.)
28. The "supervising a u t h o r i t y " is the Imperial Chancellor, who also
verifies the correctness of the reports made for the purpose of calculating
the tax. (Sec. 48.) The penal provision for false returns is contained in
section 59, No. 2.
29. Such a tax has been collected annually from the Bank of Saxony and
from the Wurttemberg note bank since 1889; and since 1890, with the
exception of the year 1894, from the Bank of Baden, and several times from
the Bavarian note bank; since 1881, from the Reichsbank, chiefly a t the
close of autumn and winter quarters. Small a t the beginning, these payments are growing steadily. They were made only once in each of the
years 1881, 1884-1886, and 1893; twenty times in 1899, but less frequently
since then; seven times in 1903, and eight times in 1904. The total t a x
paid so far by the Reichsbank is 12,250,885 marks.
30. The penal provision is contained in section 57. The business which
issues such payments remains legally valid.
31. The Reichsbank holds a position different from that of the other
banks (private note issuing banks, Chap. I I I ) . I t is the central note




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Monetary

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Bank of the Empire and must promote not only private but also public
ends; hence, in the public interest, it is vested with certain rights which
entail corresponding duties. I t is, as the imperial court says, " a constitutional organ, a quasi public Federal Institution," and its administration,
together with that of the branch institutions, is, therefore, closely connected with the federal authority.
32. Cf. sec. 25.
33. Cf. sec. 26.
34. The Reichsbank is thus separated from the Imperial Treasury; b u t
it is not a stock company. I t has its special law, namely, the Bank Act,
and its statute. In addition to these it is subject to those provisions of
the "Handelsgesetzbuch" which deal with commerce. (Cf. also sec. 66;
statute, sec. 17, par. 2, and " Handelsgesetzbuch," of the 10th of May,
1897, sec. 1, par. 2, No. 4, sec. 7.)
35. This purpose is for the most part achieved by the giro business
(sec. 13, No. 7). Payments are further facilitated by the clearing houses
established by the Reichsbank in Berlin, Bremen, Breslau, Chemnitz,
Dortmund, Dresden, Elberfeld, Frankfort (Main), Hamburg, Leipzig,
Cologne, and Stuttgart.
36. The Reichsbank has at present (end of April, 1905) a total of 428
branch offices. (Cf. sees. 36 and 37.)
37. The local main offices of the Reichsbank are established in such
large cities as the Bundesrat may designate (sec. 36). Since 1876, the
number of these offices has increased to 19. (See below, note 106.)
38. Individual transactions which are recognized as valid by the Civil
Code and are not included under section 13 are not subject to this limitation. (Cf. Stenographic Report of the Reichstag, 1874-75, p. 1317; cf.
also sec. 35.) Numbers 1-4 treat of investments (concerning the private
note banks, cf. sec. 44, No. 1); Nos. 5-8, of other transactions.
39. Cf. sections 14 and 32. The purchase of gold imported from foreign
countries serves in reality for the maintenance and strengthening of the
note-reserve fund and supports the interests of the monetary standard.
40. This refers only to bills of exchange (drafts, checks—in so far as
they are not actual bills—warrants, and the like, are not included), which
may also be considered as a bank reserve against its circulating notes.
(Cf. sec. 17.) In the Reichstag commission for the law of the 7th of June,
1899, a resolution was adopted recommending to take into consideration
the amount to be discounted in case of bills of associations. (See Report,
pp. 55 and 56.) This is consistent with the general practice of the
Reichsbank.
41. That is, provinces, districts, and municipalities. (Cf. "BiirgerlichesGesetzbuch," sec. 1807, No. 4.) The securities must have circulating
capacity and must contain the clause of the ordinance.
42. Concerning the announcement of the discount rate, see section 15.
With regard to consulting the central committee, see sec. 32, par. 2e.




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43. Concerning the maximum amount, cf. sec. 32, par. 2d. Concerning
the announcement of the interest rate of loans on securities, see section
15. The central committee is to be consulted concerning the rate. (Sec.
32, p a r . 26?.)

44. A reduction from the value of metal, as the original bill recommended,
is not ordered.
45. Owing to the methods of auditing the federal debts (law of the
31st of May, 1891), as well as the Prussian state debts (law of the 20th
of July, 1883), no bonds, registered or made out to bearer, are issued and,
therefore, they can not be hypothecated.
46. The modifying clause was added by the Reichstag (Report of the
commission of the 19th of January, 1875, p. 38). ~ The shares and preferred
bonds need not be made out to bearer.
47. The requirement of the state supervision does not apply to the
mortgage banks {Hypothekenbanken).
(See report of the commission
January 19, 1875, p. 38; stenographic report, p. 1918.) Concerning
land mortgage institutions (Bodenkreditinstitute),
see Dr. Felix Hecht,
"Die Staatlichen und Provinziellen Bodenkreditinstitute in Deutschland,"
Parts I and II, Leipzig, 1891; also " D e r europaische Bodenkredit,"
Leipzig, 1900. Mortgages need not be made out to bearer. (Cf. note 46.)
Private insurance companies may invest their premium reserve fund only
in those mortgages of German mortagage banks which are accepted by the
Reichsbank in Class I (i. e. at three-fourths of their market value).
Cf. Law with regard to private insurance companies of the 12 th of May,
1901.
48. The addition is based on article 6 of the law of the 7th of June,
1899 (cf. note 74), which reads as follows: " T o section 13, 3 C, of the Bank
Act, after the words, 'of the exchange value,' the following sentence is
to be added " (here follows the above text.)
The provision is already to be found in article 4 of the bill proposed by
the Government. Its purpose is to extend the sphere of the securities
which may be hypothecated to bonds issued by some institutions and
banks, which afford at least the same degree of security as mortgage
bonds, but are not classified as such. I t applies also to the private note
banks, according to section 44. The restricting provisions of section 43
have no application to these banks. It was not supported in the Reichstag.
Article 6 went into operation on the 1st of June, 1901, according to article
10.
49. These preferred bonds may be made out to bearer (cf. notes 46 and
47), and may be issued by railroad companies whose roads are not in active
business.
50. Short-time bonds of the same kind fall under No. 2.
51. Not the Bank Act itself, as" is the case with the private note bank.
(Sec. 44, No. 1.) Such a provision has as yet not been published. Before
the securities of the kind here indicated can be purchased, the maximum




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Commission

amount which can be employed for this purpose must be established with
the consent of the central committee (sec. 32, par. 2 d). Since 1900 the
Reichsbank has held, in the interests of the depositors, a very limited
stock of securities of small denominations.
52. Blank credit is expressly forbidden here, as in No. 5. The details
concerning the necessary security in the purchase and sales of securities
(cf. sec. 40, No. 11) are contained in section 10 of the Reichsbank statute
of the 21st of May, 1875. In this branch of business, as in t h a t of No. 8
and also in loans on securities (No 3), the Reichsbank is subject to the
regulations imposed on bankers by the so-called Bank Deposit Law of the
5th of July, 1896. It had really observed these regulations even before
that law was passed.
53. The interest-paying deposits must then be returned. (Cf. agreement
concerning the transfer of the Bank of Prussia to the German Empire of
the 17th and 18th of May, 1875, sees. 12 and 13, and note 12.) Deposits
of this character have not generally been accepted since the 31st of May,
1879. I n spite of this, recent laws point to the acceptance of interestpaying money by the Reichsbank, as, e. g., the "Burgerlich.es Gesetzbuch,"
section 1808, and the law of the 10th April, 1892, section 40, concerning
sickness insurance ("Reichgesetzbuch," p. 417).
54. Both open and sealed, according to the legal provisions, e. g., in the
"Btirgerliches Gesetzbuch." (Sees. 1082, 1114, 2116; cf. note 52.)
55. This provision, which was the result of the investigation of the commission of the Reichstag of 1874-75, supplements the coinage right of
private individuals (cf. Coinage Law, 9th of July, 1873, art. 12), and, like
the latter law, serves for the maintenance of the gold standard. The
difference of three marks from the mint rate (law of the 4th of December,
sec. 1) forms the seigniorage (cf. Coinage Law, art 12). The periodical
reports of the purchases of gold by the Reichsbank are contained in the
" Centralblatt fur das Deutsche Reich." Bullion is, of course, coined in
proportion to demand.
56. Cf. announcement of the 8th of June, 1875.
57. The so-called private discount is related to the law of the 7th of
June, 1899 (see below, note 74), article 7, section 1, which reads: "After
the 1 st of January, 1901, the Reichsbank is prohibited from discounting
below the rate announced at stated periods (sec. 15 of the Bank Act)
whenever this rate reaches or exceeds 4 per cent.
"If the Reichsbank discounts at a rate lower than the official one, it
has to announce this rate in the ''Reichsanzeiger.' "
The bill did not contain this provision, but, together with another provision which places restrictions upon the private note banks (set Report,
pp. 32 fT), it was recommended by the commission of the Reichstag, and
accepted by the Reichstag, after the words "reaches o r " were crossed out.
As a matter of fact, however, it only sanctioned the established practice.
T h e Reichsbank made use of the' authority only in times of ready metiey.




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The announcement (art. 7, sec. 1, par. 2, law of the 7th of June, 1899)
is to be made only in the " Reichsanzeiger," and not in the other papers
intended for the announcements of the Reichsbank board of directors
(statute, sec. 30).
The discounting of so-called bills of exchange a t a lower rate has been
discontinued since the 1st of April, 1896.
The interest rate of loans on pledges is generally 1 per cent higher
than the discount rate of bills. The resolution adopted by the commission
of the Reichstag, 1899, runs as follows: " T o solicit the Reichsbank management to consider whether in times of liquid money t h e excess of one-half
of 1 per cent above the Bank rate would not be adequate for loans on
pledges." (See Report of the Commission, pp. 31 ff, 56 ff; Stenographic
Report, p. 1992.)
Meantime no change in the former practice has been made, and the rate
for loans on pledges is quite high (Dec. 31, 1903, 213,000,000 marks;
1904, 215,000,000 marks).
58. The condition of t h e reserve fund need not be announced. A bill
to that effect was rejected by the Reichstag commission of 1899. (Cf.
Report of the commission, p. 48.) See sections 8, 36, 37, and 48.
59. There is an indirect restriction in sections 9, 10, and 17.
Concerning the issue of notes of 100 and 1,000 marks, cf. the proclamation of the Reichsbank board of directors of the 6th of August, 1876,
the 20th of June, 1877, the 10th of November, 1884, etc. According to
the proclamation of the Imperial Chancellor of the 16th of December,
1875 (Reichsbank statute, sec. 1, note 3), after the 1st of January, 1876,
all notes of the former Bank of Prussia (see below, note 5) are considered
as notes of the Reichsbank. Notes of the Bank of Prussia of 100 marks
(not those of 500 to 1,000 marks) have meanwhile been recalled (cf. sec. 6,
note 11).
The average of the note circulation of the Reichsbank during the last
three years amounted to over 1,200,000,000 marks—that is, from 89.5 to
89.9 per cent of the aggregate German note circulation.
60. The notes of the Bank of Prussia still in circulation were further
removed from the sphere of bank-note policy by the following provisions
of the law of the 7th of June, 1899 (see below, note 74):
" A R T I C L E 9.

"SEC. 1. The Reichsbank shall pay to the Imperial Treasury on the 1st
of January, 1901, a n amount equal to the face value of those notes of the
former Bank of Prussia which are still in circulation.
" S E C . 2. The Empire is to compensate the Reichsbank for the notes
redeemed or accepted in payment, according to section 1, after the 1st of
January, 1901; and also for those notes w^hich the Reichsbank redeems
according to section 4 of the Bank Act.
83702—10— 1 ~6




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" S E C . 3. After the 1st of January, 1901, the notes of the former Bank
of Prussia shall not be included in determining, according to sections 8, 9,
10, and 17 of the Bank Act, the note circulation of the Reichsbank."
These provisions had already been suggested in article 7 of the government bill, but were not supported in the Reichstag. Section 3 is the
logical result of sections 1 and 2. The provisions of section 16, paragraph
2, of the Bank Act apply to those notes after, as they did before, the
above date.
According to section 1, the Reichsbank paid 2,559,040 marks, and
according to section 2, received 138,860 marks.
61. Notes are to be prepared in the imperial printing office. On the
defrayal of the costs, see Reichsbank statute, section 13, No. 2.
62. Cf. the law of the 19th of June, 1868, sections 4-7, as well as the
imperial debt ordinance of the 19th of March, 1900, sections 12-15. The
wording a t the close of section 16, " a t which a member appointed for
this purpose by the Emperor is to be present" was changed by section 20
of the imperial debt ordinance. The members elected according to section
3 d of the law of the 23d of February, 1876, as well as the members appointed by the Emperor, on the basis of section 16 of the Bank Act, are
members of the commission, with full power for the time for which they
have been elected or appointed.
63. Cf. section 8, note 17 and section 14. In section 9 the notes of other
German banks are included (note 24).
64. Bills of exchange must conform to the provision of section 13, 2.
Other bonds, silver in bullion or in coins which are not German currency,
and loans on pledges, can not be included in the reserve fund. Similar
provisions concerning the reserve fund of the private note banks are contained in section 44, No. 3.
65. Without this limitation gold exportation would be facilitated. (Cf.
Stenographic Report of the Reichstag, 1874-75, pp. 1332 ff.)
66. Cf. section 4, paragraph 1, and note 6 above.
67. The number of inhabitants is to be determined by the published
results of the legal census.
In reality the Reichsbank goes still further, since it takes into special
consideration the nature of the district as well as its advancement in the
giro business.
Concerning the efforts to widen the legal limits of the duty of acceptance, cf. Report of Commission of the Reichstag, 1899, pp. 43 ff.
68. This varies from section 44, No. 5.
69. The Reichsbank has in numerous cases paid such banks for the
costs incurred by the withdrawal of their bank notes in the imperial
standard, on condition t h a t they forego further claims for compensation.
(Cf. sec. 9, par. 2; sec. 32, par. 2 f.)
70. Cf. "Handelsgesetzbuch," sec. 1234 ff; "Handelsgesetzbuch" of 1897,
sec. 368. The exchange broker has taken the place of the commercial
broker. (See Exchange Law of the 22d of June, 1896, sec. 34.)




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71. Not from municipal, nor from other state taxes—e. g., the land
and house tax—but from the "supplementary" or " p r o p e r t y " tax, imposed on the so-called funded income in many Federal States. Concerning
the Commercial Register, cf. sec. 66.
72. An extension of the obligation is contained in section 11 of the
statute of the Reichsbank of the 21st of May, 1875. On the basis of these
provisions a n announcement concerning the Imperial Main Treasury
(Reichshauptkasse) was issued on the 29th of December, 1875.
In place of the former ledger of the 30th of December, 1875, a new one
was ordered for the Imperial Main Treasury by t h e Imperial Chancellor
on the 12 th of December, 1903.
The exchange of imperial subsidiary coins for gold coins is permissible
at the Reichsbank Main Treasury and a t a few other bank treasuries, in
accordance with article 9 of the coinage law of the 9th of July, 1873, and
the proclamation of t h e Imperial Chancellor of the 19th of December,
1875, which deal with exchange of imperial gold coins for imperial silver,
nickel, and copper coins.
This is a special agreement with the imperial postal administration; the
result of this is that the Reichsbank (for the account of the imperial deposit) furnishes the necessary advances to the postal treasuries and receives
their surplus cash.
73. This was the case in Prussia and Baden. The special accounts of
the latter were later suspended. The Prussian General State Treasury,
with a great number of other Prussian state treasuries, and a great majority of all other German central state treasuries have taken u p the giro
business, after the manner of the Empire.
74. Cf. note 34. Formerly, section 23 read: " T h e capital of the Reichsbank shall consist of 120,000,000 marks, comprising 40,000 registered
shares of 3,000 marks each. The shareholders are not personally responsible
for the obligations of the Reichsbank."
The bill introduced in January, 1899, in regard to making some changes
in the Bank Act, advocated an increase of the original capital to 150,000,000
marks, in shares of 3,000 marks each. The Reichstag commission did not
oppose this bill a t the first reading, making an amendment, however, to
the effect t h a t t h e face value of the new shares be equal to 1,000 marks
each; this plan was also supported a t t h e second reading. At the third
reading the gradual increase to 180,000,000 marks, the present amount,
was decided upon as a compromise (Report of the Commission, p p .
10 ff; Stenographic Report, pp. 1965 ff, 2002).
The provision forms the introduction to the " L a w concerning the
Change of the Bank Act, of the 14th of March, 1875." The law of the 7th
of June, 1899 (issued on the 13th of June, 1899), began as follows:
" We, William, by the Grace of God, German Emperor, King of Prussia,
etc., ordain in the name of the Empire, the Bundesrat and the Reichstag,
the following:




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'* ART. I . Section 23 of the Bank Act of the 14th of March, 1875, is
amended by the following provision (here follows the above text).
" ART. 8. The Imperial Chancellor is authorized to sell the new shares of
stock to be issued in accordance with article 1 of this law by public
subscription.
" The amount of deposit for the new shares, and the period within which
they are to be paid up, are to be determined by the Imperial Chancellor.
" A R T . 10. Articles i, 2, 5 and 6 of this law are to go into effect on the
1st of January, 1901.
" Issued over our Imperial signature and seal, at the New Palace, on the
7th of June, 1899.
"(Signed)

"WILLIAM.
" C O U N T VON POSADOWSKY."

The shareholders a t a special general meeting called on the 18th of
May, 1899, agreed to the changes of the Bank Act contained in this law, as
they had complied in 1899 with respect to the changes made a t t h a t time.'
According to article 8 of the law of the 7th of June, 1899, the shares
could not be sold except by public subscription. I t is otherwise provided in section 62, No. 1, of the Bank Act of the 14th of March, 1875.
There is no provision with respect to the unsold shares, as in section 62,
No. 2, and sections 63-65 of the act of the 14th of March, 1875.
The public subscription for the first 30,000 new shares took place on the
18th of October, 1900, and for the last 30,000 new shares on the 3d of
November, 1904.
The deposit on the 60,000,000 marks issued in 1875 (sec. 62, No. 1)
amounted to 30 per cent; 35 per cent on the emission of 1900, and 44 per
cent on that of 1904 (without the emission stamp).
Cf. Proclamation of the Imperial Chancellor of the 24th of May, 1875
(" Reichsanzeiger," No. 120); 10th of October, 1900 (ibid., No. 244); 5th
of October, 1904 (ibid., of the 29th of October, No. 256).
The new shares must be distributed within the period fixed by the new
section 23, paragraph 2.
The shares are paid up.
The slight similarity of the Reichsbank to stock companies is brought
to light in section 23, according to which the Reichsbank is founded wholly
on private capital. The Empire invested no capital, and thus assumed no
risk, but it granted the right of note circulation, and is directing and supervising the Bank (sees. 12 and 25 ff.). Concerning its share of profits, see
section 24. For the details of the "Reichsbank share of s t o c k " see
Reichsbank statute, sections 2-8.
75. According to the first form of section 24, the ordinary dividend
amounted to \% per cent (par. i, No. i, and par. 2); the distribution in
the proportion of one-fourth to three-fourths (No. 3) began only after the
total dividend of the shareholders exceeded 8 per cent. According to




78.

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the " L a w concerning the Change of the Bank Act of the 14th of March,
1875," which was enacted on the 18th of December, 1889, section 24 of
the Bank Act of the 14th of March, 1875, was substituted by a provision
which went into effect on the ist of January, 1891, and by which the
ordinary dividend was reduced to2,H per cent, while the ratio of one-fourth
to three-fourths began as soon as the total dividend exceeded 6 per centThe earnings between 3% per cent and 6 per cent were divided equally
between the Empire and the shareholders. The Government proposed a
further reduction of the dividends of the stockholders in 1899. The
original provision concerning the reserve fund, which was left unchanged by
the law of the 18th of December, 1889, required that a fund be accumulated
to equal the amount of one-fourth of the capital (120,000,000 marks)
which was realized in 1891. But in 1899 the Government proposed to
raise the fund to two-fifths of the capital (then 150,000,000 marks according
to the government bill). In other words, the reserve fund was to be increased to 60,000,000 marks. The Government further proposed that the
distribution of profits over 3 ^ per cent be equal, as long as the total
dividend of the shareholders did not exceed 5 per cent, and that after this
point had been reached, the division should begin in the proportion of
one-fourth to three-fourths. In the Reichstag commission, meanwhile,
this intermediary stage of 3^2 to 5 per cent was entirely removed, and
it was proposed that the ratio of one-fourth to three-fourths should
begin after the dividend had reached 3 ^ per cent, and after 20 per
cent of the surplus had been transferred to the reserve fund. The
latter was fixed at 60,000,000 marks, in spite of the later increase of the
capital to 180,000,000 marks. This amendment was adopted as a compromise, while the motion to limit the total dividend of the shareholders
to the maximum amount of 6 per cent was rejected. (Cf. Report of the
Commission, p. 20 ff; Stenographic Report, pp. 1975 to 2005.) The provision of the " L a w of the 7th of June, 1899," reads: "Article 2. Section
24 of the Bank Act is changed to the following form by the repeal of
article 1 of the law of the 18th of December, 1889." (Here follows the above
text.)
According to article 10, article 2 went into effect on the ist of January,
1901. The reduction of the dividend to 3 ^ per cent corresponds to the
decline of the interest rate since 1875.
Concerning a further regulation of distribution in case of an increase of
the capital, cf. Reichsbank statute, section 2, paragraph 3. As to the
dividend coupons and talons, cf. Reichsbank statute, sections 3, 9, 14, and
15. The dividends are announced by the Imperial Chancellor upon the
recommendation of the Reichsbank board of directors and with the approval
of the central committee (Bank Act, sec. 32, par. 2a; Reichsbank statute,
sec. 14). It is announced to the shareholders at their regular general
meeting. (Sec. 22, par. 2a; Reichsbank statute, sec. 21.) With regard to
the periods and methods of drawing the dividends, see section 40, No. 5;
Reichsbank statute, section 15.




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Co.mmis

s ion

76. Concerning the amount of deposit, see note 74. The deposits on the
last emission raised the reserve fund to 64,813,723.75 marks; that is, the
latter exceeded the legal amount. The practice of transferring 20 per cent,
which is prescribed in No. 2, was discontinued in 1903.
77. This follows from section 15 of the statute of the Reichsbank.
78. At present this function is performed by the Minister of Finance,
Fr. von Rheinbaben. These arrangements are made in compliance with
the ordinance of the Bank of Prussia of the 5 th of October, 1846 (sees.
41 ff).
79. The deputy appointed "for that purpose" is the General Deputy of
the Imperial Chancellor, State Secretary of the Interior, State Minister,
Dr. Graf von Posadowsky-Wehner.
80. On the basis of this provision, the Imperial Chancellor has issued the
following:
(a) The business instructions for the Reichsbank main offices and Reichsbank offices of the 30th of November, 1875.
(b) The business instructions for the Reichsbank secondary offices of
the 17th of December, 1875.
(c) The business instructions for those Reichsbank secondary offices
which are managed by two responsbile bank officials of the 21st of April,
1883.
They are not published together. Reichsbank secondary offices of the
kind indicated in (c) no longer exist. (Cf., however, note 113.) The
general business instructions are to be communicated to the central committee (sec. 32, par. 3).
81. The office of vice-president exists as such and is included in the
budget since May, 1^887 (sec. 28, par. 2). In addition to this office,
seven members of the Reichsbank board of directors are on the pay roll.
As regards the consent of the central committee, see section 32, paragraph 2C.
82. A decree was issued on the 19th of December, 1875, regarding the
appointment of officials and the competence of the management of the
Reichsbank to execute the law of the 31st of March, 1873. This decree
also dealt with the appointment of Reichsbank officials who are also
imperial officials (decision of imperial court of the 19th of December, 1904),
and with the ordinary oath of service which the imperial officials take
(law of the 29th of June, 1871), as well as with the application of the law
regarding imperial officials (not as a supplement to the statute, b u t to the
law of the 23d of November, 1874).
The salaries of Reichsbank officials are paid quarterly, according to the
proclamation of the Imperial Chancellor of the 27th of December, 1875.
The salaries of the Reichsbank officials are regulated by seniority of service, according to the decree of the 14th of June, 1895.
The provision of the 16th of February, 1903, relating to residences for
imperial officials has been applied (though with some changes), according
to the imperial decree of the 4th of January, 1904, to residences of Reichsbank officials.
80




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83. Cf. " Reichsgesetzblatt," 1877, pages 408,425,589, etc. The provision releasing other officials from the obligation to provide security does
not apply to the Reichsbank officials. Concerning the support of their
widows and orphans, cf. ordinances issued on the basis of sections 28 and 40
as "Supplements to the Statute of the Reichsbank," of the 8th of June,
1881, 20th of June, 1886, 18th of March, 1888, and the 26th of July, 1897.
84. Concerning the advice of the central committee with regard to
changes, cf. sec. 32, par. 2b.
85. The control is annually transferred by law to the Prussian audit
office. (Cf. law concerning the control of the imperial budget of the 22d
of May, 1877, etc.)
86. The necessary provision was decreed on the 5th of February, 1877.
(Hot published.)
Concerning the inclusion of the expense of the organization and management in the annual report, cf. Reichsbank statute, sec. 13, No. 2.
87. Section 30 contains the chief provisions of the Bank Act concerning
the general meeting of the stockholders (together with sees. 31, 32, par. 2a,
sec. 33, and sec. 40, par. 6). For details concerning the notice of this
meeting and its marked limitation, etc., see Reichsbank statute, section 2,
paragraph 2, and sections 16-22.
88. The central committee has a remote similarity to the supervising
committee of a stock company. I t has only an advisory voice. (See sec.
32; cf. also Reichsbank statute, sees. 22-26 and 29.)
89. The new form of the third sentence of section 31 rests on article 3
of the law of the 7th of June, 1899. (See above note 74.) This sentence
formerly read: " T h e members and the deputies shall be elected at the
general meeting of the stockholders from among the shareholders possessing
a t least three registered certificates of stock."
The amendment was as follows: " I n section 31 the third sentence is
amended from ' t h e members' to 'stock' by the following provision."
(Here follows the above text.)
I t has thereby become necessary that the new shares of stock be drawn
up only for 1,000 marks (sec. 23, par. 1). The possession of nine new
shares of stock is equivalent to the possession of three of the old.
For details concerning the execution, cf. note 88 and the Reichsbank
statute. The provision for resignation does not apply to the deputies.
(Otherwise, sec. 34.)
If a new election is necessary on other grounds (death, etc.), the change
is made only for the remainder of the interrupted period.
90. This regulation was made by the Imperial Chancellor on the 26th
of November, 1875. (Not published. Cf. sec. 34.)
91. Cf. sees. 8 and 15.
92. This takes place generally on the 8th day of each month.
93. For another instance of mere expression of opinion, see Reichsbank
statute, section 14, paragraph 3. The central committee is also to be con-




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suited in regard to questions contained in section 2, paragraph 2 (increase
of capital), and in section 7 (records of indorsements, etc.). The consent of
the central committee is required only in matters for which provision is
made by section 32, paragraph 2d; section 35 of the Bank Act; and section
15, paragraph 2, of the Reichsbank statute.
94. Cf.. section 8, note 20; sections 24 and 30; and the Reichsbank
statute, sections 13, 14, and 21.
95. Cf. section 13, No. 3.
96. Cf. section 13, No. 4, and note 93.
97. Cf. section 15.
98. Cf. section 19, note 68.
99. Cf. Reichsbank statute, section 21. Concerning the removal of
deputies, see Bank Act, sec. 34, par. 4.
100. No provision is made for vacancies occurring in the course of the
year. Elections for the rest of the period are of course not prohibited.
(Cf. note 89.)
101. Cf. Reichsbank statute, section 24. No business instructions have
so far been issued. (Cf. notes 80 and 90.)
102. The elected supervisors must be consulted only in case of section 35.
Concerning the examination of the annual report, see Reichsbank statute,
section 14. (Cf. above note 93.) Concerning their obligation, see Bank
Act, section 39.
103. Cf. especially Bank Act, section 13, and statute, sections 10 and 11.
104. This is the condition under which the organs of the stock owners
of the bank are called upon to exercise an effective control instead of merely
expressing.an opinion (sec. 32). The state governments can have no more
privileges than private business men. The provision is of fundamental
significance for the independence of the Reichsbank in fiscal matters.
105. Cf. section 12, paragraph 3.
106. Sixteen local main offices were sanctioned by the Imperial Chancellor
on the 17th of December, 1875, according to sections 36 and 37.
Later additions to the list of local main offices are the former Reichsbank
offices at Dantzig (proclamation of the Imperial Chancellor of the 24th of
April, 1879), at Kiel (proclamation of the Imperial Chancellor of the 25th
of July, 1891), and at Dresden (proclamation of the Imperial Chancellor
of the 19th of December, 1902).
Cf. also the proclamation of the Reichsbank board of directors of the 1st
of January, 1876, in regard to the beginning of the activity of the Reichsbank offices.
The Reichsbank was opened with 201 branches. By the end of April,
1905, their number reached 429.
107. At present this is the case in all 19 local main offices.
108. Cf. section 40, No. 7. Concerning the proceedings, see Reichsbank
statute, section 29, paragraph 2. Concerning the number and eligibility of
members, see statute, sections 27 and 28.




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109. The last provision has no practical significance.
n o . Cf. section 40, No. 7. Concerning the proceedings, see the Reichsbank statute, section 29, paragraph 2. Concerning eligibility, see ibid.,
section 28. Concerning their obligation, see Bank Act, section 39.
i n . Cf. Reichsbank statute, section 29, paragraph 1, and note 107 above.
112. To the Reichsbank offices named in the proclamation of the 17th
of December, 1875 (note 106), are to be added the bank offices which have
been established from former subinstitutions in the following places: at
Stolp (16th of May, 1877); at Cottbus (9th of November, 1883); at Coslin
(19th of June, 1889); at Duisburg (22d of March, 1892); at Wiesbaden
(30th of March, 1894); at Bochum (16th of September, 1896), at Darmstadt
( n t h of March, 1897); at Plauen, Bavaria (17th of March, 1897); at Hildesheim (8th of June, 1898); at Ulm (8th of September, 1898); at Friedberg,
Bavaria (29th of May, 1889); at Schweidnitz (3d of January, 1900); at
Allenstein (6th of January, 1900); at Insterburg (6th of January, 1900);
at Barmen (8th of February, 1900); at Fulda (15th of May, 1900); at
Mulheim (Ruhr) (15th of January, 1900); at Wiirzburg (17th of January,
1901); at Brandenburg (4th of March, 1901); at Altona (29th of August,
1901); at Kreuznach (13th of January, 1903); at Halberstadt (13th of
January, 1903); at Zwickau (14th of April, 1903); at Hamm (8th of January, 1904); at Lissa (5th of April, 1904); at Remscheid (8th of September, 1904).
The Reichsbank offices in Dantzig, Kiel, and Dresden were turned into
Reichsbank local main offices (Cf. note 106).
113. At the present time (end of April, 1905) there are 330 Reichsbank
secondary offices and 13 merchandise depots (chiefly for the convenience
of loans on pledges). In the larger secondary offices the director has at
least one and sometimes more than one assistant.
114. Particularly within the business circle of the Reichsbank main
office.
115. This does not include the secondary offices, which are to serve in
the main for the convenience of business. They are, however, receiving
more authority from the Reichsbank management to assume business obligations.
n 6. The provision is contained in the proclamation of the Imperial
Chancellor of the 27th of December, 1875:
" O n the basis of section 38 of the Bank Act of the 14th of March, 1875,
it is hereby announced that the Reichsbank is to be responsible for the
signature of a Reichsbank secondary office in all cases, and even where the
law requires especial authority, whenever this signature is given by the
two directors of the bank office, or their representatives. The names of
the directors and their representatives, as well as the signatures of the
same, shall be exhibited in the business room of the bank office.
" BERUN, 27th of December, 1875.




"(Signed)

V O N BISMARCK,

"The Imperial
83

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National

Monetary

Commission

117. This does not apply to the secondary offices (see note 115.)
118. The provision accords with section 13, paragraph 1, of the "Zivilprozessordnung." (Cf. also ibid., sec. 21, formerly sec. 22.) In general,
the Reichsbank is within the jurisdiction of the court of Berlin (sec. 12,
par. 2).
119. Cf. section 33, paragraph 2; section 34, paragraph 4; section 36,
paragraph 3.
120. Concerning the significance of the " s t a t u t e , " see note 1. I t is
changed in several points by the ordinance of the 3d of September, 1900,
and supplemented by the ordinance decreed on the basis of section 40,
"concerning the salaries and securities of the Reichsbank officials" (see
note 83), as well as by the ordinance decreed on the basis of sections 28
and 40, "concerning the provision for the widows and children of the
Reichsbank officials."
121. Cf. Reichsbank statute, section 23.
122. Cf. ibid., sections 4-6; also ibid., section 7.
•123. Cf. ibid., sections 8 and 9.
124. Cf. ibid., sections 12 and 13; also ibid., section 14; and Bank Act,
section 8, paragraphs 3 and 4.
125. Cf. Reichsbank statute, section 15.
126. Cf. ibid., sections 16-22, and 30. The words " t h r e e hundred,"
instead of "one hundred," and the sentence following them became necessary after the issue of bank shares of 1,000 marks, according to article 1 of
the law of the 7th of June, 1899 (see above, note 74), and were added by
the Reichstag commission. The change has been ordered in article 4 of
this law which reads:
"Section 40, No. 6, is amended by the following provision:" (here
follows the above text). Cf. also Reichsbank statute, section 17.
127. Cf. ibid., sections 22-29.
128. Cf. ibid., section 30.
129. Cf. ibid., section 31.
130. Cf. ibid., sections 2 and 31.
131. Cf. Bank Act, section 13, No. 6, and the Reichsbank statute, No. 10.
132. No use has yet been made of this notice either at the expiration of
the first period', after which the change of section 24 proposed by the
administration (in accordance with the law of the 18th of December,
1889) had taken place, or within the second period, which, according to
the law of the 7 th of June, 1899, terminated on the 31st of December, 1899
(see above note 74).
The bill originally accepted in the Reichstag commission of 1899, in
regard to the extension of the period to the 1st of January, 1921, and thereafter to periods of from twenty to thirty years, was rejected a t the third
reading (Report of the Commission, pp. 45 ff.), and was never again taken
up by the Reichstag.




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133. Cf. sections 3 and 6, paragraph 4, of the Reichsbank statute. Since
the reserve fund exceeded the legal amount of 60,000,000 marks (see sec. 24,
No. 2), the shareholders would receive 212,406,806.87 marks, or 118 per
cent (see par. 2).
The question of the so-called state ownership (b) was taken u p from
many points of view in t h e Reichstag discussion of t h e bills mentioned in
notes 74 and 75, b u t the matter was dropped by a majority both in 1889
and 1899. (See Stenographic Report of 1889-90, pp. 191 ff., 577 ff.,
628-630; Report of 1899, p p . 696 ff., 721 ff., 749 ff., 1965 ff., 1993 ff.;
Report of the Commission, p . 9.)
134. The provision is not clear. According to the history of its origin
(see Report of trie Commission of 1874, pp. 52-55) it was thought that the
Empire could not renew the privilege of t h e Reichsbank without t h e consent of the Reichstag, this consent being tacitly understood or expressed
in a properly accepted bill or resolution (cf. notes 74, 75, and 132). The
provision was expounded in this manner at the expiration of the past two
periods. A vain effort has been made in the Reichstag commission of
1899 to change paragraph 3 (see Report of the Commission, p. 46).
135. The system adopted in the Act with respect to private note banks
is as follows:
First. The Act contains certain provisions which were unconditionally
applicable to all note banks. These general provisions deal with bank
notes (sees. 2-6, 9, and 10); with bank transactions (sec. 7); with the
obligation to issue certain publications or information (sec. 8, and the law
of the 21st of December, 1874); with restrictions on changes in the statutes,
etc. (sec. 47); and with compliance to the supervision of the Imperial
Chancellor (sec. 48).
Second. The Act contains certain restrictions (sees. 42 and 43) arising
from the invalidity of the note privilege beyond the territory of the State
granting it, which restrictions the bank could remove by complying with
certain other limitations provided in the act, on or before the 1st of January, 1876 (sees. 44-46).
136. The private note banks which are still in existence are not exempt
from these limitations. (Cf. sec. 45, note 159; see also note 2; sec. 44,
pars. 3 and 4; sec. 45, par. 2, No. 1; sees. 48 and 50, par. 1, No. 2; and
the penal provision of sec. 58.)
137. Cf. note 135.
138. This restriction is a t present applied only t o the Brunswick Bank.
(Cf. sec. 45, and notes 159 and 160.) The other banks are exempt from it.
Further cf. sections 44, 48, and 50, paragraph 1, No. 3 ; section 54; and
the penal provision in section 56. Civil law does not deprive the transaction of its validity. Section 43 applies also t o paper money of section 54.
139. Cf. note 38.
140. Cf. note 51 and section 44, paragraph 4, as well as section 46.
141. Cf. section 13, No. 3.




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142. Cf. section 15, and note 156.
143. As in section 24, No. 2. On the banks which are exempt from
this restriction, see section 44, paragraph 4, and note 159.
144. This is in accord with section 17. (Cf. sec. 46.)
145. The provisions are stricter for the redemption a t the main office.
(Cf. sees. 4 and 18; also sec. 45, par. 1, No. 2; par. 2, No. 2; sees. 46, 47,
and 50, par. 1, No. 36.)
Besides Berlin or Frankfort (Main) there are still other redemption
offices. (Cf. sec. 50, No. 3c.)
146. Cf. note 67. The Reichsbank must conform to this obligation,
even in the city where the issuing bank is located. (See sec. 19, note 58.)
The duty of private banks to accept notes can be enforced by civil law.
147. Cf. section 46, paragraph 1.
148. Cf. section 1 and note 2.
149. Cf. section 2 and note 4.
150. Cf. the law of the 27th of March, 1870, section 3.
151. No use has yet been made of this authority. (Cf. sec. 41.)
152. No mention is made of partnership with other banking houses.
153. This is a limitation of the exemption from the restrictions of
section 42.
154. The banks named in paragraph 4 are not subject to any such procedure, if they comply with the required conditions. The number of
banks which have submitted their reports can not be ascertained from the
proclamations. (Cf. note 159.)
155. Cf. note 154156. Cf. section 44, paragraph 1; section 45, paragraph 2, No. 1.
157. The final sentence was added by the Reichstag.
Use has been made of the authority in so far as to permit individual
private banks to make loans up to a certain maximum amount upon some
papers, otherwise legally not loanable.
158. Cf. section 44, paragraph 1, No. 4.
159. As the result of this provision proclamations have been issued*
concerning the applications of sections 42 and 43 of the Bank Act of the
14th of March, 1875, on the 29th of December, 1875; the 7th of January,
1876; the 3d of September, 1879; and the 27th of February, 1883. These
proclamations also contained the necessary provisions concerning the
redemption offices. All existing private note banks, with the single exception of the Brunswick Bank, are not subject to the limitations of note
circulation (sec. 43). The older statutes of these banks have been entirely
changed, partly as the result of the Bank Act, partly as the result of the
Stock Act of 1884. Further changes took place in 1899 and 1900 in the
five private banks still existing, which were the result of the " Biirgerliches
Gesetzbuch," or of the " Handelsgesetzbuch," and of the Bank Act of 1899.
An important supplementary provision is contained in the following
law of the 7th of June, 1899 (see above, note 74):




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"ARTICLE

Laws

7.

" S H C . 2. The Bundesrat shall, on the ist of January, 1901, exercise its
right of revoking the privilege of note issue of those private note banks
which are now exempt from the restrictions of section 43 of the Bank Act,
if they have not bound themselves by the ist of December, 1899, to the
following:
" F i r s t . T h a t on and after January 1, 1^01, they will not discount below
the Reichsbank rate announced according to section 15 of the Bank Act,
whenever it reaches or exceeds 4 per cent.
"Second. T h a t they will in no case discount more than one-fourth of 1
per cent below the Reichsbank rate announced according to section 15 of
the Bank Act; and, in case the Reichsbank itself discounts at a lower
than its announced rate, the reduction below this new rate shall not exceed
one-eighth of 1 per cent.
" S ^ c . 3. If a private note-issuing bank disregards the obligation imposed
in section 2, its right of issue shall be revoked by judicial order, as indicated
in sections 50 ff. of the Bank Act.
" Members of the board of directors, representatives of the branch offices,
or other functionaries and agents of a bank, who disregard their regulations
and discount below the rate permitted in section 2, for the account of the
bank, shall be punished by a fine not exceeding 5,000 m a r k s . "
In order to prevent the discount policy of the Reichsbank from being
superseded by that of the private note banks (see sec. 15), the government
bill of 1899, article 5, proposed to prohibit the latter banks from discounting under the rate of the Reichsbank. This bill was opposed at the first
reading in the Reichstag (Stenographic Report, pp. 727 ff.) and then
thoroughly debated in the commission. The discussion resulted in the
provision contained in the above articles, which was based on a provision
concerning the private discount of the Reichsbank itself (Art. 7, sec. 1;
see above, sec. 15, note 57). A vain effort was made to remove the limitation, wholly or in part, in the interest of the private note banks. (See
Stenographic Report, pp. 1978 ff. and 2002 ff.)
The private note banks are, therefore, unconditionally bound only when
the Reichsbank discount rate (as a result of scarcity of money or because
of other reasons) is not lower than 4 per cent; otherwise they may discount
only one-fourth of 1 per cent below the official rate of the Reichsbank.
If the Reichsbank itself discounts at a private rate—that is, a t a lower
rate—the reduction may not be more than one-eighth of 1 per cent.
Thus the point which the Reichsbank was formerly seeking to attain
by agreement with the private note banks became legally established and
secured by the penal provision.
The penal provision in paragraph 2 includes also "other functionaries;"
t h a t is, a wider personnel than t h a t included in section 58; it also applies,
though indirectly, to evasions of the law by the so-called method of repayment (Riickvergiltung) of a part of the discount.




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The required proof was submitted at the proper time by all private
note banks.
*
160. The Brunswick Bank is the only one of the existing private note
banks that did not comply with this requirement. Its privilege lasts—
without being subject to recall—until the n t h of May, 1952. (Cf. sec.
47, par. 2.) The other banks not mentioned in the proclamation (note 159)
surrendered their right of issue. (Cf. sec. 9, note 26.)
161. This was the case with the note banks in the older Prussian provinces. (Cf. also the law of the 27th of March, 1870, sec. 4.)
162. Such consent was given to various Prussian note banks which are
no longer in existence. The provision applies to all private note banks
without exception. Concerning the application of section 47 to the paper
money of section 54, see ibid.
163. As the result of an agreement with the Bavarian Hypotheken und
-Wechselbank of the 20th of March, 1875, the latter relinquished its right
of note issue in favor of the newly founded Bavarian Note Bank, which
complied with the provisions of section 47, Nos. 1-7. (Cf. Proclamation
of the 29th of December, 1875, No. 7.) The corresponding change in the
law is contained in the Bavarian law of the 15th of April, 1875.
164. Cf. section 45. Section 48 applies to all note banks, including the
Brunswick Bank.
165. So far this has happened only once in 1901, in the case of the Bank
of South Germany, which subsequently closed its doors.
166. Cf. section 44, No. 7; sections 46 and 47, paragraph 1.
167. Cf. section 9, paragraph 2; section 19, paragraph 2; and sections
32 ff.
168. Cf. sections 50-53.
169. Cf. section 44, No. 3; section 47. Section 44, paragraph 4, applies
here also. (See Stenographic Report of the Reichstag of 1874-75, P- I 3 9 ° 0
170. Cf. section 44, paragraph 4; section 47, paragraph 3; sec. 48.
171. This was added by the Reichstag commission to prevent evasions.
172. There is then a gradation of offices beginning with the main office
(sec. 4) down to statutory redemption offices which are organized by the
bank, and some of which are obligatory.
173. A fifth case is provided for in article 7, section 3, paragraph 1, of
the law of the 7th of June, 1899. The provision of paragraph 2 is not
considered in section 101 of the " L a w for the Organization of Courts"
(Gerichtsverfassunggesetz) of the 27th of January, 1877. These charges
belong, therefore, to the civil courts. The provision, however, keeps its
significance in so far as the competence of the imperial court may not be
removed by state legislation.
174. Cf. section 6, paragraphs 4 and 5, notes 10 and 11.
175. The provision concerns the so-called corporation or municipal
paper money. (Cf. also Coinage Law, art. 18, par. 2.) Individual municipalities, associations, etc., have the same privilege, as, for example, the




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Landstdndische Bank in Bautzen, which discounts no bills, and therefore
is not to be included among the note banks. The right of issue has been
recently withdrawn. (See above, note n . ) The paper money of the
city of Hannover was withdrawn in 1893. (Cf. sees. 56, 57, and 59, par. 2.)
Concerning foreign bills of this kind, cf. sections 11 and 57.
176. Cf. sections 1, 16, 42, 43, 44, paragraphs 4, 46, 47, 48, 49, and 54.
177. Cf. section 54.
178. Only the criminal courts are competent for these cases, according
to section 74, No. 5, of the " L a w for the Organization of Courts,"
179. Cf. note 176.
180. Cf. section 54.
181. Cf. note 1.
182. Cf. the treaty concerning the transfer of the Bank of Prussia to the
German Empire, of the 17th and 18th of May, 1875.
183. All unexchanged certificates of stock (a total face value of
60,243,000 marks) were negotiated; and of these, 20,000 shares by means
of public subscription. Cf. the Proclamation of the Imperial Chancellor
of the 24th of May, 1875.
Eighty-one shares which were not exchanged for Reichsbank shares
were sold on the exchange. No use has been made of the authority given
in sections 62 and 72; sections 63-65 have never been applied.
Concerning the 60,000 shares (art. 8) which were sold according to
article 1 of the law of the 7th of June, 1899, see note 74.
184. This provision was added at the second reading by the Reichstag
to avoid ambiguity and vagueness. (Cf. sec. 12, note 34.)




89




APPENDIX TO SECTION 9.

Name of bank.

Uncovered
note
circulation.
Marksfl

Reichsbank
Ritterschaftliche Privatbank in Pommern
Stadtische Bank in Breslau
Bank des Berliner Kassenvereins
Kolnische Bank
Magdeburger Privatbank
Dantziger Privat-Aktienbank
Provinzial-Aktienbank des Grossherzogtums Posen
Kommunalstandische Bank fiir die preussische Oberlausitz
(Gorlitz)
Hannoverische Bank
Landgraflich hessische konzessionierte Landesbank
Frankfurter Bank
Bayerische Banken
Sachsische Bank zu Dresden
Leipziger Bank
Leipziger Kassenverein
Chemnitzer Stadtbank
Wiirttembergische Notenbank
Badische Bank
Bank fiir Siiddeutschland
Rostocker Bank
Weimarische Bank
Oldenburgische Landesbank
Braunschweigische Bank
Mitteldeutsche Kreditbank in Meiningen
Privatbank zu Gotha
Anhalt-Dessauische Landesbank
Thiiringische Bank (Sondershausen)
Geraer Bank
_
Niedersachsische Bank (Biickeburg)
Liibecker Privatbank
Kommerzbank in Lubeck
Bremer Bank
T o t a l . __

2 5 0 , 0 0 0 , 000
1,222,000
1, 2 8 3 , 0 0 0
963,000
1,251,000
1,173,000
1, 2 7 2 , 0 0 0
z, 2 0 6 , 0 0 0
1.307. 0 0 0
6,000, 0 0 0
159. 0 0 0
10,000, 000
32, 000, 000

16,771. 0 0 0
5.348, 0 0 0
1,440, 0 0 0
44i. 0 0 0
10,000, 000
10,000, 000
10,000, 000
1,155. 0 0 0

1,971. 0 0 0
1,881. 0 0 0
2,829, 0 0 0
3.187. 0 0 0
1.344, 0 0 0
935. 0 0 0
1,658, 0 0 0
1,651, 0 0 0
594, 0 0 0
500, 0 0 0

959.0 0 0
4.500, 0 0 0
385,000,000

° T h e shares of 2-12, 15-17, 20-23, and 25-33 have accrued to the Reichsbank (see.
sec. 9, note 26).
83702—IO-




9*




II. THE REICHSBANK STATUTE OF MAY 21,
1S75.1
We, William, by the grace of God, German Emperor,
King of Prussia, etc., on the ground of section 40 of the
Bank Act of the 14th of March, 1875, a n ( i with the consent
of the Bundesrat, ordain, in the name of the German
Empire, the following:
STATUTE OF THE REICHSBANK.
The Reichsbank is to begin operations on
the 1st of January, 1876.
On this date all rights and duties of the Bank of Prussia
shall pass to the Reichsbank.2 The Bank of Prussia is
to cease its operations on the 31st of December, 1875,
according to the treaty 3 between the Empire and Prussia
of the 17th and 18th of May of that year.
SEC. 2. The capital of the Reichsbank is to be fixed at
180,000,0004 marks, 120,000,000 marks of which is to be
realized according to the Bank Act of the 14th of March,
1875: (1) from the advanced capital of those stockholders
of the Bank of Prussia who exchanged their shares for
those of the Reichsbank within the period designated by
the Imperial Chancellor;5 (2) from the cash realized from
the new bank shares at the face value of 3,000 marks
each.6
The remaining 60,000,000 marks were to be procured,
according to article 1 of the Law of the 7th of June, 1899,
SECTION I .




93

National

Monetary

Commission

from the cash payments for the 30,000 shares of stock
which had to be sold by the 31st of December, 1900, and
for the 30,000 shares which had to be sold by the 31st
of December, 1905, at the face value of 1,000 marks
each.7
Any further increase of the capital can be legally permitted only after the general meeting of the stockholders,
following the vote of the central committee, has found
such an increase indispensable, and after it has decided
upon the new distribution of the earnings of the Reichsbank between the shareholders and the Empire, which
would necessarily follow such an increase (sec. 24 of the
Bank Act). 8
SEC. 3. The Reichsbank shares are indivisible; and,
except in so far as the regulations of section 41 of the
Bank Act provide to the contrary, are also irredeemable.
They are registered in the books of the Reichsbank,
with a record of the owner's name, business, and residence.9
A formal certificate of stock is drawn for each share, and,
together with the latter the owner receives dividend
coupons for the next five years, and a talon (dividend
warrant) guaranteeing new dividend coupons at the
expiration of the five-year period.10 The dividend coupons
and the talon are issued to bearer on prescribed blanks,
the forms of which are printed below.11
SBC. 4. If a bank share is transferred, notice is to be
given to the Reichsbank, together with the presentation
of the certificate of stock, and the transfer is to be recorded
in the stock books, as well as in the certificate of stock.
The Reichsbank considers as shareholders only those
persons who are registered as such in the stock books.13




94

German

Imperial

Banking

Laws

The Reichsbank has the right, but is not required, to
investigate the genuineness of ownership.13
SEC. 5. Bank shares can be transferred by indorsement.
The form of the indorsement is regulated by the provisions
of articles 11 to 13 of the " Wechselordnung." 14
SEC. 6. If a bank share is mortgaged, a written statement is to be made to the Reichsbank by the owner, who
is also to present the certificate of stock at the Reichsbank office.15 The mortgage is then recorded in the stock
books and a notice is made in the certificate of stock.
The Reichsbank considers as mortgagees only those
persons who are registered as such in the stock books,
and has the right, but is not required, to investigate the
genuineness and validity of the statement.
The owner can receive no new dividend coupons, and,
in case of section 41 of the Bank Act, no payments on the
bank shares, without the consent of the mortgagee; but
he is not otherwise restricted in rights granted to him by
the Bank Act and statute.
The mortgage is canceled by presenting to the Reichsbank the certificate of stock and the certified consent of
the mortgagee.
SEC. 7. The fee for recording transfers or mortgages of
bank shares is to be fixed by the Reichsbank board of
directors, with the assent of the central committee.16
SEC. 8. Lost or destroyed certificates of stock can be
declared void by means of publication (Aufgebotsverfahren), which process is to be regulated by the provisions
of section 799, paragraph 2, and section 800 of the "Biirgerliches Gesetzbuch," by the provisions of the "Zivilpro-




95

National

Mon etary

Commission

zessordnung," concerning the process of declaring documents void, as well as by the following stipulations:
The proceedings of invalidation can be carried on
solely in the court of the district where the office of the
Reichsbank board of directors is located.
Public announcement must be made of the invalidation
according to the provisions of sections 1009 and 1017 of
the "Zivilprozessordnung;" a single notice must also be
printed in those papers which are designated for announcements by the Imperial Chancellor in case of invalidation
of imperial bonds.
An official list of the certificates of bank stock which
have been declared void during the year is to be announced
annually by the Reichsbank board of directors in the aboveindicated papers, as well as by means of placards on the
exchanges in Berlin, Hamburg, Frankfort (Main), and
Munich.
Judicial proceedings which were begun before the 1st
of January, 1901, for the purpose of invalidating certificates of stock are to be conducted according to the
foregoing provisions.17
SEC. 9. Proceedings of invalidation (Mortiftkationsverfahren) can not be instituted on account of mislaid or
destroyed dividend coupons and talons; nor is the Reichsbank obliged, on proof of the loss, to issue new coupons
and talons or to pay out the corresponding amount. However, if the loss of a dividend coupon is reported to the
Reichsbank board of directors before it is canceled (sec.
24 of the Bank Act), the bank may allow payment 18 at
the expiration of the legal period after maturity, if the




96

German

Imp erial

Banking

Laws

dividend coupon has not been presented and redeemed
in the meantime. If notice is given of the loss of a talon,
the presentation of the certificate of stock is equivalent to
the delivery of the former.19
SEC. IO. Securities may be purchased for the account
of other persons only after the money necessary for the
purchase has been deposited with the bank or has been
guaranteed by a deposit of securities (sec. 13, art. 3, of
the Bank Act) .20 Likewise, goods which are to be sold on
commission must first be received by the bank.
If the purchase or sale of securities is for the account of
a public authority, 21 a statement to the effect that the
money or securities are at the disposal of the bank is
adequate.
SEC. 11. The Reichsbank is required to take charge of
the imperial deposits without compensation (sec. 22 of the
Bank Act), and also to keep records of the sums received
and disbursed for the accounts of the Empire.22
SEC. 12. The property acquired from the Bank of Prussia
is to be recorded in the report which is drawn up for the
1st of January, 1876, at the value of 12,000,000 marks.
The costs arising from the use of the property for the time
between April 1 and December 31, 1875, are also to be
added.23
SEC. 13. The following instructions are to be observed
in drawing up the annual report: 24
1. The value of current securities is to be recorded not
higher than their exchange value at the time of the preparation of the report.
2. The expenses of issuing bank notes are the only costs
of the administration and the management, which may




97

National

Monetary

Commission

be distributed over a period of several years. All other
costs are to be entered fully in the annual account under
the head of expenses.
3. The stock and the reserve fund are to be entered as
liabilities.25
4. After the balances of total assets and total liabilities
have been compared, the annual profit or deficit must be
stated at the end of the report.
SEC. 14. The annual report is to be audited by the deputies, who must have at their disposal all the books of the
Reichsbank, and who must hand in their account to the
central committee.26
The latter is to pass judgment on the report, as well as
on the amount of dividends to be allotted to the stockholders. The Reichsbank board of directors is to be notified of the decision of the central committee, which must
be ratified by all the members present at the meeting.27
SEC. 15. The dividend is to be paid on and after the
1st of April of the following year at the Reichsbank main
treasury and at all the Reichsbank local main offices and
Reichsbank local offices28 on presentation of dividend
coupons.
Semiannual payments of 1 ^ per cent may be made with
the consent of the central committee on the 1st of July
and the 2d of January. 29
SEC. 16. The general meeting of the stockholders (sec. 30
of the Bank Act) represents the whole body of stockholders
of the Reichsbank.
Every adult male shareholder may participate in this
meeting, if by a certificate deposited in the archives of




98

German

Imp erial

Banking

Laws

the Reichsbank at least one day previous to the meeting
he can prove that he is entered in the books of the Reichsbank as an owner of shares. The certificate must state
the face value of the shares which he owns.30
Entries in the books of the Reichsbank made less than
fourteen days before the general meeting of the stockholders are not counted.
Public officials, legal persons, associations,31 minors, and
unfranchised persons may participate through their representatives; married women, through their husbands.
Only those persons who are themselves entered as stockholders in the books of the bank are permitted to act as
proxies upon presentation of credentials signed by a court
or notary.32 One person is not allowed to represent more
than one shareholder.33
SEC. 17. The number of votes which each person has is
determined by the face value of his bank shares; each
share of 1,000 marks entitles him to one vote. No shareholder may have more than 300 votes.34
Questions are decided by a simple majority of votes.
In case of a tie, the conclusive vote is cast by that person
whose amount of bank shares has the highest nominal
value.
SEC. 18. The general meeting of the stockholders is to
take place in Berlin, every year, in March; but special sessions may be called at any time. Fourteen days' notice
before the meeting is to be given by the Imperial Chancellor through public announcement in the designated
newspapers (sec. 30).




99

National

Monetary

Commission

SEC. 19. The Imperial Chancellor or his deputy,35 and
in their absence the president of the Reichsbank board of
directors, is to preside over these meetings, which must
also be attended by the Reichsbank board of directors.
The members of the board may participate in the discussions, but have no vote.
SEC. 20. Minutes of the proceedings are to be taken by
a member of a Reichsbank board of directors, and signed
by the president and a member of the central committee,
two Reichsbank shareholders, and the secretary.
SEC. 21, A report concerning the management, as well
as the balance of profits (sec. 32a of the Bank Act), is to be
submitted every year to the general meeting of the shareholders. The latter is to elect, as wTell as to remove, members of the central committee (sees. 31 and 33 ibid.); and
is also to render decision concerning an increase in the
capital (sec. 2 of the Statute), or changes in the statute of
the bank, if these matters are expressly mentioned in the
notice for the meeting.
A special general meeting can take action only on matters which were expressly mentioned in the notice for that
meeting.36
SEC. 22. Members of the central committee, as well as
their deputies (sec. 31 of the Bank Act), are to be elected
by secret ballot for each particular office.
An officer is declared elected only if he has an absolute
majority of all votes cast.
If there is no absolute majority upon the second ballot,
the two candidates receiving the greatest number of votes




100

German

Imperial

Banking

Laws

are to be voted upon. In case of a tie, election shall be
decided by drawing lots.
Only men are eligible for election.
Of several shareholders belonging to one business firm,
only one can act as a member of the central committee or
as a deputy.
SEC. 23. The one-third of the central committee (sec. 31,
par. 1, of the Bank Act) who are to resign each year shall
do so the first two years by lot, and thereafter according
to priority of election.
SEC. 24. In the election of supervisors of the central
committee and their deputies (sec. 34 of t h e Bank Act),
each member has only one vote. In all other respects the
election is regulated by the provision of section 22.
SEC. 25. The minutes of the proceedings of the central
committee are to be signed by the president, two members
of the committee, and the recording secretary of the
Reichsbank board of directors (see sec. 20).
SEC. 26. The members of t h e Reichsbank board of
directors m a y participate in the discussions of t h e central
committee, b u t have no vote.
SEC. 27. The district committees (sec. 36 of t h e Bank
Act) are to consist of at least four and of not more t h a n
ten members, of whom one-half are to resign annually—
the first year by lot, and thereafter according to priority
of election. The resigning members are eligible for
reelection.
SEC. 28. Stockholders, who, according to section 22,
paragraphs 4 and 5, are not eligible for t h e central committee, can not be elected as members of the district committees or as their deputies (sec. 36 of the Bank Act).




IOI

National

Monetary

Commission

SEC. 29. When the members and deputies of the district
committees are to be nominated by the central committee
(sec. 36 of the Bank Act), the names of the eligible stockholders are marked on the list prepared by the bank commissioner and placed before the central committee.
The election of deputies by the district committees is
governed by the provisions of section 24.
SEC. 30. The announcements intended for the shareholders will be proclaimed by the Imperial Chancellor,
and published in the "Deutscher Reichsanzeiger " as well
as in the newspaper designated for that purpose 37 in
each city where the Reichsbank main offices are located.
Special announcement for individual stockholders is not
required.
The same newspapers are to be used for the public
announcements of the Reichsbank board of directors,
whenever their aim is not solely one of local interest.
SEC. 3I. 38 In case of the discontinuation of the Reichsbank (sec. 31 of the Bank Act), the Reichsbank board of
directors is to liquidate its affairs under the direction of
the Imperial Chancellor. The board of directors is to
close the current business, to fulfill the obligations of the
Reichsbank, to collect its loans, and to sell its property.
New transactions may be made if they are necessary
for the liquidation of the current business. The Reichsbank board of directors is authorized to represent the
Reichsbank, according to section 38 of the Bank Act, until
the liquidation is completed.
SEC. 32. The Reichsbank board of directors is to settle
whatever differences may arise between the Empire and
the stockholders.




102

German Imperial

Banking Laws

SEC. 33. The first regular general meeting of the Reichsbank shareholders is to be held in March, 1877. Until
that time the functions of the general meeting of the
shareholders will be performed by an assembly consisting:
1. Of those shareholders of the Bank of Prussia who
have exchanged their shares for Reichsbank shares within
the period designated by the Imperial Chancellor, or of
their legal heirs.
2. Of those persons who have subscribed to Reichsbank
certificates of stock or their legal heirs.
This assembly is to take place before the 1st of January,
1876, for the purpose of electing the central committee,
but it may be called at any time before the first regular
general meeting of the shareholders. The central committee is to meet before the 1st of January, 1876, and
elect from among its members the supervisors and their
deputies. The members of the district committees and
their deputies are also to be elected before the 1st of January, 1876, from among the persons indicated in 1 and 2.
SEC. 34. This temporary representation of the Reichsbank shareholder as ordered in section 33 is to be regulated by those provisions of the Bank Act and of this
statute which deal with the general meetings of the
shareholders, the central committee and its deputies, and
the district committees and their deputies.
Issued over our imperial signature and seal.
Given at Berlin, the 21st day of May, 1875.
(Signed)
WILUAM.




PRINCE VON BISMARK.

103




To the order of

-

-

Date
Transferred to _

Berlin

_

_ _ . Date_

..__

R E I C H S B A N K BOARD OF DIRECTORS.

(Signed.)

Registrar
Bookkeeper _

To the order of

_ _ _ _ _

_

__

Date___
Transferred to

__

Berlin

__

__

Date

REICHSBANK BOARD OF DIRECTORS.

(Signed.)

Registrar

_

_ ,_

Bookkeeper,

19—
1 9 —
The bearer of this coupon is to receive, on presentation of the same, the arrears of the dividend on t h e bank
share No
for the year 19
The arrears will be paid a t t h e Reichsbank main treasury, and a t all Reichsbank local main offices and local
bank offices.
The amount of the same, as well as the time of payment, will be announced publicly by the Imperial Chancellor
(Bank law, sections 24, 32a; statutes 15, 21, and 30).
Berlin
, Date
, 19
(Signed.)

Registrar

REICHSBANK BOARD OF DIRECTORS.

Bookkeeper

Back-standing dividends are canceled after four years' maturity in favor of the Bank.—Section 24 of the Bank Act.
TALON TO T H E REICHSBANK CERTIFICATE O F STOCK.
No_
The bearer of this talon is to receive, on presentation of the same, dividend coupons for the five years
inclusive, and a new talon.
If proof is issued of the loss of t h e talon, the presentation of the certificate of stock is adequate (Section g of
the statute).
Berlin
, Date
, 19
(Signed.)

Registrar

REICHSBANK BOARD OF DIRECTORS.

Bookkeeper

19

19

First half year.

Second half year.

The bearer of this coupon is to receive, on presentation of same on t h e 1st of July, 19
, 52 marks, 50
pfennigs, as the first half-yearly payment of dividend
for the year
on Reichsbank share No
The dividend will be paid a t t h e Reichsbank main
treasury, and a t Reichsbank local main offices and
local bank offices.

The bearer of this coupon is to receive, on presentation of same, on the 2d of January, 19
, 52 marks,
50 pfennigs, as the second half-yearly payment of dividend for the year
on Reichsbank share No
The dividend will be paid a t t h e Reichsbank main
treasury, and a t Reichsbank local main offices and
local bank offices.

Berlin

, Date

, 19

REICHSBANK BOARD OF DIRECTORS.

(Signed.)

Registrar
Bookkeeper

Back-standing dividends are canceled after four years'
maturity in favor of the Bank.—Section 24 of the Bank Act.




83702—10

(To face page 105.)

Berlin

, Date

, 19

REICHSBANK BOARD OF DIRECTORS.

(Signed.)

Registrar
Bookkeeper

Back-standing dividends are canceled after four years'
maturity in favor of the Bank.—Section 24 of the Bank Act.

FORM O F A REICHSBANK CERTIFICATE O F STOCK OF 3,000
MARKS.
REICHSBANK CERTIFICATE OF STOCK.

No.
Reichsbank share No.
for 3,000 marks is registered in the books
of the Reichsbank, according to section 3 of the statute of the Reichsbank,
on the name of
Berlin
Date
REICHSBANK BOARD OF DIRECTORS,

(Signed)

Registrar
Bookkeeper

r

PROVISIONS CONCERNING T H E METHODS OF TRANSFERRING
AND MORTGAGING THE SHARE.

i. The Reichsbank share can be transferred by indorsement, either by filling out one of the prescribed blanks, a
form of which is attached here, or by merely affixing the
signature.
2. If a bank share is transferred, notice is to be given to
the Reichsbank together with the presentation of the
certificate of stock. The Reichsbank considers as shareholders only those persons who are registered as such in
the stock books.
The Reichsbank has the right, but is not required, to
investigate the genuineness of ownership.
A note of the transfer is to be made on the certificate
of stock, which is then to be returned #to the owner, wdiile
the other documents remain in the archives of the bank.
3. If a bank share is mortgaged, a written statement is
to be made to the Reichsbank by the owner, who is also to




105

National

Monetary

Commission

present the certificate of stock at the Reichsbank office.
The Reichsbank considers as mortgagees only those persons who are registered as such in the stock books. The
Reichsbank has the right, but is not required, to investigate the genuineness and validity of the statement. The
owner can receive no new dividend coupons, and, in case of
section 41 of the Bank Act, no payment for the bank
share, without the consent of the mortgagee; but he is not
otherwise restricted in rights granted to him by the Bank
Act and the statute. The mortgage is cancelled by presenting to the Reichsbank the certificate of stock and the
certified consent of the mortgagee. In other particulars
the regulations of provision 2 are to be observed.




106

To t h e order of

- -

1

Date
Transferred to

Berlin

__

__

_

__ _

-

___

__

Date

REICHSBANK BOARD OF DIRECTORS.

(Signed)

Registrar
Bookkeeper

To the order of

__

_ _ _ _ _ _ _

__ _

Date

__

Transferred to

Berlin.

_ __

[SEAI,.]

_ . Date

__ _

REICHSBANK BOARD O P DIRECTORS.

(Signed)

Registrar. _
Bookkeeper _ _

19—
1 9 —
The bearer of this coupon is to receive, on presentation of the same, the arrears of the dividend on the bank
share No
for the year 19
The arrears will be paid a t the Reichsbank main treasury, and a t all Reichsbank local main offices and local
bank offices.
The amount of the same, as well as the time of payment, will be announced publicly by the Imperial Chancellor
(Bank law, sections 24, 32a; statutes 15, 21, and 30).
Berlin
Date
, 19
(Signed)

Registrar

REICHSBANK BOARD OP DIRECTORS.

Bookkeeper

Back-standing dividends are canceled after four years' maturity in favor of the Bank.—Section 24 of the Bank Act.
TALON TO T H E R E I C H S B A N K CERTIFICATE O F STOCK.
No
The bearer of this talon is to receive, on presentation of the same, dividend coupons for the five years
,
inclusive, and a new talon.
If proof is issued of the loss of the talon, the presentation of the certificate of stock is adequate (Section o of
the statute).
Berlin
Date
, 19
(vSigned)

Registrar

REICHSBANK BOARD OF DIRECTORS.

Bookkeeper

19

19
First half year.

Second half year.

The bearer of this coupon is to receive, on presentation of same, on the 1st of July, 1 9 - - , 17 marks 50
pfennigs, as the first half-yearly payment of dividend
for t h e year
, on t h e Reichsbank share No.
The dividend will be paid a t the Reichsbank main
treasury, and a t the Reichsbank local main offices and
local bank offices.
Berlin
Date
, 19

The bearer of this coupon is t o receive, on presentation of same, on the 2d of January, 1 9 . - , 17 marks 50
pfennigs, as the second half-yearly payment of dividend
for t h e year
, on t h e Reichsbank share No.
The dividend will be paid a t t h e Reichsbank main
treasury, and at the Reichsbank local main offices and
local bank offices.
Berlin
Date
, 19

REICHSBANK BOARD OF DIRECTORS.

(Signed)

Registrar
Bookkeeper

REICHSBANK B O A R D OF DIRECTORS.

(Signed)

Registrar
Bookkeeper

Back-standing dividends are canceled after four years' I
Back-standing dividends are canceled after four years'
maturity, in favor of the Bank.—Section 24 of the Bank Act. I maturity, in favor of t h e bank.—Section 24 of the Bank Act,




83702—10

(To face page 107.)

FORM

OF

A REICHSBANK
OF

1,000

CERTIFICATE

OF

STOCK

MARKS.

REICHSBANK CERTIFICATE Otf STOCK.

No.
Reichsbank share No.
for 1,000 marks is registered in the books
of the Reichsbank, according to section 3 of the statute of the Reichsbank,
on the name of
Berlin
Date
REICHSBANK BOARD OF DIRECTORS,

(Signed)

PROVISIONS

CONCERNING

Registrar
Bookkeeper
THE

METHODS

OF

TRANSFER-

RING AND MORTGAGING T H E SHARE.

i. The Reichsbank share can be transferred by indorsement, either by filling out one of the prescribed blanks, a
form of which is attached here, or by merely affixing the
signature.
2. If a bank share is transferred, notice is to be given to
the Reichsbank together with the presentation of the
certificate of stock. The Reichsbank considers as shareholders only those persons who are registered as such in
the stock books.
The Reichsbank has the right, but is not required, to
investigate the genuineness of ownership.
A note of the transfer is to be made on the certificate
of stock, which is then to be returned to the owner, while
the other documents remain in the archives of the bank.
3. If a bank share is mortgaged, a written statement is
to be made to the Reichsbank by the owner, who is also
to present the certificate of stock at the Reichsbank office.
83702—10




8

107

National

Monetary

Commission

The Reichsbank considers as mortgagees only those persons who are registered as such in the stock books. The
Reichsbank has the right, but is not required, to investigate
the genuineness and validity of the statement. The
owner can receive no new dividend coupons and, in case
of section 41 of the Bank Act, no payment for the bank
share without the consent of the mortgagee; but he is not
otherwise restricted in rights granted to him by the Bank
Act and the statute. The mortgage is canceled by presenting to the Reichsbank the certificate of stock and the
certified consent of the mortgagee. In other particulars
the regulations of provision 2 are to be observed.




108

NOTES ON THE REICHSBANK STATUTE.
i. The " S t a t u t e " of the Reichsbank has only a remote similarity to
the statute of a stock company. As a supplement to chapter 2 of the
Bank Act of the 14th of March, 1875, it contains provisions in regard to
the Reichsbank which might just as well have been contained in the Act
itself. This arrangement, however, is plausible because it relieves the Act
from detailed provisions which are for the most part regulative (cf., e.g.,
sees. 10, 11, and 13), and which have little to do with the relations of the
bank shareholders, and also because it renders a supplement possible in a
more convenient form. With regard to the latter, cf., for example, Bank
Act, section 40, and note 120. Concerning the change of the statute, cf.
section 21, ibid. Such a change has taken place as a result of the law of
the 7th of June, 1899, upon the imperial decree and in conjunction with
the Bundesrat, on the 3d of September, 1900. This decree ordered t h a t a
series of sections of the statute be amended, and such amendment was
approved by t h e general meeting of the shareholders on the 19th of March,
1900. The preamble of the ordinance reads:
" We, William, b y the grace of God, German Emperor, King of Prussia,
etc., ordain, in the name of the Empire, in accordance with section 40 of the
Bank Act of the 14th of March, 1875, and with the consent of t h e Bundesrat,
the following:
"After the 1st of January, 1901, the version of sections 2, 3, 8, 15, 16,
and 17, of the Statute of the Reichsbank of the 21st of May, 1875, shall be:
(Then follow the above-mentioned new paragraphs.)
" Issued over our imperial seal and signature.
"Given a t the New Palace on the 3d of September, 1900.
"(Signed)

WILLIAM.
"Graf POSADOWSKY."

2 On this occasion t h e following proclamation of the Imperial Chancellor
was issued:
"According to section 1 of t h e statute of the Reichsbank of the 21st of
May, 1875, the Reichsbank shall commence operations on t h e 1st of January,
1876, and, on t h e same day, all rights and duties of the Bank of Prussia,
which will cease its activity on the 31st of December, 1875, according to
the agreement between Prussia and the Empire concluded on t h e 17th and
18th of May, 1875, shall be transferred to the Reichsbank.
"After the 1st of January, 1876, all notes issued by the Bank of Prussia
over the signature of t h e Royal Prussian Board of Directors, including
those in the thaler standard, as well as those in the imperial standard,
are to be considered in all legal relations as notes of the Reichsbank.
"(Signed)

V O N BISMARCK,

"The Imperial Chancellor.
"BERWN, the 16th of December, 1875"




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3. Especially section 1, paragraphs 2-4, ibid.
4. Cf. Bank Act, section 23.
5. Cf. Bank Act, section 61, No. 3, and the proclamation of the Imperial
Chancellor of the 24th of May, 1875.
6. The changes in paragraph 1 are necessary because of the increase of
the capital and the issue of shares of 1,000 marks which has taken place
according to the law of the 7th of June, 1899. These changes are: " 180,000,000 m a r k s " instead of "120,000,000 m a r k s ; " the phrase "of which
120,000,000 marks is composed, according to the Bank Act of the 14th of
March, 1875," and the insertion of the words "of three thousand m a r k s "
after " n e w bank shares." Instead of "face v a l u e " it was formerly called
"nominal value."
Concerning the sale of bank shares which are paid up, cf. note 74 of the
Bank Act.
7. Paragraph 2 was inserted after the ordinance of the imperial decree of
the 3d of September, 1900. (See above note 1.)
Concerning the sale of the new 1,000-mark shares, see above, note 74
(note-bank legislation).
8. Cf. Bank Act, sections 30 and 32, notes 87 and 93.
9. Cf. " Handelsgesetzbuch" of 1897, section 222.
10. Cf. section 9 below.
11. Cf. Bank Act, section 24, paragraph 4. This regulation is based on
the law of the 7th of June, 1899, according to which formal blanks are also
to be used for the certificates of 1,000 marks.
The new certificate of stock, according to schedule i a of the imperial
stamp duty of the 14th of June, 1900, are subject to stamp duty of 2 marks
per 100 of the face value besides the premium. This duty is also imposed
on interim certificates for the receipted amounts. The express assessment
of the Reichsbank shares rests on a decision of the Reichstag commission
(Report of the Commission No. 870 of the documents, pp. 16 and 17).
Indorsements of transfers made on federal stamp-taxed paper and
entered in the stock books are exempt from additional (federal and state)
taxes (Imperial Stamp Law, sec. 4). The shares issued before the 1st of
July, 1900, are subject to the old law (sec. 5, ibid.).
12. See section 6, paragraph 2; section 16, paragraphs 2, 3, and 4.
13. Cf. "Handelsgesetzbuch" of 1897, section 223.
14. The consent of the creditor or the mortgagee and the transfer of the
indorsed paper are necessary (" Burgerliches Gesetzbuch," sec. 1292).
15. Cf. ibid., section 222.
16. A fee of 3 marks is fixed by the law of the 4th of January, 1876;
b u t if more than one share is simultaneously transferred or mortgaged by
the same owner to the same transferee or mortgagee, a fee of 1 mark is
imposed on the second and each succeeding share. Cf. the imperial stamp
law of the 14th of June, 1900, sections 4-6, schedules 4a, 4, and above,
note 10 with regard to stamp duties.




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17. The former provisions of section 8 were adapted to those of the law
of the 12th of May, 1873, which is no longer in force. The imperial debt ordinance of the 19th of March, 1900, with its amendment of t h e provisions
concerning the imperial bonds and with the corresponding new regulations
in the ' 'Btirgerliches Gesetzbuch " and in the "Zivilprozessordnung," has also
been declared binding for the Reichsbank shares by the provisions of t h e
decree of the 3d of September, 1900, which are repeated in the text. These
provisions were framed like those of section 17, paragraph 1, a n d sections
18, 19, and 21, paragraph i, and section 22 of the imperial debt ordinance.
"Provisions of t h e Zivilprozessordnung"—particularly sections 946 fT.
and 1003 ff.
" W h e r e t h e office of t h e Reichsbank Board of Directors is located;" a t
present it is the district court in Berlin.
18. B u t is not required. (See " Biirgerliches Gesetzbuch," sec. 804.)
19. Corresponds to practice.
20. Cf. Bank Act, section 13, No. 6.
21. See decision of the imperial court in the penal reports, volume 8,
page 9.
22. Cf. Bank Act, notes 72 and 73.
23. Cf. Bank Act, section 61, No. 6, and treaty of the 17th and 18th of
May, 1875, section 8. The costs amounted to 751,012 marks 85 pfennigs.
(Report of the administration of the Bank of Prussia for 1875, p. 7; Report
of the administration of the Reichsbank for 1876, p. 9.)
24. Cf. Bank Act, section 8, No. 2, notes 18 and 20.
25. Cf. Bank Act, sections 23 and 24, No. 2.
26. Cf. Bank Act, sections 32a and 34.
27. Cf. Bank Act, section 32a.
28. Also a t the secondary offices which are provided with treasuries.
(See Bank Act, sec. 37, note 113.)
29. Cf. Bank Act, sections 24, 32, and note 93. Stock companies are
prohibited from making such payments ("Handelsgesetzbuch" of the 10th
of May, 1897, sec. 215). The change of " i % " instead of " 2 ^ " corresponds to the law of the 18th of December, 1899 (see above, note 75), b u t
was first inserted in the statute after the decree of the 3d of September,
1900. (See above, note 1.)
30. Cf. above, section 4, paragraph 2. The change, " the face value of
the shares which he owns" instead of "how many," is contained in the
decree of the 3d of September, 1900, and is the result of the issue of shares
of 1,000 along with older shares of 3,000 marks. (See above, note 1, par. 2,
and note 6.)
31. Collective firms (open commercial corporations, limited liability companies, etc.) can be represented only by one of their qualified partners.
The business manager may act for limited liability companies; stock companies and registered associations may be represented b y an authorized
member of the board of directors, or by any other authorized delegate.
(Cf. sec. 22, par. 5.)




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With regard to "public officials" (offentliche Behorde), see note 21.
32. A proxy must also comply with the requirements of paragraph 5.
33. Cf. " Handelsgesetzbuch " of 1897, section 252. The restriction applies only to agents with full power and not to other representatives.
34. The former version of section 17 read: " B a c h one present a t the
meeting (sec. 16) has as many votes as he represents shares of bank stock,
b u t not more than 100 votes.
"A simple majority of votes is conclusive. In case of a tie, the vote of
that person who represents the greatest number of bank shares is decisive."
The change urged by the decree of the 3d of September, 1900, according
to which the number of votes is no longer determined by the number of
shares, b u t by their face value, was rendered necessary after the issue of
shares of 1,000 marks. (Cf. sec. 16, note 30.) The limitation to a maximum of 300 votes corresponds to the new form of section 40, No. 6,
which was introduced by article 4 of the law of the 7th of June, 1899.
(Cf. Bank Act, sec. 40, No. 6, note 126.)
35. Cf. Bank Act, section 26 and note 79.
36. Cf. above, section 18.
37. Cf. the proclamation of the Imperial Chancellor of the 3d of November, 1875. The newspapers which had meanwhile ceased to exist were
substituted by others.
38. Cf. "Handelsgesetzbuch" of 1897, section 297 ff.




119

III. TREATY BETWEEN PRUSSIA AND THE GERMAN EMPIRE CONCERNING THE TRANSFER
OF THE BANK OF PRUSSIA TO THE GERMAN
EMPIRE.
[May 17 and 18, 1875.—Issued on the 24th of May, 1875.]1

In view of the authority extended in section 61 of the
Bank Act of the 14th of March, 1875,2 and in section 1 of
the law of the 27th of March, 1875, the Imperial Chancellor, Prince von Bismarck, in the name of the German
Empire, first party, and the Royal Prussian Minister of
Finance, vice-president of the State Ministry, Camphausen, together with the Royal Prussian Minister for Commerce, Industry, and Public Works, Doctor Achenbach,
in the name of the Royal Prussian State Government,
second party, conclude the following treaty:
Prussia is to withdraw from the Bank of
Prussia its capital of 5,720,400 marks, as well as its share
of the reserve fund, amounting to 9,000,000 marks, on
the 1st of January, 1876.
On this date the Bank of Prussia is to be transferred,
with all its rights and duties, to the Empire, according
to the provisions of this treaty.
The Empire will merge this bank into the Reichsbank 3
(sec. 12 of the Imperial Bank Act).
The Bank of Prussia is to be transferred to the Empire
in this wise: The head of the Bank of Prussia shall conSECTION I .




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Monetary

Commission

vey in writing the property of the latter to the Reichsbank
board of directors, who shall manage the bank after the
date mentioned.4
SEC. 2. The officials of the Bank of Prussia, who
remain in their positions, will retain their seniority and
receive their salaries from the Reichsbank.
Officials who are reluctant to enter the service of the
Reichsbank shall be placed temporarily on the pension
list by the Royal Prussian State Administration. The
Reichsbank shall meet all claims in regard to salary,
compensation for loss of time or pension, to which an
official of the Bank of Prussia is entitled for the time
after the ist of January, 1876. It shall also meet all the
claims of the heirs of officials of the Bank of Prussia, with
the exception of the claims concerning pensions of the
Royal Prussian General Widow-Pension Institution.
SEC. 3. Prussia is to receive 15,000,000 marks from the
Empire in compensation for the Bank of Prussia. This
sum is to be defrayed by the Reichsbank, and is to be
paid to Prussia on the ist of January, 1876.5
SEC. 4. The former shareholders of the Bank of Prussia have the privilege of demanding, within a period to
be determined by the Imperial Chancellor, the exchange
of their shares for those of the Reichsbank of the same
nominal value, provided they surrender all rights granted
them through their shares of the Bank of Prussia in favor
of the Reichsbank.6
SEC. 5. The Reichsbank is to compensate all claims
presented by the legitimate owners of those shares of the
Bank of Prussia which are not exchanged according to




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section 4 for Reichsbank stocks. The Reichsbank is to
pay out to these shareholders on and after the ist of
January, 1876, their original capital, as well as their
share of the reserve fund in accordance with the provisions
in sections 16 and 19 of the Bank Act of the 5th of October,
1846.7
SEC. 6. The Reichsbank is to pay to Prussia after the
ist of January, 1876, the annual sum of 621,910 thalers
(1,865,730 marks) in semiannual instalments 8 on account
of the obligations assumed by the Bank of Prussia in the
agreement of the 28th~3ist of January, 1856, with regard
to the state loan of 16,598,000 thalers. The term of this
obligation is to expire on the ist of July, 1925, so that by
the year 1925 only 310,955 thalers, or 932,865 marks, will
be due.
If the privilege of the Reichsbank shall not be renewed,9
and no other bank shall assume the obligations of the
latter, the payments shall be made by the Empire, so
that the income will flow undiminished to the Prussian
State Treasury until the expiration of the time above
mentioned.
According to the agreements of the28th~3ist of January, 1856, and of the 22d of April, 1874, the Bank of
Prussia was given the privilege of delivering to the
Prussian State Treasury \% per cent consolidated state
loan bonds, equal in face value to the annual payments of
621,910 thalers made to the sinking fund of the loan
of 1856, in accordance with section 6 of the agreement of
the 28th~3ist of January, 1856. This privilege is to cease
with the end of the year 1875.




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SEC. 7. The report of the assets and profits of the
Bank of Prussia for the year 1875 shall be drawn up by
the Reichsbank board of directors and the central committee of the Bank of Prussia, in accordance with sections
95 and 96 of the Bank Act of the 5th of October, 1846,
and the principles since observed. This report, together
with suggestions concerning the division of profits and
the rate of dividends to be paid to the former stockholders
of the Bank of Prussia, and also together with the Proclamation of the close of that bank, shall then be presented
to the Royal Prussian Minister of Commerce, Industry,
and Public Works for definite approval.
SEC. 8. The property of the Bank of Prussia is to be
entered in the report (sec. 7) at its real value, which is
to be appraised according to an arrangement with the
Imperial Chancellor.
The question with regard to the property of the Bank
of Prussia, which was left open in section 61, paragraph
6, of the Bank Act, is thereby settled. No subsequent
demands for a change in the valuation can be made. 10
SEC. 9. In accordance with the requirement of the
Royal Prussian Government, the Reichsbank is to follow
the precedent established by the Bank of Prussia in its
collection of debts listed in No. II of the royal Prussian
cabinet order of the 18th of July, 1846, for the account of
the Prussian State, and is to turn in the collected amounts
to the Prussian State Treasury.11
SEC. 10. The report of the management concerning
transactions designated in sections 7 and 8, as well as the
final annual report for the year 1875, will be submitted




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by the Royal Prussian Minister of Commerce, Industry,
and Public Works to the meeting of the shareholders to
be called by him not later than the 31st of March, 1876.
The Reichsbank board of, directors are to be present.
The meeting is to be composed of the 200 persons who
owned, according to the books of the Bank of Prussia, the
greatest number of shares on the 31st of December, 1875,
disregarding the question whether or not they had applied
for exchange of their shares for those of the Reichsbank
(sec. 4). In all other respects, but for a few changes
resulting from the nature of the case, the regulations contained in sections 61 to 65 and 97 of the Bank Act of the
5th of October, 1846, are applicable to this general meeting of the stockholders. The Reichsbank is to undertake
the disbursement of the balance of dividends on presentation of the proper dividend coupons at the places to be
designated by the Royal Prussian Minister for Commerce,
Industry, and Public Works.
SEC. 11. With the exception of the provisions contained
in the present treaty, the legal relations between the Prussian State and the Bank of Prussia established by the
Bank Act of the 5th of October, 1846, the law of the 7th
of May, 1856, and the treaty of the 28th~3ist of January,
1856, shall cease on the 1st of January, 1876.
SEC. 12. The rights and obligations of the Bank of
Prussia designated in sections 21,22,23, a n d 2 5 °f the Bank
Act of the 5th of October, 1846, with regard to the investment of money of courts, churches, schools, hospitals, and
other charitable institutions and public offices, as well as




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the amounts deposited according to those provisions, are
transferred by the Bank of Prussia to the Reichsbank.
Both parties reserve the right of giving six months 1
notice of the withdrawal of such deposits, under the following provisions:
i. Whenever notice of the withdrawal is given, the acquired rights and obligations cease upon the expiration
of the period of notice, and the deposited money is to be
repaid.
2. With respect to the money of courts, the Prussian
Government can give no notice of withdrawal before the
ist of February, 1876, nor can the Empire give such'
notice before the ist of February, 1877.12 Taking into
no consideration the repayments made in current transactions, the repayments of the deposits at the expiration
of the period of notice is to be made in five equal instalments, which are due in consecutive periods of three
months each, commencing at the expiration of the period
of notice.
If the provisions of the Prussian law concerning the
investment and lending of money of courts are repealed,
the obligation to deposit such money with the Reichsbank
is to cease on the same day that the repeal goes into
effect.13
SEC. 13. The provisions contained in section 12 go into
effect only in case the Royal Prussian Government, during the course of the year 1875, is given legal authority to
conclude an agreement with the Empire with regard to
the investment of money of courts.14




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In proof thereof t h e undersigned have drawn u p t h e
present t r e a t y in duplicate form.
F R I E D R I C H S R U H , 18th of May,

1875.

BERUN, 17th of May, 1875.
VON

BISMARCK,

Imperial
(Signed)

Chancellor.

CAMPHAUSEN,

The Royal Prussian Minister of Finance,




Vice-President

of the State

Ministry.

ACHENBACH,

The Royal Prussian Minister for
Commerce, Industry, and Public Works.

119




NOTES ON THE TREATY BETWEEN PRUSSIA AND THE GERMAN
EMPIRE CONCERNING THE TRANSFER OF THE PRUSSIAN
BANK TO THE GERMAN EMPIRE.
i. Cf. The Prussian bank ordinance of the 5th of October, 1846, and the
treaty of the 2 8th~3ist of January, 1856; also the law of the 7th of May,
1856. The period of notice provided for in section 2 of this law expired
before the 31st of December, 1871. The treaty of the 17 th and 18th of
May, 1875, is published also in the "Preussische Gesetzblatt " of 1875,
page 224.
2. See above "Final provisions."
3. This has been carried into effect by section 1 of the statute of the
Reichsbank.
4. This took place upon the decree of the chief of the Bank of Prussia of
the 31st of December, 1875.
5. Cf. Bank Act, section 61, No. 2. The compensation was paid from
the deposits on the first subscription of the Reichsbank shares. (Cf.
note 74 of the Bank Act, sec. 23.)
6. Cf. Bank Act, section 61, No. 3; cf. proclamation of the Imperial
Chancellor of the 24th of May, 1875.
7. Cf. Bank Act, section 61, No. 4. Eighty-one shareholders did not
make the exchange and were compensated in accordance with this provision. (Cf. Bank Act, note 183, sec. 62.)
8. Cf. Bank Act, section 61, No. 5, and the treaty of the 28th to the
31st of January, 1856, section 5, cited in note 1.
9. Cf. Bank Act, section 41.
10. Cf. Reichsbank statute, section 12.
11. This occurred several times.
12. Notice of the withdrawal of the money of courts has been issued by
the Prussian State Government on the ist of February, 1876. Notice of
the withdrawal of the money of churches, schools, etc., has been issued by
the Reichsbank on the 26th of November, 1878. Finally, on the 3d of
December, 1878, the Reichsbank issued notice of the withdrawal of the
interest-bearing money deposited by trustees, guardians, and private
persons, and has since accepted no such deposits. Cf., however, Bank Act,
section 13, note 53, and the proclamation of the Reichsbank board of
directors of the 3d of February, 1878.
13. Cf. Prussian law concerning deposit banking of the 19th of December, 1875; also the deposit ordinance of the 14th of March, 1879, and the
ordinance of the guardianship of the 5th of July, 1875, section 39, " Burgerliches Gesetzbuch," section 1808.
14. Provision is made for this authority in the Prussian law of the 19th
of June, 1875.




121




IV. LAW OF JUNE 7, 1899, CONCERNING CHANGES
IN THE BANK ACT OF MARCH 14, 1875.
[Issued on June 13, 1899.]

We, William, by the grace of God, German Emperor,
King of Prussia, etc., ordain, in the name of the Empire,
and with the consent of the Bundesrat and the Reichstag,
the following:
ARTICLE

I.

Section 23 of the Bank Act of the 14th of March, 1875,
is amended by the following provisions:
The capital of the Reichsbank is to consist of 180,000,000
marks, comprising 40,000 shares of 3,000 marks each, and
60,000 shares of 1,000 marks each.
Of the latter, 30,000 shares are to be sold by the 31st of
December, 1900, and the other 30,000 shares by the 31st of
December, 1905. The provision of section 38 of the law
of the 22d of June, 1896, does not apply to this sale.
The shares are to be registered in the names of the
owners.
The shareholders are not personally responsible for the
liabilities of the Reichsbank.
ARTICLE

2.a

Section 24 of the Bank Act is changed to the following
form by the repeal of article 1 of the law of the 18th of
December, 1889:
a

83702—10




See Law of June i, 1909, article 1, p. 128.
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The net annual profit of the Reichsbank is to be divided
at the close of each year in the following manner: *
i. In the first place, a regular dividend of 3 ^ per cent
of the capital is to be distributed among the shareholders.
2. Twenty per cent of the remainder is to be transferred
to the reserve fund, if the latter has not reached the
amount of 60,000,000 marks.
3. Of the balance which still remains one-fourth is to be
allotted to the shareholders and three-fourths to the
Imperial Treasury.
If the net earnings are less than 3 ^ per cent of the capital, the difference is to be made up from the reserve fund.
The premium gained on the sale of Reichsbank shares
is to be added to the reserve fund.
Back dividends having a four-year standing after
maturity are canceled in favor of the Bank.
ARTICLE 3.

In section 31 the third sentence from "the members"
to " m a r k s " is amended as follows:
The members and the deputies are elected by the stockholders at a general meeting from among those whose
registered shares amount to 9,000 marks minimum.
ARTICLE 4.

Section 40, paragraph 6, is amended by the following
provision:
6. The form of notice for the general meetings of the
stockholders, as well as all that relates to the exercise of
the right of vote by the latter. This right, however, need




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not be conditioned by the possession of more than one
certificate of stock, nor may one person have more than
300 votes. A share of 3,000 marks entitles one to 3 votes,
a share of 1,000 marks to 1 vote.
ARTICLE

5®

The total amount of tax-free uncovered notes to be
apportioned to the Reichsbank, according to section 9 of
the Bank Act, including the shares of the banks numbered 2 to 11, 15 to 17, 21 to 23, and 25 to 33, which have
accrued to the Reichsbank, is to be fixed at 450,000,000
marks, and the total note circulation for all the banks is
to be raised to 541,600,000 marks.
ARTICLE

6.*

The following sentence is added to section 13 of the
Bank Act, paragraph 3b, after the words "of their
exchange value:"
"To these are to be added the bonds of the above institutions and banks, which are payable to bearer and which
are issued on the basis of loans granted to a domestic
municipal corporation or which are guaranteed by such a
corporation.''
ARTICLE

7.

After the 1st of January, 1901, the Reichsbank is prohibited from discounting below the rate announced according to section 15 of the Bank Act whenever this rate reaches or exceeds 4 per cent.
SECTION I .




a See Law of June 1, 1909, article 2, p. 129.
&See Law of June 1, 1909, article 6, p. 131.
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If the Reichsbank discounts at a lower than the official
rate, it has to announce this new rate in the Reichsanzeiger.
SEC. 2. The Bundesrat shall, on the ist of January,
1901, exercise its right of revoking the privilege of note
issue of those private note banks which are now exempt
from the restrictions of section 43 of the Bank Act, if they
have not bound themselves by the ist of December, 1899,
to the following: *
1. That on and after January 1, 1901, they will not
discount below the Reichsbank rate announced according
to section 15 of the Bank Act whenever it reaches or
exceeds 4 per cent.
2. That they will in no case discount more than onefourth of 1 per cent below the Reichsbank rate announced
according to section 15 of the Bank Act; and, in case the
Reichsbank itself discounts at a lower than its announced
rate, the reduction below this new rate shall not exceed
one-eighth of 1 per cent.
SEC. 3. If a private note-issuing bank disregards the
obligation imposed in section 2, its right of issue shall be
revoked by judicial order, as indicated in section 50 ff.
of the Bank Act.
Members of the board of directors, representatives of
the branch offices, or other functionaries and agents of a
bank, who disregard their obligations and discount below
the rate permitted in section 2 for the account of the bank
shall be punished by a fine not exceeding 5,000 marks.




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Laws

8.

The Imperial Chancellor is authorized to sell the new
shares of stock t o be issued in accordance with article i of
this law by public subscription.
The a m o u n t of deposit on the new shares and the period
within which they are to be paid up are to be determined
by the Imperial Chancellor.
ARTICLE

9.

The Reichsbank shall pay to t h e Imperial
Treasury on the i s t of J a n u a r y , 1901, an a m o u n t equal to
the face value of those notes of the former Bank of
Prussia which are still in circulation.
SECTION I.

S E C . 2. The Empire is to compensate the Reichsbank
for the notes redeemed or accepted in payment, according
to section 1, after t h e i s t of J a n u a r y , 1901; and also for
those notes which th#e Reichsbank redeems according to
section 4 of the Bank Act.
S E C . 3. After the ist of January, 1901, t h e notes of
the former Bank of Prussia shall not be included in determining, according to sections 8, 9, 10, and 17 of t h e Bank
Act, t h e note circulation of the Reichsbank.
ARTICLE

10.

Articles 1, 2, 5, and 6 of this law are to go into effect
on the i s t of J a n u a r y , 1901.
Issued over Our Imperial signature and seal.
Given at t h e New Palace, the 7th of June, 1899.




(Signed)

WILLIAM.
G R A F VON POSADOWSKY.
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V. THE LAW OF FEBRUARY 20, 1906.
We, William, by the grace of God, German Emperor,
King of Prussia, etc., ordain, in the name of the Empire
and with the consent of the Bundesrat and the Reichstag, the following:
The Reichsbank is empowered to prepare and to issue
bank notes of the denomination of 50 and 20 marks.
Issued over Our Imperial signature and seal.
Given at Kiel, on board Prussia, the 20th of February,
1906.

(Signed)
WIIXIAM,
Count Von Posadowsky.
VI. LAW OF JUNE 1, 1909, CONCERNING CHANGES
IN THE BANK ACT.
We, William, by the grace of God, German Emperor,
King of Prussia, etc., ordain, in the^ name of the Empire
and with the consent of the Bundesrat and the Reichstag, the following:
ARTICLE I .

Section 24 of the Bank Act of the 14th of March, 1875,
is changed to the following form by the repeal of article
2 of the law of June 7, 1899.
The net annual profit of the Reichsbank is to be divided
at the close of each year in the following manner:
1. In the first place, a regular dividend of $% per cent
of the capital is to be distributed among the shareholders.
2. After 10 per cent of the balance has been transferred to the reserve fund the new balance shall be distributed in the proportion of one-fourth to three-fourths




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among the shareholders and the imperial treasury, respectively.
If the net earnings are less than 3% P e r c e n t of the
capital, the difference is to be made up from the reserve
fund.
The premium gained on the sale of Reichsbank shares
is to be added to the reserve fund.
Back dividends having a four-year standing after
maturity are canceled in favor of the Bank.
ARTICLE 2.

Article 5 of the law of June 7, 1899, *s amended by the
following provision:
The total amount of tax-free uncovered notes to be
apportioned to the Reichsbank, according to section 9 of
the Bank Act, including the shares of the banks numbered
2 to 12, 15 to 17, and 20 to 33, which have accrued to the
Reichsbank, is to be fixed at 550,000,000 marks, and the
total note circulation for all the banks is to be raised to
618,000,000 marks.
The amount of notes in circulation, according to the
reports which are submitted at the end of March, June,
September, and December of each year, for the purpose of
determining the tax (section 10 of the Bank Act), raises the
shares of the Reichsbank to 750,000,000 marks, and the
aggregate circulation to 818,771,000 marks.
ARTICLE 3.

The notes of the Reichsbank are legal tender. In all
other respects the provisions of section 2 of the Bank Act
remains in force.




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ARTICLE 4.

I. In section 18 of the Bank Act the words "German
currency " are changed to "German gold coins."
II. Section 19, paragraph 1, of the Bank Act is changed
to the following form:
The Reichsbank is required to accept at full face value
the notes of those banks which are announced by the
Imperial Chancellor, according to section 45 of this act,
not only in its main office in Berlin, but also in its branch
offices either in cities of more than 80,000 inhabitants or
in the city where the bank which has issued the notes is
located, as long as the issuing bank punctually fulfills its
duty of note redemption.
Similarly, the Reichsbank is required to exchange to
bearer its notes for the notes of each of the announced
banks in its branch offices which are located in the same
States where the issuing bank is operating, as far as the
amount of the notes of these branch offices permit such
exchanges.
The notes accepted or exchanged, according to paragraphs 1 and 2, may be presented by the Reichsbank
either for redemption or as payments to the same bank
which issued them, as well as payments in the city where
the latter has its principal office.
ARTICLE 5.

I. In section 8, paragraph 66, of the Bank Act, the
words "and checks" shall be inserted after "bills."
II. The following words shall be inserted in section 13 2
of the Bank Act after " solvent:" " as well as checks which




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are indorsed b y not less t h a n two persons known t o be
solvent."
I I I . The following words shall be inserted in section 17
of the Bank Act after " solvent:" " or in checks which are
indorsed by not less t h a n two persons known t o be solvent."
IV. I n section 32, paragraph 1, of the Bank Act, after
the phrase " t h e sale and purchase of gold and bills," the
words " a n d checks" shall be inserted.
V. The following provision shall be appended t o section
47 of the Bank Act:
SEC. 47 a. W i t h regard to the reserve against the circulating notes of the private note banks which are exempt
from the restrictions of section 42, the provisions of section 17 shall be applicable.
ARTICLE

6.

I. Article 6 of the law of June 7, 1899, is amended as
follows:
The following sentence is to be added t o section 13 of
the Bank Act, figure 3c, after the words "of their exchange value:"
" To these are to be added the bonds of domestic quasipublic agricultural credit institutions, which are issued
to bearer, as well as the bonds of the above institutions
and banks, which are payable to bearer and which are
issued on the basis of loans granted to a domestic municipal corporation or which are guaranteed by such a corporation."




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II. The following provision is to be inserted under
figure 9 in section 13 of the Bank Act:
9. To issue interest-bearing loans for not longer than
three months on pledges of the right of claim of debts
registered in the debit books of either the Empire or one
of the German States, to the maximum amount of threefourths of the exchange value of the converted debt.
III. Section 20 of the Bank Act is to be supplemented
by the following provisions to be designated as sections
20a and 206:

SEC. 20a. If the right of claim of debts registered in
the debit books of either the Empire or one of the German
States (sec. 13, fig. 9) is pledged to the Reichsbank, the
signatures of the persons, for which the Reichsbank is
kept responsible according to section 38, are adequate for
the recording of the pledge in the debit books in the name
of the Reichsbank. Inasmuch as this latter provision
requires the signatures of two members of the board of
directors, the authentication of the application is valid
when made by other officials of the Reichsbank named
by the board of directors to the debt administration.
The provisions of section 183 of the law concerning
voluntary jurisdiction are applicable to the authentication.
SEC. 20b. If the pledge of the right of claim of debts
has* been registered in the name of the Reichsbank in the
debit books (sec. 13, fig. 9), the Reichsbank retains the
right to the pledge even when it has been transferred to
a third party, unless the right of the latter has been
recorded in the debit books before the entrance of the
pledge of the right to the claim or if at the time of regis-




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tration the right of the third party has been either known
or, save for gross negligence, could have been known to
the Reichsbank.
If the debtor does not meet his obligations guaranteed
by the pledge of the right to the claim, the debt administration is authorized and required, upon the written
request of the Reichsbank, to issue to the latter, without demanding any proof of the delay on the part of the
pledger to meet his obligation, certificates of indebtedness to bearer for the whole or a corresponding part of
the claim, unless such issue is prohibited by judicial
order or when the right to request such issue or to make
other arrangements was recorded in favor of a third
party prior to the pledge of the right to the Reichsbank.
The pledge of the right >f claims may also be used for
the purpose of defraying the cost incurred in the issue
of the certificates of indebtedness.
The debt administration shall inform the Reichsbank,
at the time of issuing certificates of indebtedness to the
latter of the later transfers of the right to the claim.
The provisions of section 20 stipulate for the compensation to be demanded by the Reichsbank out of the
certificates of indebtedness to be issued by the debt
administration.
ARTICLE 7.

Section 22 of the Bank Act is to be changed to the
following provision:
The Reichsbank is required to take charge of the
business of the Imperial Treasury without compensation.




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The Reichsbank is authorized to assume the obligation of administering the similar business of the federated
States.
ARTICLE 8.

Articles 3, 4, 5, and 6 of this law shall go into effect on
the ist of January, 1910. The other provisions shall
go into effect on the ist of January, 1911
Issued over Our Imperial signature and seal.
Given at the New Palace, the ist of June, 1909.
(Signed)
WILLIAM,




VON BETHMANN-HOLLWEG.

134

BOOK TWO.

GENERAL PROVISIONS CONCERNING BUSINESS
RELATIONS WITH THE REICHSBANK.
I.—General principles.
SECTION I .

Every ordinary business man may transact
business with the Reichsbank according to the following
provisions: He must give the necessary information
concerning his business to the office of the bank in whose
district he is located, and if his firm is entered in the
Register of Commerce (Handelsregister), he must submit
the certified page containing his name.
SEC 2. Should the business be carried on through
agents or representatives, a certificate of authority drawn
up in a definite form and valid only in business transactions with the Reichsbank, is to be deposited with the
bank. Payments to such persons are to be made upon
their being personally introduced by the one who issues
the order.
II.—Purchase of bills of exchange (Wechsel).
A. PURCHASE OF BIU,S ON GERMANY.

i. Requisites of bills.—Bills of exchange must be made
out according to the ordinance or the legal provisions of
the foreign countries where they are drawn; they must
run for not more than three months, and must be indorsed
in the name of the bank of the city where the payment is
to be made by three, and in exceptional cases by two,
persons or firms known to be solvent.




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All bills which are payable in the city where the purchasing bank office is located, except those not exceeding
the amount of 500 marks and having only fourteen days
more to run, or those which mature within less than thirty
days, can be negotiated by the bank only upon the indorsement of at least three persons.
Unaccepted domiciled bills shall be purchased only if
they have not more than a week to run; they may run
a longer period if there is a bank where the drawee resides.
Bills which contain the phrase "or value," or which
are accepted for another day than the stated day of maturity, or which have erasures or corrections, are not negotiable by the Reichsbank.
When bills have blank indorsements they must always
be drawn to the order of the seller and indorsed by the
latter to the bank. "Alongen" a must always contain a
complete description of the bill in question.
Bills must contain the date of maturity, and must be
drawn in accordance with the attached account (sec. 2).
2. Requisites of the account (Rechnung).—Special account
must be made—
(a) For local bills (payable in the city where the
purchasing bank or one of its branches is located).
(6) For bills payable in other German cities having
bank institutions.
In making discounts during the period from the 31st
of October to the 31st of December of each year the bills
maturing in the old year are to be distinguished from those
a " A l o n g e n " are slips attached to a bill for the purpose of receiving
the additional indorsements for which there is frequently not room on
the bill.—Palgrave's Dictionary.




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maturing the next year and must be entered in separate
accounts.
In the account the bills are to be arranged either according to the bank offices or according to the day of maturity,
and are also to be described individually, detailing the
amount, the day of maturity, the drawee, the place of
payment, and the amount of accrued interest. In domiciled bills the names and the dwelling places of the drawee
and the remittee are to be given.
Each month is to be reckoned as thirty days in calculating interest. The month of February is to be reckoned
as having twenty-eight or twenty-nine days for such bills
as are due on the last day of February. The day of
purchase is not included. Thus, interest is to be calculated
as follows: For bills negotiated on the 15th of February
and due on the 5th of March, twenty days; for bills
negotiated on the 15th of February and due on the
28th of February, thirteen days; for bills negotiated on
the 15th of February and due on the 29th of February,
fourteen days; for bills negotiated on the 28th of February and due on the 5th of March, seven days.
The minimum interest is to be calculated as follows:
(a) Four days' interest on bills which are payable at
the place of negotiation.
(b) Five days' interest on bills not payable at the
place of negotiation and which are presented in amounts of
10,000 marks and more, or in a parcel amounting to 20,000
marks minimum, in pieces of not less than 5,000 marks.
(c) Ten days' interest on all other bills.




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Thirty pfennigs are to be realized for each individual bill
not exceeding ioo marks, and 50 pfennigs minimum for
each bill over 100 marks.
The seller is to defray the cost of transmission for bills
not exceeding 100 marks which are at such short sight
that they must be sent immediately to the place of payment.
The interest is to be calculated according to interest
tables. For individual bills the computation according
to the table is as follows:
For 30
pfennigs.

At the rate of—

For 50
pfennigs.

Marks net.
36. 00
30.86
27. 00
24. 00
21. 60
19.64
18. 00
16. 62
15-43
14.40

3 per cent. _
3.5 per cent
4 per cent__
4.5 per cent
5 per cent_.
5.5 per cent
6 per cent__
6.5 per cent
7 per cent__
7.5 per cent

Marks net.
60. 00
Si-43
45-00
40. 00
36.00
32.73
30.00

27. 69
25. 73
24. 0 0

Bill accounts are to be receipted by the seller, by his
agent, or authorized representative.
B.

PURCHASE* OF

BIIVLS

AND

CHECKS

ON

FOREION

COUNTRIES.
(a) GENERAL

PROVISIONS.

Countries of negotiation.—According to the following
provisions, the bank institutions may purchase bills on
the following countries: Belgium, Denmark, England,
France, Holland, Italy, Switzerland, Scandinavia,




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Checks which are drawn in Belgium, England, AlsaceLorraine, France, Italy, Austria, Portugal, Switzerland,
Spain, and North America, and are payable in Belgium,
England, France, Italy, and Switzerland, are negotiated
only from well-known firms, if they agree to release the
Reichsbank from the obligation of presenting the checks
for payment at the stated time. This agreement is not
necessary in case of checks from England on England.
Domiciled bills.—Unaccepted domiciled bills on foreign
countries are purchased only if they have not more than
fourteen days to run.
Requisites of bills.—Bills must be drawn in the monetary
standard {Geldsorte) of the country in which they are
payable, in conformity with the legal requirements concerning their form and stamps, and must be indorsed by
three, and in exceptional cases by two, persons or firms
known to be solvent, as well as by the seller, to the order
of the Reichsbank Board of Directors in Berlin.
If the bills or checks are presented in several copies
(original, first, and second of exchange), only one copy
is to be indorsed by the seller to the Reichsbank.
Securing of acceptance.—It is the custom of the Reichsbank to secure payments, without, however, assuming
any obligation, of bills having more than twenty days
to run and which are drawn for large amounts on the
following starred principal cities. The Reichsbank is not
in a position to secure acceptance of bills on secondary
cities.
Principal cities.—The following are regarded as principal cities: (i) Belgium, *Antwerp and Brussels; (2)
83702—10




10

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Denmark, ^Copenhagen; (3) England, ^London; (4)
France, *Paris; (5) Holland, * Amsterdam and *Rotterdam; (6) Italy, *Milan, Florence, Genoa, Leghorn, Naples,
Rome, Turin, Venice; (7) Switzerland, *Zurich, Berne,
St. Gall, Basel, Geneva, Winterthur; (8) Scandinavia,
Stockholm, Christiania, Gottenburg.
Rate of exchange.—Negotiations are made by the banks
on the basis of the last official quotations of the Berlin
Exchange announced in the '' Reichsanzeiger.'' For South
German bank offices, the quotations of the Frankfort
Exchange are good for the purchase of bills on Switzerland.
The quotations are good only for bills on principal
cities. On all other places of the above-named countries (secondary cities) bills or checks will be negotiated
at a discount of 1 per cent, and not less than 30 pfennigs
on each piece. The short rate of exchange is used for a
period not exceeding fourteen days; the long rate for a
period of from fifteen days to three months.
Interest computation.—If the long rate of exchange is
used, each month is to be reckoned as thirty days; in
case of the short rate, each month is to be reckoned
according to the actual number of days (for example,
January, 31; February, 28 or 29, etc.).
Except in case of English sight bills and checks, no
interest is calculated on bills which have a shorter period
to run than that to which the short quotations apply.
On unaccepted bills at a definite date after sight, five
days1 interest shall be calculated for the time elapsing
before acceptance, besides the regular interest.




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In computing interest the following is to be observed:
i. If the seller owes interest to the Reichsbank at the
time of the negotiation, it is to be calculated at the
interest rate of the foreign place of payment.
2. If the Reichsbank owes interest to the seller, a distinction is to be made between long-dated and mediumdated bills.
The long-dated bills are (a) on England, those having
a period of seventy-five to ninety days to run; (b) on Belgium, France, Holland, Italy, and Switzerland, those having a period of from forty-five to ninety days to run.
The medium-dated bills are (a) on England, those having a period of from fifteen to seventy-four days to run;
(b) on Belgium, France, Holland, Italy, and Switzerland,
those having a period of from fifteen to forty-four days to
run.
Interest on the long-dated bills is to be paid according
to the following discount from the interest rate at the place
of payment:
From the rate up to 4 per cent inclusive, the abatement =
one-half of 1 per cent;
From the rate of from 4 to 7 per cent inclusive, the
abatement = 1 per cent;
From the rate of over 7 per cent, the abatement = 1 %
per cent.
On medium-dated bills the foregoing deductions are
increased by one-half of 1 per cent.
Stamp duties.—If the foreign stamp is lacking, abatement is made only from short-time bills or checks according
to the tax schedules of the respective countries.




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Fees.—The negotiation fee for bills and checks must be
one-half of i per cent of the amount of the transaction and
not less than 30 pfennigs per item.
Delivery.—(a) Denomination: The following denominations are deliverable on the exchange: In Belgium, from
1,000 to 50,000 francs; in Denmark, from 1,000 to 20,000
crowns; in England, from £100 to £3,000; in France, from
1,000 to 50,000 francs; in Holland, from 500 to 25,000 Holland florins; in Italy, from 1,000 to 25,000 lires; in Switzerland, from 1,000 to 50,000 francs; in Scandinavia, from
1,000 to 20,000 crowns.
No charge is made for denominations of higher than the
foregoing amounts; on the other hand, a deduction of 1
per cent is made on bills of smaller denominations (except
English bills and checks).
(6) Running period for short paper: In order to be
delivered on the Berlin Exchange as short paper, bills
must have the following running periods:
1. Bills on the principal cities in Belgium, Denmark,
England, 0 France, Holland, and Switzerland must have a
minimum period of five days; in Italy and Scandinavia
a minimum period of seven days.
2. Bills on secondary cities in England and France
must have a minimum period of eight days; in Belgium
and Holland a minimum period of ten days; in continental Italy a minimum period of ten days; in insular
Italy a minimum period of fourteen days.
Papers having shorter than the foregoing periods are
negotiated only in case the seller releases the Reichsbank
from the obligation of presenting them when due.
a In case of bills on England the days of grace are not counted.




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No interest is paid on bills of this kind.
(c) Bills in the " m a r k " standard: Foreign bills drawn
in the " m a r k " standard are negotiated at the interest
rate of the Reichsbank, provided the interest rate in the
foreign country is higher. The interest is to be calculated for a minimum period of ten days, but not less than
30 pfennigs for each bill under 100 marks, and not less
than 50 pfennigs for each bill over 100 marks, is to be
realized by the bank.
The bill in the " m a r k " standard is to be reduced to
foreign standards according to the following rates:
Marks.

i franc
1 crown
1 pound sterling
1 Holland florin
1 lire

o. 80
1.25
20. 40
1.70
. 80

Recall of bills.—Foreign bills sold to the Reichsbank
may be recalled before maturity, if the person requesting
the recall compensates the bank for all ensuing expenses.
The rate of exchange shall be equal to the rate charged in
negotiating bills of the same foreign country, while the
interest for the time since the day of negotiation until
the day of repayment shall be computed according to
the rate of the bank.
Return bills (Rilckwechsel).—In the event of failure of
payment, returned foreign bills are to be computed at the
foreign rate of exchange according to the tet short-rate,
to which the interest for a period of from six to eight
(for London, nine) days at the rate of the foreign city is
to be added.
The account must also include (i) the cost of the protest
and other expenses; (2) the return bill fee of one-third of 1




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per cent, (3) 6 per cent interest until the day of payment;
(4) remittance fee of 1 per cent.
Collection.—Bills as well as checks on the above-mentioned countries which are not negotiable may be accepted
for collection (Cf. Business on Commission, IX, 4).
Foreign bank notes.—Foreign bank notes are not negotiable (Concerning their acceptance for collection, cf. IX, 5).
(6) SPECIAL PROVISIONS.**

Belgium.
Principal cities.—* Antwerp, Brussels.
Purchase.—Bills and checks, as well as accepted drafts
(Mandate), are negotiable. Concerning the purchase of
checks, compare the conditions stated above in Part III,
B, a.
Abatement.—One per cent is deducted from bills or
checks under 1,000 francs, and from those on secondary
cities.
Stamp duties.—Bills drawn in Belgium must be drawn on
Belgian stamped paper (papier timbre). Those drawn
outside of Belgium must be stamped in Belgium before
being certified at the exchange. Charge is made for the
missing stamp only in case of short bills.
The designation of the monetary standard is not
required.
Rate and interest.—Short bills (usance, eight days; deliverable in principal cities, from five to fourteen days; in
secondary cities, from ten to fourteen days) are computed
a Bills on the following starred principal cities having more than twenty
days to run, and drawn on big amounts, may be accepted by the bank
without its assuming any responsibility for them.




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according to the short rate; if they have from nine to fourteen days to run, interest is deducted for the period of from
one to six days, at the Belgian interest rate; no interest
compensation is demanded for bills of shorter periods.
Long bills (usance, sixty days; deliverable, from fortyfive to ninety days) are computed according to the long
rate; if they have from forty-five to fifty-nine days to run,
interest for fifteen days receding down to one day is to be
added at the rate of from i to i % per cent below the Belgian
interest rate; if they have to run from sixty-one to ninety
days, interest for the period of from one to thirty days is to
be deducted, at the Belgian interest rate.
Medium-dated bills (from fifteen to forty-four days) are
computed according to the long rate, and interest is to be
added for the period of from forty-five days receding down
to sixteen days, at the rate of from i to 2 per cent below the
Belgian interest rate.
Denmark.
Principal city.—* Copenhagen.
Abatement.—One per cent is deducted from bills under
1,000 crowns, as well as from those on secondary cities.
Stamp duties.—Both the original and the duplicates are
subject to the stamp duty, while indorsed copies are
exempt. If the stamp is lacking, charge is made only in
case of short bills.
The designation of the monetary standard is not
required.
Rate and interest.—Short bills (usance, eight days; deliverable, from five to eight days) are computed according
to the eight-day rate, without interest compensation.




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Long bills (usance,
; deliverable, from nine to
ninety days) are computed according to the eight-day
rate, and interest is to be deducted for a period of from one
to eighty-two days at the Danish interest rate.
England.
Principal city.—* London.
Purchase.—Besides bills (bills of exchange, drafts,
promissory notes), post bills of the Bank of England and
its branches, as well as checks named above in II, B, a,
are negotiable.
Abatement.—One per cent is to be deducted from bills
and checks on secondary cities.
Stamp duties.—Bills drawn in England on England must
be drawn on paper with the English impressed stamp.
Drafts of bankers on bankers at seven days' sight, or
twenty-one days' date, are exempt from the stamp duty.
Charge is made for the missing stamp only in case of short
bills and checks.
Special fee.—A special fee of i per cent is to be charged
for bills on England which are payble at the presentation of
the attached bill of lading.
The designation of the monetary standard is not required.
Rate and interest.—(a) Checks and sight bills on London
are computed according to the short rate, and six days'
interest is to be added at the rate of from one-half of i per
cent to i ^ per cent below the London interest rate; no
interest is calculated for amounts under £100.
(b) Checks and sight bills on London agents, etc., are
computed according to the short rate, without interest
compensation.




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(c) Checks and sight bills on secondary cities are computed according to the short rate, without interest compensation but upon an abatement of i per cent.
Short bills (usance, eight days; deliverable in London,
from five to fourteen days; in secondary cities, from eight
to fourteen days) are computed according to the short
rate; if they have from nine to fourteen days to run, interest is deducted for the period of from one to six days at the
London interest rate; no interest is to be charged for
shorter periods.
Long bills (usance, ninety days; deliverable, from
seventy-five to ninety days) are computed according to
the long rate; if they have to run from seventy-five to
eighty-nine days, interest for fifteen days receding down
to one day is to be added at the rate of from one-half
of i per cent to i ^ per cent below the London interest
rate.
Medium-dated bills (from fifteen to seventy-four days)
are computed according to the long rate with the addition
of interest for seventy-five receding down to sixteen days
at the rate of from i to 2 per cent below the London
interest rate.
France.
Principal city.—*Paris.
Abatement.—One per cent is to be deducted from bills
and checks under 1,000 francs; as well as from those on
secondary cities.
Purchase.—Bills (traites, lettres de change, billets de
change) and drafts, as well as checks named above in II,
B, a, are negotiable.
The designation of the monetary standard is necessary.




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Stamp duties.—Bills drawn, accepted or indorsed in
France can be purchased only when they are provided
with the French stamp. Deduction is made for the missing stamp only in case of short bills, and checks drawn in
other countries.
Rate and interest.—Short bills (usance, eight days; deliverable in Paris, from five to fourteen days; in secondary
cities, from eight to fourteen days) are computed according
to the short rate; if they have from nine to fourteen
days to run, interest is to be deducted for the period of
from one to six days at the Paris interest rate; no interest
compensation is to be demanded for shorter periods.
Long bills (usance, sixty days; deliverable, from fortyfive to ninety days) are computed according to the long
rate; in case they have from forty-five to fifty-nine days
to run, interest for fifteen days receding down to one day
is to be added at the rate of from one-half of i per cent
to i % per cent below the Paris interest rate; if they have
from sixty-one to ninety days to run, interest for the
period of from one to thirty days is to be deducted at the
Paris interest rate.
Medium-dated bills (from fifteen to forty-four days) are
computed according to the long rate; interest for fortyfive days receding down to sixteen days is to be added at
the rate of from i to 2 per cent below the Paris interest
rate.
Holland.
Principal cities.—* Amsterdam and * Rotterdam.
Purchase.—Bills, order billets, and promissory notes to
order are negotiable; the purchase of the last two kinds,
however, is restricted under certain conditions.




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Acceptance.—The accepted bill must have, besides the
signature, the word " accepted,'' or its equivalent.
The designation of the monetary standard is necessary.
Stamp charge.—Charge is made for the missing stamp
only in case of short bills.
Abatement.—One per cent is deducted from bills under
500 Holland florins, as well as from those on secondary
cities.
Special fee.—A fee of 1 per cent is charged for the loss
of interest on unaccepted bills indorsed "without costs,"
whether they do or do not bear the note "fourteen days
duration/' or " t o be submitted after fourteen days," and
other notes to that effect.
Rate and interest.—Short bills (usance, eight days;
deliverable in the principal cities, from five to fourteen
days; in secondary cities, from ten to fourteen days) are
to be computed according to the short rate; if they have
from nine to fourteen days to run, interest for a period of
from one to six days is to be deducted at the Amsterdam
interest rate; no interest is charged for shorter periods.
Long bills (usance, sixty days; deliverable, from fortyfive to ninety days) are computed according to the long
rate; for the period of from forty-five to fifty-nine days,
interest for fifteen days receding down to one day is to be
added at the rate of from one-half of 1 per cent to 1%
per cent below the Amsterdam interest rate; for the
period of from sixty-one to ninety days, one to thirty days'
interest is to be deducted at the Amsterdam interest rate.
Medium-dated bills (from fifteen to forty-four days)
are computed according to the long rate; interest for
forty-five days receding down to sixteen days is to be




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added at the rate of from i to 2 per cent below the Amsterdam interest rate.
Italy.
Principal cities.—*Milan, Florence, Genoa, Leghorn,
Naples, Rome, Turin, and Venice.
Purchase.—Bills drawn in Italy with a specification
"cambiale" or lilettera di cambio," except those specified
' ' prima or sola di cambio,' * are negotiable. Checks are purchased only under conditions stated in II, B, a.
The designation of the monetary standard is not required.
Abatement.—One per cent is deducted from bills under
* 1,000 lires as well as from bills on secondary cities. The
deduction from the latter is not made in case of bills of
the Bank of Italy {Banca d'ltalia).
Stamp duty.—Charge is made for the missing stamp
only in case of short bills and checks drawn in foreign
countries.
Stamp exemption.—The bills of the following banks are
exempt from the stamp tax: La Banca Nazionale nel
Regno d'ltalia; la Banca Nazionale Toscana; la Banca
Romana; la Banca Toscana di Credito; il Banco di Napoli;
il Banco di Sicilia.
Special.—Bills must contain no statement like " without costs," " without protest," or similar phrases.
Rate and interest.—Short bills (usance, ten days; deliverable in the principal cities, from seven to fourteen days;
in secondary cities, on the Continent, from ten to fourteen days; on the islands, fourteen days) are computed




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according to the short rate; if they have from eleven to
fourteen days to run, interest for a period of from one to
four days is to be deducted at the Italian interest rate;
no interest compensation is to be demanded for shorter
periods.
Long bills (usance, sixty days; deliverable, from fortyfive to ninety days) are computed according to the long
rate; if they have from forty-five to fifty-nine days to
run, interest for fifteen days receding down to one day is
to be added at the rate of from one-half of i per cent to
i per cent below the Italian interest rate; if they have
from sixty-one to ninety days to run, interest for a period
of from one to thirty days is to be deducted at the Italian
interest rate.
Medium-dated bills (from fifteen to forty-four days) are
computed according to the long rate; a interest for a
period of forty-five days receding down to sixteen days is
to be added at the rate of from i to 2 per cent below the
Italian interest rate.
Switzerland.
Principal cities.—*Zurich, Berne, St. Gall, Basel, Geneva,
Winterthur.
Purchase.—The last quotation of the Frankfort Exchange is to be used by the South German bank offices;
while the others have to use the last quotation of the
Berlin Exchange. The purchase of checks is to be governed by the conditions named above in II, B, a.
a If the long rate is not quoted, the short rate is to be used, upon the
deduction of interest for the time exceeding ten days, a t the Italian interest
rate.




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Abatement.—One per cent is to be deducted from bills
or checks under ioo francs, as well as from those on secondary cities.
Stamp duties.—Charge is made for the missing stamp
only in case of short bills and checks on cities in those
cantons which prescribe stamps.
Rate and interest.—Short bills (usance, eight days; deliverable, from five to fourteen days) are computed according
to the short rate; if they have from nine to fourteen days
to run, interest for a period of from one to six days is to
be deducted at the Swiss interest rate; no interest compensation is to be charged for shorter periods.
Long bills (usance, sixty days; deliverable, from fortyfive to ninety days) are computed according to the long
rate; if they have from forty-five to fifty-nine days to
run, interest for fifteen days receding down to one day is
to be added at the rate of from one-half of i per cent to
\% per cent below the Swiss interest rate; if they have
from sixty-one to ninety days to run, interest for the
period of from one to thirty days is to be deducted at the
Swiss interest rate.
Medium-dated bills (from fifteen to forty-four days)
are computed according to the long rate, a and interest
for forty-five days receding down to sixteen days is to be
added at the rate of from i to 2 per cent below the Swiss
interest rate.
a If the long rate is not quoted, the short rate is to be used, upon the
deduction of interest for the time exceeding eight days, at the Swiss interest rate.




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Scandinavia.
Principal

cities.—Stockholm,

Christiania, and Gotten-

borg.
Abatement.—One

per cent is deducted from bills under

i ,000 crowns, as well as from those drawn on secondary
cities.
Stamp

duties.—All

bills payable or circulating in Nor-

way must compound for the stamp duty.

If bills are

drawn in several copies, the one crossed on the back and
designated for acceptance only and not for circulation
is exempt from t h e stamp duty.

Drafts of foreign coun-

tries on Sweden require stamps, while bills drawn in
Sweden on Sweden and bills at sight (h vista) drawn in
foreign countries on Swedish banks or bankers are exempt
from the stamp duty.

Charge is made for the missing

stamp only in case of short bills.
Rate and interest.—Short

bills (usance, ten days; deliv-

erable, from seven to fourteen days) are computed according to the ten-day rate, without interest compensation.
Long bills (usance,

; deliverable, from eleven to

ninety days) are computed according to the ten-day rate,
and interest for the period of from one to eighty days is to
be deducted at t h e Swedish or Norwegian interest rate.
III.—Sale of bills and checks on foreign
(a)

countries,

BIIXS.

Applications
(Antrage).—Applications
for remittances
of bills and checks on foreign countries are to be made at
t h a t bank in whose district the applicant resides. The




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bank may carry out the order by telegraph to Berlin if
the purchaser is willing to defray the costs.
If short bills are desired it is to be stipulated whether
the order is given exclusively for the stated bills, and if
such are not available, whether it may be carried out by
check. Interest for such checks shall be computed according to the interest computations given below (III, b).
Rate of exchange.—On bill days, 0 bills kept in the portfolio of the Reichsbank are to be sold at short, maximum
fourteen-day sight at the day's rate; on other than bill
days, at the rate of the next exchange day. If the bills
demanded are not in the possession of the Reichsbank,
they shall be secured from the exchange.
Delivery.—Only the remittance of bills on principal, but
not secondary, cities may be guaranteed. Dutch bills are
deliverable, according to the choice of the seller, either at
Amsterdam or Rotterdam; Belgian bills either at Brussels
or Antwerp.
Orders on the following cities are carried out wholly or
in part by means of checks on the correspondents of the
Reichsbank: Amsterdam, Antwerp, Brussels, Copenhagen, London, Paris, Rotterdam, Zurich, and Milan
and the other principal cities of Italy. Checks are drawn
on the cities named below (III, b).
Concerning the interest on checks, see the interest
computations in III, b.
If checks are not desired it is to be expressly stated in
the application.
a Foreign bills are received on the Berlin Exchange only on Tuesdays,
Thursdays, and Saturdays, unless holidays cause a- change.




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Interest.—The bank selling foreign bills of exchange
having a longer period to run after acceptance than that
established by usance must compensate the purchaser
for the extra days at the rate of interest of the foreign
bank.
Payment.—The applicant is to deposit either cash or
securities, which may be hypothecated, to cover the foreign bills which are demanded. The order is not carried
out if the purchaser insists on getting bills only, or papers
on a secondary city, or on a country in which the Reichsbank has no correspondents.
Fees.—A fee of i per cent of the amount of the transaction, and not less than 50 pfennigs, is charged for each
parcel of bills or checks on the same country.
No fee is charged if the discount or loan transaction
between the purchaser and the bank yields to the latter
at least ten days' interest, or if the ten days' interest on
the amount of the foreign bill was obtained by discounting a greater amount for a shorter period or a smaller
amount for a longer period than ten days.
(6) CHECKS.

Applications.—Applications for remittances of checks
are to be made at the bank of that district where the
applicant resides. Telegraphic transfer is permissible if
the purchaser is willing to bear the cost.
Interest-free checks.—Checks of this kind on London—
that is, papers under £100, or bearing the note "London
agents"—are sold only when they are readily available in
the Reichsbank. Since ordinarily only few checks are
83702—10




11

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available, applications are accepted only on condition t h a t
t h e purchaser declares himself willing to accept bills or
checks issued by t h e bank.
Delivery.—Checks

on t h e correspondents of t h e Reichs-

bank are to be drawn on every week day u p to t h e following amounts:
Amsterdam and Rotterdam
Antwerp and Brussels
Copenhagen
London
Paris, Bordeaux, Havre, Lyon, Marseille, Nice
Basel, Zurich
Milan and other principal cities of Italy

Holland florins. _
francs- _
crowns. _
pounds sterling. _
francs. _
do
lires. _

20, 000
30, 000
10, 000
5,000
50, 000
50, 000
30, 000

Higher amounts are restricted. If checks for amounts
higher t h a n the foregoing are demanded, no immediate
execution of the order can be counted upon, since t h e
delivery of papers purchased on the exchange occurs customarily only on t h e next week day. Interest on checks
purchased on the exchange is t h e same as on those drawn
b y the Reichsbank.
Amounts in marks.—The Reichsbank will draw checks
in the standard of t h e place of p a y m e n t equivalent to t h e
a m o u n t of m a r k s received b y it (upon deducting expenses).
Rate.—If the checks drawm in Berlin are m a d e out on a
day other t h a n a bill day and on amounts higher t h a n
those given above, t h e rate of exchange shall be computed according to the rate of t h e next exchange day on
which bills of foreign exchange are negotiable in Berlin.
If t h e amount is below the limits given above, t h e rate
shall be computed according to t h e rate of the previous
exchange day.




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Interest computation.—The

Laws

purchaser of checks drawn

by the Reichsbank will be charged interest according to
the respective rates of interest, as follows:

Checks on

England, for nine days; on Italy, for eight days; on other
countries, for six days.
Fees.—The

fe^es are i per cent of t h e amount of the

transaction, and not less t h a n 50 pfennigs for each parcel
of checks on the same country.

No fees will be charged

under conditions named above (III, a), in case of bills
of foreign exchange.
Transfers and remittances.—Concerning

remittances and

transfers to foreign countries by the Reichsbank and its
branches, see V I I I , B.
IV.—Purchase of redeemable bonds, etc.
Purchase.—Bonds

of the Empire, of a German State, of

domestic municipal

corporations, provincial

mortgage

bonds or annuities, original shares, original

preferred

shares and bonds of German state railroads (for whose
capital and interest t h e State acts as guarantor), as well
as tax-indemnity certificates

(Steuervergiltungs-Anerkennt-

nisse), and export-allowance certificates for sugar
fuhrzuschusscheine

filr Zucker)

are

negotiable

(Ausby

all

banks, if they m a t u r e within three m o n t h s ; the latter two
kinds of paper are purchased, even if they have more
t h a n three months to run.
Postage.—The

cost of postage of discounted securities

to another bank office is to be borne by t h e seller.

The

Reichsbank bears t h e cost only in case of tax-indemnity
and export-allowance certificates.




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Stamp duty.—Inasmuch as the above kinds of securities are subject to stamp duty according to Schedule 4 of
the imperial tax law of the 3d of June, 1906, the costs are
to be defrayed by the seller.
Interest computation.—At least five days' interest is to
be charged on tax-indemnity certificates, if the period of
notice demanded is not more than three days. Otherwise,
interest is to be calculated for a period exceeding the time
of notice by not less than two days.
Not less than 30 pfennigs for each single item not exceeding 100 marks, and at least 50 pfennigs for each item
above 100 marks, is to be collected by the bank as interest.
V.—Loans on pledges (Lombardverkehr).
The Reichsbank issues loans in Berlin and at its branch
offices at the announced interest rate, on the following
pledges: Noble metals, merchandise within the country,
bills, and those securities which are named below. If the
latter are deposited with the main office of the Reichsbank,
the presentation of the certificate of deposit, together with
the certificate of the office concerning the circulating
capacity of the deposited securities, is adequate guaranty
for the loan. (Cf. XIV, B, sec. 16, par. 2.)
A.

PROVISIONS.

(a) GENERAL PROVISIONS.

Loans in amounts of less than 500 marks
are as a rule not issued. Furthermore, according to section 13, paragraph 3, of the Bank Act of the 14th of
March, 1875, a l ° a n c a n not be made for a term exceeding
three months.
SECTION

I.




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SEC. 2. The loan may be repaid or recalled on any day
without previous notice. A letter addressed to the borrower is sufficient notice of the recall.
SEC. 3. Should the borrower fall behind in payment
(sec. 2), or should the interest fall into arrears (sec. 5), the
Reichsbank is empowered to sell the pledges according to
section 20 of the Bank Act of the 14th of March, 1875,
except in cases named in sections 1234 and 1238 of the
"Biirgerliches Gesetzbuch," and section 368 of the "Handelsgesetzbuch." The Bank is to compensate itself from
the proceeds for its capital, interest, and costs.
SEC. 4. The Reichsbank has the right, if it considers it
expedient for the purpose of the sale or for other reasons,
to transfer the pledges at the borrower's risk and expense
to another place, whether it be in the same locality or
elsewhere, and leave them there for safe-keeping or sale.
S E C 5. Interest is to be paid every three months, and,
as far as possible, before the close of the calendar quarter.
If the capital is repaid before the lapse of this period, the
interest is to be reimbursed.
Interest on hypothecated securities, including bills of
exchange, is to be computed for a minimum period of ten
days, if the loan is contracted before the close of the quarter for a period extending beyond the last week day of the
quarter or on the first week day of the new quarter. If
the loan is due after the seventh day of the first
month of the new quarter, interest is to be charged for a
minimum period of fourteen days. In all other cases
interest is calculated only till the day of repayment.




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Not less than i mark interest is to be realized by the Bank
on each receipt issued for pledges (Pfandschein). Should
the interest rate of the Reichsbank rise or fall, the new
interest rate goes into effect on all loans issued after the
day of its announcement.
SEC. 6. Partial repayments are permitted only in
amounts of at least 10 per cent of the debt and not less
than 500 marks.
SEC. 7. The Reichsbank reserves for itself the privilege,
but does not assume the obligation, of verifying the right
of the holder to the receipt of the pledge (Pfandschein)
or of the one who receipts the return of the pledge, as well
as of testing the authenticity of the receipt itself; but it
may hold anyone who presents the receipt for the pledge
as the legal owner. The borrower, therefore, has to take
care of his receipt, in order that the pledge (Unterpfand)
may not be returned to the wrong person, or that the latter
may not contract a new loan on the receipt.
The pledge is to be returned to the borrower only upon
the surrender of the receipt or the judicial declaration of
its invalidation, and after full repayment of the loan and
interest. If the pledge was sold by the bank, the surplus
above the loaned sum and interest shall be returned to
the pledgor upon surrender of receipt. The acknowledgment of the receipt of the pledge must read (without
further addition):
" I (or we) have received the security.
" (Place.)
" (Date.)
"(Signature.)"




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SEC. 8. All payments of capital, interest, and costs by
t h e debtor are recorded by t h e Reichsbank according to t h e
prescribed provisions, b u t no further note is t o be made on
t h e receipt for t h e pledge or its duplicate (sec. 12). Repayments made at a Reichsbank suboffice are recognized
by the Reichsbank only if the payer sends immediate notice to t h a t effect to the Reichsbank main office or t o t h a t
Reichsbank office which issued the receipt for the pledge.
SEC. 9. If the pledge has not sufficient value to satisfy
the Reichsbank fully, the latter is entitled to a personal
claim on the borrower for t h e deficiency, even if he transfers his rights and obligations to another.
SEC. 10. The changes made by the Reichsbank in the
receipt for the pledge, with reference to the capital or the
pledge itself, are binding for both parties.
SEC. 11. The above provisions are similarly applicable to
the newly added pledges and loans. The Reichsbank may
compensate itself for its capital, interest, and costs from
the aggregate of pledges, irrespective of the time when the
new pledges were added or the new loans made, and,
according t o section 3, the pledges may be sold by the
Reichsbank in the aggregate or singly.
SEC. 12. The borrower has to acknowledge the receipt of
the pledge (Pfandschein) on a duplicate, which is to remain
with t h e Reichsbank. If the receipt is mislaid, the duplicate with t h e changes made in it by the Reichsbank shall
have full force for both parties.
SEC. 13. W i t h respect to t h e safe-keeping of pledges the
Reichsbank has to t a k e such precautionary measures as it
is accustomed t o take on its own behalf (sec. 277 of the
" Burgerliches Gesetzbuch " ) , except in cases relating to the




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special provision of section 20. The Reichsbank is in no
case, not excepting time of war, required to transfer the
deposit to another place.
(b) SPECIAL PROVISIONS.

I.—Pledges

of state and communal paper, mortgage bonds, shares, and
similar securities, as well as of bills of exchange.

SEC. 14. The Reichsbank does not concern itself with the
redemption of pledged papers and the announcement of
their recall or changes regarding them that may take
place at any time. This is the business of the borrower,
who alone is affected by disadvantageous results if the
necessary steps are not taken. He must also bear the
results of a wrong or premature detachment, realization,
surrender, or remittance of interest coupons, irrespective of
whether the said detachment, etc., was made by himself
or by the officials of the Reichsbank, and, in the latter case,
it is also of no consequence whether it was done with or
without the knowledge of the borrower.
SEC. 15. If, during the period of the loan, the exchange
value of the security falls as much as 5 per cent, the borrower is required to restore the security to the original
amount within three days, either by making a partial repayment or by raising additional security, according to the
choice of the Reichsbank. If the pledgor does not comply
with this provision, the Reichsbank (if it does not desire to
demand the restoration of the security in a legal procedure) is empowered, but is not required, to recompense
itself out of the security, according to section 3, and to
draw on the debtor, in case of an uncovered balance,
according to section 9.




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SEC. I6. Bills and other papers not payable to bearer
must be provided with the blank indorsement of the
pledger; and the Reichsbank is authorized, for the purpose
of receiving compensation, either to sell the securities,
according to section 3, or to draw on the debtor at the risk
of the latter, and to fill out in each case the blank indorsement to itself or to a third party. The blank indorsement
constitutes an obligation to the Reichsbank, according to
the laws of bills of exchange.
II.—Loans on merchandise.
SEC. 17. The storehouses, as well as the date of appraisement of merchandise, the possession of which is transferred
to the Reichsbank, are to be mentioned in the receipt.
T^ie storehouse may not be changed without the consent
of the Reichsbank. The removal of the pledge to another
place does not affect the Reichsbank's right of possession,
and no new certificate of transfer is needed.
SEC. 18. If the goods are stored in warehouses or
depositories which are under the supervision of public
officials, or in a warehouse belonging to a private corporation, or if the goods are kept in any other manner outside
of the Reichsbank, their ownership is to be transferred
to the Reichsbank in the legally necessary form, in accordance with each individual case.
SEC. 19. The goods must be protected against fire by
sufficient insurance as long as they are kept as a pledge
by the Reichsbank. The insurance policy is to be handed
in to the Reichsbank, and with it the privilege is granted
to the latter of compensating itself in case of damage to
the pledge by fire. The Reichsbank has the right, but




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is not obliged, to renew t h e insurance at the risk a n d
expense of the pledger and t o t a k e charge of t h e new
policies with t h e same authority, whether they read in
its own or in t h e n a m e of t h e borrower.

I n the case of

damage b y fire, t h e debtor is to decide whether he is going
t o cover his debt out of t h e insurance premium.

The

pledger is obliged to consult t h e Reichsbank in his negotiations with t h e insurance companies concerning t h e
appraisal of the damages to t h e pledged goods, and m a y
not, without its agreement, enter into any settlement b y
which the loan, together with interest and costs, is n o t
covered.
SEC. 20. The Reichsbank is not responsible for any
damage to the goods while in pledge, which m a y result
without gross neglect on its part, be it through leakage,
evaporation, or verminous and other ruinous

causes,

irrespective of whether t h e said goods are stored in t h e
houses of the Reichsbank or elsewhere.

I t is the business

of the pledger—and t h e Reichsbank m a y not hinder him—
t o examine t h e goods a t frequent intervals and t o m a k e
t h e necessary effort for their preservation.
SEC. 21. The costs arising through transporting, appraising, storing, inspecting, packing, or sorting t h e goods, or
through other measures considered necessary b y

the

Reichsbank, as well as t h e costs arising from t h e keeping
of goods in the Reichsbank warehouses, are to be defrayed
b y the pledger.

The goods and t h e insurance policy,

together with the renewed policy, serve as security t o
t h e Reichsbank for all costs incurred b y it, including t h e
expense for insurance against fire.




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S E C 22. If t h e pledged goods fall, while in pledge,
one-sixth below t h e appraised or market price, or if they
lose one-sixth of their value through a change in their
utility or quantity, according t o a n appraisement made
by t h e Reichsbank through one of its official appraisers
or through another expert, t h e debtor is required t o give
an additional pledge for, or t o repay t h e equivalent of,
the depreciation of t h e pledge.

If t h e pledger does n o t

comply with either of these provisions, t h e Reichsbank
(if it does n o t desire t o demand t h e restoration of t h e
pledge in a legal procedure) is empowered, b u t not
required, t o recompense itself o u t of t h e pledge, according
to section 3, a n d t o draw on t h e debtor, in case of an
uncovered balance, according t o section 9.
B. CLASSIFICATION OF SECURITIES WHICH MAY B E HYPOTHECATED I N T H E REICHSBANK.
CLASS I.—Domestic securities.

The following can be hypothecated a t three-fourths of
their value:
1. Bonds, annuities, etc.—(a) Interest-bearing bonds of
the Empire, or of a German State, or those maturing
within one year a n d payable t o bearer, including interestbearing premium bonds. The latter, however, are acceptable a t t h e value of a t least 15 marks under t h e lowest
premium rate of t h e nearest drawing.
(b) Tax-indemnity certificates
(Steuervergutung-Anerkenntnisse)
drawn b y t h e t a x authorities of German
States for b r a n d y exported or t o be exported, and export-




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allowance certificates for sugar (the day on which these
papers fall due is to be observed).
(c) State bonds of the former Kingdom of Hanover.
Annuities (Rentenbriefe) of the Prussian annuity banks.
Provincial annuities (Landrentenbriefe) of Anhalt (small German
State).
Royal provincial annuities (Landrentenbriefe) of Saxony.
Royal agricultural annuities (Landeskulturrentenscheine) of Saxony.
Brunswick-Liineburg bonds (Leihhaus-Obligationen und Landesschuldverschreibungen).
Royal Bavarian 4 per cent bonds (Grundrentenablosungs-Schuldbriefe).
Railroad bonds of the Bavarian Bank in Nuremberg.
Bonds of the East African Railroad Company in Berlin (guaranteed at 3 per cent by the Empire, and reading to bearer).
Bonds of the State Credit Bank (Kreditanstalt) of the Duchy of
Oldenburg (payable to bearer).
Bonds of the Ducal Landesbank in Altenburg.
Bonds of the Ducal Landeskreditanstalt in Gotha (payable to
bearer).
Bonds of the Grand Ducal Landeskreditkasse in Weimar ($% and
4 per cent bonds).
Bonds of the Landeskreditkasse of Schwarzburg-Rudolstadt in
Rudolstadt (payable to bearer).
Bonds of the Ducal Landrenten Bank of Saxony in Coburg (payable to bearer).
Bonds of the Ducal Landeskreditanstalt in Meiningen.

(d) The following earlier railroad stocks and bonds
which were taken over as fixed interest loans by the respective States are regarded as state securities:
The Altdamm-Kolberg Railroad bonds at 3 ^ per cent (these
expired on the 1st of June, 1908).
The Berg-Mark preferred railroad bonds at 3 ^ per cent.
The Brunswick preferred railroad bonds at 4 ^ per cent.
The Magdeburg-Wittenberg original railroad shares (accepted
b y the Prussian state at 3 per cent).




166

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The
bonds
The
bonds
The
bonds

Imp erial

Banking

Laws

Leipzig-Dresden Railroad Company bonds (now Saxon
at 3 % per cent).
Lobau-Zittau Railroad stocks, Lit. A (now Saxon state
at sH per cent)
Lobau-Zittau Railroad stocks, Lit. B (now Saxon state
at 4 per cent).

(e) Provincial, district, city, dike-building, and other
bonds, the interest and sinking fund of which are raised by
means of taxation, are accepted within the limits fixed by
the Reichsbank board of directors: *
The bonds of the Hannoverische Landeskredit-Anstalt in Hannover.
The bonds of the Landescreditkasse in Cassel (payable to
bearer).
The bonds of the Leihbank in Hanau.
The bonds of the Leih- und Pfandhaus in Fulda.
The bonds of the Nassauische Landesbank in Wiesbaden (payable to bearer).
The bonds of the Wurttembergische Kreditverein in Stuttgart.

2. Mortgage bonds, communal bonds, etc.—(a) Bonds
issued by the following provinces, provincial credit unions,
associations, and the like:
The Berlin Pfandbrief-Amt in Berlin (mortgages).
Centrallandschaft fur die preussischen Staaten in Berlin (mortgages).
Prussian Provinziallandschaften (mortgages).
The Erblandischer Ritterschaftlicher Kreditverein of Saxony at
Leipzig (mortgages).
The Kur- und Neumarkische Ritterschaftliche Darlehne in Berlin
(communal bonds).
The Landschaftlicher Kreditverband for the Province of Schleswig-Holstein in Kiel (mortgages).
The Landstandische Bank des Konigl. Sachsischen Markgraftums Oberlausitz in Bautzen (mortgages and 3 ^ per cent bonds
of 1905).




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Monetary

Commission

The Landwirtschaftlicher Kreditverein im Konigreich Sachsen
zu Dresden (mortgages and bonds).
The Mecklenburgischer Ritterschaftlicher Kreditverein in Rostock (mortgages)

(b) Bonds issued by the following joint-stock mortgage
banks: °
The Aktien-Gesellschaft fur Boden- und Kommunalkredit in
"Alsace-Lorraine in Strassburg (Alsace).
The Bavarian Bodenkredit-Anstalt in Wiirzburg.
The Bavarian llandelsbank in Munich.
The Bavarian Hypotheken- und Wechselbank in Munich.
The Bavarian Vereinsbank in Munich.
The Berlin Hypothekenbank (stock company) in Berlin.
The Brunswick-Hanover Hypothekenbank in Brunswick.
The Deutsche Grundkreditbank in Gotha.
*The Deutsche Hypothekenbank (stock company) in Berlin.
*The Deutsche Hypothekenbank in Meiningen (also its premium
mortgage bonds).
*The Frankfurt Hypothekenbank in Frankfurt (Main).
The Frankfurt Hypotheken-Kreditverein in Frankfurt (Main).
The Hanover Boden-Kreditbank in Hildesheim.
*The Hessische Landes-Hypothekenbank in Darmstadt.
The Hypothekenbank in Hamburg.
.The Leipzig Hypothekenbank in Leipzig.
The Mecklenburg Hypotheken- und Wechselbank in Schwerin.
The Mitteldeutsche Bodenkredit-Anstalt in Greiz.
The Norddeutsche Grund-Kreditbank in Weimar.
*The Pfalzische Hypothekenbank in Ludwigshafen.
The Prussian Bodenkredit-Aktienbank in Berlin.
*The Prussian Central-Bodenkredit-Aktiengesellschaft in Berlin.
The Prussian Hypotheken-Aktien-Bank.
*The Prussian Pfandbrief-Bank in Berlin.
*The Rheinische Hypothekenbank in Mannheim.
a Besides mortgage bonds to bearer, the starred municipal bonds to
bearer issued by mortgage banks {Hypothekenhanken) can be hypothecated.
*




168

German

Imp erial

Banking

Laws

The Rhine-Westphalian Boden-Kredit-Bank in Cologne.
The Sachsische Bodenkreditanstalt in Dresden.
*The Silesian Boden-Kredit-Aktien-Bank in Breslau.
The Schwarzburgische Hypothekenbank in Sondershausen.
The South German Bodenkreditbank in Munich.
The Vereinsbank in Nuremberg (land-credit bonds).
The Westdeustche Bodencreditanstalt in Cologne.
The Wiirttemberg Hypothekenbank in Stuttgart.

3. Railroad original securities of—
The Brunswick Landes-Eisenbahn.
The Crefelder Eisenbahn.
The Halberstadt Blankenburger Eisenbahn.
The Lubeck-Buchner Eisenbahn.
The East Railroad Company in Berlin (guaranteed by the Empire at 3 per cent, shares payable to bearer).
The Pfalzische Ludwigsbahn.
The Pfalzische Maxbahn.
The Pfalzische Nordbahn
The Zschipkau-Finsterwalder Eisenbahn-Gesellschaft.

4. Railroad original preferred stocks of the Prignitz
Railroad Company.
5. Railroad preferred bonds of—
The Brunswick Landes-Eisenbahn.
The Crefelder Eisenbahn ( 3 ^ per cent).
The Eutin-Liibecker Eisenbahn (of 1881, 4 per cent).
The Halberstadt-Blankenburger Eisenbahn (of 1884, 1895, 1903,
1906, $y2 per cent).
The Kremmen-Neuruppin-Wittstocker Eisenbahn-Gesellschaft
(of 1904, 2>H P e r cent).
The Lausitz Eisenbahn (4 per cent).
The Lubeck-Buchner ( 3 ^ and 4 per cent).
The South German Eisenbahn in Darmstadt ( 3 X per cent).
The Zschipkau-Finsterwalder Eisenbahn (of 1898, $% per cent).
The Pfalzische Eisenbahn ( 3 X and 4 per cent).




169

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Monetary
CLASS II.—Foreign

Commission
securities.

[Can be hypothecated at one-half of their exchange value.]

i. Railroad bonds which were taken over by the Russian Government:
Three per cent Great-Russian Railroad bonds of 1881.
Four per cent Moskow-Kursk Railroad bonds.
Four per cent Oral-Griasi bonds of 1887 and 1889.
Three per cent Transcaucasian bonds.

2. Bonds of the following railroads directly guaranteed
by Russia:
The 4 per cent Ivangorod-Dombrovo (first emission).
The 4 per cent Kozlow-Woronezh-Rostow of 1887 and 1889.
The 4 per cent Kursk-Kiev.
The 4 per cent Lodz Factory Railroad Company of 1901.
The 4 per cent Moscow-Yaroslav-Archangel of 1897.
The 4 per cent Moscow-Kasan of 1901.
The 4 per cent Moscow-Kiev-Woronezh of 1895.
The 4 per cent Moscow-Ryazan of 1885.
The 4 per cent Moscow-Smolensk.
The 4 per cent Moscow-Windau-Rybinsk of 1897 and 1898.
The 4 per cent Ryazan-Kozlow of 1886.
The 4 per cent Ryazan-Uralsk of 1894, 1897, and 1898.
The 4 per cent Russian Southeastern Railroad of 1897, 1898, and
1901.
The 4 per cent Russian Southwestern Railroad of 1885.
The 4 per cent Rybinsk of 1895.
The 4 per cent Wladikavkas of 1885, 1895, 1897, and 1898.

3% Miscellaneous:
Bonds of the United States of America.
Italian rente:
Italian 3 per cent railroad preferred bonds:
Mediterranean Railroad Company.
Meridional Railroad Company.
Sicilian Railroad Company.
The 3 per cent Norwegian State loan of 1888.




170

German Imperial

Banking Laws

The 4 per cent Austrian gold annuities.
The
The
The
The
The
The

5 per cent Russian-English loan of 1822.
3 per cent Russian-English loan of 1859.
4 per cent Russian loan of 1880.
5 per cent Russian gold annuities of 1884.
4 per cent Russian gold loans of 1889, 1890, and 1894.
4 per cent Russian Consolidated Raikoad loans of 1889 and

1891.

The
The
The
The
The
The

4 per cent Russian State loans of 1902.
4 X per cent Russian State loans of 1905.
3 K per cent Swedish State loans of 1886 and 1890.
3 per cent Swedish State annuities of 1888.
3 per cent Hungarian gold loan of 1895.
4 per cent Hungarian gold annuities.

VI.—Deposit and transfer of bank-accounts transactions
(Giroverkehr).
Giro transactions are open to all classes alike. Private
persons may be provided with giro accounts, as well as
merchants, institutions, and public authorities.
A. UNLIMITED GIRO TRANSACTIONS.

Unlimited giro transactions—in contrast to the limited
(see below, B)—are carried on in the principal office of
the Reichsbank, the Reichsbank local main offices, the
Reichsbank local offices, and in the Reichsbank suboffices which have at least two officials, according to the
following provisions: a
1. The application for an account is to be made at the
Reichsbank office of the district where the applicant
resides.
a
F o r the giro business of the Reichsbank main office in Hamburg
special provisions, varying in particulars, are issued.

83702—10




12

171

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Monetary

Commission

2. If the application is accepted, the applicant receives,
together with the necessary blanks, an account book in
which all amounts of money coming in from or for him, in
cash or by transfer to his account, are entered by the Reichsbank. No other certificates are given.
3. Cash deposits, negotiated bills of exchange, loans
issued on pledges, bills, and checks which are payable at
the respective Reichsbank offices and are satisfactorily covered, are credited at once to the giro account.
4. The account holder can withdraw his deposits at any
time in convenient amounts, but, aside from the regulations of section 8, only by means of checks on blanks furnished to him by the Reichsbank. Orders issued otherwise will not be considered.0
5. Cash withdrawals are made by means of white checks,
which are to be made out to a definite person or firm, with
the addition "or bearer." The Reichsbank pays the
amount to the bearer without verifying his right to it, even
if the check is drawn to order. b
If the check is to be used only for settlement with the
Reichsbank, or with another account holder, it must be
crossed—that is, it must be provided with a written or
printed note across the face, "For placing to account
only." In this case the Reichsbank must not pay out the
amount in cash.
For transfers of accounts to the same or another banking
city, red check blanks are to be used. They must be made
a

I t is recommended that checks be provided with the stamp of the firm
issuing them.
b Concerning the redemption of white checks at another office than the one
keeping the account, cf. IX, 2.




172

German Imperial

Banking Laws

out to the order of a particular person0 and are not transferable. h
The deposits may be used to defray all charges of the
Reichsbank, and even those not yet due.
6. No claims of an account holder can be brought
against the Reichsbank concerning the execution of a giro
commission after the expiration of two years. The term
of limitation begins with the close of the year in which the
order was given to the Reichsbank.
7. The check blanks will be furnished by the Reichsbank
to each account holder on demand, in books of 50 blanks
minimum, which must be receipted by him. c
The account holder is required to hold the check blanks
in proper safety, since he bears all the disadvantageous
results arising from their loss if he does not at once give
written notice of the loss to the bank keeping his account,
in order to prevent payment to the wrong person.
0 Since i t is not the business of the bank to demand proof whether t h e
designated receiver has a giro account with the Reichsbank, the use of the
" List of names of the Reichsbank of giro account holders" is recommended.
This list is published by A. Bath, in Berlin. Giro customers are also recommended to have the heading "Reichsbank giro account" on their letter
paper and checks.
& If the red checks intended for transfers to another bank city are delivered between 4 and 4.30 in the afternoon, a fee of 50 pfennigs and, if delivered
between 4.30 and 5, a fee of 1 mark is to be collected for each transfer by the
Reichsbank.
For each withdrawn transfer a fee of 1 mark is to be collected.
For each transfer to another city which, on the written order of the deliverer of the red check, is to be dispatched a t once, a fee of 1 mark will be
charged, besides the postage, if long-dated bills equal to the dispatched
amount are not discounted a t the same time.
c For the purpose of receiving a new check book, there is a receipt before
the last blank, which must be carefully guarded. The new check book is
issued only when the receipt is filled out to bearer by the account holder, or
by his representative. The Reichsbank is empowered, b u t not required, to
verify the authenticity of the signatures.




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Monetary

Commission

The account holder of the Reichsbank is likewise responsible if he does not fill out the check blank so that forgeryis impossible; or if, before the issue of the check, he does
not cross out the figures of the right column of the white
check which exceed the amount of the check. Checks
containing written insertions between the printed lines are
rejected.
Spoiled check blanks are to be returned to the Reichsbank, with the stamp of the firm or the name of the account
holder on them.
8. Bills drawn on an account holder a are to be made
payable at the Reichsbank, or at another banking house
which has daily clearings with the Reichsbank, and are to
be properly certified (see below VII, the list of the clearing houses). Bills in the possession of the Reichsbank
which are made payable neither at its offices nor at any of
the banking houses named in this list, or which are not
properly certified, must be paid in cash.
Redeemed securities will be returned to the account
holder upon his receipt.
9. If the account holder desires to draw a bigger amount
than his deposit, the Reichsbank shall not only refuse payment, but it also reserves the right of breaking off all business relations with him at once. If he draws his whole
deposit, he expresses thereby his intention of discontinuing
his account. In the latter case all check blanks are to be
returned to the Reichsbank.
10. Giro deposits bear no interest.
a Domiciled bills drawn on an account holder may be made payable at
the bank office which keeps the account. The bill must read as follows:
" Payable at the Reichsbank
in
on the account of
."




174

German Imperial

Banking Laws

11. The account books are to be balanced and submitted
to the bank as often as possible,a but in any case on the 4th
of each month (with the exception of the 4th of January)
and on the 28th of December. 6
12. The Reichsbank expects that the account holders
will make regular use of the privilege granted them by
section 8, but they are forbidden to use giro payments for
persons who are not account holders. The cash deposit
should not fall below a certain limit; otherwise it can
hardly claim the interest of the management. The bank
reserves the right of breaking off its relations with the
account holder without any notice but a written announcement, if this requirement is not conformed with or if the
former considers such a step necessary for other reasons.
Furthermore, the present provisions can be changed at
any time after a public announcement of fourteen days'
notice in the papers designated in section 30 of the Reichsbank statute.
13. Before receiving an account book, the applicant
must show his compliance with these provisions by affixing his signature to the latter. The signatures of the
other persons who, in the capacity of business partners
and the like, have a right to sign their names for the
firm having a giro account, must be presented to the
Reichsbank. Superintendents and agents must also subo> The account book is to be submitted, if possible, every time a deposit is
made in cash. The credit side (at the right) is to be filled out only by the
bank; the account on the debit side (at the left) is to be kept by the account
holder.
# This applies only to Berlin; in other cities the book must be balanced
and submitted a t the latest on the 7th of July and the 31st of December of
each year.




175

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Mon etary

mit special certificates according to
by the Reichsbank. All signatures
mitted to the Reichsbank remain in
office receives written notice of their

Commission
the forms prescribed
and certificates subeffect until the bank
invalidation.

B . — U M I T E D GIRO TRANSACTIONS.

The foregoing provisions for unlimited giro business are
applicable to the suboffices of the Reichsbank which are
managed only by one official, with the following limitations:
i. Applications for receiving an account book are to be
sent to the Reichsbank suboffice, which will keep the
account.
2. If a deposit made with a Reichsbank suboffice exceeds
the amount of 5,000 marks, it is acknowledged by the
Reichsbank only if on the day of deposit the account
holder sends written notice to that effect to the bank
office which has charge of the suboffice. If several deposits are made on one day, each amounting to less than
5,000 marks, but exceeding that sum in the aggregate,
written notice is to be sent with regard to the total
deposit.
3. Cash withdrawals are made only by means of white
checks, issued to the order of a definite person or firm and
containing the phrase addition "or bearer/' They are
to be paid by the suboffice, if the latter has sufficient
funds, or by the bank office in charge of the suboffice.
The Reichsbank pays the amount to the bearer without verifying the legitimacy of his claim, even if the check
is indorsed to a definite person.




176

German

Imperial

Banking

Laws

4. If the account holder desires the redemption of a
white check at the bank office in charge, he must first
present the check to the suboffice, where it must be
stamped.
5. Giro transfers on red checks in amounts of from
1,000 to 150,000 marks will be executed directly by the
designated suboffice without the mediation of the office in
charge; sums exceeding 50,000 marks, however, are transferred only in case bills or loans are negotiated simultaneously by the conveyor, upon which the Reichsbank realizes interest for a minimum period of ten days. Transfers on red checks in amounts of less than 1,000 marks
will be conveyed directly to the designated institution
only if a fee of 30 pfennigs for each transfer is paid to the
suboffice.
6. Bills on an account holder are to be made payable at
the Reichsbank suboffice, at the bank office in charge of
the same, or at a banking house having daily clearings with
the latter, and are to be properly certified. Bills in the
possession of the Reichsbank suboffices which are not
made payable at those offices, or are not properly certified, must be paid in cash.
7. The account books of the suboffices which have not
the right of unlimited transfer are to be sent semiannually
to the bank office in charge, for the purpose of verifying
the accounts.
8. Before receiving an account book the applicant must
show his compliance with these provisions by affixing his
signature to the latter. The signatures of the other persons, who, in the capacity of business partners or the




177

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Monetary

Commission

like, have a right to sign their names for the firm having
a giro account, must be presented to the Reichsbank suboffice and to the bank office in charge of the same. Superintendents and agents must also submit to the suboffice special certificates, made out in accordance with the
forms prescribed by the Reichsbank. All the signatures
and certificates submitted to the Reichsbank remain in
effect until the Reichsbank suboffice, as well as the bank
office in charge, receives written notice of their invalidation.




178

VII.—Clearing houses and their members.
A.—CLEARING HOUSES.

Clearing houses are established in the following cities:

Breslau.

Dresden.
Elberfeld.
Frankfurt (Main).
Hamburg.

Chemnitz.

Leipzig.

Berlin.
Brunswick,
Bremen.

Cologne.

Munich.

Dortmund.

Stuttgart.
B. MEMBERS OF THE CLEARING HOUSES.
Berlin.
Konigliche Seehandlung (Prussian
State Bank).
Krause, F. W., & Co.
Mendelssohn & Co.
Mitteldeutsche Creditbank.
Nationalbank fur Deutschland.
Reichshauptbank.
Schaafhausen'scher Bankverein.
Schickler Brothers.

Bank des Berliner Kassen-Vereins.
Bank fur Handel und Industrie.
Berliner Handels-Gesellschaft.
Bleichroder, S.
Commerz- und Disconto-Bank.
Delbruck, Leo, & Co.
Deutsche Bank.
Direction der Disconto-Gesellschaft
Dresdner Bank.
Engelhard, C. R.

Brunswick.
Brunswick Privatbank Aktiengesellschaft.

Lobbecke Brothers & Go.

Brunswick Bank und Kreditanstalt
Aktiengesellschaft,
Bremer, L., & Co




Gutkind, M., & Co.
Meyersfeld, D.
Nathalion, R. S. (successor).

Uhl, C, & Co.

179

National

Monetary

Commission

B.—MEMBERS OP T H E CLEARING HOUSES—continued.

Bremen.
Bank fur Handel und Gewerbe.
Bremer Bank Filiale der Dresdner

Bernhard, Loose & Co.
Plump, Carl F., & Co.
Reichsbankhauptstelle.

Bank.
Bremer Filiale der Deutschen Bank.

Sparkasse, Die, in Bremen.

Deutsche Nationalbank.

Weyhausen, E. C.

Direction der Disconto-Gesellschaft.
Breslau.
Breslauer Disconto-Bank.

Oppenheim & Schweitzer.

Breslauer Wechslerbank.

Pachaly's Enkel, G. von.

Dobersch & Bielschowsky.

Prinz & Marck, jr.

Eichborn & Co.

Reichsbankhauptstelle.

Guttentag Brothers.

Schlesischer Bank-Verein,

Heimann, E.

Schlesische Handelsbank.

Landsberger, S. L.

Schlesische Landschaftliche Bank zu
Breslau.

Nelken, Marcus & Son.
Chemnitz.

Filiale der Dresdner Bank in Chem-

Chemnitzer Bank-Verein.

nitz.

Chemnitze Stadt-Bank.

Filiale

Dresdner Bankverein.

der

Sachsischer

Bank

zu

Dresden.

Dresdner Bankverein; Branch: Ernst

Metzner, F .

Petasch.
Filiale der Allgemeinen

Deutschen

Reichsbankstelle.

Credit- Anstalt.
Filiale der Allgemeinen Deutschen
Credit-Anstalt;

Branch:

Kunat

& Nieritz, Chemnitz.
Cologne.
Barmer Bankverein,

Hinsberg,

Fischer & Co., Cologne.

Reichsbankhauptstelle.
Rheinisch - Westfalische

Bergische-Markisch Bank, Cologne.

Disconto-

Gesellschaft, Cologne.

Deichmann & Co.

Schaafhausen'scher Bank-Verein.

Hess, L., & Sons.

Seligmann, Leopold.

Oppenheim, S., jr. & Co.

Stein, J. H.




180

German

Imperial

Banking

Laws

B.—MEMBERS OF T H E CLEARING HOUSES—continued.

Dortmund.
Deutsche Nationalbank (Komman-

Markische Bank.

ditgesellschaft auf Atkien).

Reichsbankhauptstelle

Dortmunder Bankverein, Zweiganstalt

des

Barmer

Rheinisch - Westfalische

Bankvereins,

Disconto-

Gesellschaft.

Hinsberg, Fischer & Co.

Stern Brothers.

Essener Credit-Anstalt in Dortmund.

Wiskott & Co.

Dresden.
Allgemeine Deutsche Credit-Anstalt

Dresdner

Abteilung, Dresden.

Filiale

der

Deutschen

Bank.

Arnhold Brothers.

Elimeyer, Philip.

Bassenge, H. William, & Co.

Reichsbankhauptstelle.

Dresdner Bank.

Sachsische Bank zu Dresden.

Dresdner Bankverein.
Elberfeld.
Bergisch-Markische Bank.

Reichsbankstelle.

Elberfelder Bankverein.

Wichelhaus, I., & Son.

Heydt-Kersten, Von der, & Sons.
Frankfurt
Deutsche Effekten-

und

(on

Wechsel-

bank.

Main).

Goll, John, & Sons.
Grunelius & Co.

Deutsche Vereinsbank.

Hauck, George, & Son.

Direction der Disconto-Gesellschaft.

Ladenburg, E.

Dresdner Bank in Frankfurt

Metzler, B.

(on

Main).

Mitteldeutsche Creditbank.

Dreyfus, J., & Co

Neufville, D. & J. de.

Filiale der Bank fur Handel und Industrie.

Pfalzische Bank.
Reichsbankhauptstelle,

Frankfurter -Bank.

Schuster Brothers.

Frankfurter

Speyer-Ellissn, L.

Filiale der Deutschen

Bank.




Wertheimber, I,. & E.

181

National

Monetary

Commission

B.—MEMBERS OF THE CLEARING HOUSES—continued.
Hamburg.
Commerz- und Disconto-Bank.

Norddeutsche Bank in Hamburg.

Filiale der Dresdner Bank in Hamburg.

Reichsbankhauptstelle.
Vereinsbank in Hamburg.

Hamburger Filiale der

Deutschen

Bank.
Leipzig.
Allgemeine Deutsche Credit-Anstalt.

Leipziger

Filiale

der

Deutschen

Bank.

Bruhm & Schmidt.
Credit- und Spar-Bank.
Dresdner Bankverein.
Filiale der Sachsischen Bank
Dresden.
Frege & Co.
Hammer & Schmidt.
Knauth, Nachod & Kiihne.

Meyer & Co.
Plaut, H. E.
zu

Privatbank

zu

Gotha,

Leipzig

Branch.
Reichsbankhauptstelle
Salefsky, I. G.
Vetter & Co.
Munich.

Bayerische
dustrie.
Bayerische
Bank.
Bayerische
Bayerische
selbank.
Bayerische

Bank fur Handel und InFiliale der

Deutschen

Handelsbank.
Hypotheken- und Wech-

Bayerische Vereinsbank.
Filiale der Dresdner Bank.
Konigliche Filialbank.
Merck, Finck & Co.
Miinchener Industriebank.
Pfalzische Bank.
Reichsbankhauptstelle.

Notenbank.
Stuttgart.

Allgemeine Renten-Anstalt zu Stuttgart.

Reichsbankhauptstelle.
Stahl & Federer Aktien-Gesellschaft.

Doertenbach & Co.

Wurttembergische Bankanstalt, vor-

Hartenstein & Co.

mals Pflaum & Co.
Wurttembergische Landesbank.
Wurttembergische Notenbank.
Wurttembergische Vereinsbank.

Hummel, E., & Co.
Keller's Sons, G. H.
Konigl. Wurttembergische Hofbank.
Lebens- und

Rentenversicherungs-

verein auf Gegenseitigkeit.




182

VIII.—Transfers to accounts and remittances.
The Reichsbank accepts payments for the account of
third parties to be remitted through its domestic offices,
as well as through its correspondents in foreign countries.
Transactions named below in 2, 3, and 4 are carried on
only by those Reichsbank suboffices which are authorized
to purchase bills.
A. DOMESTIC BANKS.
I. TRANSFERS TO FOREIGN GIRO ACCOUNTS.

Cash deposits are accepted during business hours to be
transferred to the account of all firms having giro accounts
with a bank office.
Postal money orders received by persons having no
giro account may be conveyed to the account of a giro
depositor.
The term for claims against wrong transfers expire
after the lapse of six months.
The Reichsbank is not responsible for deposits exceeding 5,000 marks made with the Reichsbank suboffice for
the purpose of transfer to another's account or for remittance through a Reichsbank local main office, or a Reichsbank local office, unless the depositor sends on the same
day written information to that effect to the bank office
in charge of the suboffice.
The fee is 10 pfennigs for every 1,000 marks, but not
less than 30 pfennigs for each transfer. For each transfer




183

National

Monetary

Commission

made during business hours at noon from 12.30 to 1
o'clock, or during the afternoon hours up to 4 o'clock,
an additional fee of 50 pfennigs, and after 4 o'clock an
additional fee of 1 mark, is to be paid.
For transfer orders made by mail, either by account
or non-account holders of other bank offices, a fee of 20
pfennigs for each 1,000 marks, and not less than 50
pfennings, will be collected for each individual amount,
irrespective of the fact whether it is to be transferred to
the account of a depositor of the same bank or remitted
to another bank.
No fee is charged for remittance of:
(a) Bills and mortgages from which the Reichsbank
realizes interest for a minimum period of ten days.
(6) Cash remittances to the giro-account of the Reichsbank Securities' Department which are made for the
purchase of securities, or which are intended as interest
on mortgage bonds deposited with the bank to be transferred to the account of the depositor.
2.

REMITTANCES.

All banks will accept money to be remitted to a third
person. Remittances which have to be disbursed by a
Reichsbank suboffice managed by only one official may
not exceed the amount of 20,000 marks.
The independent bank offices and the Reichsbank suboffices which are managed by at least two officials shall
issue a receipt for the sum remitted, while those Reichsbank suboffices managed by only one official shall give a
provisionary receipt, which is to be exchanged for one
issued by its supervisory bank office. With regard to




184

German

Imperial

Banking

Laws

remittances of more than 5,000 marks made through
the suboffices, cf. above, with reference to transfers of
accounts (VIII, 1, par. 4).
For remittances of sums up to 2,500 marks, fees of onefifth of 1 per cent and not less than 50 pfennigs are to be
charged; for higher amounts, 1 pfennig more is charged
for each 50 marks or fraction thereof.
For each remittance made during the business hours at
noon from 12.30 to 1 o'clock, or during the afternoon until
4 o'clock, an additional fee of 50 pfennigs, and after 4
o'clock a fee of 1 mark, is to be paid.
The following are exempt from the fee:
(a) Remittances from one bank office to another arising from transactions in securities on which a fee was
realized.
(b) Remittances of bills and mortgages on which the
bank realizes interest for a minimum period of ten days.
3. DRAFTS.

The Reichsbank, the Reichsbank local main offices, and
the Reichsbank local offices may draw on each other by
special order to unlimited amounts. The remitter is to
bear the cost of the stamp to be affixed in such cases. The
fees are the same as under No. 2.
No fee is charged for bills and mortgage drafts on
which the bank realizes at least ten days' interest.
4. LETTERS OF CREDIT.

Simple, as well as circular, letters of credit, good for a
maximum period of six weeks, may be issued by the
independent bank offices on the Reichsbank, as well as on




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all Reichsbank local main offices and Reichsbank local
offices.
A fee of one-half of i per cent of the full amount for
which these letters are issued, whether the credit is to be
used all at once or in parts, is to be paid to the bank.
If the receiver of a letter of credit sells deposited or
other bills or negotiates a loan on securities, the fee of
one-half of i per cent of the amount of discounted bills,
or of the loan made, will be refunded to him, or charged
to his credit, provided the bank realizes ten days' interest
from this transaction (including the interest on the loan).
B.

FOREIGN

COUNTRIES.

I . REMITTANCES TO FOREIGN COUNTRIES.

The Reichsbank makes remittances to foreign countries
through its correspondents in the places named in III, b,
and in English secondary cities. In the latter case it is
necessary that the name of the remitter, the remittee,
and the provincial bank which keeps the account of the
latter be given. Obligations to deliver the order on a
definite day can not be assumed.
The rate is to be computed according to the short rate
of the day on which securities can be purchased in Berlin.
Interest will be calculated at the interest rates of the respective countries as follows: Remittances to England, for
nine days; to Italy, for eight days; to other places for
six days.
The fee amounts to i per cent, and not less than i
mark. No fee is charged if the bank realizes ten days'
interest.




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2. REMITTANCES FROM FOREIGN COUNTRIES TO GERMANY.

Transfers of bank accounts, as well as remittances
through the Reichsbank and its branch offices to third
parties, are made by all the Reichsbank correspondents
in foreign cities.
The fee to be paid by the remittee amounts to i per
cent, and must be not less than i mark.
IX.—Business on commission.
I . COLLECTION OF BILLS OF EXCHANGE, DRAFTS, CHECKS,
NEGOTIABLE PAPERS, ETC.

Bills of exchange, drafts, checks on domestic banking
houses, and negotiable papers of all kinds, which are
payable within fourteen days in the mark standard in
cities having bank institutions, will be accepted for collection by the bank offices from persons and firms within
their business district on each week day during morning
business hours. The papers are to be indorsed to the
bank office of the place of payment and must contain the
note "for collection" and, if they have less than five
days to run, they must be provided with the phrase
"without obligation for presentation or protest at the
due time," since the Reichsbank can not send each bill
separately, and, on this account, can not undertake the
proper presentation or protest of bills which are handed
in late.
Orders from persons or houses outside its business
district will be executed by a bank only in exceptional
cases.

83702—10—13




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Fees will be calculated as follows:
(a) One per cent for bills of exchange, drafts, checks
on domestic banking houses which are not connected with
a clearing house, receipts, etc., on foreign banks which
do not exceed 10,000 marks; in case of bigger amounts,
one-fifth of 1 per cent. Not less than 50 pfennigs is to
be charged for each piece.
(b) Two per cent, and not less than 50 pfennigs, for bills,
etc., from persons or houses outside the business district
of the bank (with the exception of papers drawn payable
to the Reichsbank).
(c) One-fifth of 1 per cent, and not less than 50 pfennigs,
for checks on members of foreign clearing houses connected
with the Reichsbank. 0
(d) For unpaid securities (in whatever amount), 1
mark is to be collected for each piece, besides the costs of
postage and protest. If no protest is made, only 50 pfennigs per piece will be charged besides the cost of postage.
(e) For recalled commission papers, whether they have
or have not been sent out, 50 pfennigs per piece; in the
former case, in addition to the fee of 50 pfennigs, the incurred cost of postage will also be collected.
No fee is charged for checks on the Prussian Central
Genossenschafts-Kassen in Berlin.
2 . COLLECTION OF REICHSBANK CHECKS AND REICHSBANK
DOMICILED BILLS.

White checks on the Reichsbank are cashed by all the
Reichsbank offices upon proof of their validity. A fee
of one-fifth of 1 per cent, and not less than 30 pfennigs,




a See above, VII.
188

German Imperial

Banking Laws

will be charged for cashing those white checks which have
to be sent by mail to a bank office within the German
Empire or which are presented for payment to a bank
office other than the one keeping the account.
A fee of one-half of i per cent, and not less than 50 pfennigs for each piece, will be charged for checks received
from foreign countries.
A fee of one-fifth of 1 per cent of the face value, and
not less than 50 pfennigs for each piece, will be collected
for Reichsbank domiciled bills, regardless of the place
where they were issued or of how they came to the collecting Reichsbank office.
3. COLLECTION OF INTEREST AND DIVIDEND COUPONS.
Interest and dividend coupons, which are payable in a
city having a bank institution, will be accepted for collection at a fee of one-fourth of 1 per cent, and not less than
50 pfennigs for each kind.
For interest coupons received by mail which are payable
at the Reichsbank offices, and which are redeemable without charge in their own business districts, a fee of one-fifth
of 1 per cent, and not less than 50 pfennigs, will be collected. No fee is charged if the interest coupons are
those of imperial or Prussian loans.
4. COLLECTION OF BILLS OF EXCHANGE AND CHECKS ON
FOREIGN COUNTRIES.
Bills and checks on the countries named above in
III, B, a, which are not negotiable, will be accepted for
collection. The fees and costs amount to 1% per cent on




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Monetary

Commission

principal cities and 3 per cent on secondary cities and not
less than 1 mark for each piece.
For unpaid papers (whatever the amount), a fee of 1.50
marks per piece, besides the cost of postage and protest,
shall be charged. If no protest is made, 1 mark per piece,
besides the cost of postage, shall be collected.
5.

COLLECTION OF FOREIGN BANK NOTES.

Foreign bank notes will be collected in moderate
amounts for known firms or persons, provided the latter
are willing to defray the cost of postage and registration
for the full face value of the notes. Bank notes are to be
presented with a double list of the numbers, of which one
stamped copy is to be given back to the deliverer in lieu
of a receipt.
In accepting bank notes for collection, the Reichsbank
gives no guaranty for their genuineness.
The fee for collection is 1 % per cent and not less than 1
mark.
6. PROCUREMENT OF ACCEPTANCE OF BILLS AND WITHDRAWAL OF DUPLICATE BILLS.
The giro customers of the Reichsbank are permitted to
make use of the services of the latter for procurement of
acceptances, and for withdrawal of the original bills on the
presentation of duplicates, in places on which the bank
purchases bills (cities with bank institutions). For orders
of this kind prescribed blanks, which the bank offices furnish free of cost, are to be used. They are white for bills
for direct acceptance and blue for duplicates.




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The order is to be sent by the applicant, free of charge,
directly to that bank office which is to procure the acceptance or withdrawal.
For each bill, irrespective of the amount, a fee of 50
pfennigs in cash, or in German post stamps, is to be added.
7. CONVERSION OF EAST PRUSSIAN MORTGAGE BONDS INTO
SECURITIES PAYABLE TO BEARER.

East Prussian mortgage bonds will be accepted, after
proper application has been made, by all bank offices,
with the exception of the Reichsbank local main office in
Konigsberg (East Prussia), for the purpose of effecting
their conversion into securities payable to bearer.
The fee for each mortgage bond is 15 pfennigs, and not
less than 50 pfennigs for each parcel. In addition to this
fee, the cost of postage both ways shall be collected from
the mortgagee on returning him the bonds.
8 . PURCHASE AND SALE OF SECURITIES.

Application for the purchase and sale of securities will be
accepted by the stock exchange division of the Reichsbank
securities department in Berlin, as well as by all foreign
bank offices.
Orders for purchase will be carried out only after the
necessary amount has been deposited in cash or satisfactorily guaranteed either to the Reichsbank securities department or to the respective bank office. Sales will be
effected only after the paper to be sold has been delivered
and found in order.
The transmission of the paper already purchased or for
sale is registered according to its face value, unless the




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Monetary

Commission

applicant appraised it differently. The cost of postage is
to be defrayed by the applicant. The Reichsbank collects for the purchase and sale of securities a fee of i y2 per
cent of the face value of the latter, and not less than 50
pfennigs for each kind, besides the stamp fees. Brokerage
is not included.
If securities deposited with the Reichsbank securities
department for safekeeping are offered for sale, the certificate of deposit (Depotschein) is to be attached to the written application.
X.—Mortgage

transactions (Hypotheken Zahlungsverkehr) .a

1. The Reichsbank accepts mortgage documents of all
kinds, such as mortgage bonds, transfer certificates,
mortgage-redemption certificates, and, in general, all
documents pertaining to mortgage transactions which are
to be presented to a third party for payment. The Bank
keeps them until the day of payment, gives the other
party an opportunity of examining the documents, and
delivers them on the day of payment on receiving the
payment. These transactions may take place, however,
only between two account holders, and when the payment
can be effected by the transfer of accounts either from or
to the giro deposit of an account holder.
2. The person who is to receive the payment must
deliver the documents to the proper Reichsbank office
a Mortgage transactions were introduced on the 1st
for the Reichsbank, Reichsbank local main offices,
offices, and the Reichsbank suboffices managed by a t
Reichsbank suboffices managed by only one official
from this business.




192

of February, 1908,
Reichsbank local
least two officials.
are still excluded

German

Imperial

Banking

Laws

not later than on the seventh week day before the date on
which payment is due. The documents are to be delivered
in an unsealed, but tied, packet, on which the following
details are to be registered:
(a) The stamp and number of the packet (to be filled
out by the Reichsbank).
(b) The number of documents contained therein.
(c) The name and residence of the remittor.
(d) The names and residences of the payer and receiver
of the documents or their authorized agents; in the latter
case, a note to that effect should be made.
(e) The amount of payment.
(/) The date of payment and delivery of the document.
(g) The name and residence of the receiver of the payment.
A full list of the documents must be contained in the
packet, in order that the correctness of the contents may
be verified when necessary.
3. The remittor of the document will be given a receipt
by the Reichsbank.
4. The Reichsbank office to which the documents are
delivered is to transmit the same without delay to the
Reichsbank office in the district where the remittee,
resides.
5. It is the business of the remittor to notify the remittee, and to request him to examine the documents and
receive them on making the payment. It is recommended
that a formal blank be used.
The Reichsbank gives no notice to the remittee.




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6. The examination of the documents is to be made in
the business office of the Reichsbank, in the presence of a
Reichsbank official, and not later than on the third week
day before the date on which the payment is due.
Mortgage banks and other credit institutions, as well as
insurance companies, may, upon application, and, if necessary, upon furnishing security, receive the permanent
privilege of examining the documents in their own offices.
The Reichsbank Board of Directors is to grant this privilege (which can be revoked at any time) and is also
authorized to determine the kind and amount of guaranty.
Public (state, provincial, and municipal) institutions
and notaries may be allowed by the Reichsbank office to
examine the documents in their own offices without
furnishing security.
7. If this examination is not satisfactory, the remittee
must immediately inform the remittor, who, if possible,
is to adjust the matter properly.
8. If the person who is to make the payment has a
giro account, he has to furnish, until the day of payment,
a deposit sufficient to cover the payment, and to order on
a prescribed blank the transfer of his account; or else
he has to prove that the transfer has already been made.
The Reichsbank then delivers to him in a tied packet
the documents previously examined by him, for which
he gives a receipt.
If he has no giro account, the documents are to be
delivered to him on payment in cash of the amount stated
on the packet by the remittor.




194

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Banking Laws

If the person who is to receive the payment has a giro
account, the payment received shall be credited to this
account. If he has no such account, the amount shall
be transmitted, free of charge, to the bank office of his
district, where he can receive it in cash, or make other
arrangements concerning it.
9. Documents which are not redeemed when due are
to be returned by the Reichsbank on the following day
and handed back to the remittor on presentation of the
receipt.
10. The Reichsbank is to charge a fee of 10 pfennigs
for each 1,000 marks, or fraction thereof, of the amount
to be collected on delivery of the documents, but the
charge is to be not less than 2 and not more than 20
marks. The fee, if it is not guaranteed in some other way,
is to be collected from the remittor when he makes his
application.
11. The blanks (the packet, the list required in 2, the
formal blank of notice required in 5, and the receipts
named in 8 and 9) shall be furnished free of charge by the
Reichsbank.
XI.—Acceptance of noninterest-bearing deposits.
The Reichsbank pays no interest on deposits. The
latter are accepted only upon the following conditions:
1. The rights afforded by the deposit book (Quitttmgsbuch) are not transferable.
2. The first deposit must amount to 150 marks minimum. All, including the later deposits, must be divisible
by 10. All transfers of accounts and remittances will




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Commission

be entered in the book only by the Reichsbank. These
entries {Vermerke) have full power of evidence for the
depositor against the bank if they are provided with the
stamp of the bank office and the signature of the officials
representing the latter. If the deposit book can not be
presented, the books of the bank are evidence in its
place.
3. The deposit is to be repaid on demand at any time.
The bank may allow to leave with it only a portion of
the deposit if it is not less than 50 marks and is divisible
by 10.

4. The Reichsbank is authorized to give written notice
of the withdrawal of the deposit, wKich notice has to be
sent to the address of the depositor.
5. Repayments may be made to any person who presents the deposit book; the bank is authorized, but not
required, to investigate the bearer's right to the book.
6. Written notice of the loss or the mislaying of the
deposit book is to be sent to the bank at once. Repayment can then be made only on proof that the book has
been legally invalidated.
XII.—Sealed deposits.
The safe-keeping of sealed deposits is undertaken by
the Reichsbank, Reichsbank local main offices, and
Reichsbank local offices, as well as by the Reichsbank
suboffices, as far as available room permits, in the following cities:




196

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Imperial

Banking

Altenburg.
Aschaffenburg.
Auerbach.
Beuthen.
Bonn.
Celle.
Colmar.

Lahr.

Crimmitschau.
Duisburg-Meiderich.

Neuwied.

Duisburg-Ruhrort

Pforzheim.
Possneck.
Ravensburg.

Forst.
Fiirth.
Goppingen.
Gotha.
Greiz.
Guben.
Hagen.
Hameln.

Landeshut.
Lippstadt.
Munchen-Gladbach.
Neumimster.
Neunkirchen.
Neustadt.
Paderborn.

Regensburg.
Reichenbach (Silesia)
Rendsburg.
Reutlingen.
Rheydt.
Saarbriicken.

Hanau.

Soest.

Heidelberg.
Heilbronn.
Hirschberg.

Sorau.
Trier.

Hof.
Holzminden.
Jauer.
Kaiserslautern.
Kattowitz.
Kempten
Konstanz.

Laws

Velbert.
Viersen.
Waldenburg (Silesia).
Weissenfels.
Werdau.
Wesel.
Worms.
Zitta

The sealed packages must be delivered by the possessor
himself to the bank of his business district. He is to fill
out and affix his own signature to a certificate of delivery.




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CONDITIONS.

i. Sealed packages are accepted and delivered only
during the morning business hours. a
2. The full name of the firm or of the depositor must be
clearly written on the packages, which are to be closed
and sealed in such wise that they may not be opened
without breaking the seal.
With each deposit a certificate of delivery is to be filled
out and signed by the depositor. b
3. The Reichsbank does not examine the contents of the
package, and is responsible for each deposit to. the maximum amount of 5,000 marks, except when the deposit is
appraised at a higher value and when a correspondingly
higher insurance fee is collected besides the fee for safekeeping. The Reichsbank is not responsible for damages
resulting through the elements and other natural causes
(hohere Gewalt). It has only to exercise the same care
which it is accustomed to bestow on its own goods. It is
in no case, not excepting time of war, required to send
packages to another place.
4. For each deposit the owner receives a certificate of
deposit, consecutively numbered.
5. The annual fee for safe-keeping is as follows:
For packages up to 30 centimeters wide and high, 40
centimeters long, 10 kilograms in weight, 10 marks; for
packages above the foregoing up to 60 centimeters wide
a The office of the Reichsbank in Berlin (S. W. 19, Jagerstrasse 34-36)
is open for this purpose on all week days in the morning from 9 to 12.30
o'clock* During the same hours rooms provided with locks and keys are
at the disposal of the depositors who want to open their packages undisturbed, for the use of which they must pay 50 pfennigs each time.
& Formal blanks are furnished without charge.




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and high, 70 centimeters long, 25 kilograms in weight,
20 marks; for still larger ones, up to 100 centimeters
wide and high, 100 centimeters long, or more than 25
kilograms in weight, 30 marks.
Packages of more than 100 centimeters in length,
width, and height will not be accepted.
The annual insurance fee is 25 pfennigs for each 1,000
marks, or a fraction thereof, of the excess above 5,000
marks.
In both cases the year begins with the first day of
deposit.
5a. Until further notice deposits for only a quarter of
a year shall be accepted. The fee for safe-keeping is 3,
6, and 9 marks, respectively, according to the conditions
of size and weight (compare 5). The fee for the extension
of time is estimated according to the above rates.
The insurance fee is always reckoned for a whole year,
and is to be paid together with the fee for safe-keeping at
the time of making the deposit. In case of the extension
of the time of safe-keeping, a new insurance fee will be
collected only at the beginning of a new deposit year.
6. Fees for insurance and safe-keeping are to be collected
at the time of deposit, and then in advance once every year.
For additional insurance in the course of the deposit year
the full insurance fee is to be paid. If the fee for safekeeping is not punctually paid, the Reichsbank may,
without legal proceedings, turn over the packages to the
public depositories at the risk and expense of the owner.
As long as the insurance fee is in arrears, the Reichsbank
is not responsible for the declared excess value. The




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obligation of the depositor to pay t h e insurance fee is
thereby not removed.
The safe-keeping and insurance fees can n o t be paid
in instalments.
7. The deposit m a y be returned

a

only upon t h e sur-

render of the receipted certificate of deposit or on proof
of t h e legal invalidation of t h e same, irrespective of t h e
fact whether t h e deposit is taken out permanently or
only temporarily.

If the depositor returns the

same

deposit again within one week, an additional fee of only
1 m a r k is to be collected.
No additional fee is charged if t h e deposit is returned
within t h e last week before t h e expiration of t h e deposit
year, and if t h e fee for safe-keeping for another year is
collected.
8. If a person other t h a n t h e depositor, or together with
the latter, or if among several depositors any one of t h e m
is authorized to receive t h e deposit, or if t h e depositor
wishes to have his deposit returned to his agent on t h e
surrender b y the latter of the receipted certificate of
deposit, t h e deposit office m u s t be given a written statem e n t to t h a t effect at t h e time the deposit is m a d e . b
If such documents are subject

to s t a m p d u t y , the

depositor must compound for the complete p a y m e n t in
due time.
The Reichsbank has t h e right, b u t is not required, to
return t h e deposit to any person presenting t h e certifier The return of the sealed deposit is ordinarily to be requested orally
or in writing at least one day beforehand.

Post cards, which the bank

furnishes free of charge for this purpose, may be used.
& Formal blanks can be obtained at the office without charge.




200

German Imperial Banking Laws
cate of deposit, without further examination of his right
to it or of the validity and genuineness of the receipt.
9. The deposit can not be transmitted directly to the
depositor or to other persons.
The Reichsbank, however, undertakes, on the written
application of the depositor or of his authorized agent,
and upon receiving compensation for the costs, to transmit the deposit to any branch office of the Reichsbank
which is authorized to care for sealed deposits. Such
applications are to be made out in duplicate form, signed,
and handed in to the Reichsbank office with the receipted
certificate of deposit.a
10. Fees for insurance and safe-keeping already collected for the current deposit year hold good for the new
place of deposit.
11. Conditions made by depositors with respect to the
handling of deposits other than the foregoing ones, even
though they may be contained in the certificates of
deposits or named on the packages of the deposits, form
no obligation for the Reichbank.
a

Formal blanks are furnished by the bank without charge.




201




XIII.—Open deposits of securities.
A. GENERAL PROVISIONS.

Acceptance.—The securities department of t h e Reichsbank in Berlin, S. W. 19, accepts securities and documents of every kind for safe-keeping. They m a y be sent
through an agent or by mail. The office of the department is open on week days in the morning from 9 to 12.30.
The officials are obliged to maintain the strictest
silence concerning all business transactions of depositors.
Depositors.—If authorities, corporations, charitable and
other institutions, companies, or commercial firms wish to
avail themselves of this function of the Reichsbank, special
arrangements are to be made. Securities owned b y more
t h a n one, b u t at most three persons, in common, m a y be
deposited, if their owners affix the following statement to
their application: " T h e deposited securities, as well as
t h e money received for them, may be at the disposal of,
and receipted by, each one of us or by the legal successor
of each one of u s . "
Certificates of deposit.—For each kind of securities a
separate certificate of deposit is to be given; for each
kind, therefore, a special application for deposit is to be
made. The certificate of deposit is drawn by t h e securities
department and is signed b y three members of t h e directorate. The numbers of the securities are not indicated
on t h e certificate of deposit. Only in case of lottery
securities m a y the depositor attach t h e list of numbers
83702—10




14

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National

Monetary

Commission

to the application. This list is returned to him, after being
stamped, together with the certificate of deposit, in case of
the acceptance of the deposit.
Password.—The depositors are allowed to hand in any
sealed password, which they may determine, without
which the deposit should not be returned (compare below,
condition 10). Since the password can be considered
only in case the office of the securities department makes
a note of it on the certificate of deposit, it is recommended
that the password be given at the time when the securities
are deposited.
Payment of interest.—The interest on the deposited
securities is to be collected only in the morning from
9 t o 12.30.
B. CONDITIONS
NOT

FOR

INCLUDING

SAFE-KEEPING
THOSE

OF

OF

WARDS

OPEN DEPOSITS,
AND

MINORS

(Milndeldepots).
1. The Reichsbank assumes a legal guaranty for the
safe-keeping of the securities deposited with it, together
with the following obligations:
(a) To collect, when due, the interest and dividend
coupons attached to the securities, if they are redeemable
in Berlin or at a branch institution of the Reichsbank, or
else to have them sold on the Berlin Exchange (Borse).
(b) To examine the lists of prizes announced in the
General Lottery Tables by Ulrich Levysohn of Berlin,
which are compiled by arrangements with the Reichsbank,
the Prussian State Bank (Konigliche Seehandlung), and
the Central Association (Centralverband) of Banks and
Bankers; to keep watch of notices of recall and con-




204

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Imperial

Banking

Laws

versions which are announced during the period of safekeeping; to present at the proper time the recalled papers
for redemption, or to.secure their conversion; and to sell
the papers on the exchange, if they are not redeemable
at a fixed rate in Berlin or at a branch office of the
Reichsbank.
Notice to the depositor concerning recall and conversion
is given through ordinary letters, or, if it is a whole series
of securities, through the l ' Deutscher Reichs- und Koniglich
PreussischerStaatsanzeiger," and public newspapers designated for announcement by the Reichsbank. In each
case the Reichsbank is authorized, even when no special
request is made by the depositor, to serve best the interests of the latter, and especially to secure conversions for
his account.
(c) To place the amounts received at the securities
department in Berlin in accordance with (a) and (b) at
the disposal of the depositor not later than on the third
week day after maturity; and the amounts received at
the Reichsbank offices within one week after maturity.
(d) To collect the new interest and dividend coupons,
when due, if the proper certificate of renewal (talon) is
deposited with the Bank, or if collection can be made
merely by presentation of the security itself.
(e) To exchange paid-up interim certificates (Interimsscheine) for final ones (endgultige Stilcke).
(/) To assume the same obligations with regard to the
new securities, and to make for the depositor the further
payments on securities not paid in full, if the latter sends
a written request to that effect not later than one week
before the expiration of the period of payment, and if




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Commission

he advances the necessary sum, together with the fees
(compare below, sec. 2).
Interest coupons and securities which are payable in
Europe are sold on the exchange one week, and those
payable elsewhere two weeks, before maturity.
2. For the care and the risk connected with these
services, a fee of one-half of 1 per cent, and, in case of
securities drawn in foreign countries, a fee of threefourths of 1 per cent—i. e., 50 or 75 pfennigs for every
100 marks of the face value of the securities—is to be collected by the Bank. The minimum fee, however, is 2
marks; and in case of lottery securities (Lospapiere) or
premium securities payable to bearer, as well as securities
issued in foreign countries, the minimum fee is 3 marks
for each deposit. If the exact valu£ of the document
can not be ascertained, the fee is 15 marks per year.
The year is to be reckoned from the first of the month in
which the deposit is made to the first of the corresponding
month in the next year. Securities in the foreign standard
are reduced to the imperial standard (at the rates given
in the footnote) for the purpose of fixing the fees.a For
a Rates used on the Berlin Exchange (Borse):
1 franc, lire, peseta, leu
1 Austrian gulden (gold)
1 Austrian gulden (standard)
1 Austro-Hungarian crown
1 pound sterling
i Holland gulden (standard)
1 Scandinavian crown
1 old gold ruble
1 credit ruble
1 peso (gold)
1 peso (paper)
1 dollar, Japanese yen
1 gulden, South German standard
1 mark banko_
_




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Marks.
o. 80
2. 00
1.70
.85
20. 40
1. 70
1. 125
3. 20
2. 16
4. 00
1.75
4. 20
12. 00
1.50

German Imperial

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the collection and disbursement of cash in case of lost,
recalled, or converted securities (i, b) and for the making
of payments (i, /), the Reichsbank charges a brokerage
fee of one-eighth of i per cent (and 50 pfennigs minimum)
of the payments to be made or collected, besides the
expense of transmission. For the collection of new
interest or dividend coupons, as well as for the exchange
of interim certificates (Interimsscheine) (1, d and e),
only the expenses incurred in cash shall be counted.
3. Fees are to be collected for a full year, regardless of
the time the securities are to remain in safe-keeping.
They are to be deducted from the deposit account (Guthaben), and, in the absence of such, they are to be sent
by the depositor by mail. If payment is not obtained
in this way, the withdrawal of the deposit will be demanded
(see below, 15). The Reichsbank may without legal
proceedings compensate itself for back-standing fees out
of the deposit, and, if necessary, by means of sale according
to section 20 of the Bank Act.
4. Fees will in no case be returned. But in case of redemption, sale, or withdrawal of a part of the securities, as
well as in case of convertible securities, new certificates of
deposit will be issued free of charge for the remainder of the
year already paid for.
5. The Reichsbank is not responsible for disadvantages
resulting from wrong classification of securities or from a
wrong designation of the numbers in the application for
deposit. The examination of the lottery lists, etc. (1, 6),
takes place solely upon special request in the application
for deposit.




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6. Notice of errors must be given to the bank as soon as
they are detected.
7. The certificate of deposit is made out in the name of
the holder and is not transferable. If it is transferred or
pledged, or if a legal attachment is made on the deposit
itself, the bank is authorized either to place the securities
with the public depository at the risk and cost of the depositor, or to give up its custody of the deposit, and especially to secure no collection and make no disbursement of
interest, etc.
8. The interest on mortgages can be paid upon stating
the number of the certificate of deposit either at the treasury, at the securities department, or at the Reichsbank
office to be transferred to that department for the account
of the depositor. No fee is charged in either case, and it
is the business of the depositor to direct the debtor to pay
at the Reichsbank.
9. The depositor must state in his application for the
deposit whether the collection of interest from a branch
office of the Reichsbank shall be effected by transfer to a
giro account or by cash payment at the treasury of the
securities department. 0 Changes in this respect, as well
as in respect to the originally selected bank office, or the
indicated giro account, are to be made known in writing,
not later than four weeks before the maturity of the interest coupons; otherwise, the payment is made in the originally indicated manner. Disbursement of interest Colts Cash payments take place:
1. At the branch institutions on every week day from 9 a. m. to 12 m.
2. At the treasury of the securities department on every week day from
9 a. m. to 12.30 p. m.




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lected for the depositor can not be made in several places.
Disbursement can be made through an agent or by mail.
In the latter case the depositor has to add to his application the receipt for the amount which he demands. The
money is transmitted to the address indicated by the
depositor. If it amounts to more than 300 marks, it may
be withdrawn in sums of not less than 150 marks. The
collection of interest coupons in natura is permissible only
when securities are drawn in foreign countries, and provided it was expressly requested at the time of depositing
the securities.
10. Each individual deposit can be withdrawn only as a
whole. It is to be returned upon the surrender of the certificates of deposit, receipted as follows:
" I have received the deposit herein mentioned.
" (Place.)
" (Date.)
" (Signature.) "
If the certificate is lost, the deposit is to be returned only
after legal invalidation of the former. If the return is to
be made not to the depositor, but to another designated
person or firm, written information is to be given to the
securities department. The bank is authorized to investigate the right of the bearer to the certificate of deposit, as
well as the genuineness and validity of the receipt, and
will make use of this authority in every case when the
bearer of the certificate is unable to give the password.
The bank assumes, however, no obligation to make such an
investigation, and reserves for itself the right of returning
the deposit to the bearer of the certificate of deposit.




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i i . Deposited securities, as well as certificates of re-*
newal (talons), interest, and dividend coupons (i, d and
e), certificates of deposit, documents, checks, bills of exchange, and drafts, are transmitted by mail at the risk
and cost of the depositor. Certificates of deposit, certificates of renewal, bills, checks, drafts, mortgage documents, etc., are sent registered; the other securities must
be insured according to their face value, if the depositor
has not expressly given another valuation. Cash is to be
registered for its full amount.
12. (a) In the application for deposits the depositor may
declare that he acts with parental authority (father or
mother) or as guardian of persons who are incapable of performing business because of character, age, or other reasons
which must be stated explicitly.
Parents are to present certificates of the birth of their
children. Trustees and guardians are to present the certificates of their appointment, and, if the deposit is not to
be conditioned by the provision named below (b), they are
to present proof that they are exempt from the stipulation
of section 1814 of the " Btirgerliches Gesetzbuch." In the
latter case the bank is to pay to the depositor the accrued
interest and dividends without investigating his authority. If the parent or guardian desires to receive either the
securities themselves or the prizes proceeding from the
latter (1, 6), he must issue new proof of his identity as the
possessor of parental authority, or he must present his certificate of guardianship, and, in case he is not known at the
securities department, he must be introduced by a responsible person who is known to the latter. Should he fail to




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comply with this stipulation, the securities or the prize
shall be transmitted to him by mail (see above, n ) .
(b) The deposit can be made with the stipulation to be
mentioned in the certificate of deposit that the securities
(including certificates of renewal) should be returned by
the bank only upon the consent of the court of guardianship (sec. 1814 of the "BurgerlichesGesetzbuch"). As
long as the termination of parental authority, guardianship, or trusteeship is not proved, the return of the deposit
can take place only upon the consent of the court expressed in the certificate of deposit and only to the person
explicitly named by the court.
(c) The Reichsbank is not required to verify the genuineness and validity of the certificate of appointment, the
receipt, or the consent of the court of guardianship. The
expiration of the guardianship, trusteeship or parental
authority with respect to one or several coowners of a
deposit does not alter the foregoing requirements.
13. If a third person is to be authorized to collect interest and dividends and to receipt for the same, a written
statement signed by that person is to be handed in to the
securities department. Similarly, the presentation of
a formal certificate of authority is necessary, if a third
person (whether he be superintendent or general agent)
is to be authorized to make statements for the depositor
and to have charge of, and make receipt for, the deposit,
interest, etc.
14. A formal declaration must be handed in to the
securities department, and the application for the deposit
is to be provided (at the close, over the signature) with




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the note: "Closed deposit according to article 14, A, B,
or C," if either of the three following stipulations is made:
(A) That a third person shall, in virtue of an agreement
or by testamentary right, receive during his life the interest or the dividends of the deposited securities.
(B) That the securities are deposited to insure an
extra allowance to a military officer on his marriage.
(C) That the securities, including the certificates of
renewal, should be returned only upon the consent of a
third person.
A note to that effect must also be made on the certificate
of deposit. In the first case (A) the interest and dividends may be paid and the deposit returned to the
depositor or liis heir only upon presentation of an official
certificate of the death of the third person; in the second
case (B) this can be done only upon presentation of a
written consent of the military authority. In the case of
C, the securities, including the certificates of renewal
{talons), shall be returned to the depositor or his heir only
upon the consent of that third person or his heir. With
regard to the proof of the genuineness and validity of the
certificates of consent in cases A and C, the provisions
concerning the proof of genuineness and validity of certificates of deposits (see above, 10) are applicable.
15. The Reichsbank may demand at any time the withdrawal of the deposit without stating its reasons. If the
withdrawal is not made within fourteen days after the
written notice, the Reichsbank is authorized either to
turn over the securities to the public depository at the
risk and cost of the depositor or to give up its custody of




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Banking Laws

them and especially to secure no collection and make no
disbursement of interest, etc.
16. The Reichsbank reserves the right of changing the
conditions of deposit. Such changes, however, if they
are to be instituted during the next calendar year, are to
be announced before the 15th of November in the newspapers designated by the Reichsbank board of directors
for public announcements and by means of placards in
the office of the securities department.
N. B.—If, according to the provisions concerning loans on pledges, the
deposited securities may be hypothecated, and if they are not deposited on
the conditions named above in 14, t h e depositor can obtain a loan from
the Reichsbank, as well as from the branches of the Reichsbank, by hypothecating the securities and placing the certificate of deposit with the bank.
He must, however, submit a certificate of the securities department, which
may be obtained a t any time, testifying the circulating capacity of the
securities.
C. CONDITIONS FOR S A F E - K E E P I N G OF DEPOSITS OF WARDS

AND MINORS

{Milndeldepots).

i. Securities belonging to wards and minors and subject to the supervision of the court of guardianship shall
be accepted by all Reichsbank main offices and Reichsbank offices for safe-keeping if they have certificates of
renewal {talons), provided they have no mature interest
or dividend coupons.
Similarly, the Reichsbank and the Reichsbank offices
may accept deposits of wards and minors which are made
by one of the parents in accordance with sections 1666
and 1667 of the " Biirgerliches Gesetzbuch" and with section 1814, ibid.
2. The. deposit may be delivered by the guardian or
one of the parents, as well as through an agent, either
personally or by mail, together with the application




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signed by the depositor. In each case the court certificate of appointment or, in case of legal representation, the
certificate of authority is to be submitted. Application
blanks for deposit can be obtained at the Reichsbank
offices.
3. The Reichsbank assumes the legal risk of the safekeeping of securities, but executes no other function. It
is the business of the trustee, the guardian, or the legal
representative to renew the talons at the proper time; to
examine the lottery lists and to follow the announcements concerning conversion or recall of securities; to
present redeemable papers, when due, for redemption; to
exchange paid-up interim certificates for final certificates;
to make payments on securities not fully paid-up, etc.
4. For all securities simultaneously deposited a special
deposit book, in which the securities will be entered
according to their kinds and amount, but not according
to their numbers, will be issued. Only in case of lottery
securities may the depositor present a list of the numbers
together with the application for the deposit. In case of
the acceptance of the latter deposits, the list is to be
stamped and handed back to the depositor, together with
the deposit book.
5. The deposit book is to be issued by the Reichsbank
main office or the Reichsbank office, and must bear,
besides the official seal, the signatures of two officials.
The deposit book is to be submitted to the respective
bank each time a new deposit is made or a withdrawal of
securities takes place, in order that the changes may be
entered in it. The depositor is to notify the bank of the




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errors which may occur in the deposit book immediately
after their being detected.
6. As long as the expiration of trusteeship, guardianship, or representation is not proved, the return of all or
some of the securities, as well as of the certificates of
renewal {talons, etc.), can take place only upon the consent of the court and only to the person explicitly named
by the latter. The receiver is to affix his signature to the
certificate of the court authorizing the receipt of the stated
securities, or the certificate of renewal, and in case he is
not known personally to the officials of the bank, he must
prove his identity by presenting the proper documents
(certificate of appointment, etc.). If he is not in a position to comply with the latter requirement, or if the bank
doubts the genuineness of the signature, the bank has a
right, but is not obliged, to demand proof of identity or
to send the securities by mail. Nor is the bank obliged
to investigate the genuineness and validity of the receipt
or of the legal consent, and it reserves the right of returning the securities to the person wTho presents, besides the
certificate of consent of the court, the deposit book, or, in
case this is lost, the certificate of invalidation. The book
is therefore to be kept with the utmost care.
7. The court certificate authorizing the withdrawal of
the talons by the guardian or trustee for the purpose of
obtaining new interest coupons will be returned to the
depositor, together with a receipt for the securities, which
is to serve as evidence before the court of guardianship,
only after the new talons have been handed in to the bank.
The Reichsbank exercises no control over the return of
the talons,




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8. Deposited securities, as well as deposit books, are
transmitted at the risk and cost of the depositor, and, as
long as the latter has not appraised them differently, the
securities are insured at their face value, while the deposit
book is sent registered.
9. Fees are to be collected as follows:
(1) A fee of 1 mark at the time of issuing each deposit
book.
(2) An annual fee for safe-keeping of one-fifth of 1
per cent for each 1,000 marks, or a fraction thereof, of the
face value of the securities simultaneously delivered, or at
the beginning of each new deposit year.
Securities in a foreign standard will be computed in
the Imperial standard, for the purpose of fixing the fees,
according to the rates given in XIII, B, 2, foot note.
10. The deposit year is to be reckoned from the first of
the month in which the first deposit has been entered in
the deposit book to the first of the corresponding month
of the next year. All subsequent deposits entered in the
same book are to be computed from the same date as the
first one. The guardian, however, may demand a special
deposit book for securities subsequently deposited, in
order to have the latter computed from the new date.
11. Fees are to be paid in advance for a full year, irrespective of the duration of time the deposit will remain in
the bank, and are to be receipted in the deposit book.
The latter is, therefore, to be presented at the bank office
at each payment of fees. Fees will in no case be refunded.
12. The deposit book is not transferable. If, however, it is transferred or pledged, or if the securities them-




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selves are legally attached, the bank is authorized to turn
over the latter to the public depository at the risk and
cost of the ward or minor. The bank reserves the same
right in case the withdrawal of the deposit does not take
place at the expiration of four weeks after written notice—
without stating reasons for the withdrawal—has been
given.
13. The Reichsbank reserves the right of changing these
conditions. Such changes, however, if they are to be
instituted during the next calendar year, are to be
announced before the 15th of November, in the newspapers
designated by the Reichsbank board of directors for
public announcements and by means of placards in the
business rooms of its bank offices.




217

XIV.—Collection of bills by means of checks.
Acceptance of checks.—Checks on the Reichsbank are to
be accepted by the bank officials of the Reichsbank in
their collection of bills in Berlin. The checks must be
crossed according to the regulations of VI, article 5,
paragraph 2, and besides the words "for transfer only"
must contain the following note: "On the account of
bills for.
(amount)
due
(date of maturity.' ' Crossed checks with a single note, "for settlement of bills only," need not, however, be rejected;
the risk that the check may be used to cover another bill
to be paid by the issuer is assumed by the latter.
Receipt.—The treasury officials receiving a check on the
account of a bill collected by them are not to give out the
bill to the issuer of the check; nor is the bill to be given
out if only a part of the sum collected is paid by check
and the other part in cash. The treasury officials issue
only a receipt for the check.
Withdrawal of securities.—Redeemed securities are
returned every day after 4.30 p. m. at the giro office of
the Reichsbank upon the surrender by the owner of the
bank receipt. The Reichsbank does not require proof
of the right of the bearer to the certificate. The withdrawal can take place only within the first five days after
redemption.




218

PART II
Stock Exchange Regulations

83702—10—15




219




I.
STOCK EXCHANGE LAW AS AMENDED MAY 8,
1908.
I.—GENERAL PROVISIONS CONCERNING

EXCHANGES.

I.—Exchanges may be established only with
the permission of the state governments.^ The latter may
also order the suspension of operating exchanges.
The state governments exercise supervision over the
exchanges, which supervision may be intrusted to commercial organizations (the chambers of commerce and
commercial corporations).
Notifying offices, clearing banks, clearing associations,
and similar institutions connected with the exchanges are
also subject to the supervision of the state governments
or the commercial organizations exercising the direct supervision.
SEC. 2.—The state governments are to be represented
on the exchanges by state commissioners, who shall control, in accordance with the detailed instructions given
to them by the state governments, the transactions on the
exchanges, and enforce the laws and provisions concerning the latter. The commissioners are authorized to be
present at the business conferences of the members of the
exchanges, and to call the attention of the said members
to any abuse which may take place. They are also required to report all abuses on the exchange and to suggest
preventive measures.
SECTION

a The governments of the Federated States of the German Empire.




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The activities of the state commissioners in particular
exchanges may, with the approval of the Bundesrat, be
restricted to cooperation in the proceedings of the cotirts
of honor, or, in case of small exchanges, the appointment
of state commissioners may be entirely dispensed with.
SEC. 3.—An expert exchange committee (Borsenausschuss) is to be formed with the purpose of reporting upon
matters which are, according to this law, within the jurisdiction of the Bundesrat. The exchange committee is
authorized to tender its motions to the Imperial Chancellor and to consult with experts.
The exchange committee is to consist of not less than
30 members, who are to be elected by the Bundesrat for a
period of five years. Members of the committee are eligible for reelection. One-half of the members are to be
elected upon nomination by the members of the exchange.
The Bundesrat is to determine the number of candidates
which the individual exchange departments may nominate. The election of the other half is to take place with
special consideration of the conditions of agriculture and
industry.
The regulations for the committee shall be enacted, after
a conference with the latter, by the Bundesrat. The daily
remuneration and traveling expenses to be allowed to
the members of the committee are to be fixed by the
Bundesrat.
SEC. 4.—Regulations must be issued for each exchange
separately.
The regulations must be approved by the state government. The latter may demand the incorporation of cer-




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tain provisions in the regulations of the exchange, and
particularly the incorporation of the provision which stipulates that the interests of agriculture and allied trades
be adequately represented in the boards of directors of
the produce exchanges.
SEC. 5.—The exchange regulations shall contain provisions concerning (1) the administration and the departments of the exchange; (2) the transactions authorized on
the exchange; (3) the admission to the exchange; and (4)
the quotations of prices and rates.
SEC. 6.—The regulations may allow the use of the exchange for branches of business outside of those designated
in section 5, figure 2, unless particular sections of this law
(sees. 42, 43, and 51) provide to the contrary. In the
latter case the persons concerned may lay no claim to the
exchange for any purpose other than that for which it was
established. The Bundesrat is authorized to prohibit
either completely or partially the use of the exchange for
particular branches of business.
SEC. 7.—The following are to be debarred from the
exchange:
1. Persons of the female sex.
2. Persons deprived of their civil rights.
3. Persons who, in virtue of a judicial order, are restricted in the right of the disposal of their property.
4. Persons against whom a final conviction of fraudulent
bankruptcy has been pronounced.
5. Persons against whom a final conviction of ordinary
bankruptcy has been pronounced.
6. Insolvent persons.




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7. Persons who have been excluded from the exchange
by a final or immediately enforceable decision of the court
of honor.
Admission or readmission to the exchange can take
place in the cases designated under 2 and 3 only after the
debarring causes have been removed; in the case designated
under figure 5 only upon the expiration of six months
after the enforcement of the legal decision or upon its
becoming void, either because of the lapse of the period
of limitation or because of remission. In the latter case,
as well as in the case named under figure 6, the admission
may be granted only when the exchange board of directors
is satisfied that all obligations to the creditors have been
either fulfilled by payment or straightened out by remission or respite. A person who has been declared insolvent or bankrupt for a second time is to be debarred from
admission or readmission for a minimum period of one
year. In the case named under figure 4 the exclusion can
not be recalled.
The exchange regulations may prescribe exclusion from
the exchange for other reasons.
The state governments may, in special cases and upon
the recommendation of the exchange departments, allow
exceptions from the provisions concerning the exclusion
or debarment from the exchanges.
SEC. 8.—The supervising authorities are authorized to
issue regulations concerning the maintenance of order
and the transactions on the exchange.
The board of directors is to be responsible for the
maintenance of order, and is authorized to remove dis-




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orderly persons and to punish them either with temporary exclusion from the exchange or by imposing a
pecuniary fine.
The maximum penalty or fine is to be fixed by the
exchange regulations. Exclusion from the exchange may
be made public upon the consent of the supervising
authorities by means of placards.
Appeal from the infliction of a penalty may be made
to the supervising authority within the period fixed by
the exchange regulations.
Persons whose objects are incompatible with the order
or the business of the exchange shall be debarred from
the latter.
SEC. 9.—Each exchange is to have a court of honor.
When the direct authority of supervision is transferred
to a particular commercial organization (sec. 1, par. 2),
the court of honor is to consist of the whole organization
or of a committee of the latter. The court is to be
elected by the departments of the exchange when there
is no direct supervising authority. Further provisions
concerning the organization of the courts of honor shall
be issued by the state governments.
SEC. 10.—The court of honor is to summon those persons who, in connection with the exchange, enter into
transactions which are open to suspicion or which forfeit
the claim to business confidence.
SEC. 11.—The state commissioner (sec. 2) is to be informed of the institution or suspension of proceedings by
the court of honor. He is authorized to request the
court of honor to institute proceedings, which request,




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as well as all demands of evidence, must be complied
with. The commissioner is also authorized to be present
at all proceedings and to offer such suggestions and
questions to the defendant, the witnesses, or the experts
as he may deem pertinent.
SEC. 12.—The court of honor may authorize one of its
members to make a preliminary inquiry before the official hearing of a case. The defendant shall be informed
of the charges against him and called to the preliminary
investigation, and, if he is present at the latter proceedings, his statements and recommendations must be
recorded.
Witnesses and experts may be heard without their
taking an oath.
SEC. 13.—The court may, with the consent of the state
commissioner, discontinue the proceedings. Otherwise,
the trial is to take place on the fixed date.
SEC. 14.—The trial before the court of honor is to take
place even if the defendant does not appear. It is to be
conducted behind closed doors. The court of honor,
however, may order certain proceedings to be conducted
publicly if it is requested by the state commissioner or
the defendant, unless the conditions named in section 173
of the law of the court organization (Gerichtsverfassungsgesetz) render publicity illegal.
The defendant is authorized to avail himself of the
services of a counselor.
The court of honor has a right to call witnesses and
experts and examine them under oath.




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SEC. 15.—The penalty shall consist of reprimand as
well as of temporary or permanent exclusion from the
exchange. If no dishonorable action beyond a disturbance of order can be proved, the penalty shall be inflicted
by the court of honor according to section 8, paragraph 2.
SEC. 16.—The decision, together with the motives for
it, is to be announced at the session at which the oral
proceedings are concluded, or official copies containing the
motives for the decision are to be submitted within two
weeks to both the state commissioner and the defendant.
The decision of the court is also to be sent to the defendant in case of his absence from the proceedings. The state
commissioner, as well as the defendant, may demand an
official copy containing the reasons for the decision, even
if the latter has been announced in their presence.
The court of honor may order that the decision be
made public and may state in what way this is to be
effected.
The court of honor may direct that the decision, which
excludes the defendant from the exchange either temporarily or permanently, shall go into effect immediately.
The court has to arrange, upon the application of the
vindicated person, for the public announcement of the
vindication.
SEC. 17.—Both the state commissioner and the defendant have the right to appeal the decision of the court of
honor to the periodically formed chamber of appeals.
The chamber of appeals is to consist of a chairman and
six judges. The chairman is to be appointed by the
Bundesrat. The judges are to be elected by the exchange




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committee from among those of its members who have
been nominated by the departments of the exchange.
The number of judges to be elected from each exchange
may not exceed two.
Deputies for the chairman and the judges shall be
appointed and elected, respectively, in the same manner.
Not more than two members of the same exchange may
participate in the proceedings of a case which has been
brought to the court of appeals.
SEC. I8.—An appeal can be made-either by means of
an oral statement to be entered in the minutes of the
court (Protokoll), or in writing to the court of honor
from which the appeal is made. The maximum period
for bringing an appeal is one week.
This period for appeal by the state commissioner or
the defendant is to begin, in case the decision has been
announced by the court, immediately after the announcement. Otherwise, it shall date from the time the copies
of the decision have been submitted to the party making
the appeal.
SEC. 19.—If an appeal is made from the decision,
copies of the latter containing the motives are to be
sent to the state commissioner and the defendant if
such copies have not been sent before.
SEC. 20.—The appellant is allowed a period of one week
to present a written statement of the motives for his
appeal, if the latter has been made in due time. This
period is to commence upon the expiration of the term
for appeal, or, in case a copy of the decision has not yet
been submitted, from the time when it will have been
submitted.




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SEC. 21.—The writ of appeal, together with the motives
presented by the defendant, is to be submitted to the
state commissioner; and vice versa, the writ of appeal,
together with the motives presented by the state commissioner, is to be submitted to the defendant. A reply
to the appeal can be made within one week after the writ
of appeal has been submitted to either of the parties.
SEC. 22.—The periods for submitting the motives for
or the reply to the appeal may be extended, upon application, by the court of honor.
SEC. 23.—Upon the expiration of the periods designated in sections 18, 20, 21, and 22, all the documents
relating to the case are to be transferred to the chamber of
appeals. The defendant shall be summoned and the
state commissioner invited to be present at the hearing
of the appeal.
The chamber of appeals may, for the purpose of clearing
up the matter, demand that all previous evidence be
submitted.
The provisions of sections 11, 14, 15, and 16 shall apply
also to the proceedings in the court of appeals.
SEC. 24.—Minutes shall be taken by a sworn recording
secretary at every session of the preliminary, as well as of
the regular, hearings of the case.
SEC. 25.—Besides the penalty, the defendant may be
called upon to defray all or part of the costs incurred on
account of the proceedings.
SEC. 26.—The courts are obliged to comply with the
requests of both the court of honor and the chamber of
appeals to examine witnesses and experts.




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SEC. 27.—The persons exercising supervision over the
exchanges are obliged to bring to the notice of the
state commissioner, or, in case no such commissioner has
been appointed, of the court of honor, any action on the
part of persons attending the exchange, which is subject
to the jurisdiction of the court of honor.
SEC. 28.—An agreement, by which the concerned parties
submit to the decision of an exchange court of arbitration,
is to be binding only in case both parties are persons who
may, according to section 53, deal in futures on the
exchange, or in case the agreement to submit to the
arbitration court has been reached after the conflict has
taken place.
II.—REGULATIONS

CONCERNING

THE

PRICES

ON THE

EXCHANGES AND THE BROKING SYSTEM.

SEC. 29.—Prices of merchandise or securities, if officially
quoted, are to be fixed both for cash transactions and
futures by the directors of the exchange, in so far as the
exchange regulations do not prescribe the cooperation of
representatives of other trades.
No person is allowed to be present during the fixing of
prices except the state commissioner, the exchange
directors, the exchange secretaries, the exchange brokers,
and those representatives of other trades whose cooperation is prescribed by the exchange regulations.
The exchange quotations must correspond to the actual
state of business on the exchange.
SEC. 30.—Special aids (brokers) shall be appointed to
assist in the official quotation of prices of merchandise
and securities. As long as these persons act as brokers,




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their duty shall lie in bringing about the adjustment of
exchange transactions in the specific merchandise or
securities. The appointment as well as the removal of
brokers shall be made by the state government. Before
assuming their functions the brokers are to take an oath
to the effect that they will faithfully fulfill the duties of
their office.
The representative organization of the exchange brokers
(the chamber of brokers) is to be consulted when new
brokers are to be appointed and a new assignment of
business among the individual brokers is to be made.
Further provisions with regard to the appointment and
removal of exchange brokers, as well as with regard to
their representative organizations and the relation of the
latter to the state commissioners and the departments of
the exchanges, shall be issued by the state government.
SEC. 31.—Claims to special consideration in the official
fixing of exchange prices of merchandise or securities can
be made only in case the transactions are performed
through the agency of a broker. This does not affect the
right of the directors of the exchange to take into consideration other than the above-mentioned transactions.
SEC. 32.—Brokers participating in the official fixing of
exchange prices of certain kinds of merchandise or securities may transact the latter kinds of business for their
own account or in their own name, or may serve as guarantors for the transactions performed through their
offices, only when those transactions are absolutely necessary for the brokers to properly execute the orders received
by them. The way in which supervision shall be exercised




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in enforcing this regulation is to be determined by the
state government. The validity of the transactions is not
impeached by this regulation.
Brokers are prohibited, unless special permission is
granted by the state governments, from engaging in any
other than the broking business or from participating in
any business as shareholders or silent partners, as well as
from rendering services to merchants in the capacity of
clerks, authorized representatives, and the like.
SEC. 33.—The daybook to be kept by the exchange
broker shall be submitted, before use, to the directors of
the exchange in order that the number of sheets or pages
may be certified.
In case of the death or retirement of a broker, the daybook of the latter shall be submitted to the exchange
board of directors.
SEC. 34.—Brokers are permitted to negotiate sales and
purchases which must be transacted through an authorized
commercial broker.
SEC. 35.—The Bundesrat is authorized—
1. To allow individual exchanges to fix prices of merchandise or securities by methods diverging from the
regulations of section 29, paragraphs 1 and 2, and sections
30 and 31.
2. To prescribe the official fixing of exchange prices
of particular merchandise, either for all or for specific
exchanges.
3. To issue regulations for the purpose of securing
uniformity in the fixing of prices of merchandise and
securities.




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This provision does not deprive the state governments
of their authority of issuing the regulations named under
2 and 3 if the Bundesrat has not exercised its authority.
The Imperial Chancellor is to be informed of the issue of
the state regulations.
III.—SECURITIES TO BE LISTED ON THE EXCHANGES.

SEC. 36.—The listing of securities on each exchange
shall be granted by a committee (board of admission).
At least one-half of the committee must consist of persons who do not professionally deal in securities on the
exchange.
Members interested in the listing of particular securities
on the exchange shall be debarred from the conferences of
the committee, and their places shall be taken by deputies
to be appointed according to the exchange regulations.
The functions and duties to be discharged by the board
of admission are as follows:
(a) To require the submission of the documents, on
the basis of which the securities are to be issued, and to
examine them.
(b) To make public, as far as possible, all facts and
legal regulations for adequate information with regard to
the securities to be issued, and to prohibit the issue in
case of inadequate information.
(c) To prohibit the issue of securities which may imperil important public interests, or which may eventually
lead to fraud.
The board of admission may refuse the right of issue
without stating its reasons. Further regulations con-




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cerning the organization of the board of admission and the
method of appeal from the decision of the board shall be
enacted by the exchange. The board has a right to
exclude listed securities from the exchange.
SEC. 37.—If the board of admission rejects an application for the listing of securities on the exchange, it is to
inform the boards of directors of all other German stock
exchanges, stating whether such rejection was due to
local or other conditions. In the latter case the listing
of the securities on another exchange can take place only
upon obtaining the consent of the board which had
refused their listing.
The applicant must state whether application for the
listing of the securities was ever made before or was being
made at the time to any other exchange. Should this
be the case, the securities are to be listed only with the
consent of the other board of admission.
SEC. 38.—The application for the listing of securities,
containing the name of the applicant, the amount and a
description of the securities, is to be published by the board
of admission. A minimum period of six days must
elapse between the publication of the application and
the listing of the securities on the exchange.
Prior to the listing of the securities, a prospectus containing the necessary information about the securities
is to be published. This provision applies also to conversions of securities as well as to increases of capital.
In case of applications for listing on the exchange of
securities, which are already listed on another German
exchange, the state government may, upon the request of




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the board of admission, release the applicant from the
required publication of a prospectus.
SEC. 39.—German imperial and state bonds shall be
listed on every exchange. The board of directors of
the exchange is to be notified of the kind of securities to
be listed, but no prospectus is required.
SEC. 40.—In case of bonds whose interest and principal
are guaranteed by the Empire or one of the Federated
States, as well as in case of bonds of municipal corporations, of credit institutions of such corporations, or of
mortgage institutions which are under state supervision,
the state governments may release the applicant from the
required publication of a prospectus. In this latter case
the securities shall be regarded as already listed on the
exchange.
The board of directors is to be notified of the amount
and the kind of securities to be listed. In case of mortgage
and similar bonds of a municipal credit institution or of
a public mortgage institution under state supervision, the
statement of the amount of securities is not required.
SEC. 41.—The listing of shares of an enterprise which
has been converted either into a stock company or a limited liability company may take place only upon the expiration of one year after the registration of the company
in the Commercial Register (Handelsregister) and upon the
publication of the first annual report containing the profit
and deficit accounts. This restriction may, under certain
circumstances, be removed, either entirely or partially, by
the state government.
The listing of foreign stocks or bonds not guaranteed by
the state is to be conditioned by the obligation of the appli83702—10




16

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cant to publish annually, for a period of five years, in the
German newspapers designated by the board of admission,
the reports containing the profit and deficit accounts.
SEC. 42.—In case of securities which are open to public
subscription, no official fixing of the price shall be
declared before the closing of the subscription, and no
negotiations shall be made on the exchange. Neither
may the prices be quoted by the exchange brokers or be
published in the list of quotations (Kurszettel) or in
any other way.
SEC. 43.—The official fixing of prices can not take
place with securities the listing of which has either been
refused or not applied for. No transactions in such
securities can be carried on either on the exchange or
through the office of an exchange broker. The quotations for such securities may not be published or otherwise circulated on the exchange except when otherwise
stipulated by the exchange regulations.
SEC 44.—The minimum amount of the stock, as well
as the minimum amount of the face value of each share
necessary for the listing of the shares on the particular
exchange, shall be determined by the Bundesrat.
The Bundesrat shall also define the duties to be discharged by the board of admission and make provisions
concerning the requirements for the listing of securities
on the exchanges.
The authority of the state governments to enact supplementary regulations is not impaired by the above
provisions. The Imperial Chancellor shall be informed of
the state regulations.




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SEC. 45.—Should statements contained in the prospectus and purporting to give information about the
particular securities, on the basis of which information
the latter securities have been listed on the exchanges,
prove incorrect, the persons who have issued, as well as
those who have authorized the issue of, the prospectus,
if they were aware of the inaccuracy or could have been
aware of it save for gross negligence, shall be liable as
joint debtors to each security-holder for the loss which
the latter has suffered as a result of the wrong statements.
Similarly, this provision shall apply in case certain facts
have not been printed in the prospectus owing to malicious concealment or neglect arising from an inadequate
examination of the facts on the part of those persons
who have either issued or authorized the issue of the
prospectus.
The above-named persons shall not be released from liability even when it is mentioned in the prospectus that
the printed statements proceeded from a third party.
SEC. 46.—The above provision concerning the right of
the shareholders to demand compensation for their losses
applies only to those securities which were listed on the
exchange on the ground of the information given in the
prospectus and which were acquired by the owner in a
transaction concluded within the country.
The persons who are liable for the losses of the shareholders may compensate the latter by redeeming their
securities at the price which was paid by the owners or
which was quoted at the time of the first listing of the
securities on the exchange.




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The holder of the securities may demand no compensation for his losses in case of his having been aware, at the
time of his purchasing the securities, of the inaccuracy or
inadequacy of the statements published in the prospectus.
Nor may any demand for compensation, unless such demand has been instigated by malicious concealment, be
granted, in case the security holder could have learned, at
the time of his negotiations, about the wrong statements
in the prospectus, had he exercised the same precaution as
he ordinarily uses in his affairs.
SEC. 47.—The period of limitation for claims to compensation shall terminate after five years from the first
listing of the securities.
SEC. 48.—Any agreement purporting to modify or
annul the responsibility imposed by sections 45 to 47 is
hereby made void.
The right to other claims for breach of contract, for
which provision has been made in the civil code, is not
impaired by the above regulations.
SEC. 49.—The litigations proceeding on the basis of
sections 45 to 48, irrespective of the value of the claim,
are subject to the exclusive jurisdiction of the provincial
court in whose district the exchange which listed the
securities is located. If the court includes a chamber
for commercial suits, the claims shall be laid before that
chamber. All appeals, including those from decisions of
the provincial court of appeals, must be brought before
the supreme court of the Empire.




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IV.—DEALINGS IN FUTURES ON EXCHANGES.

SEC. 50.—Future dealings in merchandise or securities
on the exchange shall be permitted by the board of
directors in accordance with the exchange regulations.
Thfc board of directors is authorized to recall the right
of future dealings in certain securities or merchandise.
The conditions of future dealings in merchandise or
securities must be determined by the exchange authorities
before extending the right of such transactions on the
exchange.
Prior to the granting of the right of transactions in
futures in merchandise, the board of directors of the exchange shall, in each individual case, consult representatives of that particular trade and inform the Imperial
Chancellor of the result. The granting of the right of
investments in futures can take place only upon the
declaration of the Imperial Chancellor that he sees no
reason for further inquiries.
The right of future dealings in securities may be granted
only when the aggregate nominal value of the securities
reaches the minimum amount of 20,000,000 marks.
Future dealings in shares of a domestic industrial enterprise may be transacted on the exchange only with the
consent of the company. The right of future dealings in
such shares may, at the request of the company, be recalled
not later than after the expiration of one year from the
date on which such request has been sent to the board of
directors of the exchange.
Further provisions concerning the granting of the right
of dealings in futures may be issued by the Bundesrat.




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SEC. 51.—Merchandise or securities, in which the right
of future dealings has been refused or revoked, shall not
be negotiated as futures on the exchange or through the
office of an exchange broker. If future negotiations deviate from the regulation laid down in section 50, paragraph
2, or if such negotiations are transacted in merchandise
or securities which are not included in the list of futures,
the board of directors shall order that such transactions
be prohibited on the exchange and that no broker shall
be allowed to participate in them. The board of directors may, however, suspend the issue of its order if
negotiations are conducted with regard to the inclusion of
the particular merchandise or securities in the list of
exchange futures. The maximum period of the suspension of the order shall not exceed one year.
Quotations (Kurszettel) for future dealings concluded
within the country may not be published or otherwise
circulated on the exchange, if, according to paragraph 1,
these futures may not be negotiated on the exchange or
through the office of an exchange broker.
SEC. 52.—Future dealings on the exchange which do
not infringe upon this law or upon the regulations of.the
Bundesrat shall be considered valid only if negotiated
according to sections 53 to 56.
SEC. 53.—The transaction is binding if both contracting
parties are merchants who are registered in the commercial register or whose registration is, according to section
36 of the "Handelsgesetzbuch," not required, or if both
parties are registered associations. Small traders, not
excepting those who are registered in the commercial




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register, are not included in the merchant class in the
accepted sense of the above provision.
The following are to be regarded as merchants to whom
the provision of paragraph i is to be applied:
i. Persons who at the time of, or prior to, the conclusion of the transaction have been engaged in the banking
business or in future dealings on the exchange, as well as
those who held the permanent right of admission to, and
of taking part on, the exchange on which the dealings in
the particular merchandise or securities are authorized.
2. Persons who at the time of concluding the transactions have neither domicile nor business establishment
within the country.
SEC. 54.—If one of the contracting parties in the transaction of securities is precluded by section 53 from engaging in future dealings on the exchange, while the second
party is either a merchant or an association of the nature
designated in section 53, paragraph 1, and in case the
latter party has obtained securities for the proper execution of the contract, this same party has a right to compensate itself out of the security, and the transaction is
equally binding for the latter party.
The security obtained for the proper execution of the
contract shall be used as indicated in paragraph 1 only
when the former consists of money or of listed securities,
and when the party which furnished the security declared
explicitly and in writing that the security is to cover eventual losses suffered by the other party on account of his
future dealings.




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The paper on which the above declaration is made shall
contain no other declarations of the party furnishing the
security.
If the furnished security consists of negotiable papers,
the latter must be specified in the declaration according
to their kind, number, or nominal value.
A declaration not containing such a description of the
securities is to be regarded as void.
Telegraphic communication is acceptable as written
declaration. An additional written declaration, however,
may be subsequently required.
Alterations made in the declaration, which do not affect
the nominal value of the furnished security, are exempt
from stamp duty.
SEC. 55.—The return of the consideration given in connection with the time bargain can not be demanded on the
ground of sections 52 to 54.
SEC. 56.—Claims arising out of time bargains may be
compensated from the consideration given in connection with other future dealings even in case such claims
can not, within the meaning of sections 52 to 54, be made
directly on the ground of the latter transactions.
SEC. 57.—A future dealing which is not prohibited on
the exchange is to be regarded as binding from the beginning, if at or after the time of maturity one of the parties
agreed to accept the consideration given by the other
party.
SEC. 58.—No objection against claims can be made on
the ground of sections 762 and 764 of the Civil Code® by




« These sections deal with gambling.
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persons for whom future dealings in the merchandise or
securities which are allowed on the exchange are binding according to sections 53, 54, and 57. Nor does such
objection affect the right of the other party to compensate itself, according to sections 54 and 56, from the consideration of that particular or other transactions.
SEC. 59.—The provisions of sections 52 to 58 are applicable also to a compact by which one party assumes
an obligation toward the other with the purpose of clearing, and particularly with the purpose of acknowledging,
a debt by means of future dealings permissible on the
exchange.
SEC. 60.—The provisions of sections 52 to 59 are applicable also to the issue and acceptance of orders, as well
as to combinations made with the purpose of concluding
nonprohibited future dealings.
SEC. 61.—The provisions of sections 52 to 60 are applicable also to transactions which have been concluded
or which must be carried out abroad.
SEC. 62.—In case of future dealings in merchandise, the
vendor is to be considered as breaking the contract if, after
due notice, he delivers goods not in accordance with the
agreement, even though the time for delivery has not yet
expired.
Any stipulation to the contrary is to be void.
SEC. 63.—Future dealings in stocks of mines or factories
are permissible only after the consent of the Bundesrat
has been gained.




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The Bundesrat is authorized to prohibit future dealings
in particular merchandise or to make such transactions
dependent upon certain conditions.
SEC. 64.—The transaction is not binding in case of
stocks of mines or.factories in which dealings in futures
are not permissible on the exchange (sec. 63, par. 1),
or in case of merchandise in which such transactions are
prohibited by the Bundesrat. (Sec. 63, par. 2.) This
provision applies also to the furnishing of security.
The return of the consideration can not be demanded
on the ground of the first part of paragraph 1.
SEC. 65.—Future dealings in farm products are prohibited.
SEC. 66.—Future dealings in farm products are not binding. This applies also to the furnishing of security.
The right of demanding the return of the consideration
on the ground of paragraph 1 shall be forfeited upon the
expiration of two years after the consideration has been
given, unless the person demanding the latter informed
the other party to that effect before the expiration of that
period.
SEC. 67.—The provisions of sections 60 to 66 are not
applicable to transactions in farm products if they are
contracted on terms approved by the Bundesrat or if the
following were the contracting parties:
1. Producers or manufacturers of the same kinds of
goods as those in which the transactions are made.
2. Merchants or registered associations trading in farm
products.




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Banking' Laws

The following stipulations must be explicitly stated:
i. That, in case of forfeiture, the nonnegligent party
shall not be able to refuse acceptance of the consideration
without giving the other party an adequate period for
supplying the consideration.
2. That only such goods must be delivered which, before
the declaration by the vender of his readiness to deliver
them, have been examined by sworn experts and found
fit for delivery.
3. That goods may be delivered not in accordance with
the agreement, if the reduction in the value of the goods
appraised by experts does not exceed a certain amount
and if the difference is returned to the buyer, or if the
excess value appraised by experts, in case of higher value,
is turned in to the vender.
SEC. 68.—The provision of section 66 is applicable also
to compacts concluded to the effect that the difference
which may arise between the prices of the farm products
at which they are sold and the exchange or market price at
the time of delivery shall be returned to the losing party.
This provision is valid even in cases when future dealings
are not forbidden on the exchange, as well as in cases when
the repayment of the eventual difference being the intention of one party, this intention is known or could be
known to the other party.
The provisions of sections 762 and 764 of the Civil Code
have no application to an agreement for the future delivery of farm products.
SEC. 69.—The provisions of sections 64, 66, and 68 are
also applicable to an agreement by which one party as-




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sumes an obligation toward the other party with the purpose of clearing, and particularly with the purpose of
acknowledging, a debt by means of future dealings which
are either prohibited on the exchange or are of the nature
specified in section 68.
SEC. 70.—The provisions of sections 64, 66, 68, and 69
are applicable also to the issue and acceptance of orders
as well as to combinations made with the purpose of negotiating futures which are either prohibited on the exchange
or are of the nature specified in section 68.
V.—IMPOSITION OF FINKS.

S E C 71.—Any person who concludes a time bargain in
farm products which was to his knowledge prohibited
on the exchange is to be subject to a fine not exceeding
10,000 marks.
SEC. 72.—The period of limitation for offenses punishable according to section 71 shall terminate upon the
expiration of three years after the date on which the
offense was committed. The provisions of sections 68
and 69 of the Penal Code shall be applicable.
SEC. 73.—The state governments shall establish committees with authority to direct proceedings and to impose
fines for offenses on the corn exchanges. The state
governments may appoint one common committee for
several exchanges.
SEC. 74.—Appeals can be made from the decision of
the committee by the state commissioner as well as by
the defendant. For this purpose an appellate committee
shall be appointed by the Bundesrat.




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SEC. 75.—The committees authorized to render decisions
must consist of five, and the appellate committee of seven,
members, including the respective chairmen. One half
of the members of the committee must be representatives
of commerce, the other half representatives of agriculture.
SEC. 76.—The chairmen of the committees and the
appellate committee must be either federal or state
officers.
The provisions concerning the manner of convening
the necessary number of members of the committees are
to be issued by the state governments.
The provisions concerning the manner of convening
the necessary number of members of the appellate committee are to be issued by the Bundesrat.
The office of a member of these committees is honorary.
The members shall have their traveling expenses defrayed.
The provisions of section 56 of the law of organization of
courts are applicable in so far as the president of the
appellate committee shall have the deciding voice.
SEC. 77.—Proceedings may be carried on only by the
committee of the exchange where the particular transaction has taken place.
If it is uncertain as to which of the committees is
competent to render decision in a particular case, the
question shall be determined by the chairman of the appellate committee.
SEC 78.—Notice of violation of the exchange laws may
be given to the cha : rman of the committee either in writing or verbally.
The authorities intrusted with the supervision and control of the exchanges shall bring to the notice of the




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chairman of the committee, any action which may be
subject to the penalty of a fine.
Persons suspected of having committed an action in
defiance of the prohibition of this law must, upon the
order of the state commissioner or the chairman of the
committee, produce a list containing all the transactions
concluded by them in farm products which are subject to
the duty specified under the tariff number 4b of the imperial stamp law of the 3d of June, 1906. (" Reichsgesetzblatt" p. 695.) The time to be covered by the list shall
be determined by the chairman. Besides the required
list of transactions, the defendants must also submit the
letters, in the original or in copies, sent and received in
connection with the transactions, as well as the accounts
and bills. (Section 12 of the imperial stamp law.)
SEC. 79.—The provisions of sections 11 and 12, paragraph 1, section 16, paragraphs 1, 2, 3, and 5, and sections
18 to 25, are applicable also to the proceedings of the
committees in so far as these proceedings are not affected
by the following provisions.
SEC. 80.—The decisions of the committees shall be rendered only by majority vote. Decisions which may be
necessary before the final trial shall be issued by the chairman. The proceedings may be dismissed only with the
consent of the state commissioner. The chairman may
require information from all public authorities.
SEC. 81.—The examination of witnesses and experts
shall be conducted according to sections 48 to 64, 66 to
80, and 82 to 86 of the "Strafprozessordnung."
The witnesses and experts may, upon the consent of the
state commissioner, be excused from taking an oath. The




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latter must, however, b e taken in the preliminary proceedings.
The district court of t h e locality where t h e witnesses or
experts have their domicile or temporary residence m a y ,
upon request of t h e committee, bring t o bear coercive
measures and also impose fines upon witnesses and experts
who ignore t h e subpoena of t h e committee or who refuse
either to testify or t o take oath.
SEC. 82.—In t h e course of proceedings t h e committee
m a y order t h a t t h e business books of t h e defendant be
produced for examination.
The defendant refusing t o comply with t h e above order
shall b e subject t o a fine which m a y n o t exceed 1,000
marks. Appeals brought from the imposition of such fines
shall b e subject t o t h e decision of the appellate committee.
The provision of paragraph 2 is applicable also t o t h e
refusal t o comply with t h e order designated in section 78,
paragraph 3.
S E C . 83.—Orders of t h e committees, t h e appellate
committee, a n d t h e chairmen must b e executed b y t h e
courts within t h e limits of their competence.
Appeal from t h e decision of t h e court m a y be m a d e in accordance with t h e provisions of the " Straf prozessordnung.''
S E C . 84.—The state governments are authorized t o
issue supplementary regulations regarding t h e proceedings in t h e courts of first instance, and particularly regarding t h e exaction of fines a n d costs in behalf of t h e state
treasuries.
Supplementary regulations regarding t h e proceedings
in t h e courts of second instance m a y b e issued b y t h e
Bundesrat.




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The exaction of fines and costs shall be carried out in
accordance with t h e provisions of t h e law concerning t h e
collection of duties and fines, of t h e 9th of June, 1895.
(" Reichsgesetzblatt," p . 256.)
S E C . 85.—A fine imposed according to section 71 is t o
be exacted in favor of t h e S t a t e in which t h e decision b y
t h e committee in the court of first instance was pronounced. The state treasury is to defray all costs which
m u s t not be returned by t h e defendant or which can not
be exacted from t h e latter.
S E C . 86.—The period of limitation for exaction of fines
imposed on t h e ground of section 71 is to terminate upon
t h e lapse of two years after t h e decision has become
final. Actions taken b y t h e proper authority for t h e
exaction of t h e fine remove t h e period of limitation.
SEC. 87.—Persons guilty of offenses designated in section 71 m a y be subject, besides t h e penalty of a fine, t o
reprimand as well as to temporary or permanent exclusion
from t h e exchange by t h e court of honor. (Sec. 10.)
V I . — P E N A L AND F I N A L

PROVISIONS.

SEC 88.—Any person who intentionally makes

use

of fraudulent means in order t o manipulate t h e exchange
or market prices of merchandise or securities shall be p u n ished with imprisonment, together with a fine which is
not to exceed 15,000 marks.

The offender m a y also be

deprived of his civil rights.
If extenuating circumstances exist, t h e fine alone m a y
be imposed.
The same penalty is t o be imposed upon any person
who intentionally makes false statements in t h e prospec-




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tus (sec. 38) or in public announcements purporting to
bring about subscription, purchase, or sale of securities.
SBC. 89.—Any person who, in reward for communications in the press purporting to bring about manipulation
of prices, affords or offers advantages which are evidently
out of proportion to the consideration, or any person who
accepts such reward or the promise for such reward, shall
be punished with imprisonment for a period not exceeding one year and fined a maximum amount of 15,000
marks.
The same penalty shall be imposed upon any person
who advisedly allows advantages to be afforded or promised him as a reward for suppression of communications
with the purpose of manipulating the prices on the
exchange.
The mere attempt at such offenses is punishable. If
there are extenuating circumstances, the fine alone may
be imposed.
SEC. 90.—Any person who, in defiance of the provisions
of sections 42, 43, 51, paragraph 2, publishes or in any
other way circulates lists of quotations (Kurszettel),
shall be liable to a fine not exceeding 1,000 marks, or to
imprisonment for a period not exceeding six months.
SEC. 91.—Any person, who has once been convicted
and fined for violation of section 71, and who contracts
for a second time future dealings in farm products, shall,
if found guilty, be punished with imprisonment and a
fine not exceeding 10,000 marks.
SEC. 92.—Any person who, with a mercenary object in
view and with the intention of manipulating the prices
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of farm products, concludes transactions falling within
the prohibition of section 68, shall be punished with
imprisonment and a fine not exceeding 10,000 marks.
Where extenuating circumstances exist, the fine alone
may be imposed.
SEC. 93.—The provisions of sections 78, paragraph 3,
and 82, paragraph 3, apply also to offenders named in
section 92.
SEC. 94.—Any person who, with a mercenary object
in view, induces other people to take part in exchange
speculations and thus takes advantage of their inexperience or indiscretion, shall be liable to imprisonment and
fined an amount not exceeding 15,000 marks. The
offender may also be deprived of his civil rights.
SEC. 95.—An agent who, in order to procure a pecuniary
advantage to himself or a third party, (1) either renders
advisedly wrong counsel or inaccurate information concerning the transaction to be concluded, and thus causes
pecuniary detriment to his client, or (2) acts intentionally
to the disadvantage of his client in carrying out the
orders or in settling the affairs of the latter, shall be liable
to imprisonment. The offender may also be fined an
amount not exceeding 3,000 marks and may be deprived
of his civil rights. Where extenuating circumstances
exist, the fine alone may be imposed.
A mere attempt to commit the offense designated
under (1) shall be punishable.
S E C 96.—The provisions of II and IV, as well as those
of section 88 concerning securities, are also applicable to
bills of exchange and foreign money.




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II. REGULATIONS FOR THE BERLIN EXCHANGE
OF DECEMBER, 1908.
I.—SUPERVISION AND ADMINISTRATION.
SECTION I.—The right of direct supervision over the
Berlin exchange shall be vested in the chamber of commerce in Berlin.
Notifying offices, clearing banks, clearing associations,
and similar institutions connected with transactions on
the Berlin exchange are subject to the supervision of the
same authority. The statutes of such institutions, as
well as their regulations concerning transactions on the
exchange, must be approved by the chamber of commerce. The statutes and regulations of institutions
already in existence shall remain in force.
SEC. 2.—The administration of the exchange shall be
carried on by the board of directors. This board shall
consist of 36 members, of whom 9 must be elected by the
chamber of commerce from among its members, and 27
by and from among the persons who have the permanent
right of transacting business on the exchange (sec. 15).
The financial administration of the exchange shall, in
accordance with the statutes of corporations, be in the
hands of the senior members of the city of Berlin, who
shall recommend to the board of directors and the board
of admission the necessary employees with the exception
of the recorders who are to be appointed by the chamber
of commerce.




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SEC. 3.—The election of the members of the board of
directors by the persons admitted to the exchange shall
take place in the month of December, for three calendar
years, by secret ballot and by a plurality of votes. In
case of a tie the election shall be decided by lot. Of the
27 members to be elected by the exchange members, 15
shall be elected from among those persons who have the
right of transacting business in the stock-exchange department, and 12 from among those who have the right of
transacting business in the produce-exchange department.
(Sec. 17, par. 1, sentence 2.) Members of the chamber of
commerce are not eligible. Four of the 15 members
elected from among the persons admitted to the stockexchange department and 2 of the 12 elected from among
the members of the produce-exchange department must
be senior merchants.
The election shall take place in the following two ways:
(1) Two ballots shall be used for the election of the
members of the stock-exchange department, one being
for the election of the 4 senior merchants and another
the election of the 11 remaining members, and (2)
three ballots shall be used for the election of the members of the produce-exchange department, one for the
election of the 2 senior merchants, another for the
election of 2 members engaged in the farm industry,
and a third one for the election of 8 members without
these limitations.
Of the members of the board of directors thus elected
5 of those representing the stock-exchange department
(par. 4) and 4 of those representing the produce-exchange
department (par. 4) shall retire annually.




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The list of electors shall be ready for examination in
the registrar's office eight exchange days before the
election. The time for such examination shall be announced by means of placards in the exchange halls. No
attention is to be paid to objections against the list of
electors which are received after the expiration of the
eight-day period.
The election shall take place upon the notification
given by the chamber of commerce by means of placards
in the exchange halls for a period of eight exchange days
and by means of advertisements in not less than four
Berlin newspapers.
The election of the members of the board of directors
by the chamber of commerce from among its members
shall take place in the month of December, for one calendar year, in the following manner: (3) Five members
shall be elected for the stock-exchange department, and
(4) four members for the produce-exchange department.
In case of resignation of some members elected in
accordance with paragraph 1, the board of directors may
cooptate new members for the remainder of the calendar
year. In case of the resignation of some members elected
in accordance with paragraph 6, the vacancies shall be
filled by members of the chamber of commerce.
SEC. 4.—The board of directors shall consist of two
sections: (1) The stock-exchange section, to which belong
the members specified in section 3, figures 1 and 3, and
(2) the produce-exchange section, to which belong the
members specified in section 3, figures 2 and 4.
In addition to the above number of the board of
directors, five representatives of agricultural and allied




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industries shall be elected, who shall participate in the
meetings of the board of directors dealing with matters
concerning the agricultural trade. The board of agriculture {Landes-Okonomie-Kollegium) shall nominate for
this purpose 10 persons, of whom 5 shall be elected for
three calendar years by the persons who have the right
of transacting business in the produce exchange department. (Sec. 2.) The election shall be carried out in accordance with the regulation of section 3, paragraph 1.
In case of the resignation of some members representing
agricultural and allied trades, the members of the board
of directors elected, in accordance with section 3, from
among the members of the produce exchange department,
shall fill out the vacancies by cooptation of new members
till the end of the term for which they are elected. The
board of agriculture {Landes-Okonomie-Kollegium) shall
nominate for this purpose twice the number of persons
to be elected and not less than five candidates.
SEC. 5.—The quorum of the general board of directors
of the exchange is to consist of 15 members; of the stock
exchange section, of 9 members; of the produce exchange
section, of 7 members; while the quorum of the section
representing the agricultural and allied trades is to consist of 9 members.
SEC. 6.—The board of directors and its sections shall
elect annually from among their members a chairman and
two deputies. These elections require the sanction of the
chamber of commerce.
The board of directors and its sections shall issue their
own standing orders. The latter require the approval of
the chamber of commerce.
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SEC. 7.—The particular functions of the board of
directors are as follows:
1. To control the enforcement of the laws and administrative regulations with regard to the exchange.
2. To maintain order on the exchange and to issue,
with the approval of the chamber of commerce, regulations
concerning the conclusion of transactions on the exchange.
3. To decide upon the granting of the right of admission to the exchange.
4. To enforce discipline on the exchange.
5. To nominate candidates for the election of the
exchange committee.
6. To grant the right of future dealings in merchandise
and securities on the exchange.
7. Tofixand announce the quotations and prices.
8. To determine the conditions of transactions on the
exchange.
9. To straighten out, in accordance with the business
regulations, all differences arising in connection with the
exchange transactions.
In so far as the functions pertain to the business and
the transactions of the separate departments of the exchange, they are to be discharged independently by
each individual section of the board of directors.
SEC. 8.—The board of directors of the exchange shall
elect annually from among its members a committee for
the purpose of examining applications for admission to
the exchange. The committee is competent to pronounce a final decision with regard to such applications,
if the decision is made unanimously.




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This committee is to discharge also the functions of
an investigation committee. (Cf. sec. 20.)
SEC. 9.—The board of directors of the exchange shall
elect annually from among its members a committee of
5 members and 8 deputies to act as arbiters, in a quorum
of 5 members, in controversies which are voluntarily
submitted to the committee for award. Further regulations concerning the procedure shall be issued together
with the standing orders of the general board of
directors.
SEC. 10.—The members of the board of directors of
the exchange are required to maintain order and decorum in the assembly rooms and in all other places of
the exchange.
Each member of the board of directors elected in
accordance with section 2, paragraph 1, is authorized
to remove at once from the exchange, without entering
into any explanation, any person who causes a disturbance or infringes on the rules relating to decorum of the
exchange, or who refuses to obey the order of a member
of the board of directors relating to the same effect.
The member of the board of directors who orders such
a removal shall render on the very same day a written
report to that effect to the chairman of the board of
directors.
The chairman is authorized, upon his examination of
the removed member, to debar the latter from admission
to the exchange during the pendency of the proceedings
instituted in accordance with sections 19 and 20.




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The board of directors of the exchange shall appoint
officers for the purpose of enforcing the instructions of
the members of the board of directors in regard to the
maintenance of order and decorum.
SEC. I I . — I n the decision of appeals brought either
against a section of the board of directors representing
the stock exchange or the produce exchange departments, or against the general board of directors, the
members of the chamber of commerce, who are also
members of the respective departments, and, in the
latter case, members of the board of directors, shall have
no vote. They are allowed, however, in all cases to
participate in the deliberations.
II.—TRANSACTIONS ON THE B E R U N EXCHANGE.

SEC. 12.—The function of the Berlin exchange consists
in facilitating transactions in the following merchandise
and securities:
i. Specie and noble metals, bank notes, paper money,
state or other negotiable papers, coupons, dividend warrants, bills of exchange, checks, drafts, and orders (stock
exchange department).
2. Corn, flour, malt, starch, sugar, seeds, rapeseed oil,
petroleum, spirits, and other products and merchandise
(produce exchange department).
III.—ADMISSION TO THE EXCHANGE—DISCIPLINARY
PROCEEDINGS.

SEC. 13.—Admission to the exchange shall be granted
to an applicant by the board of directors, upon the written
request of the former.




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Members of the exchange having the permanent right
of concluding transactions on the exchange (section 15)
shall receive, upon the payment of a fee, an exchange
card. New members shall receive an admission card. If
not otherwise provided, the cards shall be made out for
one calendar year, and shall be not transferable.
Members of the board of seniors (Aeltestenkollegium) and
the chamber of commerce, who take no part in the exchange transactions, officers of the chamber of commerce
and the association of merchants, as well as all persons
who, without taking part in the exchange or broking transactions, are authorized, in virtue of their offices, to be
present at the exchange meetings, shall be admitted to the
exchange without requiring special permission, and shall
receive an admission card free of charge. Exchange brokers must provide themselves, upon payment of a fee, with
an exchange card.
SEC. 14. The following are debarred from the exchange:
1. Persons of the female sex.
2. Persons deprived of civil rights.
3. Persons who in virtue of a judicial order are restricted
in the right of the disposal of their property.
4. Persons against whom a final conviction of fraudulent bankruptcy has been pronounced.
5. Persons against whom a final conviction of ordinary
bankruptcy has been pronounced.
6. Persons who are insolvent or who are representatives of one of the companies or associations named in
section 15, which are declared insolvent. Within the
meaning of this law, all debtors, who, instead of meeting




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their indisputable obligations, either make offers of
some kind of settlement to the creditors or leave their
mature and indisputable debts unpaid, shall be regarded
as insolvent. Liabilities which have been declared due
either by the final decision of the exchange arbitration
court or by the award of any other arbitration board
shall be regarded as indisputable debts.
7. Persons who have been excluded from the exchange
by a final or immediately enforceable decision of the court
of honor.
8. Persons who suffer from any disease which may involve danger to the members of the exchange or prove
detrimental to the business of the exchange.
Should any of the cases specified under figures 2 to 6
and 8 present itself after the granting of the right of admission, the exclusion shall take place only upon the decision of the board of directors.
Admission or readmission to the exchange can take place
in the cases designated under figures 2 and 3 only after the
debarring causes have been removed; in the case designated under figure 5, only upon the expiration of six
months after the enforcement of the legal decision or upon
its becoming void either because of the lapse of the period
of limitation or because of remission. In the latter case,
as well as in the case named under figure 6, the admission
may be granted only when the exchange board of directors
is satisfied that all obligations to the creditors have been
either fulfilled by payment or straightened out by remission or respite. A person who has been declared insolvent
or bankrupt for a second time is to be debarred from




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admission or readmission for a minimum period of one
year. In the case named under figure 4 the exclusion
can not be recalled. In the case designated under figure
6 the exchange board of directors may fix a minimum
period of exclusion.
In case of debarment of the principal or representative
of a firm in accordance with the regulations under figures
2 to 7, the other members or representatives of the same
firm may be deprived of their right of admission by the
decision of the board of directors.
SEC. 15.—Permanent admission to the exchange with
the right of transacting business shall be granted to those
adults who are registered as owners of a firm, as partners
of a commercial company, as members of the board of
directors of a joint-stock company, as personally liable
partners of a limited liability company or of a limited
liability stock company, as managers of a limited liability
company, or as members of the board of directors of an
association which is entered either in the commercial
register or in the association register of Berlin or its suburbs, as well as to members of the board of directors of
public banking institutions which are located either in
Berlin or in its suburbs.
Admission may be refused to the designated persons
who have fulfilled the requirements named in section 17,
only if such admission conflicts with the provisions of sections 14 and 17, paragraph 4, or if certain circumstances
are known to the board of directors of the exchange which
justify the suspicion that the applicant will be unable to
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business. In this case the rejection of the application
need not be accompanied with a statement of the reasons.
Authorized clerks or representatives of the business
may in certain cases be permanently admitted to the
exchange with the right of concluding transactions for
the persons specified in paragraph i of this section.
The board of directors of the exchange may grant to
other persons the right of admission and transacting business on the exchange, if such admission does not conflict
with paragraph 2 of this section, and if the prescribed requirements are complied with. The board of directors
may also recall such right at its own discretion.
SKC. 16.—The following persons may be admitted to
the exchange by the board of directors if such admission
does not conflict with the provisions of sections 14 and 17,
paragraph 4:
1. Commercial employees (authorized clerks, assistants,
unsalaried clerks and apprentices) of a person who is
authorized, in accordance with section 15, to attend the
exchange, of a broker, of one of the companies or associations named in section 15 and represented on the exchange
by at least one person who has the right of admission
according to section 15, or of a public banking institution
which is located either in Berlin or in one of its suburbs.
These persons may transact business on the exchange only
in the name and for the account of their employers.
2. Admission without the right of concluding transactions may be granted to (a) press reporters; (b) persons
engaged in a trade which is auxiliary to the exchange business; (c) messengers of the persons, etc., named under




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figure i; (d) other persons residing in Berlin or its suburbs;
{e) merchants and authorized clerks who do not reside in
Berlin or its suburbs and recommended by a person who
has the right of admission in accordance with section 15.
The last-named persons shall be supplied with a stranger's
entrance card which is to be valid for six weeks.
The right of admission shall be granted to persons named
under figures 1 and 2 c for a period of one calendar year;
to persons named under 2 e, for six weeks, while the right
of admission to the other persons shall be granted for an
unlimited period of time.
The board of directors may recall the right of admission
at its discretion. The board is required to recall the
privilege in case the admitted person participates in exchange transactions without his having any right to the
latter.
Adults, against whom no objection exists, may be admitted to the exchange without an admission card; but
not more than six times a year, if they are introduced
by persons having the right of admission according to
section 15, and after the names of both the introducers
and the introduced, the latter with particulars of calling
and residence, have been entered in the visitors' book at
the entrance to the exchange rooms.
S E C 17.—Applications for the right of admission to the
exchange must, in the cases designated in section 16, figures 1 and 2 c, be made by the employer; in all other cases
by the persons* seeking such admission. Persons who
apply for admission in accordance with section 15, shall
state in their application whether they wish to be entered




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as members of the stock exchange department or of the
produce exchange department, in order that their names
shall be enrolled in the proper list of electors. (Sec. 3.)
The applications in cases of sections 15 and 16, figures
2 a and 6, shall be provided with the signatures of three
guarantors who, in accordance with section 15, have held
the right of admission for at least two years; in the case of
press reporters, the application shall be provided with the
signatures of three guarantors who hold the right of admission as reporters; in the case of the traders designated
in section 16, figure 2fe,the application must contain the
signatures of three guarantors who are admitted to the
exchange in virtue of their trades. The application, together with the names of the guarantors, must be exhibited in the exchange rooms for a minimum period of eight
exchange days. After the expiration of this period the
guarantors must make the declaration which is to be entered in the records of the exchange that upon careful consideration they regard the applicant as a man who, in the
cases named in section 15, deserves the respect of his professional colleagues and the permanent admission to the
exchange with the right of participation in the exchange
transactions, or who, in the cases named in section 16,
figure 2 a and b, deserves the respect of persons attending
the exchange and the right of admission to the exchange.
Members of the board of directors of public banking institutions are not required to produce guarantors.
Members of the exchange who have been debarred from
the latter by the decision of the court of honor or the
exchange board of directors (see sees. 18 and 19) for a




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definite period of time, shall, after the expiration of the
fixed period, be readmitted to the exchange without any
application. Persons, who in compliance with section 15
or section 16, figure 2 a and 6, were granted the right of
admission to the exchange, but forfeited it either through
revocation or through exclusion for an indefinite period or
through any other reason (relinquishment, inability to
further comply with the requirements for admission, etc.)
and who apply for readmission, may be released by the
board of directors from producing guarantors.
Persons whose applications for admission to the exchange have been rejected may not renew their applications within a period of six months.
SEC. 18.—Should a person admitted to the exchange in
accordance with section 15 or section 16, figure 2 a and 6,
be excluded for a period of three months, or should his
right of admission be recalled, the board of directors of
the exchange is required to investigate whether at the
time of their recommendation the guarantors were or,
had they properly fulfilled the duty imposed upon them
by reason of their recommendation, could have been
aware of facts which were in conflict with the statements
made by them in their declaration. A guarantor found
guilty of such misdemeanor shall be temporarily or permanently deprived of the right of serving as guarantor, and
may, besides, be debarred from the exchange for a minimum and a maximum period of three days and three
months, respectively. No proceedings shall be instituted
against the guarantors if a period of over three years has
elapsed between the time of furnishing the guaranty and
the time of exclusion,




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In the cases named in section 16, figures i and 2 c, the
employer is required to see that the persons designated
in figure 1 shall transact business on the exchange only
in the name and for the account of the employer, and that
the persons designated in figure 2 c shall discharge only
their messenger duties.
If an employer who applied for the admission of his
employees was or could have been aware that they would
transact business for which they were not authorized, or
if he advisedly or through negligence suffered them to
transact such business, he shall be subject to the penalty
imposed on persons having the right of admission to the
exchange and committing one of the offenses specified in
section 19. If the employer is a company or an association, the penalty shall be imposed upon their representative or representatives who are admitted with the right
of transacting business on the exchange.
SEC. 19.—All persons attending the exchange are subject to the orders of the board of directors of the exchange.
The following shall be expelled from the meetings of
the exchange:
1. Any person who, in the rooms or in all other places
of the exchange, between the time of opening and the
time of closing the entrance doors, (a) insults a person
who has the right of admission to the exchange or an
official employee of the latter; (b) excites a tumult,
causes a disturbance, hinders the business on the exchange, or acts contrary to the order of a member of the
board of directors; (c) refuses to obey the order of the
exchange official to leave the exchange after the close of
business.
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2. Any person who, in cases under the jurisdiction of
the board of directors, fails without excuse to appear on
the summons of the latter or of its committee, either as a
witness or as a defendant in disciplinary proceedings, or
who either refuses to testify or advisedly gives false
testimony.
The period of exclusion shall be not less than three days
and not more than one year.
In lieu of expulsion from the exchange, the board of
directors may either reprimand or impose a fine of not less
than 50 and not more than 1,500 marks. The amount
received shall be used for the purpose of aiding necessitous persons among those attending the exchange.
SEC. 20.—Before the issue of an order for expulsion
from the exchange, for recall of the right of admission, for
deprivation of the right of serving as guarantor, for reprimand, or the imposition of a fine, the person concerned
shall be summoned before a recorder and the investigation
committee of the board of directors of the exchange.
The defendant shall be informed of the decision. If the
address of the defendant is unknown, the subpoena, as
well as the decision, shall be exhibited in the exchange
rooms for eight exchange days.
SEC. 21.—The decisions referred to in section 20, paragraph 1, may be made public, upon the order of the board
of directors, by exhibition in the exchange rooms for eight
exchange days.
SEC. 22.—Appeals may be made to the chamber of
commerce from the rejection of an application for admission to the exchange, as well as from the decisions referred




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to in section 20, paragraph 1, and section 21, within a
period of one week after the decisions have been served
on the appellants.
IV.—THE COURT OF HONOR.

SEC. 23.—The court of honor of the Berlin exchange
shall consist of 5 members and 7 deputies, and shall be
elected by and from among the members of the chamber
of commerce for a period of three calendar years. Any
vacancy occurring during this period shall be filled by a
substitute to be elected by the chamber of commerce for
the remainder of the period. In addition to the above
members and deputies, the chamber of commerce shall
also elect a recorder, who is to be present at the conferences
of the court of honor with an advisory voice.
The quorum of the court of honor shall consist of 5
voting members.
The board of directors of the exchange shall be notified
of all decisions which have become final or which have
been declared immediately enforceable on the ground of
section 16, paragraph 4, of the exchange law.
In case of temporary expulsion of a member from the
exchange, the beginning of the period of exclusion shall
be determined by the board of directors, if the court of
honor has not availed itself of the power conferred upon
it by section 16, paragraph 4, of the exchange law.
V . — T H E BOARD OF ADMISSION.

SEC. 24.—The board of admission of the Berlin exchange shall consist of not more than 28 and not less
than 22 members, as well as of not more than 10 and not




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less than 8 deputies. At least one-half of the members
and one-half of the deputies shall be elected from among
persons who are not piofessional exchange dealers in
securities. Five of the members shall be elected from
among those of the chamber of commerce and 6 from
among the senior merchants.
The members shall be elected for a period of three calendar years by the chamber of commerce. Any vacancy
occurring during this period shall be filled by a substitute
to be elected by the chamber of commerce for the remainder of the period.
The quorum of the board of admission shall consist of
9 members.
SEC. 25.—The board of admission shall elect annually
from among its members a chairman and two deputies.
These elections must be approved by the chamber of
commerce.
The board of admission shall issue its own standing
orders, which must also be approved by the chamber of
commerce.
SEC. 26.—Applications for the listing of securities on
the exchange can be made only by firms which are located
either in Berlin or in one of its suburbs.
SEC. 27.—Appeal may be made to the chamber of commerce from the decision of the board of admission rejecting
the application for the listing of a new emission. In
order to be considered, such appeal must be made within
two weeks after the appellant has been notified of the
decision. The chamber of commerce shall submit a copy
of the appeal to the board of admission.




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Members of the chamber of commerce belonging to the
board of admission may participate in the deliberations
of the former in regard to appeals from the decisions of the
board of admission, but they may have no vote.
VI.—INVESTMENTS IN FUTURES.

SEC. 28.—Future dealings in merchandise or securities
shall be allowed on the exchange only after the application for their listing has been announced for two weeks by
means of placards in the exchange rooms.
The result of the investigation instituted, in accordance with section 50, paragraph 3, of the exchange law,
before the listing of the merchandise on the exchange
shall be communicated to the Imperial Chancellor through
the Minister of Commerce and Manufacture.
The Minister of Commerce and Manufacture is to be
notified of the listing of merchandise or securities on the
exchange.
Finally, for the purpose of obtaining the approval of
the Bundesrat, the Minister of Commerce and Manufacture shall be informed of the business conditions in regard
to the transactions specified in section 67 of the exchange
law.
VII.—QUOTATIONS AND PRICES.

SEC. 29.—The official quotations and prices shall be
fixed in the name of the exchange board of directors by
one or several members of the latter board.
The names of the authorized members shall be announced by means of placards in the exchange rooms.
In case the members are prevented from discharging their




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duties, the fixing of prices shall be effected by other members of the board of directors.
The fixing of prices of farm products shall be effected
with the cooperation of at least two members of the
board of directors who have been elected as representatives of agriculture and allied industries. The control
of the fixing of prices shall lie in all cases in the hands
of one member of the board of directors who has been
elected in accordance with section 2, paragraph 1. In
case of the cooperation of several members in the fixing
of the prices, the control shall be transferred to the eldest
member. Differences of opinion shall be decided by
majority vote. In case of a tie the vote of the senior
member shall be decisive.
SEC. 30.—The board of directors shall determine, with
the approval of the chamber of commerce, on what days
and at what intervals the fixing of. the prices and quotations shall take place. The approved decision shall be
announced by means of placards in the exchange rooms.
SEC. 31.—The fixing of prices shall be effected imme-.
diately after 2 o'clock, and on Saturday immediately
after 1.30, in the rooms designated for that purpose. The
exchange brokers shall, on the days on which prices or
quotations are to be fixed for their branch of business, be
present in the designated rooms punctually at 2, and on
Saturdays at 1.30 p. m., and remain there until dismissed
by the officiating members of the board of directors.
The exchange brokers must give all information to the
best of their knowledge which may be necessary in connection with the fixing of quotations and prices.




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If doubts or differences arise in that regard the member
of the board of directors to whom the control of the fixing
of prices and quotations is transferred is authorized to
demand an explicit and recorded declaration of the exchange brokers, who must be reminded of their oath; he
is also authorized to test at his discretion the veracity
of the brokers by examining their daybooks or by availing
himself of any other means he may deem fit. The exchange brokers have a right, when submitting the daybooks, to withhold the names of their clients.
The quotations and prices to be fixed shall be determined solely by the board of directors, and it is left to
them to acquire the necessary information, outside of what
is furnished by the exchange brokers, either by looking
into the transactions concluded in conformity with the
exchange regulations or by examining the prices offered
or demanded.
The records of the fixing of quotations and prices shall
be kept by the exchange secretaries.
No quotations or prices shall be officially fixed for transactions concluded after 2 o'clock, and on Saturday after
1.30.

SEC. 32.—The official list of quotations of various kinds
of farm products (wheat, rye, barley, etc.) in which the
main exchange transactions are to be concluded shall
specify the prices for domestic and imported goods and
state whether the latter belong to an old or new harvest,
with the distinctions of quality, color, odor, dryness, etc.,
so far as such distinctions can be made.




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S E C . 33.—As far as can be ascertained, t h e prices actually paid shall be fixed for each of t h e farm products
quoted in accordance with section 32.
If t h e quotations are m a d e only for negotiations of particularly small quantities, or if there are other special
conditions, a statement is to be m a d e to t h a t effect,
together with the issue of the list of quotations.
SEC. 34.—Immediately after t h e prices have been fixed,
t h e official exchange list of t h e Berlin stock exchange
and the official merchandise report, which m u s t be prepared in conformity with t h e recorded minutes, shall be
printed, and, upon being certified with the s t a m p of t h e
proper section of the board of directors of t h e exchange,
shall be published on the same afternoon.
The decision relating to t h e necessity and t h e m a n n e r
of making other announcements in regard to t h e quotations a n d prices shall be left to t h e authority of the board
of directors of t h e exchange.
V I I I . — G E N E R A L PROVISIONS.

SEC. 35.—The offices of the members of the board of
directors of the exchange, of t h e court of honor, and of
the board of admission shall be honorary.
S E C . 36.—Exchange meetings shall take place in t h e
exchange building belonging to t h e Corporation of Merchants of Berlin. I n case of eventual changes, t h e place
for t h e exchange meetings shall be determined b y t h e
chamber of commerce with t h e approval of t h e Minister
of Commerce and Manufacture.




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SBC. 37.—Exchange business shall be transacted every
day, with the exception of Sundays and holidays, from
12 to 3 p. m., and on Saturdays from 12 to 2 p. m.
New hours, and consequently changes in the hours
fixed in section 37, paragraph 1, may be decided upon by
the board of directors, with the approval of the chamber
of commerce. The decision shall go into effect after it
has been announced for eight days by means of placards
in the exchange rooms and inserted three times in not
less than four Berlin newspapers.
The board of directors is authorized to cancel certain
exchange days or to curtail the meeting hours on certain
days.
SEC. 38.—The beginning and the close of the exchange
hours shall be made known by a bell.
If, according to custom, the validity of notices or of
declarations is conditioned by their being made during
the exchange hours, the termination of the period may,
by the order of one of the sections of the board of
directors, be made known by a bell.
SEC. 39.—Announcements, other than those coming
from the chamber of commerce, of the senior merchants,
the board of directors of the exchange, and the board
of admission may be made by means of placards in the
exchange rooms, provided the board of directors of the
exchange finds such announcements suitable in form
and contents and in conformity with the purpose of
the exchange business and with the general business
interests.
Official announcements shall be certified by an exchange
official.




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SEC. 40.—The state commissioner is to be invited to
all meetings of the exchange board of directors and its
sections, as well as of the board of admission.
The Chamber of Commerce in Berlin.
(Signed.)
FRANZ VON MENDELSSOHN.
BERLIN, December 7, 1908.
The above exchange regulations are approved.
Minister of Commerce and Manufacture.
(Signed)
DELBRUCK.
BERLIN, December 23, 1908.
The above exchange regulations shall go into effect on
the 2d of January, 1909.
The Chamber of Commerce in Berlin.
(Signed.)
FRANZ VON MENDELSSOHN.
BERLIN, December 31, 1908.




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III. ANNOUNCEMENT CONCERNING THE LISTING
OF SECURITIES ON THE EXCHANGE, BERLIN,
1896.
The following provisions regarding the listing of securities on the exchange were enacted by the Bundesrat on
the ground of section 42 of the exchange law of June 22,
1896:
SEC. I.—Securities may be listed on the exchange only
when the total nominal value of the stock to be put into
circulation amounts to a minimum sum of 1,000,000
marks in case of the exchanges in Berlin, Frankfort-onMain, and Hamburg, and to a minimum sum of 500,000
marks in case of all other exchanges.
The supervising authorities of the exchanges in Berlin,
Frankfort-on-Main, and Hamburg may, in special cases,
allow the listing of securities of a minimum total value of
500,000 marks, provided the stock is of importance only
for the industrial district in which the exchange is located.
The state governments may under similar conditions
allow the listing of securities of a total value of less than
500,000 marks on any other exchange.
The limitation mentioned in paragraph 1 does not apply
to securities issued by a municipality, a company, or an
individual, whose other securities have already been listed
on the same exchanged
(a)

SUPPLEMENTARY ANNOUNCEMENT CONCERNING THE LISTING OP SECURIT I E S ON THE EXCHANGE, OF NOVEMBER 20,

1900.

The Bundesrat resolved to supplement the last paragraph of section 1
of the announcement concerning the listing of securities on the Exchange
of December 11, 1896, as follows:
" If, in consequence of the relinquishment of a portion of the capital of a
company whose shares have been listed on the exchange, the total value




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SEC. 2.—Shares or interim certificates of a stock company or of a limited liability stock company shall be listed
on the exchange, provided the value of each share amounts
to at least i ,000 marks.
The last limitation does not apply to shares and interim
certificates, the face value of each of which, owing to the
state legislation concerning stocks, is less than 1,000
marks.
Foreign shares and interim certificates of a smaller face
value shall be listed only with the consent of the state
government.
SEC. 3.—The listing of securities is conditioned by the
following requirements:
1. That the securities be fully paid up.
2. That their face value be in the German standard or
in the latter together with some foreign standard.
3. That the interest and dividends, as well as the shares,
which are either drawn in lottery or recalled, be payable
in a German exchange city, and that the new coupons be
issued there free of charge.
The requirement named under figure 1 is not applicable
to shares and interim certificates of insurance companies.
In certain cases the board of admission may disregard
the requirements named under figures 1 to 3. The state
commissioner shall be notified of the granted exceptions
and the reasons for them.
of the stock falls below the minimum fixed in section i, the board of admission may in certain cases allow the relisting of the shares.
" (Signed)

G R A F VON POSADOWSKY,

Imperial
"BERWN, November 20, 1900."




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In the case of exception from the requirement named
under figure 2, the board of admission shall fix the rate
at which the foreign standard shall be computed in the
German standard which is to be adopted on the exchange.
SEC. 4.—Applications for the listing of securities on the
exchange must be made in writing to the board of admission. The application must contain the particulars which,
according to section 38, paragraph 1, of the exchange
law, are required for the announcement of the application.
The application must be submitted together with the
prospectus and the vouchers required in section 8. The
prospectus must bear the signatures of the persons
issuing it.
If the applicant is excused from submitting a prospectus (sec. 38, pars. 2 and 3 of the exchange law), no
voucher shall be required.
SEC. 5.—The prospectus must state:
1. The name of the municipality, company, or person
whose securities are to be listed on the exchange.
2. The legal titles (law, charter, agreement, and decision
of the company, etc.) on the basis of which the securities
have been issued.
3. The special purpose for which the profit of the emission may be intended.
4. The nominal amount of the issue, i. e., both the
amount to be put into circulation and the amount to be
provisionally kept out of circulation, as well as the period
for which the latter amount will be reserved. (Sec. 38,
par. 2, sentence 3, of the exchange law.)
5. The characteristic features (the amount, series, and
numbers) of the individual securities, and whether they




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are to be registered in the name of the holders or to be
issued to bearer.
6. The nature of the securities in regard to their liquidation and redemption.
7. The kind of guaranty furnished for the capital,
interest, and dividends, as well as an adequate description
of the nature of the guaranty.
8. The advantages of the newly issued securities over
the old ones and vice versa (preferred bonds, preferred
stocks, etc.).
9. The abatements or limitations made at the payment
of interest, dividends, or capital.
10. The places and the times at which the interest,
dividends, and capital shall be disbursed, as well as the
period of limitation for claims to interest, dividends, and
capital.
11. The rate to be computed in case of section 3, paragraph 4.
SEC. 6.—Besides the above statements, the prospectus
must also contain the following:
(A) In case of loans of a foreign state, a foreign municipal corporation or municipal credit institution:
1. An abstract of the last (ordinary and extraordinary)
financial report of the municipality or a statement that
ho such report has been published by the municipality.
2. A review of the essential results of the financial
affairs of the municipality during the last three years.
3. A report of the state of indebtedness of the municipality.
4. A description of the circumstances in case of failure
on the part of the municipality to meet the obligations




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in regard to the payment of capital or interest and arising
out of a loan negotiated within the last ten years in
accordance with the conditions of public loans.
(B) In case of shares or bonds of an industrial enterprise :
i. A description of the object and the extent of the
enterprise.
2. A statement of the privileges extended to the enterprise, their duration, and the particular conditions upon
which they were granted.
3. A statement of the rights possessed by another
party as over against the entrepreneurs.
4. An account of the interruption in the work or the
stagnation of trade which may have taken place within the
last three years and which have diminished for a considerable length of time the proceeds of the enterprise.
5. A statement of the rights of the bondholders as over
against the bond issuers.
(C) In case of certificates of indebtedness and mortgage
bonds:
1. A description of the fundamental principles on which
the appraisal of the property and the issue of the loan have
taken place.
2. A statement of the maximum amount of certificates
of indebtedness or mortgage bonds which may be issued on
the basis of the loaned capital or the pledge.
3. A statement of the amount of the mortgage bonds
and certificates of indebtedness which were in circulation at
the close of the last calendar year.




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4. A statement of the principal rights of the bondholders
as over against the issuers. (The appointment of a depositary, the right to dead pledges, etc.)
5. A statement of the right of supervision to be exerted
by the State, the municipality, etc.
SEC. 7.—In the case of shares or bonds of a joint-stock
company or a limited liability stock company, the prospectus must contain, in addition to the statements required in
sections 5 and 6, the following:
1. A description of the enterprise.
2. The date of registration in the Commercial Register.
3. The amount of the stock capital.
4. The method of appointment and organization of
the boards of directors and supervisors, as well as a list
of the names of the members in office.
5. The method of calling a general meeting of the
shareholders.
6. The method of making public announcements.
7. The annual financial report of the company.
8. The regulations concerning the preparation of the
balance sheet, the accumulation of the reserve fund, the
division of profits, the right to vote, and the right of sale
of the shares by the shareholders. In case of domestic
companies, the reference to the corresponding provisions
of the Commercial Code, in so far as these have not been
altered by the stipulations of the company, shall be
adequate.
9. The special advantages granted to individual shareholders in so far as these advantages refer to the right of
sale or the redemption of the shares.




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10. If two years have n o t y e t expired since the registration of t h e company in t h e Commercial Register, t h e
account of t h e advantages granted to individual shareholders a n d n o t included in figure 9; a description of t h e
plant a n d other property acquired or t o be acquired by
the company; an account of t h e deposits for stock made
by t h e shareholders a n d n o t paid in cash; a statement of
the total amount of expenses incurred b y the company, in
the form of indemnity or reward to shareholders or other
persons, on account of t h e organization of t h e company.
11. A statement of t h e amount of dividends distributed
during t h e previous five years.
12. T h e balance sheet for t h e last business year, together with t h e profit a n d deficit accounts, or, if t h e first
business year of t h e company has n o t yet expired, an
account of t h e assets and liabilities.
13. T h e a m o u n t of t h e mortgage debts a n d loans, their
maturity, a n d t h e method of redemption.
14. T h e right of sale of t h e shares exercised b y t h e
first subscribers a n d other persons.
The above provisions are applicable to t h e bonds of all
limited liability companies.
SEC. 8.—There must also be submitted:
1. W i t h each application for listing, proof of t h e legal
title forming the basis of the issue (sec. 5, fig. 2), as well as
a statement of t h e relation of t h e latter issue to t h e
previously issued securities. (Sec. 5, fig. 8.)
2. I n case of an application for t h e listing of a loan of
a foreign state, a foreign municipal corporation, or a
municipal credit institution, proof t h a t t h e statements
83702—10




19

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furnished in accordance with section 6, A, figures i to 3,
are based on official data.
3. In case of an application for the listing of securities
of an enterprise based on a franchise, the certificate of
the latter or an abstract therefrom containing the particulars required in section 6, B, figure 2.
4. In case of an application for the listing of shares or
bonds of a stock company or a limited liability stock
company:
(a) Proof of registration in the Commercial Register.
(b) The stipulations of the company.
(c) The last financial report.
(d) If two round years have not yet expired since the
registration of domestic companies in the Commercial
Register, the report made, in accordance with article 209 h
of the Commercial Code, by special auditors.
These vouchers must be submitted in authentic form
to the board of admission. Vouchers drawn in any other
than the German, English, or French languages must be
submitted together with an authenticated translation.
SEC. 9.—The requirements named in section 6, A, figures 1 to 3, and in section 8, figure 2, need not be enforced
in the case of loans of foreign states whose financial position is universally known to be of such high standing that
no further information designated in section 36, paragraph
3 b, of the exchange law, is required by the public. In the
case of bonds of municipalities, companies, or individuals,
which are guaranteed by such states as mentioned above,
the requirements named in section 6, A, figures 1 to 3,
section 6, B, figures 2 to 4, section 7, figures 2, 4 to 10 and
12, and section 8, figures 2 to 4, need not be enforced.




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These exceptional privileges must not be granted in the
case of the provisions of section 6, A, figure 4, relating to
foreign states.
The state commissioner must be notified of the granted
exceptions and their reasons.
SEC. 10.—Upon the receipt of the application for listing,
the board of admission shall authorize the publication of
the former, provided it has been submitted in compliance
with the requirements of section 38, paragraph 1, of the
exchange law.
The publication shall be made, at the cost of the applicant, in the " Reichsanzeiger " and at least in two other
German newspapers. The latter are to be determined by
the board of admission, and must include one paper which
is published in the city where the exchange is located,
and in the case of shares or bonds of a domestic stock
company or limited liability stock company, one paper
published in the immediate commercial district to which
the company belongs. The application must also be
made public by means of placards in the exchange rooms.
SEC. 11.—As soon as the publication is authorized, the
board of admission shall at once proceed to examine the
prospectus, which must contain all the particulars required
in sections 5 to 7. Should any doubt arise as to the completeness or lucidness of the statements, the board shall
require the applicant to make the necessary alterations.
The board shall further decide, in accordance with section 36, paragraph 3 a and b, of the exchange law, what
other particulars shall be inserted in the prospectus, or
what other documents must be submitted for examination, and shall notify the applicant accordingly.




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Should the applicant fail to comply with these requirements, the application shall be rejected, subject, however,
to the right of appeal according to the regulations of the
exchange.
SEC. 12.—A minimum period of three days must
elapse between the publication of the application in the
newspaper of the city where the exchange is located and
the decision of the board.
SEC. 13.—The board of admission shall examine all
statements made to it as a result of the publication of
the application, and take into consideration the conditions specified in section 36, paragraph 3c, of the exchange law.
The decision in favor of the listing must specify the
date on and after which the listing on the exchange may
take place, in accordance with the provisions of section
38, paragraph 1, sentence 2, of the exchange law.
The decision shall be announced for three days by
means of placards in the exchange rooms.
The vouchers (section 8) shall be publicly exhibited
in the exchange rooms from the time of publication of
the decision until the actual listing on the exchange.
SEC. 14.—The applicant must secure the publication
of the prospectus in the same newspapers, with the exception of the " Reichsanzeiger," in which the application
for the listing was published.
SEC. 15.—Listed securities may be introduced on the
exchange not before the third week day after the decision
in favor of their being listed and after the date on which
the prospectus was first published.
Imperial Chancellor,
(Signed)
I. V. VON BOTTICHER.
BERLIN, December 11, 1896.




286

IV. PROVISIONS CONCERNING BROKERS ON THE
BERLIN EXCHANGE, JULY, 1906.
[Official Gazette (" Amtsblatt")

of the Royal Government in Potsdam and the city of
Berlin for 1906, p. 427.]

Pursuant to section 30, paragraph 2, and section 32,
paragraph 1, of the exchange law of the 22d of June, 1896,
I hereby ordain, in lieu of the repealed provisions of the
4th of December, 1896, and the supplement thereto of
the 29th of December, 1900, concerning the brokers on the
Berlin exchange, the following:
I. APPOINTMENT AND REMOVAL OF BROKERS.

I.—Brokers shall be appointed by the lord
lieutenant (Oberprdsident) of the Province of Brandenburg and the city of Berlin, upon whose order the state
commissioner at the Berlin exchange shall administer an
oath binding the said brokers to discharge faithfully the
duties incumbent upon them (section 30, paragraph 1,
sentence 3, of the exchange law).
SEC. 2.—Before any appointment is made the chamber
of commerce and the chamber of brokers shall be consulted. They shall submit their opinions to the lord
lieutenant through the state commissioner, the chamber
of commerce being required to previously consult the
board of directors of the exchange.
SEC. 3.—The appointed broker, after being sworn in,
shall receive a certificate of appointment issued by the
lord lieutenant.
SECTION




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SEC. 4.—A broker may be removed if he proves guilty
of any gross breach of duty or if by his behavior in his
official capacity or otherwise he shows himself unworthy
of the respect, prominence, and confidence which his calling
bestows upon him, or if he is incapacitated from discharging his official duties for a long time. The removal shall
take place upon the order of the lord lieutenant, after the
chamber of commerce and the chamber of brokers have
been consulted. In urgent cases the state commissioner
is authorized to temporarily prohibit the broker from
exercising his functions.
SEC. 5.—The right of attending the exchange shall go
with the appointment of a broker.
SEC. 6.—.Each broker is required to recommend a
deputy to represent him during leave of absence or in
the event of his being hindered by illness from attending
his duties. The chamber of brokers may, under special
circumstances, release the broker from this obligation.
The regulations of sections 1 to 5 are applicable to
deputies with the limitation that the appointment is only
for a definite period. During the time of official capacity
the deputies shall exercise all the rights and duties of
brokers (sections 23 to 26, and 28 to 33).
The authority of the deputy shall be canceled by the
declaration to that effect of the broker whom the former
represents. The broker shall in due time give notice
thereof to the chamber of brokers, which shall in its turn
notify the lord lieutenant, the state commissioner, and
the board of directors of the exchange.




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T H E CHAMBER OF BROKERS.

SEC. 7.—The brokers shall be represented by a chamber of brokers.
The chamber of brokers shall consist of 13 members and
6 deputies, of whom 11 members and 5 deputies shall be
elected by the brokers of the stock exchange department
from among their members, and the remaining 2 members
and 1 deputy by the brokers of the produce exchange
department from among their members.
The members elected by the produce exchange brokers
shall take no part in business concerning the stock exchange department exclusively. The deputies shall be
convened by the chairman of the chamber according to
standing orders of the latter.
SEC. 8.—Members shall be elected to the chamber of
brokers for a period of four years. After the expiration of
two years, 6 members and 3 deputies of those elected
from among the brokers of the stock exchange department and 1 member of those elected from among the
brokers of the produce exchange department shall resign.
The remaining 5 members and 2 deputies elected from
among the brokers of the stock exchange department, as
well as the remaining member and deputy elected from
among the brokers of the produce exchange department,
shall resign after the expiration of the next two years.
Retiring members of the chamber are eligible for reelection. They shall remain in office until the newly elected
members assume their duties.
SEC. 9.—The time and the manner of election to the
chamber of brokers shall be fixed by the executive board
of the chamber.




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If legal proceedings are instituted against a broker
which may result in his disqualification from public office,
or if proceedings before the court of honor be pending
against him, or if he be prohibited from exercising his
functions, that broker shall be deprived of the right of
vote and shall lose his eligibility for election.
Unless the electors unanimously decide otherwise, the
election of the members to the chamber of brokers shall
take place by secret ballot.
Candidates shall be elected by a majority vote.
If no absolute majority has been obtained, a second
ballot with the names of those candidates who have
received the larger votes, these names not exceeding
twice the number to be elected, shall take place. The
candidates receiving at the second ballot the larger number of votes shall be declared elected.
Objections against the validity of the election shall be
submitted to the chamber of brokers within eight days
after the announcement of the result. An appeal from
the decision of the chamber of brokers may be made to
the lord lieutenant.
SEC. IO.—If a member of the chamber of brokers
resigns more than three months before the expiration of
the period for which he was elected, the chamber of
brokers shall cooptate a new member till the next election,
from among the deputies.
At the next election the place of the retired member, if
the period for which he was elected has not yet expired,
shall be filled by a member elected to office for the remainder of the period.




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If the period for which the retired member was elected
has expired, a new election shall take place.
SEC. I i.—The board of directors of the chamber of
brokers shall consist of a chairman, vice-chairman, secretary, assistant secretary, and treasurer.
The board of directors shall be elected by and from
among the members of the chamber of brokers.
SEC. 12.—Minutes shall be kept of the meetings of the
chamber of brokers and its board of directors, as well as
of the election proceedings, and shall be signed by the
chairman and the secretary.
The results of the elections of members to the chamber
of brokers and the board of directors shall be communicated to the lord lieutenant, the state commissioner, the
chamber of commerce, the senior merchants, and the
board of directors of the exchange, and shall be announced
by means of placards in the exchange rooms.
SEC. 13.—The following are the duties and powers of
the chamber of brokers:
1. The exercise of supervision over brokers, which must
not interfere with the authority of the state commissioner, the chamber of commerce, and the board of directors of the exchange.
2. The assignment of business to the individual brokers.
3. The settling of differences of brokers upon the application of the latter.
4. The settling of differences between brokers and their
clients upon the application of the latter.
5. The rendering of opinion when required by state
authorities.




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SEC. 14.—The chamber of brokers may intrust individual members, or commissions formed from among
its members, with the preparation or settling of specific
affairs.
SEC. 15.—The board of directors shall administer the
business of the chamber of brokers.
Its particular duties shall be as follows:
1. To represent the chamber of brokers in its affairs
with a third party.
2. To administer the revenue and expenditures, as well
as the investments and liquidations of the chamber of
brokers and to submit annual reports of its administration
to the chamber of brokers.
3. To arrange, convene, and conduct the meetings of
the chamber of brokers, and to procure the execution of
their decisions.
4. To appoint and superintend the employees required
in connection with the management.
5. To submit to the state commissioner and the chamber
of commerce annual reports of the activities of the chamber of brokers. The reports shall also be submitted to
the senior merchants and to the board of directors of the
exchange in as many copies as there are members, and also
to each exchange broker.
SEC. 16.—Declarations of the board of directors, and
particularly those made in behalf of the chamber of
brokers, require the signatures of the chairman or his
deputy and of one other member of the board of directors.
Written declarations must be provided with the official
seal.




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Declarations which are to be made to the chamber of
brokers shall be taken into consideration if delivered to
one member of the board of directors.
SEC. 17.—The office of the members of the chamber of
brokers shall be honorary. Cash outlays incurred by the
members shall be refunded to them.
SEC 18.—The chamber of brokers shall be convened if
either the state commissioner, the chamber of commerce,
the senior merchants, the exchange board of directors, 5
members of the chamber of brokers, or 20 brokers file an
application to that effect, stating the agenda.
SEC. 19.—Notice to attend the meetings of the chamber
of brokers and the board of directors shall be given in writing by the chairman or vice-chairman. The state commissioner shall also be notified of the meetings to take place.
The state commissioner shall also be informed of the
agenda. Decisions on all matters, with the exception of
a mbtion for a new meeting of the chamber, shall be valid
only if not more than 2 members of the chamber of brokers
have voted against them.
The state commissioner is empowered to participate
with an advisory voice in the meetings of the chamber of
brokers and its committees.
S E C 20.—The quorum of the chamber of brokers as well
as of the board of directors must consist of more than half
of the voting members. If no decision can be adopted
because of the want of a quorum, a new meeting shall be
called to take place not earlier than the next day, and the
cause for such a meeting shall be stated in the call. The
new meeting may pronounce its decision, provided it is
attended by at least 3 members.




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SEC. 21.—Decisions of the chamber of brokers and of the
board of directors shall be adopted only by a majority
vote. In the case of a tie, the vote of the chairman shall
be decisive. Members who have personal interest in the
decision shall have no vote. In all other respects, the
chamber of brokers and the board of directors shall make
their own standing orders.
SEC. 22.—At the beginning of each year an account of
the revenue and expenditures of the chamber of brokers
must be drawn up by the treasurer and approved by the
chamber. The costs incurred may be defrayed by subscription of the brokers. The chamber of brokers shall
determine the ways and means of the collection of such
contributions.
RIGHTS AND DUTIES OF EXCHANGE BROKERS.

SEC. 23.—Exchange brokers are required to attend and
sit through all the exchange meetings.
Applications for leave of absence must be made to the
chamber of brokers, which may grant such leave for a
total period of two months within each calendar year.
A longer period of leave of absence may be granted by
the lord lieutenant upon consulting the exchange board
of directors. The latter shall be informed by the chamber
of brokers of the granting of leave of absence.
SEC. 24.—Brokers are required to furnish to the best
of their knowledge all information which may be requested by the members of the exchange who are authorized to fix the prices and quotations to be entered in the
official list of the Berlin exchange.




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If doubts or disputes arise in regard to the fixing of the
quotations and prices, the member of the board of directors of the exchange, who is intrusted with that duty, is
authorized to demand explicit information from the
brokers, who are to be reminded of their oath. Such
information must be*recorded in the minutes. It is left
to the discretion of the said member to test the validity
of the information either by requiring the brokers to
submit their daybooks for examination or in any other
way that may be deemed necessary. In producing the
daybooks the brokers have a right to withhold the names
of their clients.
SEC. 25.—Brokers may act as business agents only for
those exchange visitors who are in possession of an exchange card entitling them to conclude transactions on
the exchange. Unless otherwise permitted by the clients
or required by the nature of the transaction, the brokers
are pledged to secrecy in regard to the orders placed with
them.
Exchange brokers are authorized to negotiate such
sales and purchases as, pursuant to the provisions of the
commercial and the civil codes, must be transacted by
a commercial broker. This provision does not apply to
public auctions.
SEC. 26.—Brokers are required to enter daily in their
daybooks and over their signatures all transactions which
they have concluded for their own account or in their
own name, as well as the guarantees assumed by them in
connection with transactions concluded through their
agency. (Sec. 32, par. 1, of the exchange law.)




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ASSIGNMENT OF B U S I N E S S .

SEC. 27.—The assignment of business (sec. 13, fig. 2)
shall take place every year during the first half of December for the next calendar year. Should occasion demand
any change during the course of the year, the assignment
may be altered by the chamber of brokers.
The state commissioner and the exchange board of
directors shall be notified of the assignment of business
as well as of each alteration made during the year.
The state commissioner and the exchange board of
directors are empowered to recommend alterations in
the assignment of business whenever they find it advisable.
Appeal from the decision of the chamber of brokers in
regard to the assignment of business may be brought to
the chamber of commerce by the state commissioner or
the exchange board of directors within a period of six
days after they have been notified of the decision.
SUPERVISION AND DISCIPLINE.

SEC. 28.—Like all exchange visitors, brokers shall be
subject to the regulations of the exchange board of directors and the court of honor.
Supervision over the brokers shall be exercised by the
chamber of brokers and the state commissioner.
Complaints concerning the activities of brokers in their
official capacity shall be brought to the state commissioner who shall give notice thereof to the chamber of
brokers and the exchange board of directors.
SEC. 29.—The chamber of brokers is authorized to
enact rules and regulations for the official and business




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functions of the brokers.

Banking

Laws

These regulations require t h e

sanction of the chamber of commerce which shall in its
t u r n consult the exchange board of directors.
SEC. 30.—The state commissioner and the chamber of
brokers are empowered to require the brokers to submit
for examination their notebooks as well as their daybooks.
SEC. 31.—Brokers guilty of breach of duties shall be
subject to a disciplinary penalty to be imposed upon
them by t h e chamber of brokers, provided the

lord

lieutenant does not release them from their obligations
or provided their offense does not lie within the jurisdiction of the court of honor.
Disciplinary penalties shall particularly be imposed
upon brokers who violate t h e rules and regulations enacted
by the chamber of brokers; who, without

reasonable

excuse, fail to attend the exchange; or who, owing to
negligence, furnish wrong information in connection with
the fixing of quotations.
SEC. 32.—The disciplinary penalties are (1) warning,
(2) reprimand, (3) fines not exceeding 1,500 marks, and
(4) temporary removal frot£L office and debarment from
t h e exchange for a period not exceeding three months.
The exchange board of directors shall be notified—immediately after t h e decision goes into effect—of the removal from office and t h e debarment from t h e exchange
of a broker.
SEC. 33.—The fines shall be collected by the board of
directors of t h e chamber of brokers, and transferred to a
special fund for relief of brokers or their families.




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DISCIPLINARY

Commission

PROCEEDINGS.

SEC. 34.—The chamber of brokers shall decide whether
disciplinary proceedings should be instituted.
SEC. 35.—A legal expert shall be invited to assist in the
disciplinary proceedings.
The presence of at least seven members of the chamber
is necessary for adopting a decision.
SEC. 36.—Disciplinary proceedings shall be conducted
behind closed doors.
SEC. 37.—In so far as no other provisions are enacted,
those of the exchange law concerning the proceedings
before the courts of honor shall be applicable.
The state commissioner shall have the same powers as
in the case of proceedings before the courts of honor.
(Sees. 9 to 27 of the exchange law.)
SEC. 38.—Appeal from the decision of the chamber of
brokers may be made to the lord lieutenant by the
state commissioner or the defendant within fourteen days
after they have been notified of the decision.
The judgment shall be suspended by such appeal.
The Minister for Trade and Commerce,
(Signed.)

BERUN, July 9, 1906.




298

DEIVBRUCK.

V. REGULATIONS OF THE CLEARING ASSOCIATION FOR INVESTMENTS IN FUTURES ON
THE BERLIN STOCK EXCHANGE, FEBRUARY,
1909.
SECTION

I.—The purpose of the clearing association,

which has its office in Berlin, is to facilitate and expedite
settlings on clearing days of the Berlin stock exchange, and
to balance and regulate the investments in futures made
during the month by the members of the association on
the Berlin stock exchange in accordance with the regulations of the board of directors of the association.
SEC. 2.—Any person wishing to be enrolled as a member
of the association must submit a written application to
the board of directors. The latter must examine the application and may reject it without giving its reasons.
In joining the association every member binds himself
for the duration of one calendar year. If a member wishes
to withdraw from the association he must send written
notice to that effect to the board of directors not later
than the 1st of December; otherwise he must pay his
annual dues for the following year.
SEC. 3.—The expulsion of a member may take place if
he suspends payments of dues or fails to fulfill his obligations to the association, particularly if he refuses to
pay the fines imposed in accordance with sections 7 and
8, or to restore damages in accordance with sections 8
83702—10




20

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and 9, or if he fails to procure delivery or acceptance in
accordance with section 10, and finally if he impairs t h e
interests of the association b y deliberately making false
entries in his balance sheets. The expulsion of a member
depends on the board of directors and m a y take place
only when at least two-thirds of the members of the board
vote in favor of such expulsion. The board of directors
is empowered to issue a warning before expulsion.
No claim can be m a d e by an expelled member for t h e
restitution of his entrance fee or his annual dues.
S E C . 4.—In order to realize the purpose of t h e association, each member is required, even when he has no balance of securities to deliver or receive, to present to t h e
office an account of his transactions in securities concluded during the last m o n t h with the members of t h e
association. This account m u s t be submitted on t h e following exchange day after the announcement of t h e pre~miums, during the hours fixed by the board of directors
or by t h e office. The board of directors is not responsible
for the safety of the balance sheets after t h e clearing
hours.
If, b y special arrangements of the parties concerned, a
settling took place through the office during t h e course of
t h e month, t h e balance sheets m u s t be submitted in accordance with the regulations of t h e board of directors.
S E C . 5.—Every member who has a balance of securities
to receive is required to a t t a c h receipts to his balance
sheets. If he fails to do this, t h e office is authorized to
announce t h e member as the receiver of t h e respective
securities.




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Every member who has a balance of securities to deliver
is required to call at the office for a voucher at the time
fixed by the board of directors. a
SEC. 6.—The delivery shall be made according to the
rate of the clearing association. The difference between
this rate and the one agreed upon by the parties must be
settled between the contracting parties themselves.
SEC. 7.—Every member who entirely or partially fails
to submit his balance sheets at the fixed time, even when
he has no securities to deliver or receive, shall be subject
to a fine to be determined by the board of directors of the
clearing association. The fine is not to exceed 300 marks
for each sheet which is missing or which has not been submitted in due time. The member must also defray the
costs incurred by the association on account of the missing
sheets or their late delivery.
Every member whose balance sheets contain errors,
shall pay a fine of 6 marks for each error and defray the
costs incurred and the loss of interest suffered by the
association.
SEC. 8.—If the different balance sheets of the members
do not agree, these sheets with the balance of securities
to be received or delivered shall be left in the clearing
office, where by the comparing of the various sheets the
error shall be discovered.
(a) Supplementary clause adopted at the meeting of the members on the
n t h of February, 1909:
The attaching of, and calling for, vouchers are "not required in case of
securities which, accoKling to the decision of the board of directors, must
be delivered and received through the clearing association. The securities
are to be delivered to the association which, in its turn, delivers them
* directly to the receivers.




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If the error has been discovered prior to the submission
of the balance sheets of the next exchange, and if the correction has been made at once by the responsible member,
the latter shall be subject to the fine named in section 7.
But in case the error can not be found by that time, and
there is a balance to receive, the office is authorized to
accept the securities in the name of the association.
The member subsequently found responsible for the
error shall be subject to a fine, besides having to defray
the costs incurred and the loss of interest, in case he declares
himself willing to accept at once all the securities which
were temporarily taken over by the clearing association,
or to deliver the missing securities.
If the responsible member fails to accept or deliver the
securities in due time, the securities which were taken
over by the association shall, on the next exchange day,
be sold to the highest bidder, and the securities which were
missing shall be bought on the account of the responsible
member, through an exchange broker. The association
is also empowered, instead of negotiating a sale or purchase through a broker, to require from the responsible
member the payment of the difference between the clearing rate and the average quotation on the next exchange
delivery day.
In either case the responsible member is liable not only
for the difference between the rates and the subsequent
damages, but also for the usual brokerage.
SBC. 9.—If no restitution of the damages designated
in section 8 can be obtained from the responsible member,
the liability shall be shifted proportionately to all mem-




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bers who have been connected with the former member
in the transactions of the particular securities, i. e., in
case of his refusal to accept the securities which had thus
to be sold through an exchange broker, the members
who delivered these securities shall be responsible, and
in case of his failure to deliver the missing securities which
had thus to be purchased by the association, the members
who are to receive the securities shall be held responsible.
Any surplus resulting from the sale or purchase of
the securities shall go to the association, provided the
legitimate owner of the profit can not be located.
SEC. IO.—In order to avert postponement of action
till the next exchange day after the delivery day, all
claims in regard to nondelivery or nonacceptance of securities must be made at i o'clock to one of the managers
of the office who may then be present. If the claims are
well grounded, the manager shall confer with the member
of the board of directors who is then on duty, and they
shall jointly remind the delinquent of his obligation to
deliver or accept the securities. These officials are also
authorized to proceed at once in accordance with sections
8 and 9. If a member of the association sends written
notice to the board of directors before or on the delivery
day to the effect that he is unable to accept or deliver the
securities named in his balance sheets, the board is authorized to proceed without delay in accordance with sections
8 and 9. In all these cases the designated provisions are
also applicable in regard to restoration of damages.
SEC. 11.—In order to maintain a guaranty fund for
eventual losses, an initiation fee of 75 marks shall be




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required from each member. All fines and other revenues
of the association, with the exception of the annual membership dues, shall be transferred to this guaranty fund.
The administration of the guaranty fund and its utilization for the purpose ordained by the statutes shall lie
with the board of directors, which is authorized to invest the accumulated fund in interest-bearing German
imperial or Prussian state bonds or in any other interestbearing securities in which investments of trust funds
may be made. The acquired securities shall be deposited
according to articles 84 and 85 of the Prussian ordinance
which relates to the enactment of the Civil Code.
If the guaranty fund exceeds the sum of 300,000 marks,
the residue of the annual budget of the association may
be employed for the partial defrayal of the administrative
expenditures.
If, through losses suffered by the association, the
guaranty fund becomes exhausted, a special meeting of
the members must be called at once to decide upon necessary measures.
Sec. 12.—For the purpose of defraying the administrative expenditures of the office, each member of the association shall pay annual dues which must not exceed 3,000
nor fall below 60 marks. The dues shall be fixed every
year in proportion to the stipulated sum of administrative
expenditures of the clearing office.
The assessment of each member shall be made by a committee consisting of (1) 5 delegates selected by and from
among the members of the board of directors, and (2) 6
members of the association elected annually at the general meeting of the association.




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The meetings of the committee must be presided over
b y the chairman of the board of directors, who must be
elected one of t h e 5 delegates, or by the vice-chairman,
who is also authorized to substitute the chairman, in case
of his absence, at the meetings of the committee. A quorum
of the committee must consist of at least 3 members of the
board of directors and 3 members of the association. Decisions shall be adopted by a simple majority. In case of
a tie, the chairman shall have the decisive vote. Voting
may take place by written ballot.
Members joining the association during the course of the
year must pay in full the annual dues for which they have
been assessed.
SEC. 13.—The association shall be represented by the
board of directors consisting of 11 members. The board
and its individual members shall prove their identity to
outside parties b y means of certificates to be issued by t h e
chief of police of Berlin, who, for this purpose, must
always be notified of the results of the elections.
Decisions or binding declarations in behalf of the association m a y be adopted when 6 members of the board of
directors are present or send in their written declarations.
The decisions of the board of directors shall be recorded,
and the minutes shall be signed by the members present
at the meeting.
Documents issued by the board of directors shall bear
the signatures of the chairman or vice-chairman, and the
secretary, or, in case of his absence, of any other member
of the board.
The board of directors is required t o discharge t h e
following functions, viz, to protect the rights and in-




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terests of the association, to exercise general control over
the clearing affairs, to buy securities which have not
been delivered or sell those which have not been accepted,
to draw up standing orders, to determine the amounts
of fines, to assess the responsible parties for the restitution of eventual damages, to enroll new members, to
conclude eventual compacts, and to represent the association before the courts.
Meetings of the board of directors shall be called by
the chairman as often as required by the business or
upon the request of 3 members of the board, but at
least one regular monthly meeting shall be held in the
first week of each month. The board shall appoint one
of its members every month to discharge special administrative duties and to represent the board on the exchange.
A member of the board of directors who is a copartner
of a firm may be represented in the board by any other
member of the firm. The latter, however, not being a
member of the board of directors, has no right to represent
the association before third parties.
SKC. 14.—The members of the board of directors shall
be elected from among the members of the association at a
regular meeting for a term of three years, i. e., till the following third general meeting. Regardless of eventual
vacancies, 4 members shall resign annually for two successive years, and 3 members after the third year, i. e., upon
the expiration of their term. Uijtil a regular order of succession shall have been established, the resignation of the
members shall be determined by lots to be drawn by the




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chairman or vice-chairman of the board of directors.
Retiring members shall be eligible for reelection.
At its first meeting after the regular annual meeting of
the association, the board of directors shall elect from
among its members and for a period of one year a chairman,
vice-chairman, secretary, and treasurer.
The vice-chairman is authorized to represent the chairman at any time without having to prove that the chairman has been prevented from discharging his functions.
Should a vacancy in the board of directors occur during
the course of the year, the board shall cooptate one of the
members of the association till the next general meeting
of the latter, when a member shall be elected for the
remainder of the term which the retired member did not
serve.
Every member of the board of directors is pledged to
secrecy in regard to the contents of balance sheets.
Should both the chairman and the vice-chairman be
temporarily prevented from discharging their duties, these
latter shall for the necessary time be assumed by the
oldest member of the board of directors who is neither
secretary nor treasurer of the association. If also the
oldest member is unable to act in the capacity of chairman, this duty shall be devolved on the next oldest member, and so on.
SEC. 15.—The clearing office shall be established either
by the association itself in accordance with the provisions
of the board of directors or by one of the banking institutions in accordance with stipulated business regulations
of the board of directors. The election of officers shall,




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in the former case, be made, and in t h e latter case be
approved, by the board of directors.
All t h e employees of t h e office are pledged to t h e strictest secrecy in regard to the contents of t h e balance sheets.
S E C . I6.—Should differences which can not b e settled
amicably arise between the association and t h e individual
members, the decision of the board of directors of t h e
Berlin stock exchange shall be conclusive.
S E C . 17.—The regular general meetings of t h e association shall take place in Berlin during one of t h e first two
months every year.

Special meetings shall be called as

often as t h e board of directors deems necessary, or either
in t h e case named in section 11, paragraph 4, or when an
application containing the reasons and purpose of such a
meeting is m a d e b y a t least 30 members.
A general meeting shall be regarded as properly convened when a t least fourteen days' notice has been p u b lished, together with a statement of t h e order of business, in t h e Berlin " Borsen-Zeitung," " B a n k - und Handels-Zeitung," "National-Zeitung," and "Borsen-Courier."
The notice shall be issued b y the board of directors,
which, in case one of t h e named newspapers should cease
t o appear, is authorized to designate another in its stead
for printing t h e public announcements of t h e association.
The chairman, or vice-chairman, of the board of directors shall preside over t h e general meetings and determine
t h e method of voting.
A financial report of the association shall be submitted,
and t h e resignation of t h e board of directors of t h e expired
year tendered, to the regular general meeting a t which a




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new board of directors (section 14) and a new committee
of assessors (section 12) shall be elected. If t h e elections
have n o t been unanimous b y acclamation, a ballot shall
be taken a n d decided b y a simple majority. If no majority has been obtained, a second ballot with t h e names
of those candidates who have received t h e larger votes,
these names not exceeding twice t h e number to be elected,
shall take place. I n case of a tie t h e election shall be decided b y lot drawn b y t h e chairman of t h e meeting. T h e
proceedings of t h e general meeting must be recorded a n d
the minutes signed b y t h e chairman and three members
present a t t h e meeting.
Recommendations to t h e general meeting must be presented in due time so t h a t they may be stated in the notice
of the meeting.
No decision can be passed upon questions which have
not been announced in t h e notice of t h e meeting, except
when a motion for a special general meeting has been made
at t h e meeting. Each member is entitled to one vote.
The annual financial accounts, ^s well as t h e report of
the activities of t h e association, shall be filed after each
general meeting with the nearest state supervising authority.
SEC. 18.—The existence of the association is n o t limited
to a n y specific period.
Changes in these statutes, as well as t h e dissolution of
the association, may take place only upon t h e decision of
the general meeting. Decisions relating t o amendments
of these statutes m a y be adopted only b y three-fourths
of t h e members present a t t h e meeting.




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The association shall be regarded as dissolved when
three-fourths of the members of the association are present at a general meeting called especially for that purpose
and vote in favor of dissolution. If three-fourths of all
the members are not present, a new general meeting must
be called, which may decide upon the dissolution of the
association by a vote of three-fourths of the members
then present at the meeting, provided such a stipulation
has been inserted in the notice of the meeting.
SKC. 19.—In case of the dissolutien of the association by
the general meeting, one-half of its property shall be conveyed to the senior merchants of Berlin for further transfer
to the aid fund of the Berlin corporation of merchants and
the other half to the Friedrich Wilhelm Victoria Foundation of Berlin. Should the Berlin corporation of merchants have ceased to exist at the time of the dissolution
of the association, the general meeting which shall have
voted to dissolve the association, shall decide upon the
utilization of the one-half of the property. Should the
charter granted to the association be revoked, the abovenamed transfer of property shall not take place, and the
general meeting which shall have voted to dissolve the
association shall decide upon the utilization of the property.
SEC. 20.—Changes in these statutes and the dissolution of the association (section 19, paragraph 1) require
the sanction of the State.
Approved by the Chamber of Commerce of Berlin, on
the 26th of February, 1909.




310

VI. REGULATIONS
OF THE CLEARING
OFFICE
OF THE BERLIN
KASSEN-VEREIN
FOR INVESTMENTS
IN FUTURES ON THE
BERLIN
STOCK EXCHANGE,
FEBRUARY,
1909.
Pursuant to section 15 of the statute of the clearing
association in respect to investments in futures on the
Berlin stock exchange, the undersigned bank of the Berlin
(Kassen-Verein) Association of Banks, assuming the administration of the clearing office, enacts, with the sanction of the board of directors of the said clearing association and upon the repeal of the former provisions of
January 20, 1880, the following:
SECTION I.—The board of directors of the clearing
association shall decide what securities may be delivered
for clearing, and determine the conditions under which
the clearing shall be effected (i. e., the minimum amounts,
the right of sale, and the like).
SEC. 2.—For every clearing the following blanks shall
be provided by the clearing office:
1. A special blank for each security to be cleared, on
which the names and firms of all the members of the association shall be printed in alphabetical order. Every
member shall receive a number corresponding to his
position in this alphabetical list.
2. A blank for acknowledging the receipt of delivery
vouchers, on which every security to be cleared must be
printed in consecutive numbers.
3. A circular containing the provisions and the periods
of clearing.




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Commission

Special provisions for particular securities shall, as far
as possible, be inserted in the corresponding clearing
blank. Such inserted, as well as attached, notes must be
strictly observed.
SEC. 3.—The printed matter named in section 2 shall
be distributed not later than on the third day before the
clearing.
SBC. 4.—Every member shall receive a copy of the
printed matter. Each extra copy can be obtained at the
cost of 3 marks per month. Single copies of the clearing
and receipt blanks shall be given free of charge if there
be any surplus.
SEC. 5.—The printed matter shall, in the case of members having daily clearings with the bank of the Berlin
Kassen-Verein, be handed over to the persons calling for
the accounts; in other cases, the* blanks shall be forwarded to the address of each member. The clearing
office must therefore be notified in due time of each
change of address.
Members residing outside of the city of Berlin shall
call for their blanks. The latter, however, at the request
of such members, may be sent to them in a manner they
may designate, at their risk and cost.
SEC. 6.—Each member shall enter in the clearing blank
on the line assigned to him only the balance of the particular securities which he must receive from, or deliver to,
other members. In the former case the balance is entered
on the left, in the latter on the right side.
All transactions, including those performed on the day
of delivery of the balance sheets, shall be entered for
clearing.




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Each sheet shall be footed up and the balance brought
over. The firm of the member shall be designated at
the top as well as at the end of each sheet, for which
purpose a clear stamp is adequate. The top of each sheet
must also contain the number of the firm.
At the end of each balance sheet the total balance
shall be struck in accordance with the directions given
in the blank.
All entries in the balance sheets must not only be
correct but also clear and legible. In order to enforce
order and promptness of business, a fine of 6 marks shall
be imposed for each inaccurate or illegible entry.
SEC. 7.—Unless balances with every individual member
be absolutely clear, each member, as long as he has concluded transactions in a particular kind of securities, even
when he has no balance of these latter to receive or deliver,
is required to present an account of his transactions in
the particular securities.
SEC. 8.—Any member who has to receive a balance of
securities shall attach with a pin to the corresponding
balance sheet one or several delivery vouchers. Such
vouchers must not be made out in case of amounts which
can not be presented for clearing (cf. sec. 1).
The provisions of section 12 shall be applicable to those
securities the delivery and receipt of which through the
clearing association has been regulated by the board of
directors in accordance with section 5 of the statute.
SEC. 9.—The clearing office has a right to issue, when
necessary, several smaller vouchers equivalent to the delivery voucher. These vouchers shall be made out by




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the clearing office and be provided with the signature of
the director or his representative. The members of the
association must accept the securities named in such
vouchers.
The firms which must deliver the securities may not
break up the sum of the delivery voucher. Should this
be done the securities named in the smaller vouchers shall
not be accepted.
SEC. IO.—The office of the clearing association shall
settle only such transactions as the members of the
association, whose names are to be printed on every
balance sheet, conclude among themselves. Transactions with other firms shall be cleared only in case the
right of effecting a settling has been extended to a member of the association prior to the clearing.
Members of the association may present vouchers with
the names of nonmembers as receivers. Such a voucher
shall be provided, in a clear and legible way, with the
name of the member presenting it as well as with an
explicit note to the effect that the designated member is
the deliverer of the voucher and not the receiver of the
securities. It is recommended that across the face of the
voucher there be inserted the words "Handed in by
" (name).
The member handing in such a voucher is responsible
to the association for the proper acceptance of the securities. In case of the nondelivery of the securities, the
member who handed in the voucher may present his complaint to the clearing association, but all complaints of
the designated receiver shall be disregarded.




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SEC. II.—The provisions concerning errors (sec. 20,
par. 2) shall be applied whenever a member fails to attach
a delivery voucher to a clearing sheet containing the
balance of securities he is to receive, or when he attaches
vouchers higher or lower in amount than the actual balance, as well as when he wrongly designates the kinds of
the securities.
The clearing office is authorized to regard such a member as the receiver of the missing securities.
Enactment of the board of directors of February 11,
1909:
SEC. 12.—The following provisions shall be applicable
to those securities the delivery and receipt of which
through the clearing association have been regulated by
the board of directors in accordance with section 5 of the
statute:
1. Receipt vouchers shall not be attached to the balance
sheets.
2. Any error in a balance sheet must be corrected on
the next exchange day before 1 o'clock.
3. A bill for the balance of securities to be delivered
shall be drawn against the clearing association and be
presented in the usual way to the bank of the Berlin KassenVerein for payment within the customary period of time.
The bill shall contain the following caption: " Account of
our balance sheets for the monthly clearings."
4. The corresponding securities must be submitted together with the bill. A red security check shall be adequate if the deliverer is a giro account holder of the bank
of the Berlin Kassen-Verein and if he has deposited the
securities on his account.
83702—10




21

315

National

Monetary

Commission

5. The balance of securities shall be delivered to the
receiver by the administration of the clearing office on
behalf of the clearing association. The amount of the
bill shall be collected in the usual way, either in cash or
through the clearing process.
6. Delivery of securities to giro account holders of the
bank of the Berlin Kassen-Verein shall be effected by
means of transfers to their accounts, provided the equivalent value of the securities has been deposited with the
association. The Kassen-Verein may, in certain cases,
refuse to surrender the securities carried over to the
account, before 6 p. m.
SEC. 13.—Every member shall turn in to the clearing
office his balance sheets, filled out and with the attached
vouchers, in a sealed envelope furnished to him together
with the printed matter, not later than 8 p. m. on the
clearing day designated on every balance sheet.
The balance sheets for those securities in which the
member has concluded no transaction shall be retained
by him.
SEC. 14.—The delivery of the balance sheets shall be
certified upon the request of the deliverer, the clearing
office or the bookkeeping department of the bank of the
Berlin Kassen-Verein affixing its stamp to a receipt made
out by the deliverer.
The receipt may be entered in the blue temporary
receipt book furnished by the Berlin Kassen-Verein.
SEC. 15.—Members who are to receive delivery vouchers
shall call for them at the clearing office between 8 and 11
a. m. on the exchange day following the delivery day,




316

German

Imperial

Banking

Laws

and present receipts made out on the blanks furnished to
them together with the printed matter. (Sec. 2, fig. 2.)
If at the designated time some of the delivery vouchers
can not yet be handed over, provisional vouchers shall be
made out to be exchanged by the holder for final ones,
during the same day, at the exchange.
If a member fails to call for his delivery vouchers in
due time, he shall bear all the consequences that may
follow.

•*• !

*

SEC. 16.—In order to avoid errors as far as possible,
members are urgently requested to check up their balances beforehand and especially to enter in the balance
sheets no other items than direct negotiations (i. e., making no entries, for example, of transfers of securities to
accounts of third parties, returns of loaned or hypothecated securities, etc.), unless otherwise stipulated with the
party concerned.
SEC. 17.—Complaints in regard to failure to receive or
deliver securities for clearing shall be made in writing to
the bank of the Berlin Kassen-Verein either on the delivery
day, till 8 p. m., or on the next exchange day till 11 a. m.
Pursuant to section 8 of the statutes of the association,
no complaint shall be taken into consideration if not presented at the designated time to the said bank, or, before
1 p. m. on the exchange day following the delivery, to the
director of the clearing office then on duty at the exchange.
After the expiration of the said time the clearing association shall be released from any further responsibility.
Complaints made verbally or by telephone to the bank
of the Berlin Kassen-Verein shall not be considered.




317

National

Monetary

Commission

SEC. I8.—Changes in these regulations as well as supplementary clauses, in respect to particular balance
sheets, may be introduced at any time with the approval
of the board of directors. The latter is also authorized to
prohibit the clearing of particular securities even after
the balance sheets have been distributed.
SEC. 19.—Every new member enrolled in the association shall receive a copy of these regulations together with
a copy of the statutes of the association.
SEC. 20.—Attention is finally called to the fact that according to section 5 of the statutes of the association, any
member who, even when he has no balance of securities
to receive or deliver, entirely or partially fails to present
his balance sheets in due time, shall be subject to a fine to
be fixed by the board of directors of the clearing association, but not to exceed 300 marks for each sheet missing
or not presented in due time. The said member shall also
defray all costs incurred by the association on account of
the securities which have been missing or have not been
delivered in due time.
Any member whose balance sheets contain errors shall
be subject to a fine of 6 marks for each error, besides having to defray all costs and interest suffered by the clearing
association.
T H E BANK OF THE BERLIN KASSEN-VEREIN.
BERLIN,

February 12,1909.

Approved by the Chamber of Commerce of Berlin, February 26, 1909.




318

INDEX TO GERMAN BANKING LAWS."
Acceptance—
of bills
of noninterest-bearing deposits
of checks
Account
Alongen
Announcements—
of the Reichsbank
of the Imperial Chancellor
for withdrawal of notes
of the Imperial Treasury
of invalidation
Annual—
report of
t a x of 5 per cent
profit of the Reichsbank
Annuities
Audit—
of Reichsbank accounts
office
Bank Act

Page.
139, 149, 191
196-197
218
136, 137, 138
136
52> 75, 96, 102, 205
53,56, 59, 69, 102
59
77
96
37, 46, 52, 58, 69, 81, 82, 97
21, 37, 71
44, 98, 124, 130
165, 170
45
81
17, 18-20, 22-23, 26> 35> 65, 73-78,

8 1 - 8 3 , 8 6 - 8 7 , 93> 101—103, 106, 109, 1 1 3 - 1 1 7 , 1 2 5 - 1 2 7

Bank of England
offices, increase of
Bank of Italy
Bank of P r u s s i a unlimited right of issue
Central note bank
branches acquired from the
suspension of operation
founded on private capital
transfer of
shares of
capital of
reserve fund of
compensation for
property of

10, 146
26
150
2, 65
3
19
29
32
62, 113
64
63, 113
62, 113, 114
62, 114, 121
63, 97, 116

« The Stock Exchange Regulations are not included in this index.




3i9

National

Monetary

Commissio n

Bank of Prussia—Continued.
Page.
treaty of
89, 93
privilege of note issue of
57
rights of
93
shareholders of
63, 103
rights and duties
109, 117
notes of
66, 75, 76, 109, 127
claims of officials
114
claims of shareholders
114
privilege of
114-115
profits of
115
Bank of Saxony
66
Bank notes. {See Notes.)
Bavaria
3, 29, 65
note bank of
58, 68, 88
Bavarian Hypotheken Bank
67, 88
Bills—
short-time
19, 141, 153
of exchange
36, 37, 72, 75, 76, I35~i37> H3> i55> i57> 172,209
discount of
39, 69, 75
collection of
186-189
loans on
40
fees for
183, 185
discounted bills
41, 53
return
143
of private note banks
69
acceptance of
139, 149, 191
interest on
137-138
domiciled
136, 139, 189
foreign
143
Blankcredit
,
68, 74
indorsement of bills
136, 163
Bonds—
noninterest-bearing
38, 59, 60, 61,62
of corporations
38, 39, 60, 61,125,131, 157
of the Empire
39
of railroads
1
39, 40, 73, 157, 169,170
of foreign States
40
investment in
40
fine for issue of
60
interest-bearing
63, 64,165
preparation of___
64
amount of
64
reserve against
__
64




320

German

Imp erial

Banking

Laws

Bonds—Continued.
Page.
redemption of
64
short-time
69, 73
preferred
73
mortgage
73, 157, 167, 191
not included in reserve fund
76
invalidation of
95, 96
loan
115
of domestic institutions
131
redeemable
157
interest-bearing
39, 63, 165-171
conversion of
191
Branch offices of the Reichsbank
82, 83
Broker—
commercial
42,76
exchange
76
Brokerage fee
1
206
Brunswick Bank
20,85,86,88
Budget—
of salaries and pensions
45, 47
of the Reichsbank
80
Capital—
of the Reichsbank
21, 24,40,43, 77, 93, 123
increase of
23-24, 52, 77, 94, n o
available capital
39
invested in bonds
39, 40
investment of the Reichsbank's capital
53,54
of the Bank of Prussia
'
62
Central bank
17, 18, 71
Central committee—
of the Reichsbank
46
election of
46, 52, 100-101, 103
meeting of
46
authority of
46, 47, 48, 73, 79, 82, 94, 98
quorum of
46, 49
reports to
46, 49
supervision of
51
session of
69
consent of central committee for purchase of securities
74
Checks
27, 40, 130, 131, 138-148, 152-157, 172, 174, 176, 177, 210, 218
crossed
172,218
collection of
187-190
acceptance of
218
Clearing houses
27,72, 179-182
total delivery
33




321

National

Mon etary

Commission

Coinage—
Page.
efforts toward uniform system
i
seven systems in Germany
2
regulation of
5-6
reforms
5, 8, 10-11
treaty with Austria and Liechtenstein
5
of gold coins
5,7
Law of 1873
6-8, 10, 16, 66
of gold 5-mark pieces
6
private
7.74
supplement to coinage law
7
anomaly of the system
9
per capita
10
of 3-mark pieces
n
of crowns
12-13
Law
14
Coins—
subsidiary coins.
6, 7, 8, 10, 11, 69, 77
prohibition of other than imperial coins
6
gold
7, 11, 13, 68, 69, 77, 130
foreign
7,37,41,54
silver
8, 10, 13, 68, 69, 77
unlimited legal tender of
9
maximum amount per capita
9
total of imperial coins
12-14
copper coins
14, 68, 69, 77
imperial
19
Collection—
of bills and checks
187-190, 218
of interest and dividend coupons
189, 204, 205
of foreign notes
190
Commercial broker. (See Broker.)
Commission—
Reichstag
10, 13, 1 8 , 6 9 , 7 2 , 7 4 , 7 5 , 7 7 , 7 9 , 8 4 , 8 5 , 8 7 , 8 8 , n o
imperial debt
41
Commissioner appointed by the Emperor
49
Committee. (See Central committee; also District committee.)
Contango transactions
68
Conversion of mortgage bonds
191
Corporations—
paper money issued by them
2, 60, 88
notes of
16, 65, 66
bonds of
3 8 , 3 9 , 6 0 , 6 1 , 125, 131, 157
vested with right of issue
60
domestic
61
foreign
61




322

German Imperial

Banking Laws

Corporations—Continued.
Page.
representation of
in
warehouses of
163
Correspondents of the Reichsbank
183, 187
Coupons {see Dividends)—
interest
162,189, 204, 205, 207, 209, 213
Decimal system
9, 11
Demonetization of the thaler
7-9
Deposit—
transactions
57
safe-keeping
197-217
withdrawal of
118, 172, 176, 196, 207, 209, 212
of courts, churches, and schools
117, 121
on shares
127
giro
171-178
noninterest-bearing
195-196
amount of first
195
Discount—
rate
19*21, 23,47,54,72,74,75, 125, 126
uniform policy
23
private discount of the Reichsbank
24, 25, 87
rate higher in Germany
26
policy of the Reichsbank
32
average rate
33
of mature bills
39
transactions
57
of domestic bills
69, 75
of bills of exchange
75
District committee—
of the Reichsbank
49, 50, 101
election of members
49, 52, 101, 102, 103
authority of
50
Dividends—
division of
43, 44, 79, 124, 128
coupons- 51, 79, 94, 96, 97, 98, 104, 106, 117, 189, 204, 205, 207, 209, 213
methods of paying dividends
52
of the Reichsbank
78, 117
rate of
116
Domiciled bills
136, 139, 189
Giro—
transactions
19, 21, 26, 27, 41, 72, 76, 77, 171-178
total transactions
32
deposits
68, 171-178
transfers
171-178, 183-186, 195
Gold {see Standard; also Coins)—
stock of Reichsbank
26




323

National

Monetary

Commission

Guardian—
authority of
deposits of
Hypothecated securities
Insurance—
companies
premium
against
fire
fee
Interest. (See Coupons; also Rates.)
Interim certificates
Law—
reform of coinage law
supplement to coinage law
coinage
of 1855
of 1856
of 1857
of 1868
of 1869
of 1870
of 1871
of 1872
of 1873
_
of 1874
of 1876
of 1877
of 1884
of 1885
of 1889
of 1893
of 1896
of 1899
75, 77, 78, 79, 81, 84, 87, 88, 93, 109, n o ,
of 1900
of 1901
of 1906
of 1909
Loans—
interest-bearing
on pledges
2 3 , 3 7 , 3 9 , 4 7 , 7 5 , 7 6 , 132, 158,
on merchandise
on bills
transactions
of Prussia




324

Page.
210, 213, 215
210-217
159, 162, 165-171
73, 164, 194
164
163-164
199, 200, 201
205, 207
9
7
14
29
29, 117
29
65,76
29
16, 29,30,65
12,29,80
16
16,66,74,77
15, 16, 17,65-68
8,76, n o
88
16
16
79
68
43,74,76, 123
72,73,74,
112, 123, 129, 131
in
73
128
128
39, 41, 132
160, 161, 165,213
40, 163-165
4°
57
63

German

Imp erial

Banking

Laws

Loans—Continued.
Page.
gold
69
on securities
73, 74, 165-171
Legal tender—
of German coins
6-7
unlimited legal tender of thalers and gold coins
9
of notes
65,"129
Liquidation of the Reichsbank
52, 102
Mint
13
rate
74
Money {see Paper money)—
market
19
price of
19
Monetary convention
1
system
4
standard protected by the Reichsbank
._
19
system produced by reform laws
26
perfection of monetary system
27
circulation regulated by the Reichsbank
39
standard
19, 72, 139, 145-147, 149, 150
Mortgage—
banks
40, 73, 168, 169
of certificate of stock
51, 95, 105, 108, n o
bonds
73, 157, 167, 191
transactions
192
fee
184,185, 186
conversion of mortgage bonds
191
privilege of mortgage banks
194
Note banks {see Banks)—
nine private
3
central note banks
17, 18, 71
private
20, 22-26, 53, 66, 71, 73, 74, 76, 85-88, 126, 131
provisions of
20
right of issue
21, 35, 65
uniform system
22, 55
premium policy of
33
transactions of
37
publications of
36, 37
statutes of
65
number of
65
Notes—
total circulation
3, 70, 71, 129
uncovered
3, 21, 24, 26, 70, 71, 125, 129
foreign
3,39,61,144
prevention of increase of
4
recall of right of issue
4




325

National

Monetary

Commission

Notes—Continued.
Page.
reserve against
10, 13, 72, 131
' reform of system
14
regulation of
16
not in the imperial standard
16
indirect limitation of
20, 32, 69
treasury
15, 16, 19, 29, 38, 42, 54, 66, 69
of corporations
16, 65, 66
withdrawal of
17, 36, 59, 66, 68, 76
t a x on
17, 20, 21, 38, 129
limitation of uncovered
19
redemption of
10, 1 7 , 2 0 , 2 1 , 3 5 , 3 6 , 4 2 , 5 4 , 5 5 , 5 6 , 5 9 , 6 0 , 130
reissue of
32, 36
counterfeit
'
36, 66, 67
prohibition of issue
17
elastic device of
19
denominations of
20, 35, 66
uniform system
26
in the German standard
38
exchange of
41
limitation of note issue
56, 57
exceeding the limit
58
redeemed
60
destruction of
60, 66
fine for issue
60
unlimited right of issue
65
right of issue of
42, 67, 70, 71
legal tender of
65, 129
of Bank of Prussia
66, 75, 76, 109, 127
average circulation
75
preparation of
76
Oldenburg Landesbank
65
paper money
65
Option, right of, of the Reichsbank
52
Paper money
2, 14-16, 27, 53, 60, 61
certificates
3
funded and unfunded
.
4
replacement of
4
reform of system
14
withdrawal of
15, 65
foreign
29
state
35
Oldenburg
65
of corporations
2, 88
of Hanover
89




326

German

Imp erial

Banking

Laws

Pledges—
Page.
loans on
23,37,39,47,75,76, 132, 158, 160, 161, 165,213
of right to claims
132
depreciation of
162
Political confusion as a result of the system of circulation
1
Premium—
fund of insurance companies
73
insurance
164
Profitsurplus
24-25
accounts of
37
of the Reichsbank
43, 44, 98, 123
of Bank of Prussia
115
division of
115
Railroads—
paper money issued by them
2
certificates of
29
bonds of
39, 4°, 73, *57, 169, 170
Ratediscount
19, 21, 23, 41, 47, 54, 72, 74, 75, 125, 126
interest
47,54,73,75,79, 138, 141, i43» *44, i45» l 8 7
dividend
116
mint
74
of exchange
140, 144, 145, 146-153, 187
Redemption—
of Austrian thaler
8, 30
of notes
10, 1 7 , 2 0 , 2 1 , 3 5 , 3 6 , 4 2 , 5 4 , 5 5 , 5 6 , 5 9 , 6 0 , 130
offices
35, 56,59, 86, 88
of bonds
64
Reform—
coinage reforms
5,8
of coinage law
9
of bank-note and paper-money system
14, 65
effects of reform laws on the monetary system
26
Regulation—
of monetary system
4
of coinage
5-6
for demonetization of thaler
8
of bank notes
16
for redemption of notes
21
for security of notes
16,36, 37
change in regulations
45
enacted b y administration
_
49
for issuing loans
_
55~58
of the state laws
_
57




327

National

Monetary

Commission

Regulation—Continued.
Page.
of bank-deposit law
74
for bills of exchange
76
Relinquishment of right of issue
42, 65, 88
Reports—
monthly
17, 46
quarterly
129
of the Reichsbank
26-27
annual
37, 46, 52, 58, 69, 81, 82, 97, 98, 116
of the board of trustees
44
to the Reichsbank central committee
46
weekly
37*58,68,69,71
of directors
62
statistical
66
of the commission
69
to Imperial Chancellor
68
of purchase of gold
74
of profits of the Bank of Prussia
116
Reserve fund
37, 41, 54,58, 76,124,128,129
condition of
of the Reichsbank
79, 80, 85, 128, 129
included in liabilities
98
accumulation of reserve fund
21
increase of reserve fund
23
endowment of reserve fund
24, 44, 124
division of
53
investment of
54
Reserve—
of one-third
21, 69
against purchase of securities
40
against notes
41, 54, 57
against paper money
60
fund of the Bank of Prussia
62,63,113,114
against bonds
64
tax-free note reserve
69
premium fund of insurance companies
73
of private note banks
76
Safe-keeping transactions of the Reichsbank
197-217
certificates of safe-keeping deposits
198, 203
Secrecy, pledge to, by Reichsbank officials
51
Seigniorage
7>74
Shareholders—
liabilities of
- 43. 77» 123
dividends of
4 3 , 4 4 , 9 8 , 128,129
part in the Reichsbank management
-46




328

German

Imp erial

Banking

Laws

Shareholders—Continued.
Page.
right of vote of
52,99,101,124,125
of the bank of Prussia
63, 103
meeting of
81, 94, 98, 99, 100, 103, 109, 117
claims of
114
privilege of
114
Shares—
of the Reichsbank
43, 77, 78, 89, 94, 117
of the Bank of Prussia
^_
63
negotiation of
89
deposit on
127
Silver (see Standard; also Coins)—
medals
9
Standard—
single silver
z
1
coinage weight
1
three distinct standards
1
gold
5-6, 20
of Alsace-Lorraine
2
imperial
7, 61, 76, 109, 206
a crippled one
9
Austrian standard used in paying for notes
8
mark
14, 143
rupee
14
statutes
17
monetary
19, 72, 139, 145, 146, 147, 149, 150
opponents of monetary standard
25
Hamburg bank
29
notes in the German
38
foreign
143, 206
Stockholders
25, 46
(See also Shareholders.)
Supervision—
of banks
58
of withdrawal of notes
59
Talon
5i> 79>94>96, 97,209, 213, 214, 215
Tax indemnity certificate
^ . 157,165
Taxes—
note tax
17,20, 38, 129
5 per cent per annum
21, 38
tax-free limit
21, 23-24, 38, 69, 125, 129
total tax to be imposed upon the bank
38
income
43, 77
calculation of
58, 71, 129
fine for taxes withheld
_
__
62




329

National

Monetary

Commission

Taxes—Continued.
Page.
State
77, n o
property
77
federal taxes
no
Thaler. (See Standard; also Coins and legal tender.)
Transactions (see Deposit; also Discount, giro, and loans)—
of the Reichsbank
39
contango
68
mortgage
192
safe-keeping
192-217
Transfer—
of certificate of stock
51, 94, 105, 107
of Bank of Prussia
63, 113
giro
171-178, 183-186, 195
Treatycoinage treaty
5
of 1856
29
of 1892
8
with Prussia
62, 113
of the Bank of Prussia
89, 93
Warehouses—
of the Reichsbank
164
of private corporations
163
Wilcox paper
16
Wild bills, objection against
_
2




J*

330