Renewal of Reichs b ank Charter

have become even more noticeable than they now are.“ In 1884, when money was relatively abundant, a preferential interest rate, exceeding the discount rate only by one-half per cent, was accorded exclusively on loans secured by Imperial and State bonds. The purpose of this measure was to raise these bonds to the position of standard securities for the well-to-do classes. This purpose was fully attained, though as a result the loans on collateral grew out of all proportions and far more rapidly than the bill holdings.⁶ The lower rate could not be maintained indefinitely and was abolished July 1, 1897. The liquid character of the Bank’s assets, and hence its power of resistance, had been notably diminished. When next all classes of collateral securities were placed on the same level with regard to the interest rate, the situation was reversed immediately. The average amount of loans on collateral declined considerably, due mainly to the decline of loans on the favored bonds named, while the bill holdings showed an increase.c Whether the change
  ° Compare weekly review, for example, page 67 of the report of 1907. Marks. September 7__________________________________________ 69,   800, 000
September 30__________________________________________ 204, 100, 000
December 7___________________________________________ 78,   500, 000
December 21___________________________________________ 364, 300, 000
  ⁶ The average for 1896 was 131.28 per cent higher than the average for 1883, constituting 14 per cent of the total investments of the Reichsbank, as against 11 per cent in the earlier year.
  cThe annual averages were as follows:

Year.                                Loans on collateral.  Bills held. 
                                            Marks.           Marks.    
1896______________________           106,000, 000         646,000.000  
1905________________                 72,000,000           008.ooo. 000 
1906________________ ______________  83,000,000           089.000.000  
1907................................ 98.000,000           I,060.000,000

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