The German Reichbank; its operation. - The principle of centralized banking is much more developed in the case of Germany than in either England or France. The Reichbank operates through boards known as the Cartorium, Decktorium and the Central Auschuss, respectively. A much more closer relation with the Government exists in the case of the Reichbank than in that of the French or English institutions. The German Government exercises a much more comprehensive control and paternal attitude over the operations of the Reichbank and in the conduct of its affairs, than in the English and French institutions.

The Cartorium; Decktorium and Central Auschuss. - The Cartorium consists of a body of five, who are the head supervisors. They are appointed by the Government. The active board of management is the Decktorium, also appointed by the Government for a period of life The last named administrative body of the Reichbank is the Central Auschuss, which is a sort of advisory committee to the stockholders. It has not the powers delegated to it which the other two administrative bodies possess, though it exercises considerable influence over the bank's business affairs.

Branch banking through the Reichbank; reserves. - The branch system of banking exists in Germany, in the case of the Reichbank, which has main branches, sub-branches and agencies situated throughout the country. The controlling factor in the Reichbank's operations is the central bank, which governs the affairs of all the dependent organizations. The ownership of the German bank is private, though this is declared by many to be but a theory. The Reichbank is the holder of the reserves of the nation and is the only note issuing bank in the country with practically monopolistic powers.

Incorporated Banks

In Germany, there exist also several hundred incorporated banks, though no more than half a dozen actually control the situation, the latter conducting more than half the banking business of the country. In the majority of cases the smaller banks in Germany are dominated by the big metropolitan institutions.

Importance Of The Reichbank

As in England, the Reichbank decides the discount rate and the rate for loans. It is the central figure in German banking, and, all other institutions in the country being in close touch with it, it is like the Federal Reserve bank, a "bank for bankers." It is a private institution, and, though with private means, is still considered to be under the control of the Government. The Reichbank confines its business particularly to the discount of short term bills of exchange, especially mercantile bills. It does not engage in the discount of credit and finance bills, as they are based upon a real money claim and are to a certain extent security in themselves, being secured by capital already employed.

Long term credits; their benefits. - In Germany the connection between industrial enterprises and the banks, is very close, this fact distinguishing it from the banking systems of other countries. The German bank is attracted by long term credits, which is quite contrary when compared with the British system. In foreign trade, these long term credits have, until the outbreak of the Great War, been a direct means of bringing home to Germany large volumes of foreign business, and it is by these long term extensions of credit that the banking system of Germany has rendered its greatest service.