REICHSBANK, Deutsche, the official cen tre of the German banking and monetary sys tem, was inaugurated on 1 Jan. 1876, in accord ance with the German Banking Law of 14 March 1875. While established with private means and forming a corporate body, it is under the management and supervision of the empire. Its original capital was 120,000,000 marks, later (7 June 1899) increased to 180,000,000 marks. The purpose of its establishment was the °regu lation of the money circulation of the whole Empire, the facilitation of payments, and the utilization of available capital.° The manage ment of the institution is vested in the Imperial Chancellor, and by him delegated to the presi dent of the bank and a board of directors, these latter appointed for life. In addition, supervision over the ,bank is maintained by a board of curators — the Imperial Chancellor and four members. The shareholders have a voice, principally in an advisory capacity through a general meeting, and ad interim through a central committee consisting of 15 members and 15 alternates who meet at least once a month. From this central committee three members are selected to supervise the management of the bank and participate, with advisory powers onl3r, in the meetings of the board of directors. in matters of an unusual nature with the empire or with the German federated states the consent of a majority of the central committee is required. Upward of 500 branches of the Reichsbank are distributed throughout the empire, the shareholders of each community having such a branch, forming dis trict committees similar in function to those of central committee, from which district com mittees three deputies are selected to manage the local offices. The Reichsbank is authorized to issue bank notes, in no case more than thrice its cash reserve—coin, bullion, imperial treas ury notes and notes of other note-issuing banks the excess over the cash reserve to be ren dered secure by discounted bills secured by at least two persons of known solvency, said ex cess being subject to a tax of 5 per cent. These
bank notes the Reichsbank is obligated to re deem in German gold coin at its central or branch offices on presentation °in so far as the available cash and money requirements permit.° Such issues (Act of June 1909) are legal tender. In view of this obligation the activities of the institution are confined necessarily to banking transactions involving assets of immediate marketability; transactions in precious metals; discounting of secured bills of three months or less; purchase and sale of imperial government or federated state bonds, and other like short term securities specified by law; in addition it receives interest- and non-interest-bearing moneys on deposit and °giro° account; such, if interest-bearing, not to exceed the combined capital and surplus funds of the bank. Finally, it is authorized to receive in custody and man age articles of value. It is the Reichsbank that introduced the system (10 April 1876) of °giro° transactions whereby, in lieu of cash payment between egiro° customers of the bank, the corresponding debit and credit is entered in the accounts of the respective parties, facili tating the settlement of claim and counterclaim at the same bank or between the bank and its branches or between any of the latter by simple bookkeeping transfer. This, of course, presup poses such prior arrangement with the depos itors, who are then known as °giro° customers. At the present time a majority of the imperial and federated state government treasuries maintain °giro° accounts with the Reichsbank a facility employed also by most of the great German corporations, particularly since 1 Jan. 1909, by the introduction of a postal and cheque transfer system to which the Reichsbank is a party. The practical operation of the system is that of an immense clearing-house acting through a single institution. Since its incep tion the °giro° system has met with every de mand of German finance and transactions through it have grown more than twenty-fold.