BANKING. At the head of the German bank ing system is the Imperial Bank (the Reichs bank). Founded in 1875 by an act of the Ger man Reichstag, it has been ever since the lead ing bank of issue, and, in addition to other banking operations, has served as the depository of the Imperial Treasury. The bank is under a stricter Government control than even the Bank of England or the Banque de France. Al though practically a private stock company, its management is vested in a board of directors ap pointed by the Government and subject to the orders of the Chancellor of the Empire. The stockholders are represented by a general assem bly, electing in turn a central committee, which makes monthly examinations of the affairs of the bank, and whose consent or advice is asked in certain matters by the board of directors. The bank keeps on deposit all moneys intrusted to it by the Imperial Treasury, and attends to all collections and disbursements on its account without any compensation. Nor are the finan cial advantages derived by the Government from the operations of the bank limited to that alone. The profits of the bank are distributed as fol lows: First, an annual dividend of 4% per cent. on the capital stock of 120,000,000 marks (near ly $29,000,000) is distributed among the stock holders; second, 20 per cent. of the remaining surplus is added to the reserve fund, so long as the latter does not exceed one-fourth of the capital stock; third, the remaining surplus is divided equally between the shareholders and the Imperial Government, but the half of the surplus is allowed the stockholders only so long as it does not raise their dividends from the above sources to more than 8 per cent. Beyond that, the surplus is divided in the proportion of one-fourth to the stockholders and three-fourths to the Government. Under that arrangement, the stockholders received a dividend of nearly 11 per cent, in 1900.
Unlike the Bank of England or the Banque de France, the Imperial Bank of Germany is not the sole bank of issue in the country. At the time of the enactment of the new bank regula tions for the Empire, in 1875, thirty-one other banks were authorized to issue bank notes, the total uncovered note circulation having then been fixed at $91,630,000, of which $59,500,000 were allotted to the Imperial Bank, and the re mainder apportioned among the rest according to their capital stock. Since then the number of
these banks has gradually diminished, the allot ment of the bank-note issue of all such being transferred to the Imperial Bank. In the closing year of the century only the following eight banks still retained the right of issue: These banks may issue notes also in excess of the allotments indicated above, but all such amounts are subject to a tax of 5 per cent. The growth of the business of the Imperial Bank from the time of its foundation may be seen from the following figures: The total amount of all kinds of transactions had increased from $8,734, 000,000 in 1876 to $18,207,000,000 in 1886, to $31,297,000,000 in 1896, and exceeded $44,982, 000,000 in 1900, while its loans on securities in creased from $111,146,000 in 1876 to more than $209,440,000 in 1900.
An important business carried on by the Im perial Bank is that in connection with its clearinghouse department. The latter was founded in 1883, and the volume of clearings is behind only those of the London and New York houses, exceeding $4,760,000.000 per annum at the close of the century. Since its organization several other clearing houses have been es tablished in other cities of Germany, the more important being in Frankfort, Stuttgart, Co logne, Leipzig, Dresden, Hamburg, and Bremen. In addition to the banks of issue and the branch banks mentioned above, there are about 150 other banks organized as stock companies, whose total capital stock in 1900 exceeded $428, 400,000, as compared with $302,736,000 in 1885. That does not include the still more numer ous private banks, some of which, like the Rothschilds or Bleichroder, are among the fore most banking institutions of the world. There are also several mortgage banks (Hypotheken banken—crOdit fonder) to minister to the wants of the agricultural population, people's banks (Volksbanken) or cooperative loan associations which lend small amounts to needy artisans and owners of workshops, and finally the Prussian Maritime Association, for a description of which, as well as of the most important Berlin banks, the reader is referred to the paragraph on Bank ing, under PRUSSIA.