in reserves of the country; conducts the domestic exchanges, and
serves as a bankers' bank. It is free to do business with the general
public, but the legal and other limitations under which it must
operate give the other banking institutions of the country the
advantage in competition for this kind of business.

It shares the right of note issue with four other banks, which, out of
thirty-two that retained that privilege at the time the Imperial
banking system was established, alone retain it at the present time.
The issues of these four institutions, however, are relatively small
in volume, and the Imperial Government has the right to deprive them
of it January 1, 1921, or any tenth year thereafter, on condition of
giving one year's notice of its intention so to do. The issues of the
Imperial Bank are subject to the following regulations: they must be
covered by cash and discounted bills maturing in not more than three
months, and signed by at least two solvent persons, the proportion of
cash being not less than one-third of the total. If the total amount
issued exceeds the Bank's holdings of gold bullion, specie, and
government notes by more than 750,000,000 marks at the end of March,
June, September, and December, and 555,000,000 marks at other times, a
tax of five per cent per annum is levied on the excess.

The law confers upon the Bank the following powers:

a. To buy and sell gold and silver coin and bullion.

b. To discount, buy and sell bills of exchange whose
maturity shall be three months at the longest, and for which
usually three, and in no case less than two, accredited
vouchers shall stand good; furthermore, to discount, buy and
sell bonds of the Empire or of any German state, or domestic
municipal corporations, provided such bonds mature within
three months at the longest and conform to the new standards
of value.

c. To grant interest-bearing loans for terms no longer than
three months, upon movable security (lombard, or deposit
loan business), such as: gold and silver, coined or
uncoined; interest-bearing or non-transferable bonds
maturing within a maximum term of three months, whether of
the Empire, a German state, or of domestic municipal
corporations; interest-bearing non-transferable bonds on
which the interest is guaranteed by the Empire or by any one
of the German states; capital stock and stock prior