GIPE-PUNE-OIIOI2 - DSpace@GIPE

AND THE BANQUE DE FRANCE 37
with money or other values held as pledge. "No cover,
no note" was the principle in actual operation at the
Reichsbank,subject to the little privilege noted above.
The economic crisis of the United S~ates in 1907 had
its repercussions on Europe. And Germany had to feel
the shock quite acutely. The Reichsbank was com·
pelled (i) to increase its circulation and (ii) to lower the
amount of cash and other pledges. In 1906 and 1907
the •• average" cover for the notes ranged between 64·1
and 68·4 p.c. In 1902, it was 82·8 p.c. In 1907, at one
time the exact amount of notes in circulation was as high
as 1,275,000,000 M. while the cash was as low
as 776,000,000 M.
It is clear that the Act of 1875 did not identify cash
(Barvorrat) with gold. The cash cover for the notes was
therefore different from the gold cover. Note for note,
the proportion of gold cover was less than that of casQ
cover because cash in.cluded other metals as well ,as
Reichs~assenscheine, besides gold. The percentages
(average) of cover .are indicated below chronologically. 6 .
Year
1876
1891
1907
1913
1918
1919
1920
1921
1922
Average gold cover
41·9 p.c.
60·7 p.c.
42·9 p.c.
54·5 p.c.
17·5 p.c.
5·3 p.c.
2'08 ~.c.
1·35 p.c.
0·34 p.c.
6 Die l