GIPE-PUNE-OIIOI2 - DSpace@GIPE

AND THE BANQUE DE FRANCE 47
"special cover" of at least 40 p.c. for its daily commer~
cialliabilities. This cover is to be in the following forms :
1. Reichsbank's day to day deposits in
Germany.
2. " " " "abroad.
3. Cheques on other banks (both German and:
foreign) in favour of Reichsbank
4. Bills of exchange with a duration of not more
than 30 days.
5. Loans (Lombarddarlehn) made by the·
Reichsbank such as may be recovered:
from day to day.
All these forms of cover belong, it is clear, to the­
., short~period claims" of the' Reichsbank on others at
home or abroad.
The law says, further, that this 40 p.c. cover for daily
business is to be kept separately from the amount kept by
the Reichsbank to the credit of the Reparations Commisw
sion, which normally is not to exceed 2 milliard Marks.
The daily deposit and other liabilities of the Reichs~
bank are thus to be met out of a standing 40 p.c. reserve
i[l the shape of its daily and short~period claims. This.
reserve is to serve not only as . a cover for the ordinary
banking transactions of the Reichsbank but as an indirect
strengthening of the cover for the note~issue as well. The.
cover, security or protection of the" issue department" has.
been by this measure rendered independent of the cover,
security or protection of the "'banking department. ,. The
possessors of notes as creditors of the Reichsbank do not
therefore have to compete with the depositors and othercreditors.