GIPE-PUNE-OIIOI2 - DSpace@GIPE

AND THE BANQUE DE FRANCE 51
Drittelsdeckung principle. But here, again, there was
an alternative.' The so-called "cash" might consist
either of gold or the "German money. •• Supposing that
it was all gold, the currency was assured at least of onethird
of the note-issue as guaranteed by gold. Bct should
the cash cover have been only "German money," there
was no compulsion as to the amount of gold to be held.
The law was lenient enough to include even the
ReichskassenS'cheine (Imperial Treasury Bills), which had
no metallic basis and constituted pure paper-money,
although issued in small quantities, in its list of "cash".
We have already noticed tbis defect in the law of 1875
as apparent from the definition of the "cash."
The Reichsbank accepted the principle of the Bank
of England but took a forward step in the application of
this principle. The German currency system did not
consider gold to be the only or the chief reserve or cover
against note-circulation.
Another step ahead of the British system was embodied
in the German legislation of 1875. It consisted
in the facts (1) that a certain amount of wholly uncovered
or unguaranteed note-issue'(550,OOO,OOOM.) was possible
and (2) that even this privilege might be exceeded under
certain conditions as described above.
It is evident that the Currency and Bank Notes Act
of July 1928 does not compel the Bank of England to
adopt the principle of "proportional" gold-cover. And
yet ~t is doubtful whether the old rigidity according to
which one might almost say -that the British system was
based essentially on the principle, "no gold, no note," is
being factually maintained today. .
On 28 November, 1928, the Issue Department of the