GIPE-PUNE-OIIOI2 - DSpace@GIPE

64 THERE-MAKING OF THE REICHSBANK
means be overlooked. The 35 p.c. gold-cover in France
"is meant both for (1) notes as well as. for (2) ordinary commercial
credit, current deposits etc. But the 30 p.c. goldcover
'in Germany is meant exclusively for notes. Ordinary
banking functions of the German note-bank,
viz. current deposits, etc. are legally covered by Sonderdeckung,
special cover, which" must be 40 p.c. of the
interests involved, although not in gold-cash. In other
words, the Reichsbank emphasises the distinction between
the "issue" functions and the "banking" functions, cOosiders
the different forms of credit separately, and makes
separate provisions for each. The Banque de France, on
the contrary, co~tinues to consider both note-issue C\11d
deposit or other banking as but credit, pure and simple.
It does not therefore make special provisions for each form
of credit. One lump cover (in gold) of 35 p.c. is· considered
to be enough to take care of both kinds of credit
transactions.
It is to be noted, besides, that the German law
categorically describes the kind of cover that is compulsory
Jor the remaining 70 p.c. of note-circulation,
whereas the French law is naturally silent on this point.
France, although she has at last accepted the compulsory
principle of proportional cover, is still following her
traditional policy of freedom.
And compared to the conservatism and cautiousness
of the "British institution the French system today
PQssesses not only the elasticity of the Reichsbank but
goes beyond . it in its liberati6n and emancipation from
statutory control in regard to" the reserve for paper-money
or for ordinary banking. Here, indeed, we encounter
the ~'banking principle" in a new guise.