A. No; we are free from the government income tax, and the license fees, but we must pay the real-estate tax.
Q. What is the relation between this bank and other banks, such as the Deutsche and the Dresdner—that is, as to the character of business transacted? Are you not competitors?
A. It may be said that the Reichsbank is more restricted by law. At a private bank the rate of discount may be much cheaper than at the Reichsbank. The private banker knows his clients, and he may be willing to accept from them a bill that the Reichsbank would not and could not accept.
Q. Then there is to some extent competition?
A. Yes; but that competition is not large. It is not felt that the Reichsbank is a competitor of other banks, but it is a public institution. The Reichsbank has its official rate, which is higher than the private rate. A bank will take bills on its own account running three months or more and hold them, and in case of need will take bills running ten days or less to the Reichsbank for discount. The Reichsbank pays no interest and acts as agent for transfer of currency and credit to all parts of the Empire without charge.
Q. Has there been any feeling that your branches were supplanting the private local banks in small towns?
A. There may have been some instances where a banker may have been dissatisfied at the Reichsbank opening a branch in his locality, but as a rule the banks at such a place are quite pleased to have the Reichsbank open a branch in order that they may have the benefits of its facilities.
Q. The government deposits are received and treated exactly the same as the deposits of farmers?
A. Yes. The business for the Government and its departments is handled the same as for others, and no interest is paid on deposits. There is, however, one exception; every private institution is required to keep a minimum balance to its credit, but not so with the departments of the Government. The Empire keeps in the aggregate sufficient to compensate.
Q. Do you always charge a higher rate of discount for bills when you have a large amount of taxed notes outstanding?