The Creditbanks and the Money Market

This chapter examines the transactions of the Berlin money market before the War and the influence of the creditbanks on the development of that market. In Berlin, as elsewhere, the short loan market had two parts, those concerned respectively with the discounting of bills and the making of loans upon first class stock exchange securities. Bank money and bank acceptances created the private discount markets of Berlin, Frankfurt, and one or two other large towns. Within certain limits, the fixing of the private discount rate lay in the discretion of the banks. Loans in the money market raised on the deposit of stock exchange securities were taken up mainly, although not exclusively, by stock exchange speculators. The years from 1908 to 1911 saw the renewal and amendment of the Bank Act and various attempts on the part of the Reichsbank to strengthen its own position, but no real change in the relations between the creditbanks and the Reichsbank.