XIII. Reserves

a) The Bank shall always carry a normal reserve of at least thirtythree and one-third (oo1/^)0^ of the total amount of its notes outstandiug, subject to the following qualification:

In exceptional circumstances, the reserve agaiust notes inay be reduced below thirty-three and one third (33 * .3)°/0 on the proposai of the Managing Board, by a décision of the General Board; but said décision of the General Board shall require the affirmative vote of every member of the Board save one. In case of such a réduction in the reserve, the Bank shall incur the following penalties, the proceeds of which it shall pay to the Reich: whenever the reserve against notes shall be less thau thirty-three and one-third (331/;i)°/0 of the notes outstanding and shall so continue for more than one week the Bank shall pay the following deficiency tax upon the amount by which the said reserve is less thau thirty-three and one-third (^^1l:0°lo °f tQe notes outstandig:

When the reserve is below thirty-three and one-third (33 V^)0^ and not below thirty (30)°/0 a tax of three (3)°/0 per annum;

When the reserve is below thirtîjr (30)°/0 and not below twentyseven (27)°/o> a tax °* ^ve (^)% Per annum>

When the reserve îs below twenty-seven (27)°/0 and not below twenty-five (25)°/0, a tax of eight (8)°/0 per annum;

When the reserve is below twenty-five (25)°/0 a tax of eight (8)°/0 per annum plus one (l)°/o Per annum f°r eacû one 0)°/o tne percentage figure is below .twenty-five (25)°/0

b) No discount rate or rediscount rate shall be below five (5)°/0 per annum when the reserve mentioned in the preceding paragraph shall hâve continuously, for one week or more, been below thirty-three and one-third (33 V^)0/^ of the bank note liabilities there mentioned.

c) WThenever a deficiency tax is payable, a percentage equal to at least one-third (1/3) of the percentage rate of the tax payable shall be added to the Bank's discount rate and rediscount rate, in addition to any increase in the said rates required to comply with the provisions of the preceding paragraph.

d) The above-mentioned légal reserve may be kept in gold bars or gold coin, at any office of the Bank, and/or in the form of demand deposits, made payable in gold or its équivalent, at the rates at which the deposits were made, in banks- of high standing located in foreign fiuancial centres.

e) The Bank shall also hold a spécial reserve of gold and gold deposits, of the same character required to be held against its notes in circulation, to the amount of twelve (12) °/o of its deposit liabilities. Whenever the above reserve is continuously-, for one week or more, below said twelve (12)°/o, the Bank shall pay a deficiency tax of four (4) °/o per annum on the amount by which the reserve is less than twelve (12) °/o

Plan des Experts (Rapport Dawes). 793

and not less than ten (10)°/o; a tax of eight (8) °/o per annum on the amount by which it is less than ten (10) % and not less than eight (8) °/o; and a tax of ten (J0) % per annum in addition to said eight (8) °/o for each one (1) °/o by which the percentage figure is below eight (8)%.

f) In order to assure adéquate liquidity in the assets securing the Bank's deposit liabilities, the Bank shall at ail tirnes hold in addition to its afore-mentioncd gold reserve of twelve (12)°/o demand deposits in Gennany and abroad, chèques on other banks, and statutory notes and bills of a commercial character, payable at call or on time with maturities of less than thirty (30) % days to the amount of not less than thirty (30) ";o of the Bank's total deposit liabilities.

g) The above-inentioned reserves and the liquid assets above described shall be segregated for the service of the Bank's deposits.