The capital of the bank was changed, when the new monetary system took effect in 1900, to 210,000,000 crowns ($42,630,000). The increase from 180,000,000 crowns was accomplished by transferring 30,000,000 crowns from surplus, which was thus reduced to 6,514,000 crowns, but was gradually built up again to 15,305,349 crowns at the close of 1907. The principal accounts of the bank under the new monetary unit are shown in the following table: Accounts of the Austro-Hungarian Bank, 1900-1907. seasons. The circulation of the bank varies widely at different The degree of pressure for currency is indicated by the record of occasions on which notes have been issued in excess of the authorized limit and subject to the five per cent. tax. These occasions were more or less exceptional down to the close of 1905. During eighteen years ending with that year, a period of 864 weeks,-excess issues appeared in fifty-five weeks, some of them for very small amounts. Of these issues twenty-three occurred in the month of October, which is the harvest month.' The first occasion was in the autumn of 1890, when the limit was exceeded 656,440 florins in the week of October 7th, and the excess rose to 23,257,080 florins during the week of October 31st. The excess of circulation declined to 17,093,710 florins in the following week and disappeared in the week of November 14th. The pressure was felt more severely in later years and especially in 1907, when there were twenty-two weeks of excess circulation, and after August 23d, issues were continuously above the authorized limit. The highest excess was in the week ending October 31st, when the amount was 242,067,000 crowns ($49,125,000). Then began a gradual improvement, which carried the excess down on December 15th to 25,074,000 crowns, to be advanced again temporarily by the end-of-the-year demand for currency, which carried the excess circulation on December 31, 1907, to 187,145, 1 Letter of the Governor of the bank to the New York Chamber of Commerce, July 22, 1906. In this letter Count von Bilinski declared that "the system of note taxation exerted no decided influence upon the discount policy of the bank, inasmuch as the Council of Administration, after careful consideration of all circumstances, had occasion to raise its discount rate repeatedly during times when the limitation of its note issue had not been reached; and also on several occasions when its limitations were reached, it maintained a discount rate lower than the legal five per cent. rate. Thus the cost of the tax was not borne by its clients, but by the bank itself."-The Currency: Report by the Special Committee of the Chamber of Commerce of the State of New York, 43. ooo crowns. The range of variation in the circulation before the change in the monetary unit is indicated by the following figures for representative years: Substantially the same range of variation has prevailed since the adoption of the crown as the unit of value and the practical restoration of stable exchange. In the year 1907 the circulation at the beginning of the year was 1,982,037,000 crowns ($402,300,000) from which it fell gradually to a minimum of 1,709,004,000 crowns ($346,900,000) on March 23d. From that date the demand for additional notes increased only slowly until September 23d, when the amount was 1,871,917,800 crowns. Then began the rapid upward movement caused by the combined influence of the autumn crop movement and the disturbances in the money markets of the world, which carried the circulation on September 30th to 2,001,892,000 crowns and on October 31st to 2,070,293,000 crowns ($420,200,000),-the maximum of the year. From this point there was a gradual decline to 1,865,210,000 crowns ($378,600,000) on December 15th, until the usual movement at the end of the year, which left the amount of notes outstanding on December 31st at 2,028,024,000 crowns ($411,600,000). About one-third of the amount of the notes are for 20 crowns ($4.06). The number of these on December 31, 1907, was 32,978,829 out of notes outstanding to the number of 59,968,201, and their value was 659,576,580 crowns ($133,875,000). Notes of other denominations were 357,188 for 1000 crowns, 6, 189, 182 for 100 crowns, 4,604,357 for 50 crowns, and a small number in old notes in process of retirement.' The volume of discounts fluctuates in much the same manner as the note circulation. The maximum of 1907 was 865,223,000 crowns ($175,630,000) on October 31st, the minimum was 525,410,000 crowns ($106,650,000) on February 23d, and the average for the year was 666,309,000 crowns. As in other European banks of issue, the greater part of the paper held is of even shorter maturities than is required by the statutes. Thus, of the amount held at the close of 1907, 468,849,397 crowns, or 62.67 per cent. of the whole, matured during January, 1908, and 25.47 per cent. during February, leaving only 11.86 to run longer than two months. The rate of discount of the National Bank varied between 1817 and 1862 from five to eight per cent., and from 1863 to the fusion with the Austro-Hungarian Bank in 1878 never went higher than six and a half per cent. The changes in the rate of discount during these fifteen years were twelve, while those of the Bank of England were one hundred and fifty-two, of the Bank of France forty-six, and of the Bank of Prussia forty-five. The mean rate of the National Bank of Austria was not more than eight-tenths of a cent. above that of the Bank of England nor more than seven-tenths above that of the Bank of France, in spite of the much more complete industrial development of the latter countries." The rate has varied even less during the more recent history of the consolidated bank. Fixed at four per cent. on May 9, 1879, it was raised to five per cent. October 20, 1882, reduced to four and a half on February 3, 1883, and to four per cent. on February 23, 1883. The rate was raised again to four and a half on October 7, 1887, and reduced to four per cent. on January 11, 1888. The rate of four per cent. was pretty uniformly maintained during the early part of the year for 1 Generalversammlung der Oesterreichisch-Ungarischen Bank am 3 Februar 1908, 6. Noel, I., 382, 434. some years, but the autumn rate was usually higher, reaching in 1890 five and a half per cent. An increase from four to five per cent. was made on October 7, 1893, but was fɔllowed by a reduction to four and a half in the second half of January, 1894, and to four per cent. on February 9th, where it remained throughout the year and until the autumn of 1895, when it was put at five per cent. Reductions were made in the winter, which brought the rate down on February 14, 1896, to four per cent., where it was successfully maintained, through the elasticity of the note system, until the autumn of 1898. The scarcity of capital, which then afflicted Europe as the result of the war in South Africa and of other causes, forced the rate of discount at the Austro-Hungarian Bank to four and a half per cent. on October 14, 1898, and to five per cent. on November 25th. High rates prevailed, with slight relaxations, until the spring of 1901, when it became possible on March Ist to reduce the rate to four per cent. and in 1902, on February 5th, to three and a half per cent., for the first time in the history of the bank. This rate remained unchanged for more than three years, when the pressure again felt upon the world's stock of capital led to an advance on October 19, 1905, to four and a half per cent. Even then the advance was attributed at first to the attraction for Austrian gold which was afforded by high rates in foreign markets, but it presently appeared that there was real pressure at home as well as abroad.' Not until May 31, 1906, was a reduction made to four per cent., and on September 30th it became necessary to restore the higher rate, and on June 30, 1907, to make a further advance to five per cent. and on November 15th, to six per cent. The average rate for 1907 was 4.896 per cent. The Austro-Hungarian Bank, like the Bank of France, has done much to extend accommodation to small merchants. The whole number of pieces of paper discounted in 1878 was 368,795, which grew in 1882 to 550,829; in 1887 to 704,608; 'Raffalovich, Le Marché Financier en 1905–06, 531. |