soon as the extra fund was exhausted, the proportional systein
commenced to take effect, but this has not happened since 1870.
Since 1893, the differential system pnre and simple has been established,
the bank now being authorised to issue notes to the amount
of kr. 24,000,000, or less, over and above its stock of gold. This
limit may, as an exception, be exceeded, provided, however, that
any excess which has taken place in the course of a month be
settled before the end of the next month. This permission has
been made use of by the bank twice in the year 1899.
The coin reserve of the bank and its note circulation amounted
to kr. 16,608,000 and kr. 28,388,000 respectively, at the end of
1870, at the end of 1880 to kr. 33,721,000 and kr. 38,714,000, at
the end of 1890 to kr. 38,896,000 and kr. 49,671,000, and at the
end of 1898 to kr. 44,324,000 and kr. 63,416,000.
Besides issuing paper money, the bank also does business as a
loan, circulation, discount and deposit bank. I t accepts money
on call, but does not pay any interest thereon, and thus does not
compete with the other banks and savings hanks which chiefly
carry on their business by means' of borrowed money. The money
placed in the Bank of Norway on call, amounting at the end of 1898
to kr. 9,300,000, may most appropriately be considered as cash
in hand for some of the other banks and for the Treasury.
The manner chiefly adopted by the bank in order to make its
means productive of revenue is by lending them in return for
bills of exchange and «vexelobligationer» *) and also by lending
them against deposit and by placing them in interest-yielding-
securities and drafts on foreign countries
The bank is obliged, without compensation, to take charge of
the money transactions of the state, and- of the exchange of subsidiary
coin incumbent on the Treasury. In accordance with
certain rules, the net income of the bank is divided between the
stock-holders, the: Treasury, and the reserve fund. The dividend
paid to the stock-holders in the year 1898, amounted to 9Vs °/o.
The head office of the bank was formerly at Throndhjem, but
*) These aje a peculiar ,Mnd of debenture, which, as a rule, are issued
on personal security by means of endorsement, and require repayment within four
or six months from date of issue; they are, however, renewed at maturity by
payment of an instalment, so as to be gradually repaid in the course of a
few or many years.
in 1897 moved to Kriatiania. The bank has, besides, twelve
branch offices in the most important towns in the country.
At the end of 1898 the bank had:
Coin r e s e rv e -' . . kr. 44,324,424
Notes and «vexelobligationer»......................... . : 37,641,170
Loans on mortgage......................... . ■ -.' , .' . ‘ ? J : . 4,915,933
Drafts on foreign countries. . . , . . V". v ’ 'V’'-®-' 2,922,205
Interest-bearing securities. . . .....................2,653,075
Other assets .. . . , . . . . ' . . . . , > 464,441
Total kr. 92,921,248
The Mortgage Sank of the Kingdom of Norway is a state institution
which was established in the year 1851, and serves the
purpose of granting loans on real estate. I t has a capital which
amounted to kr. 15,000,000 at the end of 1898 ; of this amount
kr. 13,010,000 have been furnished by the state, which receives
4 % interest on this advance. The bank has, besides, -a reserve
fund which at the same time amounted to kr. 1,000,000. Otherwise
the bank procures the means of which it disposes, by selling
interest-bearing bonds payable to the bearer, the total amount
whereof must not exceed eight times the amount of the capital.
These bonds are issued in annual series and are reimbursable in
the course of 30 years by means of increasing instalments. The
interest of the series now current (i.e. those issued since 1885) is
4 % for the two series 1893—1894, and for the others 3'/a %•
At the end of 1898 the total amount of the outstanding bonds
was kr. 119,493,200, of which a little more than 70 % are placed
in foreign countries.
One fourth of the capital of the bank may be invested in
Norwegian state bonds, while such an amount of the assets of the
bank as it is considered necessary to keep ready at disposal may be
used for discounting purposes. The rest of the means at the disposal
of the bank is loaned against mortgage on real estate. The mortgage
loans are repaid in the course of forty years in increasing
instalments. The interest charged by the bank on these loans
amounted in 1898 to 4 °/o. The total amount of the mortgage loans
of the bank at the end of 1898 was kr. 122,824,300, of which
kr. 24,523,700 have been granted as loans on town property, and
•kr. 98,300,600 on country property.