Front Page Titles (by Subject) 6. Elastic Limit. - Money and the Mechanism of Exchange
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6. Elastic Limit. - William Stanley Jevons, Money and the Mechanism of Exchange 
Money and the Mechanism of Exchange (New York: D. Appleton and Co. 1876).
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6. Elastic Limit.
The above is the best name which I can find for a new method of regulation which has just been adopted in the Bank Act of the German empire. So far as regards the issue of bank-notes the banking organization of Germany will substantially resemble that of England. The new Imperial Bank, and such of the state or other banks which conform to the requirements of the law, will have the right of issuing notes not backed by gold to the aggregate sum of 385 millions of marks. They may apparently issue any further quantity of notes in exchange for a deposit of gold to an equal value. So far the method is precisely that of the partial deposit already described (p. 222). Observing, however, that the English Bank Charter Act has on several occasions been violated to prevent a panic, the German legislature has provided that more bank-notes may be issued, provided that a tax of 5 per cent. be paid thereon. It is intended in this way to make it unprofitable for any bank to exceed the normal limits. It seems likely that this provision will work well, and form an improvement on our method. The English government, indeed, has always deprived the Bank of England of the interest on any excess of notes which it issued during a suspension of the Bank Act, but the German law makes the limit of issue elastic in all cases, so as to avoid the danger of panic.