2. Sir Otto Niemeyer, (Report on Re-organization of Brazilian National Finance)

“(c). The main function of the Reserve Bank will be to assist in the maintenance of the stability of the currency and it must therefore be in a position to control credit. It must hold not only the sole right of Note Issue but the main reserves of the Commercial Banks. Provision should be made therefore that all important Commercial Banks should maintain with the Reserve Bank a balance proportionate to their demand liabilities in Brazil.”

“The whole conception of a Central Reserve Bank System implies the centralisation of all banking reserves and the maintenance of close contact between the Reserve Bank and the Commercial Banks with a view to cooperation in the general credit policy. Apart from such amounts as may be required for till money etc. it is natural that the Bank should hold the main cash resources of the Commercial Banks. Such deposits do not call for interest, for they only take the place of the cash formerly held in the vaults of the Banks.”

----------------------------