FEDERAL RESERVE BULLETIN
public cash offices and in private dealings. If,however, its weight has diminished by ordinarywear and tear below the current weight or ifthe coin has been reduced, impaired, or perfo-rated otherwise than by ordinary wear and tear,it shall cease to be legal tender. Governmentand other public cash offices when receivingsuch coin shall withdraw it from circulationby debasing the same in a striking manner andreturning it to the presentor without compen-sation.
Any counterfeit coins ascertained by anyof the aforesaid cash offices shall be impoundedwithout compensation by the Government andsent to the Government mint.
The Government mint, to which allfaulty coins must be sent, shall decide whetherthe coins have lost weight through ordinarywear and tear or other damages (see par. 1)or whether they are counterfeit (see par. 2).
The Bank shall maintain the followingmetallic cover: Until the end of 1929 at least25 per cent, by the end of 1930 at least 30per cent, by the end of 1935 and thereafterat least 35 per cent of the total note circulationplus sight liabilities.
In calculating the relation of the metalliccover to circulation, the average rate of ex-change of the gold foreign exchanges in eachfiscal quarter as quoted on the Prague Bourseduring the last fortnight of the precedingquarter shall be conclusive.
At least one-half of the metallic cover shallconsist of gold bullion or coin; the balance mayconsist of foreign bank notes convertible intogold (valuta), foreign full legal tender coin,and bills of exchange which are either draftson the principal banking places in Europe andAmerica indorsed by first-class banking in-stitutions and otherwise conforming to theconditions of bank drafts, or liquid balanceswith banks of unquestionable standing in theprincipal banking places of Europe andAmerica.
The present share capital of 12,000,000United States dollars, divided into 120,000shares of 100 United States dollars each, shallbe converted at the rate of $1 to 33.75 Kc into405,000,000 Kc, the nominal value of one sharethus becoming 3,375 K6; it will not be neces-sary, however, to issue new shares nor tostamp the old shares.
The Bank is authorized to increase itscapital to 607,500,000 KS should a resolutionto that effect be passed at a general meeting.
When the State notes debt has been reducedto not more than 1,000,000,000 K6, the Bankshall be authorized, in spite of the principlestated in paragraph 1, section 129 of the Bankact, to discount Government bills up to a totalof 200,000,000 K6 to cover temporary differ-ences in budgetary expenditure and revenue.Such temporary credits shall be repaid notlater than the end of March in the followingyear. Such bills must also bear the signature ofa banking institution.
The Bank is authorized, in agreement withthe Minister of Finance and as long as noinfringement of its own legal obligations isinvolved, to participate in international finan-cial and economic institutions and arrange-ments of monetary inportance.
The following are hereby canceled:
Sections 6 and 15 of the Bank act.Where reference is made to section 15 in sec-tion 12, section b, of the same act, the referenceshall now be to the last sentence of paragraph
section 3, of this enactment.
Article III, paragraph 1, article VII, andarticle XIV of the act of April 23d, 1925, No.102 of the Collection of Laws and Ordinancesamending and supplementing the Bank act.
The following enactments are herebyamended:(a) The Bank act, section 129, paragraph 1.(6) Act No. 102, 1925, of the Collection ofLaws and Ordinances, Article VIII in so far aswhere reference in this article is made to Article
the reference will now be to section 6 ofthis enactment.
Act No. 102, 1925, of the Collection ofLaws and Ordinances, Article XVI in whichAnnex A shall read as follows: