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28605_1925-1929

28605_1925-1929

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DECEMBER, 1929
FEDER L RESERVE BULLETIN
797
TEXT OF CZECHOSLOVAK CURRENCY LAW
On November 7, 1929, the standing com-mittee of the Czechoslovak National Assemblyenacted, in pursuance of Article 54 of the Con-stitution, certain legislation for the definitestabilization of the Czechoslovak currency.By section 11 the enactment was to come intoforce on the day of proclamation; the act wasproclaimed in force on November 27, 1929.The text is given below:
 
SECTION
 1
The Czechoslovak crown (K5) as the presentcurrency unit of the Czechoslovak Republicshall be equal in value to 44.58 milligrammesof fine gold [$0.029629].
SECTION
 2
The National Bank of Czechoslovakia (here-after referred to as the Bank) shall maintainthe exchange value of its notes at the legal rate(see sec. 1) and can be made responsible fornonperformance of this prime duty (see sec. 11of the bank of issue act of April 14, 1920, No.347 of the Collection of Laws and Ordinances).
SECTION
 3
1. The Bank shall be bound to purchase at thehead office in Prague and at such branch officesas shall be designated by the Bank, gold at theprice of 1 Kc per 44.58 milligrammes, but onlyif the seller offers a quantity of at least 12kilogrammes of fine gold [$7,975]. The Bankshall be entitled, in effecting such purchase, tomake no other charges except for assaying, andfor coining in accordance with a scale fixed bythe Government mint (see sec. 4, par. 6).
2.
 The Bank shall at the aforesaid premises(see par. 1) redeem its notes at its optioneither by gold (either in tfye form of currentcoin or gold bullion) at the price of 1 Kc per44.58 milligrammes of fine gold or by goldforeign exchanges at the rate of the day quotedon the Prague Bourse, but only in amountsequal in value to at least 12 kilogrammes offine gold. Should the Bank fail to carry outthis obligation within 24 hours of the pre-sentation of the notes without being able toplead force majeure, its charter shall be canceled(see sec. 12b of the Bank Act).
1 English text furnished
 by
 National Bank
 of
 Czechoslovakia.
3.
 The Government in agreement with theBank will determine by special decree the dateon which the aforesaid legal obligation statedin paragraphs 1 and 2 shall come into force, or,haying come into force, to what extent thisobligation shall be temporarily limited oramended with regard to the amount.
SECTION
 4
1. In conformity with the legal gold contentof the Kc (see sec. 1) gold coins (hfivny) shallbe minted, containing 900 parts of fine goldand 100 parts of copper.
2.
 One kilogramme of standard gold shallbe minted into 201.89783969 hundred-crownpieces, and one kilogramme of fine gold into224.31583669 hundred-crown pieces, the stand-ard weight of the hundred-crown piece to be4.9533 grammes containing 4.458 grammes offine gold.
3.
 The minting of the coins shall be as accu-rate as possible; in so far as this can not beattained absolutely a tolerance shall be allowedeither way of 2/1000 in standard weight and
1/1000
 in fineness.
4.
 One face of the hundred-crown piece shallbe impressed with the armorial bearings of theCzechoslovak Republic, and the denominationof the coin shall be marked on the face or thereverse according to the character of its generaldesign.
5.
 The hundred-crown gold pieces shall belegal tender for the payment of any amountswhich can be made in Czechoslovak currency.6. The general design of the hundred-crowngold coins and the date on which the Govern-ment Mint shall commence their coinage onaccount of the Government, as well as the dateon which unlimited coinage of gold for privatepersons shall commence, shall be fixed byspecial Government decree which shall alsofix the minting charges, which, however, shallnot exceed 0.3 per cent of the value.
SECTION
 5
1. If a hundred-crown gold coin has lost inweight (see sec. 4, par. 2) by ordinary wear andtear not more than 5/1000 of the standardweight, it shall be considered as of currentweight and shall be accepted as of full weightfor all payments both at Government and other
December 1929
 
798
FEDERAL RESERVE BULLETIN
DECEMBER, 1929
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.
2.
 Any counterfeit coins ascertained by anyof the aforesaid cash offices shall be impoundedwithout compensation by the Government andsent to the Government mint.
3.
 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).
SECTION
 6
1.
 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.
2.
 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.
3.
 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.
SECTION
 7
1.
 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.
2.
 The Bank is authorized to increase itscapital to 607,500,000 KS should a resolutionto that effect be passed at a general meeting.
SECTION
 8
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.
SECTION
 9
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.
SECTION
 10
1.
 The following are hereby canceled:
 a
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
2,
 section 3, of this enactment.
 b
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.
2.
 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
VII,
 the reference will now be to section 6 ofthis enactment.
 c
Act No. 102, 1925, of the Collection ofLaws and Ordinances, Article XVI in whichAnnex A shall read as follows:
December 1929

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