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28011_1930-1934

28011_1930-1934

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JULY,
 1930
FEDERAL RESERVE BULLETIN
441
In 1927
 the
 balance
 in our
 favor was 60,000,000bolivianos ( 19,000,000).
 The
 merchandisesurplus, however,
 is
 almost extinguished
 by
such invisible items
 as the
 service
 of the
 exter-nal debt, which
 for the
 year
 1929
 amounted
 to
16,500,000 bolivianos ( 6,023,000), profits
 of
foreign mining companies
 and
 business enter-
prises,
 the
 cost
 of the
 Bolivian diplomaticservice abroad,
 and the
 money taken
 out by
Bolivian tourists.
 In the
 near future
 we
 hopeto have more exact figures from reports
 and
data which
 we are now
 analyzing.We know, however, that
 the
 mining industryexpends much more
 in the
 country than
 was
originally supposed. Thirteen
 of the
 principalmining companies spent
 the
 large
 sum of
54,151,674 bolivianos ( 19,765,361)
 for
 wagesand salaries, purchases
 of
 local products,
 com-
pensation payments
 for
 industrial accidents,customs duties, taxes
 on
 profits, etc. This indi-cates that
 the net
 balance
 of
 payments
 is in
our favor, although
 the
 business depressioncaused
 by the
 falling
 off in
 exports
 of
 tin, whichis
 our
 principal export commodity, tends,
 of
course,
 to
 reduce
 our
 national revenues.Formerly
 the
 mining exporters were legallyrequired
 to
 sell their drafts
 to
 the banks throughthe National Treasury
 up to 25 per
 cent
 of
the value
 of the
 exports. This requirementhas
 now
 been abolished,
 and the
 Central Bankmaintains
 an
 exchange rate within
 the
 goldimport
 and
 export points very close
 to the
parity
 of 18d. The
 average rate
 of
 exchangeon London
 at
 90-days sight during
 the
 past
 six
months
 has
 been 13.34 bolivianos,
 or
 17
6
%
4
d.Rates
 of
 discount
 and
 interest.—Recently
 a
new schedule
 of
 discount
 and
 interest rates
 for
loans has been
 put
 into effect,
 as the
 result
 of
the policy
 of the
 bank
 to
 assist
 the
 economicprogress
 of the
 country
 in
 every
 way
 possible.The directors consider
 it
 advisable
 in the
present depressed situation that
 the
 bankshould furnish cheap credit
 to
 local industriesand
 to
 agriculture, without, however, facili-tating importations which
 are not
 actuallyindispensable. These rates
 of
 discount
 and
interest
 are as
 follows
 (per
 cent
 per
 annum):
RATES
 OF
 DISCOUNTFor industry
 _
For commerce:(a) Necessities..
 b
Other goods.
 or
 agriculture30 days
Asso-
ciatedbanks7Public789760 days
Asso-
ciatedbanks
i
Public
 
90 days
Asso-
ciatedbanks89
 
l
 
Public89108INTEEEST
 ON
 LOANSFor associated banksFor
 the
 public:IndustryAgricultureCommerceWithguaran-tee
 of
bonds,
etc.
Withguaran-tee
 of
docu-ments
 or
signa-tures10
Subsidiary notes.—The monetary
 law of
July 11, 1928, provided
 for
 coinage
 of
 silver
 for
account
 of the
 State. Subsequently, throughthe amendments
 of
 February
 5 and
 December
3,
 1929,
 it
 was agreed
 to
 retain
 the
 1-boliviano
notes
 in
 place
 of
 silver coins.
 In
 accordancewith these measures,
 the
 bank made
 a
 contractwith
 the
 Government providing
 for an
 issueof 7,000,000 bolivianos ( 2,555,000)
 in 1-
boliviano notes,
 and
 obligated itself
 to pay
the Government 2,500,000 bolivianos ( 912,500)as royalty
 for the
 40-year privilege. This
 pay-
ment
 the
 bank
 has
 made.
 The
 contract alsoprovides that
 in
 case
 the
 economic develop-ment
 of the
 country requires
 a
 larger noteissue
 of
 this denomination,
 the
 bank
 in
 agree-ment with the Government will make new issueson payment
 of a
 corresponding additionalroyalty.
 The
 Central Bank
 at
 once
 put
 intoeffect
 the
 amendments
 to the
 monetary
 law
of July 11, 1928,
 for the
 sake
 of the
 additionalfacilities thereby furnished
 to the
 country.
BALANCE SHEET
 OF THE
 CENTRAL BANK
 OF
 BOLIVIAAS
 OF
 DECEMBER
 31, 1929
RESOURCES
Legal reserve:Reserve held in Bolivia-GoldBolivian silver coinDeposits payable at sight or
 3
 days' sight heldin banks in London and New YorkBolivianos(in thou-sands)9,24127
9,268
27,
 015TotalCash assets not included in the legal reserve:Bolivian fiduciary coin in nickelNotes of other Bolivian banks _
 
 j.
Deposits abroad |Foreign moneys IDrafts and bills of exchange payable abroad., jGold bars. iTotal cash assets.._Portfolio:Due from the public-Current accounts...Loans
36 283
1 324
13 91
1
5 442
18
7 2656 57
Dollars
 i
(in thou-sands)
3 373
9
3 3839 86
13,
 243
5 77
 I,
986
2 797
2 6522 211
.__
 i
 Converted
 at
 par: 1 boliviano= 0,365.
July 1930
 
44
FEDER L
 RESERVE BULLETIN
JULY,
 1930
BALANCE SHEET
 OF THE
 CENTRAL BANK
 OF
 BOLIVIAAS
 OF
 DECEMBER
 31, 1929—Continued
RESOURCES—continued
Portfolio—Continued.Due from the public—Continued.Bills discountedDue bills
 at
 sight
 __- .-
Bills overdueBills in liquidationBills written ofL
 _ __
Bolivianos(in thou-sands)
2,385
2304148621
Dollars(in thou-sands)
87184151315
TotalObligations of central government, departments,and municipalities:Various obligationsGovernment bonds
17,214
 |
4,3843,782
1,6001,380
Total.
8,1662,981
Investments: Mortgage bonds, stocks,
 etc
Associated banks:
 Due
 from banks from
 pur-
chase of "B" class shares...
 _
Various accounts:SuppliesLand and buildingsFurniture and fixtures.Pending operationsOffice suppliesCredits abroad
619
3,505
49
2,933
4351041,279
TotalCost of notes and royalty..Interest receivableTotal resources..
LIABILITIES
Total note issueLess on hand
 in
 vaults of bank_
59
3,5802,988
889
93,
 93852,100
9,574
Note issue
 in
 hands of public
42,
 526
Deposits:Associated banks..Accounts current-.Sight deposits
5,121
6,943
1,245
181,07115938
22
1,3071,091324
34,
 287
19,
 017
3,495
15,
 5221,869
2,534
454
BALANCE SHEET
 OF THE
 CENTRAL BANK
 OF
 BODIVIAAS
 OF
 DECEMBER
 31, 1929—Continued
(Bolivianosj (in thou-i sands)
LIABILITIES—continued
Deposits—Continued.Time deposits
 _
Savings accountsWorkmen's savingsEmployees' savings fundJudicial depositsDeposits
 in
 foreign moneysDue to foreign bankersDrafts payableOther bills payableUnpaid dividendsAcceptances
1 138
1725763
1 138
1 38
1 699
4628126
Dollars(in thou-sands)
415632123415383620171046
Total
 ___
Various accounts:Charity fundFunds for employeesOperations pending between central officeand agenciesOther operations pendingReserve for collection expensesDiscount collected but not earnedReserve
 for
 interest accrued
17,887
 i
6,529
 
12
 
23
 i
1485294
Total.Capital:Capital paid
 in
Class"
 B
 " shares subscribed for but not paid..Total.Reserve fund:Reserve paid
 in
Reserve due from associated banks not paid in.Total
Profit
 and
 lossTotal liabilities..
34
 
392
22,9402,87025,810
 
5,070
 ;
634
 
5,704
 i
1,619
 j
12143
8,373
1,0489,4211,851231
2,082
591
93
938
34
287
Per centLegal reserve (art. 71
 of
 the law
 of
 July 20, 1928) 50
 per
 cent 60.0577Total reserve 94.3148
 NNU
REPORT
 OF
 THE BANK
 OF
 BRAZIL
The
 annual report
 of the
 Bank
 of
 Brazil
 for
1929
 was
 presented
 to the
 general meeting
 of
shareholders
 on
 April
 28, 1930.
 Sections
 of
the
 report
 are
 given herewith:
 
The
 year 1929 was very difficult
 for
 Brazil,
but
 the
 improvement created
 in the
 general
situation
 by
 the monetary reform
 of
 December
18,
 1926, enabled
 it to
 maintain
 a
 satisfactory
level
 of
 economic activity.
 ecause
 of the
 economic interdependence of
civilized
 nations, which
 is
 becoming closer
year
 by year, any crisis,
 of
 whatever character,
has
 repercussions throughout other countries,
i Taken with some textual revision from
 the
 official English transla-tion furnished
 by the
 bank. The full text
 of the
 report,
 the
 originalof which
 is in
 Portuguese, deals with
 the
 fluctuations
 in the
 price
 of
coffee, work
 of
 the stabilization office, industrial, commercial, and agri-cultural activity,
 the
 visit
 to
 Brazil
 of the
 British Economic Missionheaded
 by
 Lord
 d
 'Abernon, etc. The report also gives tables showingdetailed operations
 of the
 bank.
 For
 earlier reports see
 FEDERAL
 RE-
SERVE BULLETIN,
 August, 1929,
 and
 July, 1928.
and
 may
 seriously disturb
 the
 normal current
of
 human activities. Thus
 the
 present world
crisis
 is a
 continuation
 of
 that disorganization
which
 the
 Great
 War
 produced
 in all the
countries
 of the
 world.
The
 bre k in the coffee
 market
—Since
 1923
gold
 has
 been drawn
 in
 large volume from
 all
nations
 to
 the United States,
 as a
 result
 of the
development
 of
 speculation
 on the
 New York
stock
 exchange. This excessive speculation
was
 the
 primary cause
 of the
 stock exchange
crisis
 experienced
 in
 1929
 in
 New York.
In
 Brazil the effect
 of
 this crisis was
 to
 make
it
 difficult
 for
 certain States
 and for the Sao
Paulo
 Institute
 of
 Coffee
 to
 place loans in»
 the
London
 and New York markets. As
 a
 result,
the
 impending break
 in
 coffee prices could
 no
longer
 be averted;
 a
 violent drop
 in
 quotations
took
 place
 in
 October, accompanied
 by a
July 1930

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