DECEMBER, 1929 FEDERAL RESERVE BULLETIN 797
TEXT OF CZECHOSLOVAK CURRENCY LAW
On November 7, 1929, the standing com-
mittee of the Czechoslovak National Assembly
enacted, in pursuance of Article 54 of the Con-
stitution, certain legislation for the definite
stabilization of the Czechoslovak currency.
By section 11 the enactment was to come into
force on the day of proclamation; the act was
proclaimed in force on November 27, 1929.
The text is given below: *
The Czechoslovak crown (K5) as the present
currency unit of the Czechoslovak Republic
shall be equal in value to 44.58 milligrammes
of fine gold [$0.029629].
The National Bank of Czechoslovakia (here-
after referred to as the Bank) shall maintain
the exchange value of its notes at the legal rate
(see sec. 1) and can be made responsible for
nonperformance of this prime duty (see sec. 11
of the bank of issue act of April 14, 1920, No.
347 of the Collection of Laws and Ordinances).
1. The Bank shall be bound to purchase at the
head office in Prague and at such branch offices
as shall be designated by the Bank, gold at the
price of 1 Kc per 44.58 milligrammes, but only
if the seller offers a quantity of at least 12
kilogrammes of fine gold [$7,975]. The Bank
shall be entitled, in effecting such purchase, to
make no other charges except for assaying, and
for coining in accordance with a scale fixed by
the Government mint (see sec. 4, par. 6).
2. The Bank shall at the aforesaid premises
(see par. 1) redeem its notes at its option
either by gold (either in tfye form of current
coin or gold bullion) at the price of 1 Kc per
44.58 milligrammes of fine gold or by gold
foreign exchanges at the rate of the day quoted
on the Prague Bourse, but only in amounts
equal in value to at least 12 kilogrammes of
fine gold. Should the Bank fail to carry out
this obligation within 24 hours of the pre-
sentation of the notes without being able to
plead 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 the
Bank will determine by special decree the date
on which the aforesaid legal obligation stated
in paragraphs 1 and 2 shall come into force, or,
haying come into force, to what extent this
obligation shall be temporarily limited or
amended with regard to the amount.
1. In conformity with the legal gold content
of the Kc (see sec. 1) gold coins (hfivny) shall
be minted, containing 900 parts of fine gold
and 100 parts of copper.
2. One kilogramme of standard gold shall
be minted into 201.89783969 hundred-crown
pieces, and one kilogramme of fine gold into
224.31583669 hundred-crown pieces, the stand-
ard weight of the hundred-crown piece to be
4.9533 grammes containing 4.458 grammes of
3. The minting of the coins shall be as accu-
rate as possible; in so far as this can not be
attained absolutely a tolerance shall be allowed
either way of 2/1000 in standard weight and
1/1000 in fineness.
4. One face of the hundred-crown piece shall
be impressed with the armorial bearings of the
Czechoslovak Republic, and the denomination
of the coin shall be marked on the face or the
reverse according to the character of its general
5. The hundred-crown gold pieces shall be
legal tender for the payment of any amounts
which can be made in Czechoslovak currency.
6. The general design of the hundred-crown
gold coins and the date on which the Govern-
ment Mint shall commence their coinage on
account of the Government, as well as the date
on which unlimited coinage of gold for private
persons shall commence, shall be fixed by
special Government decree which shall also
fix the minting charges, which, however, shall
not exceed 0.3 per cent of the value.
1. If a hundred-crown gold coin has lost in
weight (see sec. 4, par. 2) by ordinary wear and
tear not more than 5/1000 of the standard
weight, it shall be considered as of current
weight and shall be accepted as of full weight
for all payments both at Government and other
Digitized for FRASER
Federal Reserve Bank of St. Louis
798 FEDERAL RESERVE BULLETIN DECEMBER, 1929
public cash offices and in private dealings. If,
however, its weight has diminished by ordinary
wear and tear below the current weight or if
the coin has been reduced, impaired, or perfo-
rated otherwise than by ordinary wear and tear,
it shall cease to be legal tender. Government
and other public cash offices when receiving
such coin shall withdraw it from circulation
by debasing the same in a striking manner and
returning it to the presentor without compen-
2. Any counterfeit coins ascertained by any
of the aforesaid cash offices shall be impounded
without compensation by the Government and
sent to the Government mint.
3. The Government mint, to which all
faulty coins must be sent, shall decide whether
the coins have lost weight through ordinary
wear and tear or other damages (see par. 1)
or whether they are counterfeit (see par. 2).
1. The Bank shall maintain the following
metallic cover: Until the end of 1929 at least
25 per cent, by the end of 1930 at least 30
per cent, by the end of 1935 and thereafter
at least 35 per cent of the total note circulation
plus sight liabilities.
2. In calculating the relation of the metallic
cover to circulation, the average rate of ex-
change of the gold foreign exchanges in each
fiscal quarter as quoted on the Prague Bourse
during the last fortnight of the preceding
quarter shall be conclusive.
3. At least one-half of the metallic cover shall
consist of gold bullion or coin; the balance may
consist of foreign bank notes convertible into
gold (valuta), foreign full legal tender coin,
and bills of exchange which are either drafts
on the principal banking places in Europe and
America indorsed by first-class banking in-
stitutions and otherwise conforming to the
conditions of bank drafts, or liquid balances
with banks of unquestionable standing in the
principal banking places of Europe and
1. The present share capital of 12,000,000
United States dollars, divided into 120,000
shares of 100 United States dollars each, shall
be converted at the rate of $1 to 33.75 Kc into
405,000,000 Kc, the nominal value of one share
thus becoming 3,375 K6; it will not be neces-
sary, however, to issue new shares nor to
stamp the old shares.
2. The Bank is authorized to increase its
capital to 607,500,000 KS should a resolution
to that effect be passed at a general meeting.
When the State notes debt has been reduced
to not more than 1,000,000,000 K6, the Bank
shall be authorized, in spite of the principle
stated in paragraph 1, section 129 of the Bank
act, to discount Government bills up to a total
of 200,000,000 K6 to cover temporary differ-
ences in budgetary expenditure and revenue.
Such temporary credits shall be repaid not
later than the end of March in the following
year. Such bills must also bear the signature of
a banking institution.
The Bank is authorized, in agreement with
the Minister of Finance and as long as no
infringement of its own legal obligations is
involved, to participate in international finan-
cial and economic institutions and arrange-
ments of monetary inportance.
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 reference
shall now be to the last sentence of paragraph
2, section 3, of this enactment.
(b) Article III, paragraph 1, article VII, and
article XIV of the act of April 23d, 1925, No.
102 of the Collection of Laws and Ordinances
amending and supplementing the Bank act.
2. The following enactments are hereby
(a) The Bank act, section 129, paragraph 1.
(6) Act No. 102, 1925, of the Collection of
Laws and Ordinances, Article VIII in so far as
where reference in this article is made to Article
VII, the reference will now be to section 6 of
(c) Act No. 102, 1925, of the Collection of
Laws and Ordinances, Article XVI in which
Annex A shall read as follows:
Digitized for FRASER
Federal Reserve Bank of St. Louis
DECEMBER, 1929 FEDERAL RESERVE BULLETIN 799
SHARE OP THE NATIONAL BANK OF CZECHOSLOVAKIA
for Kc 3,375
Three thousand three hundred and seventy-five Czecho-
slovak crowns conferring on of
or his lawful heirs and assigns all rights in
the entire property and profits of the " National Bank
of Czechoslovakia" that belong to every shareholder
according to the laws of April 14, 1920, No. 347 of the
Collection of Laws and Ordinances, and of April 23,
1925, No. 102 of the Collection of Laws and Ordinances,
and according to the enactment of the Standing Com-
mittee of the National Assembly of November 7th,.
1929, No. of the Collection of Laws and Ordi-
(SEAL.) NATIONAL BANK OF CZECHOSLOVAKIA.
This enactment shall come into force on the
day of proclamation. The Minister of Finance
shall be charged with putting it into execution.
ANNUAL REPORT OF THE DANISH NATIONAL BANK
The annual report of the Danish National
Bank for the year ended July 31, 1929, was
submitted to the general meeting of share-
holders on September 17, 1929. An extract
from the report together with the bank's
balance sheet is presented below: *
Question of continuance of gold bullion
standard.—On December 6, 1928, by decree of
the Minister of Industry, Commerce and Navi-
gation, the provisions of the decree of January
1, 1927, promulgated by authority of the law
of December 27, 1926, with respect to converti-
bility of notes of the National Bank, were
extended until December 31, 1929. Under
these provisions the National Bank is not obli-
gated until that date to redeem its notes in
gold unless they are presented in amounts of
28,000 kroner ($7,504), or in multiples thereof,
and redemption may be made, at the option of
the bank, either in Danish gold coins at their
face value, or in bullion or in any other form
at the rate of 2,480 kroner per kilogram of fine
gold (1 krone = $0.2680).
No export of gold from the bank for foreign
account has taken place during the year under
review; but the bank sold 10,000,000 marks
($2,382,000) in gold for its own account. The
law of December 27, 1926, which made the
present method of gold convertibility effective
as of January 1, 1927, was to remain in force
for a maximum period of three years (until
the end of 1929); it is important, therefore,
that the question of its continuance should be
decided before the close of the current year.
It is well known that the proposals of the
National Bank, which were put into effect by
the law of December 27, 1926, were inspired
by considerations of the international situation,
and these considerations will likewise influence
1 The official report, available in French, contains in addition sections
dealing with international developments, domestic commerce and bank-
ing, and statistics of the bank' s operations during the year. For the
1927-28 report, see FEDERAL RESERVE BULLETIN, December, 1928.
2 In the absence of new legislation the pre-war obligation of the Na-
tional Bank to redeem its notes in any amount in gold coin will again
become effective on Jan. 1,1930.
the coming deliberations of the bank. The sit-
uation in the international gold market is still
uncertain, especially as it is difficult to form
any idea of the importance which the Bank
for International Settlements as outlined in
the Young plan will assume in this respect.
In fact, the international situation which we
have just noted, together with circumstances
of a purely domestic nature, made it necessary
to adjourn the negotiations which the three
banks were carrying on at Stockholm in De-
cember, 1928, in regard to the Scandinavian
BALANCE SHEET OF THE DANISH NATIONAL BANK AS
OF JULY 31, 1929
• Gold coin and bullion.
Sight balances with the Swedish Riks-
bank, the Norges Bank, and the German
Subsidiary coin. _. .
Due from foreign correspondents
Foreign currency and bills
Danish bills _...
Mortgage loans _
Advances on real estate bonds
Advances on other securities
Advances guaranteed by the State
Liquidation office of 1910
Other assets -
Bank notes in circulation
Deposits of Minister of Finance..
Due to foreign correspondents..
Cashier's checks outstanding
Reserve for dividends
Total liabilities .
* Conversion at par: 1 krone=$0,268.
Digitized for FRASER
Federal Reserve Bank of St. Louis