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U. S. DEPARTMENT OF COMMERCE
Daniel C. Roper, Secretary
BUREAU OF FOREIGN AND DOMESTIC COMMERCE
Alexander V. Dye, Director
+
Trade Promotion Series No. 164
HANDBOOK
OF FOREIGN CURRENCIES
PREPARED IN FINANCE DIVISION
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1936
e by the Superintendent of Documents, W ashington, D. C.
Price 20 cents
CONTENTS
Foreword__________________
Introduction-----------------------Argentina__________________
Australia___________________
Austria______________ _____
Belgium___________________
Bolivia____________________
Brazil_____________________
British India_______________
British Malaya--------------Bulgaria___________________
Canada____________________
Ceylon------------------------------Chile______________________
China______________ ______
Chosen. See Japan.
Colombia__________________
Costa Rica_________________
Cuba______________________
Czechoslovakia_____________
Danzig, Free City of-------------Denmark__________________
Dominican Republic-------------Ecuador_____________ ____ Egypt-------------------------------El Salvador. See Salvador.
Estonia____________________
Finland____________________
France____________________
Free City of Danzig. See Dan
zig, Free City of.
French Indochina___________
Germany__________________
Greece_____________________
Guatemala_________________
Haiti______________________
Honduras__________________
Hong Kong------ -----------------Hungary___________________
Iran (Persia)_______________
Iraq_______________________
Irish Free State_________ —
Italy______________________
Japan (including Chosen and
Taiwan)_________________
Paso
IV
1
3
7
9
14
18
21
23
29
31
34
41
42
44
49
53
55
59
62
65
68
70
74
76
79
82
86
89
92
95
98
99
101
105
108
110
112
114
117
Latvia_____________________
Lithuania__________________
Manchuria_________________
Mexico____________________
Netherland India____________
Netherlands________________
Newfoundland________
New Zealand_______________
Nicaragua__________________
Norway____________________
Palestine___________________
Panama___________________
Paraguay__________________
Peru_____ _______
Philippine Islands___________
Poland_____________________
Portugal___________________
Rumania___________________
Salvador, El________________
Siam______________________
Spain______________________
Sweden____________________
Switzerland_________________
Syria______________________
Taiwan. See Japan.
Turkey____________________
Union of South Africa_______
Union of Soviet Socialist Re
publics (Russia)___________
United Kingdom____________
Uruguay___________________
Venezuela__________________
Yugoslavia_________________
Appendixes:
A. Foreign exchange rates
1930-35___________
B. Average quotations in
Berlin for blocked
reichsmarks________
C. Latin America—Aver
age official and freemarket rates of ex
change____________
ni
Page
121
123
126
131
133
136
144
145
149
151
153
154
156
159
164
171
173
177
ISO
183
185
190
193
195
198
200
203
206
208
212
216
219
228
228
FOREWORD
This handbook has been prepared in response to a widespread
demand for an up-to-date revision of the Handbook of Foreign Cur
rency and Exchange (Trade Promotion Series No. 102) published by
the Bureau in 1930 and for the publication (in printed form) of the
circulars on “metal and paper currencies” issued in mimeographed
form in 1930 and 1931.
The more important topics contained in the above-mentioned pub
lications are covered in this volume. Because of limitations of
space and because currency systems have been in a state of flux since
the autumn of 1931, it is deemed inexpedient to describe recent
currency developments in as much detail as was done in the case of
the Handbook published in 1930. The great majority of inquiries re
ceived by the Bureau relate to the present status of foreign currencies.
Most of the inquirers desire the essential facts regarding the monetary
units in present use in foreign countries, for purposes connected with
the conduct of trade rather than for economic research. Any attempt
to adequately review the developments that have occurred in the
currency systems of the world in recent years would require volumes.
The inclusion in this handbook of details regarding the types of bank
notes and subsidiary coinage in circulation in the several countries
will be of special interest only to particular business groups. Neverthe
less, it is felt that these data will have value also for those whose
interest in currencies is more general.
Because of interest shown in the changes that have occurred in the
monetary use of silver since the publication of Trade Promotion
Series No. 149, The Monetary Use of Silver in 1933, the present
publication includes the latest available information on that subject.
The data presented have been derived largely from the replies to a
questionnaire sent to the Foreign Service officers of the State and
Commerce Departments, whose splendid cooperation is gratefully
acknowledged. The work of analyzing the data and of writing the
text of this study was done in the Finance Division by Herbert M.
Bratter and by his successor, Victor Vraz, under the supervision of
Grosvenor M. Jones, Chief of the Division.
A lexander V. D ye , Director,
Bureau of Foreign and Domestic Commerce.
A pril 1936.
IV
HANDBOOK OF FOREIGN CURRENCIES
INTRODUCTION
The present is manifestly a difficult time for preparing a compre
hensive study of foreign currencies. Although more than 4 years
have elapsed since Great Britain suspended gold payments (Sept. 20,
1931) and more than 2 years since the United States revalued the
dollar (Jan. 31, 1934), much uncertainty still prevails as to the
adjustments that will ultimately be made in the currency systems
of the world. Only five countries besides the United States are
now on the gold standard in any sense approaching that in which
this term has long been used. These are France, Belgium, the
Netherlands, Switzerland, and, possibly, Poland. The Netherlands
and Switzerland are the only countries now on a gold standard that
have not reduced the gold content of their monetary unit. The
French franc was devalued to the extent of about 79.7 percent on
June 25, 1928, while the Belgian franc has twice been devalued —on
October 25, 1926, by 85.G percent; and on March 31, 1935, by 28
percent of the new par value. The Polish zloty is a post-war
development.
To illustrate the difficulty encountered in classifying currencies,
the case of Germany may be cited. Although the notes of the
Reichsbank are not redeemable in gold and there is no free market
for gold in Germany, the Government publishes an official rate of
exchange based on the gold parity of the reichsmark. An important
part of Germany’s international transactions is, however, settled by
the use of checks drawn against numerous classes of blocked deposits
of reichsmarks, which are sold at varying discounts ranging from
25 to 75 percent.
Currencies might, for convenience, be divided into four principal
groups, namely sterling, gold bloc, dollar, and the “all other” group
which includes a large number of countries.
The most important is the sterling group. This includes all of
the British Empire except Canada and Newfoundland; Iraq, Palestine,
and other mandated territories; Sweden, Norway, Denmark, Estonia,
Finland, Portugal, Portuguese East Africa, Portuguese West Africa,
Egypt, Japan, and Siam. Some authorities would also include in
the sterling group Argentina and Bolivia, since the official rates of
exchange for their currencies are fixed in terms of sterling. By the
same sign China and Hong Kong, formerly classified as silverstandard countries, might now be placed in the sterling group.
l
2
HANDBOOK OF FOREIGN CURRENCIES
Since the silver nationalization decree of November 3, 1935, China
has been on a so-called “managed currency” basis, with the foreign
exchange value of the yuan Held at or about Is. 2}sd. Because of
its close economic ties with China, Hong Kong felt it necessary to
adopt a similar course of action about a month later.
The so-called “gold bloc” was formed in the summer of 1933,
following the World Economic Conference at London, when the
countries that still adhered to the gold standard banded together
for mutual aid in the retention of this standard. This decision took
the form of a protocol drawn up in Paris on July 8, 1933, by the
representatives of the central banks of the countries concerned.
They were France^ Belgium, Italy, the Netherlands, Poland, and
Switzerland. Belgium and Italy have since left this group. The
territories of France and the Netherlands might also be included in
this category, as well as Spain, Turkey, and Uruguay, whose currencies
are pegged to the French franc
The dollar group consists of the United States (since January 31,
1934, on the gold standard in a restricted form), Cuba, Dominican
Republic, Panama, Honduras, and British Honduras (where United
States currency is the principal circulating medium or an important
element in that circulation), also Nicaragua, Haiti, and the Philippine
Islands whose currencies are based on the dollar; and Mexico, Guate
mala, El Salvador, Costa Rica, Colombia, Venezuela (for imports),
and Peru, the foreign exchange value of whose currencies is fixed
with relation to the United States dollar. Although the Canadian
currency system is operated quite independently of that of both
Great Britain and the United States, the extent of Canada’s trade
and financial relationships with the United States is such as to lead
many students to consider the United States dollar a more important
factor than the British pound in determining the course of the
Canadian dollar.
The “all other” group includes so many currencies that space does
not permit a discussion of the status of each, particularly since, in
most instances, it is difficult to define that status with the precision
required for a categorical classification.
Despite the break-down in the international currency mechanism
which followed the suspension of gold payments by the Bank of
England in September 1931 and the fact that only a few countries
have continued on a gold standard, the fluctuations during recent
vears in rates of exchange for one set of currencies in terms of other
important currencies have not been wide. The phenomenon is all
the more remarkable in view of the disturbing political and economic
developments in Europe, in particular, during the past year or more.
The explanation lies largely in the policy of Great Britain in keeping
the pound relatively stable in terms of the French franc and the
United States dollar through the operations of the exchange equaliza
tion account of the British Treasury which was set up in 1932. The
extent to which the operations of the exchange stabilization fund of
the United States Treasury (established in 1934) have contributed to
this result is not generally known. Since by these and other means
the relationships between the currencies of the countries that are
leaders of their groups have been informally kept stable, the world
has probably had the best substitute for the old international gold
standard that is possible under existing circumstances.
HANDBOOK OF FOREIGN CURRENCIES
3
Following the devaluation of its currency on March 31, 1935,
Belgium established an exchange stabilization fund, the increase in
the value of the gold reserve of the National Bank being set aside
primarily for this purpose. Similarly, Canada, on July 5, 1935, passed
the Exchange Fund Act, providing that all gold held as reserve by
the Bank of Canada should be valued by the bank at the current
world market price for gold and that the profit resulting from such
valuation should be held in a special account in the name of the
Minister of Finance, who should use the same “for the purpose of
endeavoring to control the external value of the Canadian monetary
unit or of checking undue fluctuations in its exchange value” or “in
the purchase of securities of, or guaranteed by, the Dominion of
Canada.”
The action taken by Belgium and Canada, it will be observed, was
quite similar to that followed by the United States after the dollar
was revalued (Jan. 31, 1934).
Although on February 20, 1934, the gold content of the Czecho
slovak crown was reduced by 16% percent, the resulting increase in
the value of the gold reserve of the National Bank was used to reduce
the Government’s debt on account of note issue.
A development of considerable importance, because of its bearing
on currency, has been the establishment of central banks—in New
Zealand (the Reserve Bank of New Zealand) which began operations
in August 1934; Canada (the Bank of Canada), in March 1935; India
(the Reserve Bank of India), in April 1935; and Argentina (Central
Bank of the Argentine Republic), in June 1935. In this connection,
mention might also bo made of the fact that the Commonwealth
Bank of Australia has been given additional central banking functions
and that Uruguay has created an autonomous issue department in
the Bank of the Republic.
Those who are interested in following current developments in the
currency systems of foreign countries will find fairly complete infor
mation on the subject in the three series of financial notes (European,
Latin American, and Far Eastern) which are issued twice a month by
the Finance Division, and in special circulars issued from time to
time. The subscription price for each series of financial notes (includ
ing special circulars) is $1 a year.
ARGENTINA
The monetary unit is nominally the gold peso, which has a fine
weight of 1.45162 grams, or the equivalent of $1.6335 in United States
currency. The unit in actual circulation is the paper peso, the value
of which is 44 percent of the gold peso. The paper peso is referred
to as “moneda nacional” (national currency) and values expressed
therein carry as a prefix the dollar sign ($), and are followed by the
abbreviation m/n. The currency has been inconvertible into gold
since 1929, and its value in foreign exchange has been permitted to
depreciate; the rate of exchange for dollars now (Jan. 30, 1936) being
about 27.7 cents
Although Argentina has not explicitly devalued its currency, it is
interesting to note that article 4, clause b, of law 12160 of March 28,
1935, provides that the transfer to the Central Bank of the gold hold
ings of the Conversion Office (abolished by this legislation) shall be
4
HANDBOOK OF FOREIGN CURRENCIES
effected at a rate not exceeding 43,000 pesos national currency for
the fine gold content of a typical bar of 400 ounces troy.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
Paper currency in denominations exceeding 5 pesos national cur
rency is now issued by the new- Central Bank of the Argentine Re
public, established by law 12155 of March 28, 1935. The Central
Bank has assumed responsibility for the corresponding notes pre
viously issued by the Conversion Office and is required to replace
them with a new issue of its own notes.
The future issue or coining of subsidiary currency in denominations
of 5 pesos or less by the National Government may be effected only
at the request and through the intermediary of the Central Bank.
Existing notes in denominations of 5 pesos or less must be replaced
with new notes within 2 years from the beginning of the operation of
the Central Bank.
The minting of copper coins has been discontinued, since they are
unpopular. No silver has been coined since 1884. No old issues of
Argentine coins are in circulation, nor are any foreign coins, although
they may be imported.
With reference to the coinage, article 36 of law 12155, of March
28, 1935, establishing the Central Bank of the Argentine Republic,
provides as follows:
The future issue or coining of subsidiary currency in denominations of 5 pesos
or less (including nickel and copper coins) by the National Government, shall be
effected exclusively at the request of and through the intermediary of the Central
Bank, in accordance with public requirements; but in no case may it exceed 20
pesos national currency per capita, according to the annual estimates of the
National Statistics Department.
Paper Currency of Argentina
Denomination
Approximate dimensions
Value of notes
in circulation
(pesos)1
150,76«, 000
78, 134,000
352, 596.000
180,027,100
219, 862,720
86. 256, 505
63,601,877
1,131, 244, 202
Total...............................................................
1 Doc. 31, 1934, the last date for which statistics are available.
Coins of Argentina
Denomination
5 centavos..........................
1 Alloy is copper.
Metal of chief value
Fineness
»0.250
1.250
>.250
Gross weight
Grams
Grains
4.0000
3.0000
2.0000
61.7280
46 2960
30.8640
Diameter Thickness
(mm)
(mm)
21
19
17
1.0
HANDBOOK OF FOREIGN CURRENCIES
5
The total volume of notes outstanding on November 30, 1935, to
the charge of the Central Bank was 939,97G,290 pesos (m/n). The
Central Bank reported that the subsidiary currency issue, to the
charge of the National Government, amounted on that day to 211,783,658.30 pesos.
Notes of 1 peso are printed, but those of higher denominations are
engraved. Imported paper is used. The printing is done in
Argentina.
NOTE-ISSUING AUTHORITY
Article 35 of law 12155 of March 28, 1935, which establishes the
Central Bank of the Argentine Republic, provides that for the entire
term of its charter (40 years) the bank shall have the sole right of
currency issue in the Argentine Republic, except as regards the sub
sidiary currency in denominations of 5 pesos national currency or
less (including nickel and copper coins) which the National Govern
ment will take over along with the future coining or issue of such
subsidiary money (art. 4, clause c, of law 12160 of Mar. 28, 1935).
Law 12155, article 36, provides that the bank shall be responsible
for all of the notes in denominations exceeding 5 pesos national cur
rency issued by the Conversion Office (abolished by this act), and
shall replace them with a new issue of Central Bank notes.
The notes of the Central Bank shall be in denominations of more
than 5 pesos as determined by the Board of Directors (art. 37 of
law 12155) and shall be legal tender (art. 38).
«
RESERVE REQUIREMENTS
The Central Bank is required to maintain at all times a reserve
sufficient to assure the value of the peso, in gold, foreign currency,
or exchange, equivalent to at least 25 percent of its notes in circula
tion and demand liabilities. The gold and foreign currency or
exchange must be unpledged and in the unrestricted ownership of the
bank; and the foreign currency or exchange may be included in the
reserve only to the extent that they exceed all liabilities in gold and
foreign currency and exchange (art. 39 of law 12155).
Although the minimum is fixed at 25 percent, article 39 provides
that, if it falls below 33 percent during 60 consecutive days, or over a
total period of 90 days, no dividends shall be paid to the shareholding
banks, and the corresponding profits shall be allocated to the bank’s
surplus.
Another restriction is found in article 40 of law 12155, which
provides that under no circumstances may the bank hold foreign
currency or foreign exchange in an amount exceeding 20 percent of
its reserves or include them in its reserves for more than 10 percent.
As to the convertibility of the notes of the Central Bank, article 41
provides: (1) That the bank shall be obliged to exchange its notes at
sight in amounts not less than the value in national currency of a
typical gold bar of 12.441 kilograms (400 ounces troy) for gold or,
at the option of the bank, for foreign currency or exchange; and (2)
the rate at which notes shall be exchangeable into foreign currency,
or vice versa, shall not vary from parity by more than 2 percent either
way. It should be noted, however, that article 58 of the same law
(no. 12155) states that “until ordered by special law the provisions
of article 41 shall not be effective.” No such special law has been
enacted.
6
HANDBOOK OF FOREIGN CURRENCIES
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
The Conversion Office was closed in 1929 and was not reopened.
It was abolished by law 12160 of March 28, 1935, and its assets and
liabilities were transferred to the new Central Bank of the Argentine
Republic. Convertibility into gold has not been restored.
Apart from a small amount of silver bullion imported for commercial
purposes, there has been no exportation or importation of silver in
recent years.
No gold or silver smuggling is believed to exist.
GOLD
No gold hoarding is engaged in by the public. Argentine gold
coinage is practically nonexistent, apart from the amount held by the
Central Bank.
The following quotation from an article in the London Economist
of June 8, 1935, describes the steps taken regarding the revaluation
of gold in Argentina:
The Argentine Government’s financial reform was so promptly translated
into action that it became necessary to revalue the gold held by the immobilized
Conversion Office for transfer to the Central Bank. The Exchange Control
buys the great bulk of export bills at 15 paper pesos per £ sterling, which is
equivalent to 25 paper pesos per gold £, and it was at this level that Argentina
decided to revalue the gold reserves. As under the academic parity there are
11.46 paper pesos per £ gold, the gold reserves have been increased in worth in
terms of paper pesos by over 100 percent. Even when the Central Bank func
tions, however, convertibility of the peso will still be suspended, although Ar
gentina has placed herself in a position to follow promptly any international lead
toward stabilization. The initial gold stocks of the bank will be large, and the
ultimate aim undoubtedly is to supersede the dual gold and paper currency by a
Bingle unit on a gold exchange standard, and also to cancel the old conversion
law whereby gold and paper were interchangeable at a fixed rate. Until currency
convertibility is restored, however, Argentina through the Central Bank will
presumably continue the present regime of exchange control and prior exchange
permits-—with an adjustable official buying rate linked to sterling—which, from
the official point of view, has the advantage of leaving large profits in their
hands from the margin between the buying and selling rates of exchange.
Gold Reserves Transferred by the Caja de Conversion to the Central Bank
Number
Gold reserves
United States gold eagles.. .............. ....................................
1,523,329
12.237,843
22,300, 202
Old par value
Pesos
17.310,557
288,256,829
255,438,649
561,006,035
New value
Pesos
37.780,997
629,131,599
557, 505,050
1,224.417,646
The statement of the Central Bank as of November 30, 1935, shows
that the value of gold held in Argentina was still 1,224,417,646 paper
pesos; and that the bank also had holdings of gold abroad and foreign
exchange amounting to 125,344,117 pesos.
THE GOLD CLAUSE
There is no such thing as a gold clause in domestic contracts in
Argentina. Practically all contracts are made in “pesos moneda
HANDBOOK OF FOREIGN CURRENCIES
7
nacional de curso legal”, namely, paper pesos. Few contracts are
drawn in terms of “gold pesos”, but this is an artificial term which is
being eliminated from governmental as well as from private nomen
clature. In this connection it is interesting to note that article 4,
clause c, law 12160 of March 28, 1935, provides that “obligations
expressed in gold pesos, which heretofore could be paid at 2.27 paper
per gold peso, shall continue to be paid in the same manner.”
SILVER
Silver is neither held by the Treasury nor used by the public. No
silver currency exists in Argentina.
AUSTRALIA
The monetary unit is the Australian pound (symbol £), divided
into 20 shillings (s.) of 12 pence (d.) each. The pound has a par
value of approximately $8.2397. At present it is on the sterling
exchange basis at the ratio of approximately £125 Australian to
£100 sterling.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
The use of checks in the larger cities of Australia appears to bo as
extensive as in Great Britain or the United States.
Paper Currency of Australia 1
Amount
outstand
ing
May
Denomination
Dimensions
27, 1936
(millions
ê
of pounds)
7.0
2. 6
1. 6
.3
5. 1
10. 1
10.9
10 shillings...........................................................
3.6
Total............................................................
47. 1
1 Engraved in Australia on English-manufactured secretly watermarked paper. The ink is a secret
mixture.
2 Restricted to interbank use.
N ote.—The paper currency is unlimited legal tender.
Coins of Australia
Silver content Diam Thick
Metal of Fine Gross weight
Name of coin Value chief
eter ness
value ness Grams Grains Grams Grains (mm)
(mm)
s. d.
Florin 1............... 2 0 Silver.......... 2 0.925 11.3104 174.5455 10.4621 161.4545 28. 575 2.413
Shilling 1.......... 1 0 ....... do........... ». 925 5. 6552 87. 2727 5. 2310 80.7273 23. 622 1.651
Sixpence 1_____ 0 6 ........do........... *. 925 2. 8276 43. 6364 2.6155 40.3636 19. 304 1.270
21.8182 1.3078 20.1818 16.383 1. 143
Threepence 1___ 0 3 ___ do........... *. 925 9.1.4138
4498 145. 8333
30.861 2.032
Penny 3.............. 0 1 Copper____ «. 955
87.5000
25. 400 1.778
Halfpenny 3....... 0 H
«. 955 5.6699
1 Legal tender to not over 40 shillings.
2 Legal tender to not over 1 shilling.
2 Alloy is copper.
* Alloy is tin, 0.030; zinc, 0.016.
N ote.—Circulation figures of the coinage are not given out by the authorities.
8
HANDBOOK OF FOREIGN CURRENCIES
NOTE-ISSUING AUTHORITY
The Commonwealth Bank of Australia is the sole note-issuing
authority. It acts as a central bank, is wholly Government owned,
and is managed by a board of directors appointed by the Government.
The board is, however, independent of Government control both do
jure and de facto. Its powers are defined by the Commonwealth
Bank Acts, 1911-32, under which it operates.
The following are certain sections of the Commonwealth Bank
Acts, 1911-32, pertinent to the above:
PART III--- MANAGEMENT OF THE BANK
11. (1) The bank shall be managed by a board of directors composed of the
governor and seven other directors.
(2) Subject to this act, the 7 other directors shall consist of:
(a) the secretary to the treasury; and
(b) Six other persons who are or have been actively engaged in agriculture,
commerce, finance, or industry.
12. (1) The governor and a deputy governor shall be appointed by the
Governor General, and shall hold office for a period not exceeding 7 years, and
shall be eligible for reappointment.
(2) The directors specified in paragraph (b) of subsection (2) of the last pre
ceding section shall be appointed by the Governor General. * * *
(6) In the event of the office of'one of the directors specified in paragraph
(b) of subsection (2) of the last preceding section becoming vacant otherwise than
by efiiuxion of time, the Governor General may appoint a director to that office
for the remainder of the term for which his predecessor in that office was ap
pointed.
12b. (1) There shall be a board of advice in London hereinafter called the
London board.
(2) The London board shall consist of three members to be appointed by the
Governor General upon the recommendation of the board of directors.
(3) The members of the London board shall subject to this act hold office for
4 years and be eligible for reappointment.
(4) The duties and powers of the London board shall be such as may be
delegated to it from time to time by the board of the bank.
RESERVE REQUIREMENTS
Gold or sterling to an amount of not less than 25 percent of the
note circulation must be held in the currency reserve. Silver is not
eligible for this purpose.
The Commonwealth Bank Act, section 60K-4, states:
In the event of the sale of any of the gold held * * * in the reserve, the
difference between the value of the gold as shown in the books of the bank and the
amount realized on the sale of the gold shall not be deemed to be profits within
the meaning of section 60J of this act, but the amount of the difference shall be
transferred to a special reserve account and shall be available, from time to time,
as the board determines, for the purpose of stabilizing exchange or for the pur
poses of the note issue department.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
On December 17, 1929, the Commonwealth Bank was empowered,
subject to the authority of the Commonwealth treasurer, to require
holders of gold to furnish particulars of gold coin or bullion held by
them and to exchange such gold coin or bullion for Australian notes
at the rate of £3/17/10% per standard ounce. The treasurer’s
authority to take this action was delegated to the bank, and a certain
amount of gold was taken over from the trading banks during the
latter part of 1929 and the early part of 1930. The act giving the
9
HANDBOOK OF FOREIGN CURRENCIES
bank this power also authorized the Governor General, after the
receipt of a recommendation from the Board, to prohibit by procla
mation the exportation of gold. No such proclamation has been
issued.
At the present time owners of gold are allowed to deal with it as
they wish, but notes are not redeemable in gold.
There are no restrictions on dealings in silver, excepting that the
importation of coined silver from New Zealand and the exportation of
Australian silver to New Zealand are prohibited.
There being no incentive to smuggle bullion, no smuggling is taking
place.
GOLD
On May 27, 1935, the reserve against the note issue included £507,537 in gold, that is, 119,484 fine ounces troy, or 130,347 standard
ounces. (In addition, sterling exchange to the amount of £15,486,489
sterling was also held as a reserve against the note circulation.)
The mints at Melbourne and Perth, on behalf of the Commonwealth
Bank of Australia, buy all gold offered, at a price in Australian cur
rency which corresponds to the London market price, less costs of
shipment.
There are no indications of gold hoarding of any consequence.
THE GOLD CLAUSE
The gold clause has seldom been used in Australian contracts. Its
legality is doubtful. The clause probably would be upheld by the
courts outside of New South Wales. The latter State has barred the
gold clause by statute.
SILVER
The monetary stock of silver on June 30, 1934, was as follows:
Australian
pounds
Held by banks (approximately)______ 2, 000, 000
Held by public in Australia (approxi
mately) ________________________ 5, 000, 000
Total______________________ 7, 000, 000
Fine ounces
6, 700, 000
16, 800, 000
23, 500, 000
On June 30, 1935, silver held in Australia under various categories
was as follows:
Treasury:
Coin...............................................................................£75, 500
Bullion........................................................................... £40, 435
Australian silver producers______________ fine ounces.. 977, 871
AUSTRIA
The monetary unit of Austria is the schilling (s.), consisting of 100
groschen. One schilling at par equals approximately $0.2382.
DESCRIPTION AND CIRCULATION OF CURRENCY
The accompanying tables describe the currency of Austria at the
end of 1934.
Gold coins are unlimited legal tender. Silver coins of 5 and 2
schillings are accepted by Federal agencies in unlimited amount, and
are legal tender up to 100 schillings. For information on other
coins, see the following table on legal-tender limits.
10
HANDBOOK OF FOREIGN CURRENCIES
The Austrian National Bank has sole control of foreign-exchange
operations, including movement of bullion and currency. (See
Restrictions on Bullion Movements.)
The notes, which are issued solely by the National Bank, are en
graved in Austria on paper of domestic manufacture. They are full
legal tender for all purposes, including customs dues and taxes.
Although customs dues are levied in terms of gold crowns, they are
payable in schilling currency. ' For conversion purposes, one gold
crown is the equivalent of 1.83 paper schillings.
The use of checks is confined largely to drawings on the postalsavings banks.
Legal Tender Limits of Minor Coins of Austria
[In schillings]
Payments to the Austrian National
Bank
Denomination
Payments Other pay
to Federal ments
agencies
No limit....................... ...........................
50. 00
50.00
20. 00
2. 00
.80
.40
25.00
.20
Austrian Note Issue, Dec. 31, 1934
Amount outstanding—
Denomination
Dimensions
In millions
of
schillings
16.9 by 8.5 cm..........................................
Total................................................
» 65,862 schillings.
Source of circulation figures: Annual report of the Austrian National Bank for 1934.
51.7
521.8
103.1
149.0
110.6
27.6
(')
963.9
Percent
of total
5.36
54. 14
10. 70
15. 46
11.47
2.86
.01
100.00
HANDBOOK OF FOREIGN CURRENCIES
11
Austrian Coins, Dec. 31, 1934
Metal of
Denomination chief Fine
value ness
0.900
.900
.835
.640
.640
.640
«. 750
«. 750
«. 750
». 750
2 groschen......... ...do....... ».950
1 groschen......... ...do....... ». 950
T o ta l, e x
cluding gold.
100 schillings -.
25 schillings__
5 schillings___
2 schillings___
1 schilling *.......
40 groschen »—
1 schilling.........
50 groschen.......
Gold—
—do___
Silver...
. ..do.......
...do.......
...do.......
Copper .
.-.do.......
Gross weight
Gold or silver
content
Grams
Grains
Grams
Grains
23. 5245
5.8810
15.0000
12.0000
6.0000
3.0000
7.0000
5.5000
4.5000
3.0000
3. 3333
1.6666
363.0385
90. 7596
231.4853
185. 1883
92. 5941
46. 2971
108.0265
84.8780
69.4456
46. 2970
51.4412
25. 7206
21.1721
5. 2930
12. 5250
7.6800
3.8400
1.9200
326. 7352
81.6838
193. 2903
118.5205
59. 2603
29.6302
Amount
outstand
Diam Thick ing
Dec.
eter
ness 31,on1934
(mm) (mm) (thousands
of pieces)
33.0000
21.0000
29. 4894
25.0000
19.0000
26.0000
24.0000
22.0000
17. 1500
19. 0000
17.0000
2.03
»388
1.25
* 1,036
2.33
2, 740
2. 2098
11,804
1.4800 /1 4»1,024
27,307
1.3200
16,517
1.80
20, 820
1.64
976
1.6600
83,882
1.7000
22, 272
1.5700
121, 7A3
1.0300
142, 136
• 108,568
1 Amount minted.
* Withdrawn from circulation May 31, 1935, to May 31, 1936.
* 1924 issue.
* Later issues.
* To be withdrawn from circulation Aug. 31, 1935, to Aug. 31, 1936.
* Nickel 0.250.
r Tin 0.040; zinc 0.010.
* Schillings, excluding the gold coins.
Note.—In December 1935 the Vienna Mint issued a new design of Austrian gold coins of 25 and 100
schillings, carrying the new Austrian coat of arms. Austrian 5-schilling coins are also being minted, and
early in 1936 the series of 2-schilling coins carrying the portraits of well-known Austrians is to be continued.
NOTE-ISSUING AUTHORITY
The only note-issuing authority is the Austrian National Bank
(Österreichische Nationalbank). The Government has a controlling
voice in the policies of the bank, both de jure and de facto.
RESERVE REQUIREMENTS
The legal requirements as to reserves against the currency are as
follows:
According to article 85 of the statutes of the National Bank, the
ratio of its holdings of precious metals and foreign exchange
(“Barschatz”) to total note circulation, plus demand liabilities, must
be at least 20 percent until December 31, 1936, 22 percent during the
following 5 years, 24 percent during the next 5 years, and 25 percent
thereafter.
According to article 86, section 5, of the statutes of the National
Bank, small coins (“Scheidemünzen”) of the Federal State of Austria
are included under the heading “andere bankmassige Deckung” (other
banking cover); however, at the discretion of the National Bank,
silver coins may be included in the “Barschatz” at their bullion value
(“Edelmetallwert”).
The bank’s holdings of Austrian silver coins as of May 31, 1935,
amounted to 3,340,000 Austrian schillings, or about 11,750 kilograms
of fine silver, and holdings of other silver coins to about 40 kilograms,
or a grand total of approximately 379,000 fine ounces troy.
12
HANDBOOK OF FOREIGN CURRENCIES
RESTRICTIONS ON BULLION MOVEMENTS
According to paragraph 8, section 2, of the Fourth Exchange Regu
lations (devisenverordnung) of December 23, 1931, published in the
Austrian Official Gazette No. 4, of January 9, 1932, the transfer of
gold and silver to foreign countries is allowed only with the written
permission of the National Bank. As an exception to these regula
tions, tourists are allowed to take with them Austrian silver coins to
a maximum amount of 10 schillings and foreign silver coins up to 20
schillings. In the so-called border traffic, the maximum amount of
Austrian and foreign silver coins together is limited to 5 schillings.
The purchase and borrowing of gold and silver abroad is allowed
only with the written permission of the National Bank. (Par. 8,
sec. 3, of the Third Exchange Regulations of Nov. 18, 1931, published
in the Austrian Official Gazette, no. 92, of Nov. 21, 1931.)
Smuggling is believed to exist, but it is not regarded as extensive.
GOLD
The gold holdings of the National Bank on May 31, 1935, amounted
to 242,235,936.45 Austrian schillings. As 1 kilogram of fine gold is
equal to 5,999.83 schillings, or 1 schilling to 0.16667 gram of fine gold,
the weight of the bank’s gold holdings on May 31, 1935, was approxi
mately 40,373 kilograms, equivalent to approximately 1,298,000
fine ounces troy.
In June 1935 gold was being purchased by the National Bank at a
premium of 27 percent.
It is difficult to obtain reliable estimates of gold hoarded by the
public, especially as it is not known to wrhat extent the former gold
coins went to the individual succession States.
Since 1925 about 13,488 kilograms of fine gold have been minted.
The National Bank’s holdings of gold coins of the schilling currency
in June 1935 amounted to 2,160 fine kilograms. Therefore, about
11,328 fine kilograms of schilling gold coins are presumed to be held
by the Austrian public. However, certain undetermined amounts of
gold seem to have been shipped abroad occasionally for dividend
payments of the National Bank. On the other hand, unknown
amounts of old “kronen” gold coins, ducats, and foreign gold coins
are still held by the public.
THE GOLD CLAUSE
The chief legal basis for the gold clause in Austrian contracts is the
so-called Gold Clause Decree (Goldklauselverordnung) of March 23,
1933, with a number of amendments. In recent Austrian loans the
so-called Treffer-Goldklausel (Austrian lottery loan gold clause) was
used. The German name is derived from the “Trefferanleihe”, or
Austrian lottery loan.
The prospectus of the most recent Austrian loan, the Austrian
Work Loan 1935, contains a gold clause in the following form:
If on the last Bourse day before the due date of a capital or interest payment,
the gold rate on that day, announced in accordance with paragraph 2 of the Gold
Clause Order, BGB1. Nr. 73/1933, is higher than it was on the 1st of May 1935,
then the amount to be paid in legal currency is increased in the same proportion
over the par value of the payment in question.
When in future the publication of the gold rate according to the gold clause
order should for any reason be discontinued, then the creditor has a claim for
legal currency in an amount, the gold value of which shall equal the actual gold
HANDBOOK OF FOREIGN CURRENCIES
13
value of the rate prevailing on May 1, 1935 (1 schilling = 0.1654069275 fine grams
gold), but in no case less than the par value of the payment due.
In determining the amount of legal currency necessary to reach the actual gold
value, the following procedure should be adopted : First, there is determined how
much foreign exchange would have been necessary to provide, in the leading gold
markets, the amount of gold needed on the last day before the due date, and
further there is to be determined what amount in internal domestic currency in
Vienna would have been necessary actually to secure the amount of foreign cur
rency needed to obtain that amount of gold.
The following information was reported by Commercial Attaché
Gardner Richardson, from Vienna, on April 5, 1933:
The recent decision of the Austrian Supreme Court of Justice regarding obliga
tions calling for payments in foreign exchange or gold has caused much embarrass
ment in Government and financial circles, inasmuch as it is partly in contradiction
with existing practice. It was feared that the decisions of the Supreme Court
might precipitate a flood of lawsuits, create much uncertainty and disorder, and
cause insolvencies and bankruptcies. On the other hand, the Government—
which in the interest of its credit is very anxious to fulfill its foreign obligations—
did not wish to repudiate by a legislative act the validity of the principles under
lying these court decisions and thus weaken confidence in financial circles. After
protracted deliberations, a compromise was arrived at and published in the
Official Gazette of March 24, 1933, in the form of two decrees called the “Goldklauselverordnung” and the “Goldschuldenerleichterungsverordnung.”
The first decree (Goldklauselverordnung) provides that obligations calling for
payment in foreign exchange or gold schillings, but also payable in paper schillings,
can be paid at the international rate of exchange of the schilling. On each trading
day this rate will be officially calculated by a committee of the Vienna Stock
Exchange on the basis of the London gold price and of actual exchange transac
tions made in Austria.
Obligations payable in a foreign currency, that before March 30, 1933, were
paid for in schillings at the fixed rate of exchange and obligations calling for gold
schillings that were or will be paid foi in paper schillings at their face value, namely
at the fixed rate of exchange prevailing to May 1, 1933 (in both cases including
obligations arising from imports of merchandise or from services rendered), shall
be considered as fully paid; so also parts of such obligations paid up to date.
However, no claims can be made by a debtor for a refund of previous payments
at a rate in excess of the official parity of the schilling.
The above principle does not apply to pre-war debts of the former AustroHungarian Monarchy, payment of which will be regulated by a separate decision,
nor to mortgage bonds or funded bank bonds and obligations originating
therefrom which are regulated by the second decree published on March 24,
1933. * * *
The second decree (Goldschuldenerleichterungsverordnung) regulates exclu
sively the payment of mortgages and of mortgage bonds expressed in gold.
Although the decree recognizes in principle the obligation to pay such debts at
their international value, it nevertheless introduces a sweeping modification of
such existing obligations so that in practice the burden of the debtor is lightened
at the expense of the creditor. The main changes in the case of mortgage bonds
are a decrease of the rate of interest, and a considerable extension of the date of
maturity. The decree recognizes the right to demand gold so that full payment
in schillings at the international rate of exchange can be demanded. These
stipulations become effective on April 30, 1933.
The stipulations covering ordinary mortgages expressed in gold provide that,
under certain conditions recently established, mortgages can be repaid in paper
schillings at their face value, namely at the fixed rate of exchange, and that the
service on all ordinary mortgages, for the time being, can also be made in paper
schillings at their face valuj. From a certain date, which will be fixed by the
Minister of Finance, but not prior to January 1, 1936, the repayment of gold
mortgages and the service thereon will be legal only at the full gold value, namely,
at the international rate of the schilling; simultaneously, the rate of interest
agreed upon will be reduced by one-fourth.
The complicated stipulations of the above decree constitute a compromise,
the purpose of which is to recognize in theory the validity of agreements calling
for gold payments and to safeguard the rights of the creditor as far as possible
and yet avoid a financial breakdown, especially of rural land mortgage banks and
66111°— 36----- 2
14
HANDBOOK OF FOREIGN CURRENCIES
agricultural debtors, who under present conditions are not in a position to pay
a high rate of interest.
According to a press report of July 24, 1935, the Government has
ruled that Austrian insurance companies that have issued gold-dollar
policies must meet claims in gold dollars or their equivalent.
SILVER
In addition to the information in Trade Promotion Series 149, The
Monetary Use of Silver in 1933, the following facts are of interest.
Federal decree no. 155 of July 25, 1934 (published in the Austrian
Official Gazette No. 54, of July 28, 1934), ordered the issuance of
5-schilling silver coins, 0.835 fine, having a gross weight of 15 grams.
The 2-schilling pieces, 0.640 fine, weighing 12 grams, remain in circu
lation, while the 1-schilling silver coins were withdrawn from circula
tion on May 31, 1935, and the 0.50-schilling silver coins will be
withdrawn on August 31, 1935.
On February 28, 1934, the Cabinet decided to withdraw the 5-schilling paper
notes and 1- and 0.50-schilling silver coins, and to issue 5-schilling silver coins.
Several official reasons were citied: (1) Small-denomination notes were a tem
porary expedient growing out of the war; (2) replacement costs make small notes
more costly than coins to keep in circulation; (3) bank notes of less than 10
schillings are contrary to Austrian traditional practice; (4) the trend throughout
Europe is to replace small notes with coins.
The fineness of 0.835 is that used before the war.
The substituting of silver coins for the 10-schilling notes was postponed, since
the procuring of silver for the 5-schilling coins presented so many difficulties.
Hence, “further innovation in the expensive metal” was considered out of the
question.
According to the National Bank, it is impossible to estimate the
total amount of silver in monetary use that was held by the general
public and by the banks. Of the 2-schilling coins, which are held
by the public as memorial coins (Gedenkmunzen) in considerable
quantities, a total of about 80,000 kilograms has been coined up to
the present time.
The holdings of the State mint amount to about 100,000 kilograms
fine silver, and those of the National Bank amount to about 40 kilo
grams fine silver. The total of 100,040 kilograms equals approxi
mately 3,216,000 fine ounces troy.
BELGIUM
The monetary unit is the Belgian franc (abbr. fr.), divided into 100
centimes. The belga is the unit employed in foreign-exchange trans
actions. The franc is one-fifth of a belga, and has a par value of
approximately $0.0339.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
Foreign currency may be freely imported, but none circulates in
Belgium. The use of checks is usually limited to business payments,
but there has been a gradual increase in their private use. Postal
check accounts are widely held, and their number has been increasing
rapidly. All Government payments are made by postal checks.
15
HANDBOOK OF FOREIGN CURRENCIES
Paper Currency of Belgium, June 1, 1935 1
Denomination
Amount
outstanding
(billions of
francs)
Dimensions
(*)
T otal....................................................................
1.6
10.1
2.9
5.8
.5
.1
21.0
1 Engraved on specially watermarked new-rag paper imported from France and England. To make
counterfeiting difficult, the notes are printed in 3 colors on the face and 4 colors on the reverse side.
* Issued by the National Bank of Belgium.
* Issued by the Treasury.
« 43,736 francs.
Note.—The paper currency is legal tender to any amount.
Coins of Belgium, June 1, 1935
Denomination
50 francs 1......... .
Metal of
chief
value
Fine
ness
0.680
. GS0
Nickel___ 1.000
1.000
50 centimes.......... .
1.000
*. 250
».250
5 centimes.............
*.250
Total............
Gross weight
Silver content
Amount
Diam Thick out
eter ness standing
Grams Grains Grams Grains (mm) (mm) of(millions
francs)
22.000
11.000
15.000
5.000
2.000
6.500
4.000
2.500
339. 5120 14.9600 230.8777
169. 7500 7. 4800 115. 4388
231.4853
77. 1618
38.5809
100.3103
61. 7294
38.5809
35
28
31
21
17
* 20
*22
» 19
1.76
2.29
2. 03
1.40
1.20
1.41
1.21
1.20
498. 5
301.0
36.6
836. 1
1 Commemorative coin. See paragraphs under Silver.
* Alloy is copper.
* The 25-centime piece has a 4.50 mm hole in the center; the 10-centime piece, one of 4 mm; and the 5centime piece, one of 3.50 mm.
Note.—A royal decree of July 1, 1935, extended the time limit from May 31, to Aug. 31, 1935, for the
exchange of 20- and 10-franc nickel coins being withdrawn from circulation. 2-franc pieces ceased to be
legal tender on Oct. 1, 1933.
The 50- and 20-franc silver pieces, and the 5-franc nickel-alloy niece are legal tender for payments up to
any amount. The 1-franc and 50-centiine nickel-alloy pieces are legal tender for paymouts up to 50 francs;
and the pierced cupro-nickel coins comprising 25-, 10-, and 5-centiine pieces are legal tender for payment
up to 5 francs.
NOTE-ISSUING AUTHORITY
Pending replacement by metallic coins, the old notes of the National
Bank of Belgium continue to circulate as State obligations, bearing
the stamp of the Treasury. They comprise the only Government
paper money in use. The circulation of these notes as of June 1, 1935,
was 649,262,000 francs.
Only the National Bank is authorized to issue banknotes (art. 4 of
the organic law). The King nominates the Governor of the bank and
a Government official supervises the bank’s operations. If deemed
desirable, the Minister of Finance may appoint experts to collaborate
with the Government supervisor on certain temporary investigations.
The Government has the right to investigate all operations of the bank
and can oppose any measure which would be contrary to the law, the
statutes, or the interests of the State (arts. 25 and 26 of the organic
16
HANDBOOK OF FOREIGN CURRENCIES
law). Government control is therefore purely negative; that is, it can
be exercised only by a veto. The policy of the bank is fixed by the
board of directors.
RESERVE REQUIREMENTS
The National Bank is obliged to have a gold cover equivalent to at
least 40 percent of its sight obligations. Not less than three-fourths of
this minimum must consist of gold and not more than one-fourth of
foreign currencies convertible into gold. Silver is no longer permitted
to be included in the reserves.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
The importation, exportation, and transportation of gold coin and
bullion are subject to the regulations issued under royal decree no. 141
of March 17,1935. Article 7 of this decree reserves such operations to
the National Bank. There are no restrictions in regard to silver
movements. Smuggling is extremely rare.
GOLD
As of June 20, 1935, the gold reserves of the National Bank
amounted to 18,047,163,000 francs, representing about 566,349 kilo
grams of fine gold.
Gold is not being purchased at a premium by the Government or
the central bank.
Gold hoarding which was manifest prior to the devaluation of the
belga (Mar. 30, 1935) appears to have ceased almost completely since
the beginning of April 1935.
THE GOLD CLAUSE
Before the devaluation of March 30, 1935, the Belgian law, while
respecting the principle of liberty of contract where the intent of the
parties is explicitly expressed (as in guaranty or agio clauses providing
for payment of an additional sum in bank notes to offset any devalua
tion), rejected clauses in direct opposition to the legal tender and
compulsory circulation of the National Bank notes (such as “payment
in gold”, or “payment in metallic specie”). The courts refused, in the
absence of an express stipulation to this effect, to see in such clauses a
contractual device giving guaranty against currency depreciation
through at least the accessory granting of an agio.1
When the Belgian franc was devaluated in March 1935, the question
of the gold clause again came up. A royal decree of April 11, 1935,
1 The National Bank of Belgium, dealing with this subject, states: “ Belgian juridical authorities, after
some hesitation, have approved the validity of clauses serving as a guaranty against the eventual depreciation
of the national currency. The Court of Higher Appeal, in two judgments rendered on May 30,1929, admit
ted the validity of the agio clause in questions of loans. This decision is therefore applicable to all other
contracts implying obligations covering amounts due in the future. The two judgments have definitely
fixed jurisprudence in Belgium; it is now understood that the royal decree of Aug. 2,1934, did not establish
an equivalence between the value of the bank note and of the metal coin. This decree had for sole object the
ensuring of circulation of notes and tho attribution to them of the same legal tender as that of Belgian metal
coins.
“All clauses which foresee a possible depreciation of bank notes and which are intended to maintain the
equivalence of the reciprocal obligations of contracting parties are therefore valid, provided that they
respect the legal tender and compulsory circulation of the National Bank notes. As a whole, the Belgian
jurisprudence thus cancels the clause ‘payment in gold or metal coins’, as being contrary to the compulsory
circulation of bank notes, which was maintained by art. 7 of the decree of Aug. 25,1925, relating to the mone
tary stabilization, but recognizes the validity of the gold clause which, while maintaining the payment by
fiduciary issue, causes the quantity of notes to be paid to vary in relation with the gold rate of a foreign
currency. This ruling has been confirmed several times by other judgments of the Court of Higher Appeal
of June 30, 1930, May 12, 1932, and Apr. 27, 1933.“
HANDBOOK OF FOREIGN CURRENCIES
17
stipulated: That in contracts covering rental of buildings, long leases
(emphyteusis) and loans, concluded prior to March 31, 1935, and con
taining a gold or agio clause, payment from the debtor is compulsorily
calculated according to the gold parity of the belga as defined by the
royal decree of October 25, 1926, or—if it be a question of a clause
referring to the rate of exchange of a foreign currency—according to
the exchange rate for this currency as of March 1, 1935. This decree
is not meeting general adherence, and it is not improbable that it may
be modified.
The following is an excerpt from a report by Thomas L. Hughes,
American commercial attaché, Brussels, dated April 15, 1935.
The regulation of April 11 does not affect contracts with foreign countries, such
as loans obtained abroad on a gold basis or on the basis of foreign currencies,
either by private contracting parties, or by the Government of Belghim, the
Belgian Congo, the Belgian provinces, or the Belgian communes. Commercial
contracts are likewise unaffected. On the other hand, the gold clause will in
legal practice be considered as having been nullified by the decree of April 11,
1935, which fixes the gold content of the present franc as regards leases, contracts
for loans, and contracts fixing interest under Belgian law within Belgium. The
gold contract is thus abrogated only within Belgian territory, and then only in
respect to rentals, loans, and interest.
Payments on contracts for the renting of property or in respect of loans in which
the gold clause is included, must be made in the legal tender current at the moment
of payment, and the creditor may not expect more than the sum agreed upon in Bel
gian francs at the time the contract was drafted. In its report on this subject to the
King, it is pointed out by the Cabinet that the purchasing power of the Belgian
franc today, due to the low cost of living now prevailing, is greater than at any
time since 1927. Although this does not take into account the probable deprecia
tion in purchasing power which must follow the devaluation, it is none the less an
argument which may for the moment be supported by statistics on retail prices
since 1925.
It appears now that these figures may be invoked by all debtors to show that
the money which they are now returning, regardless of its purchasing power in
gold, represents a greater retail purchasing power than at any time during the
past 8 years—the period during which 90 percent of the contracts under consider
ation were drafted. It would therefore be an injustice at present to insist that
the creditors add further to their claims by insisting upon payment in gold.
Behind this argument, which price changes within the next 2 or 3 months may
render no longer applicable, there is the much more considerable reason of state
that the whole object of the devaluation, insofar as it was not an involuntary
maneuver, lay in keeping down the payments being made by Belgian producers.
To have loaded rent payers with an additional burden at the moment when the
gold value of their savings was being cut down by 28 percent would have been the
very negation of the Government’s financial policy.
SILVER
Since the publication of Trade Promotion Series No. 149, The
Monetary Use of Silver in 1933, silver coins have been put into circula
tion. Following the London Economic Conference of 1933, the Bel
gian Government again minted silver coins, and an issue of 20-franc
iieces resulted from royal decree of October 28,1933. This accounted
or important increases of silver imports during 1933 and 1934.
In addition to the 20-franc coins referred to above, a 50-franc coin
is now being minted to commemorate the Brussels 1935 Exposition,
which opened at the end of April 1935. This commemorative coin
may possibly be retired at the close of the exposition on October 31,
1935. In this event, it is the Government’s intention to replace it
by a coin of similar value which will replace the 50-franc Treasury
notes referred to under Description and Circulation of Currency.
J
18
HANDBOOK OF FOREIGN CURRENCIES
By a decree of July 30, 1932, published in the Moniteur Belge of
August 4, the Belgian 5-franc, 2-franc, 1-franc, and 50-centime silver
coins were demonetized as of August 1, 1932. Actually, these coins
have not been in circulation since the World War, as they were at
that time hoarded for their value as bullion and, later, gradually
bought up by the Treasury.
The National Bank of Belgium holds no silver, and the stock at the
mint amounted to about 100 (metric?) tons on November 21, 1934,
from which must be deducted the withdrawals necessary for the 50franc commemorative coins now being minted. At the present rate
of coinage it is estimated that the existing stock will be sufficient for
the needs of the next 4 or 5 years.
The weight of fine silver corresponding to the silver 20-franc pieces
in circulation on June 1, 1935, was 186,441 kilograms, or about
5,994,000 ounces. Similar information in respect of the 50-franc
commemorative coins is not yet available.
BOLIVIA
The monetary unit is the boliviano (abbr. b.), divided into 100
centavos. The boliviano has a par value of approximately $0.6180.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
Because coins were being hoarded by the Indians, the Government
was authorized to divide 1-boliviano notes into two parts to be valued
at 50 centavos each and used as change. Later, however, the division
of bolivianos was declared illegal, and in October 1935 the ^-boliviano
notes were being withdrawn from circulation. The Central Bank also
contracted abroad for the coinage of 5- and 10-centavo pieces of
nickel, which have been delivered. The total amount ordered had a
face value of 1,250,000 bolivianos, and, of this, 100,000 bolivianos were
put into circulation in June 1935, the balance to be used as circum
stances require. The Ministry of Finance states that the new coins
will circulate under the same conditions and with the same value as
the old.
The issuance of paper currency has greatly increased. According
to figures given by the consulate in La Paz during October 1935, the
bank had issued notes to the amount of 160,100,000 bolivianos, of
which 11,684,645 bolivianos were held by the Bank, leaving in cir
culation 148,415,355 bolivianos at that time, as compared with
85,597,351 in circulation on December 31, 1934. For recent years,
the circulation of nickel and silver coins has been reported as approx
imately 6,000,000 bolivianos. On December 31, 1934, Bolivian silver
coins held by the bank amounted to 178,413 bolivianos and Bolivian
nickel coins, to 12,300 bolivianos.
19
HANDBOOK OF FOREIGN CURRENCIES
Paper Currency of Bolivia 1
Denomination
Amount
outstanding
October
1935
(millions of
bolivianos)
Dimensions
1.9
1.7
11.6
10.6
25.3
38.2
43.5
15.5
148.3
*Issued by Central Bank of Bolivia. Engraved in the United States. Specially prepared paper, with
safety marks, is used. The paper is 75 percent linen and 25 percent cotton.
* Regarding the use of divided notes, as half bolivianos, see text above
Coins of Bolivia
Denomination
Metal of chief Fine
value
ness
Gold................ 0.900
.900
.800
50 centavos................. ... do............ .800
.... do............. .800
10 centavos................
’.250
*.250
Gross weight
Gold or silver
content
Grams
Diam Thick
eter ness
(mm) (mm)
Grains
Grams
Grains
12.2038
6.1019
15. (XXX)
7.5000
3. 0000
4.8000
2. 4000
188.3331 10.9834 169.4997
94.1606 5.4917 84. 7499
231.4853 12.0000 185. 1883
115. 7427 6.0000 92.5941
46. 2971 2. 4000 37.0377
74. 0754
37. 0377
25. 20
20.35
1.24
.94
1 These coins were provided for in the law but were never minted.
*Alloy is copper.
N ote.—A Bolivian banker is reported to have said that the hoarding and melting of coins which resulted
from the rise in the price of silver in 1034 and 1935 made it impossible to estimate the amount of coins out
standing.
NOTE-ISSUING AUTHORITY
Article 59 of the organic law of July 20, 1928, gives the Banco
Central de la Nación Boliviana, commonly known as the Banco
Central de Bolivia, the exclusive right to issue currency during the
50 years of its existence. Only notes of that bank are now in circula
tion. The bank has all the functions of a central bank and acts as
agent for the Government. The law provides that two of the eight
directors of the bank shall represent and be approved by the Govern
ment. Of the total 238,226.75 shares of the bank’s stock the Govern
ment holds 143,422.50 shares. These are called “class A’’ shares
which, according to article 8 of the law referred to, do not enjoy
voting rights.
RESERVE REQUIREMENTS
Article 71 of the law provides that the Central Bank must maintain
a minimum legal reserve in metal equal to 50 percent of its total note
circulation and deposits. Article 72 provides that this reserve shall
consist, among other things, of Bolivian silver money in the vaults
of the bank, but the amount of silver in the reserve may not at any
time exceed 10 percent of the combined circulation and deposits.
20
HANDBOOK OF FOREIGN CURRENCIES
Article 73 of the law provided that if the metallic reserve should
fall below 50 percent, a sliding scale of penalties should be imposed.
Laws enacted September 6 and November 21, 1932, authorizing the
executive to contract two loans with the Central Bank up to the sum
of 50,000,000 bolivianos, implicitly recognized the bank’s right to
reduce its metallic reserve to the extent of the credits extended to the
State during the period of war. .
The demands made upon the bank by the Government because of
the Chaco War led to the enactment of the law of September 6, 1932,
which granted the bank the right, in case of necessity, to make up its
legal reserve with first-class commercial paper, provided such paper
did not exceed 10 percent of its total reserves. The supreme resolution
of November 29, 1932, provided that if the legal-reserve ratio of the
bank falls below 50 percent, the fines specified in article 73 will not
be imposed.
A recent statement of the bank gives the following figures regarding
the legal reserve at the close of 1934. It is understood that the silver
shown under this heading is held in the form of coin, and not bullion.
To assist the bank in building up its reserve, it was authorized by a
decree of July 10, 1933, to retain 25 percent of the foreign drafts
delivered by exporters of minerals. Because of the great demand for
foreign exchange, due principally to governmental purchases of war
necessities, it is believed that the bank has not taken full advantage
of this privilege of 25 percent and that it cannot do so for some time.
On December 31, 1934, the Central Bank held among its general
assets the following, the amounts stated being bolivianos:
Gold bullion____________________________________ 888, 598
28,971
Gold coin............................................ ..........................
Total gold...................................................................... 917, 569
Bolivian silver money____________________________ 178, 413
Total metallic stock_______________________ 1, 095, 982
In addition the bank held 12,300 bolivianos in Bolivian nickel coin.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
A prohibition on the export of gold in any form, as well as a mora
torium on obligations abroad payable in foreign currency, was es
tablished by law on October 6, 1931, for a period of 30 days, subject
to extension. It has since been extended. The exchange-control law
of May 19, 1932, provides that for 2 years, subject to extension, the
Central Bank shall have the sole right to buy and sell gold.
Article 7 of the law of May 25, f932, provided that while the law
of October 6, 1931, was in effect, gold would not be exported without
the permission of the Ministry of Finance, and any sale of gold must
be made to the bank, which should acquire it on the basis of the price
fixed by the Assay Office of the United States, in New York City, and
the exchange rate of the day, after deducting insurance and transpor
tation expenses. The latter stipulation was altered by a decree of April
11, 1934, which provided that gold purchased by the Central Bank
should be paid for, 70 percent in foreign drafts and 30 percent in local
currency at the official rate of the day. This decree also authorized the
•irculation within the country of foreign drafts so acquired, reaffirmed
HANDBOOK OF FOREIGN CURRENCIES
21
the sole right of the bank to export gold, and made provision for the
appointment of agents throughout the country to buy gold on behalf
of the bank.
By decree of January 31, 1935, the bank was authorized to pay
higher prices for gold, either in local currency or, if necessary, in for
eign drafts, provided the seller imports merchandise to a value of
70 percent of the drafts he receives. The bank now (October 1935)
quotes the price of £216 17s. Od. for a kilogram of pure gold.
A decree of January 24, 1935, providing new exchange restrictions,
prohibits the exportation of silver coins and silver plate. Bolivia
is an important producer of silver ores and concentrates which are
exported subject to regulations regarding the use of the foreign ex
change derived therefrom.
Smuggling of gold is very extensive, and the Central Bank realizes
that it obtains only a very small portion of the gold produced. For
this reason there have been several changes in the rates at which the
Central Bank buys gold, in an effort to make smuggling less profitable.
As gold does not circulate, it is believed that there is little hoarding
unless by producers of this metal. Most of this available gold, how
ever, finds its way out of the country by illegal channels.
GOLD
The Central Bank held 888,598 bolivianos of gold in bars and
28,971 bolivianos of gold in coin, or a total of 917,569 on December 31,
1934. Its balance sheet shows that 8,591,505 bolivianos of gold are
also held in London. This represents gold shipped to London by the
bank and the two commercial banks in 1934 as security for sterling
loans and subject to redemption. All available gold held was shipped
at that time and the gold now in the vaults of the bank constitutes
that purchased locally since that time. The gold in the vaults as of
June 1, 1935, weighed 375.292 kilograms.
THE GOLD CLAUSE
There is no gold clause in domestic contracts of any kind. Bank
notes of the Cential Bank state that a certain sum will be paid at
sight “in gold or in gold drafts”, but this has necessarily been abro
gated in effect.
SILVER
There has been no further information on silver since the publica
tion of Trade Promotion Series No. 149, The Monetary Use of Silver
in 1933.
BRAZIL
The monetary unit of Brazil is the milreis (written 1$000), divided
into 1,000 reis. One conto is equal to 1,000 milreis. The Bank of
Brazil still considers the milreis to have a parity of $0.1196 United
States currency, but as the conversion of circulating currency into
HANDBOOK OF FOREIGN CURRENCIES
22
gold has been abandoned, the milreis does not possess, practically
speaking, any determinable par of exchange:
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the following tables:
Paper Currency of Brazil
Denomination
Dimensions
Amount
outstanding
Aug 7,1935
(millions of
milreis)
by 3H inches...............................................
\7Mfl by 3H 2 inches.............. ................................ }
7Me by 37A e inches..............................................
/6H by 3Ha inches----------------------------------\7H by 3Mo inches......................... ..................... }
6»M« by 3M inches................................................
J6H by 2»M« inches........................................... }
\5H by 2lH« inches........... ................................
97.9
1,527.5
421.2
443.6
306.8
189.6
128.4
66.3
10.4
9.5
3. 201.2
Coins of Brazil
Gross weight
Denomination
Silver content
Amount
standing
Diam Thick June 30,
Metal of Fine
eter
ness 1935
chief value ness
Grams Grains Grams Grains (mm) (mm) (millions
of
milreis)
0.500
.910
.......do........... .910
Copper »___ .750
.750
200 reis................. .
.750
8
8
4
12
8
5
123. 456
123. 456
61. 728
185. 184
123. 456
77.160
4 61.728 26.1110 1.8542
26. 7208 2.4130
22. 7584 1. 7018
30. 4292 2. 0828
25.1968 2. 1082
21.0820 1. 8796
42.1
70. 4
16 7
16.1
16. 4
10.5
172.2
* Copper, 75 percent; nickel, 25 percent.
NOTE-ISSUING AUTHORITY
Under existing law the National Treasury and the Bank of Brazil
are the only agencies legally authorized to issue currency. However,
the amount of notes which may be emitted by the Bank of Brazil is
limited to 100,000,000 milreis.
Although it does not perform all of the functions of a central bank,
the Bank of Brazil possesses many of the characteristics of such an
institution. As a majority stockholder in the bank, the Government
exercises both de jure and de facto control over its functions and
policies.
RESERVE REQUIREMENTS
There are no legal requirements with respect to the establishment
and maintenance of precious-metal reserves against currency issues.
Although internal purchases of gold have been made on a substantial
HANDBOOK OF FOREIGN CURRENCIES
23
scale by the Bank of Brazil for the account of the Treasury since
December 1933 (authorized by decree 23,535 of Dec. 4, 1933), this
bullion is not specifically earmarked for reserve purposes. Silver is
employed exclusively for minting purposes. It is estimated that
about 78,800,000 grams of the metal are in monetary use in the
country. RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Decree 23,258 of October 19, 1933, made reoperative the provisions
of the law of December 31, 1921, which prohibited the exportation of
gold, silver, and other precious metals. A subsequent decree (Dec.
4, 1933) required that all gold extracted in the country be sold to the
Bank of Brazil or its authorized agents. The restrictions provided
for by these two decrees are currently in effect and will continue to be
until modified, since no time limitation, specific or implied, is carried
in the text of either.
Opinions as to the extent of gold smuggling vary considerably, but
it is generally believed that the Government is actually receiving
perhaps as little as one-third and certainly not more than one-half
of the country’s total gold production.
GOLD
According to an official statement, the Bank of Brazil held at the
disposition of the National Treasury on July 31, 1935, 11,300,023.345
grams of fine gold, which was purchased at a total cost of 182,251,000
milreis.
The price paid by the Bank of Brazil for gold closely approximates
the world market price (current price 18.5 milreis per gram). As
previously mentioned, the Federal Government has been actively
buying gold since December 1933.
Gold hoarding is not believed to be practiced to any extent in
Brazil, although a group of local capitalists was reported to have held
a sizable amount of the metal for speculative purposes during the early
part of 1934, which was later disposed of. At present, practically
all of the gold acquired clandestinely is smuggled out of the country.
THE GOLD CLAUSE
Decree no. 23,501 of November 27, 1933 (published in Diario
Official of Nov. 30, 1933) abolished the gold clause in all contracts
executable in Brazil. This law has not been modified in any essential
detail.
SILVER
The conditions outlined in Trade Promotion Series No. 149, The
Monetary Use of Silver in 1933, with respect to the monetary use of
silver in Brazil, have undergone no change.
It is estimated that 78,803,136 grams of silver have been minted
into coins (2-milreis) now in circulation.
BRITISH INDIA
The monetary unit is the rupee, divided into 16 annas. One anna
equals 4 pice; 1 pice equals 3 pies. The rupee is pegged to the pound
sterling at a ratio of 1 shilling 6 pence per rupee and accordingly has
a par value of approximately $0.6180. British Indian coins are in
use in Ceylon, British Somaliland, Zanzibar, Pemba, Mauritius, and
24
HANDBOOK OF FOREIGN CURRENCIES
elsewhere, but are being withdrawn from circulation in Iraq. The
monetary unit in Cevlon is the rupee, but fractional coins differ
from those in use in British India, since in Ceylon they are based
on the decimal system. In Mauritius, also, the rupee is divided into
100 cents, and cent coins are in use. Mauritius employs silver coins
in denominations of 1 , %, yt , and rupee. In Zanzibar silver coins
in the denominations of ys rupee are issued; in silver content these
coins are proportionate to the British Indian rupee silver piece.
One lakh equals 100,000 rupees (written 1,00,000); 1 crore equals
10,000,000 rupees (written 1,00,00,000). For example, 172,500,000
rupees would be written 17,25,00,000 and would be read as 17 crores
25 lakhs.
The notes of the reserve bank are legal tender in any amount, as
are 1- and ^-rupeo silver coins that are not defaced and are within
2 percent of their standard weight. All coins of less than rupee
are legal tender in amounts not exceeding 1 rupee.
DESCRIPTION AND CIRCULATION OF CURRENCY
The accompanying tables describe the paper money and coins.
Paper Currency of British India, Mar. 31, 1934
Amount
outstanding
(millions of
rupees)
97.8
113.1
6.0
649.0
13. 3
(»)____......................................................................
.2
f5M by 3?$ inches................................................ }
10 rupees............................................................ \6>t
674.1
by 4 inches......................................................
f0 by 3?i inches....................................... .............
215.3
\5 by 2-/i inches............................................ .......... }
(»)..........................................................................._
.1
3.3
..................................... ............................
Total........................................................
1,772.2
>Sizes mentioned are for notes issued by the Government of India under the signatures of the then Comp
trollers of the Currency. All new notes will be issued by the Reserve Bank of India, but no issue is expected
before late 1936. Designs and other details of the new notes are still under consideration.
1 Data not available.
Denomination
Dimensions 1
Coins of British India
Denomination
1 rupee 1...............
?$ rupee 1.............
?4 rupee 1...........H rupee *.............
4 annas s..............
2 annas *1*i*............
1 anna »6.7............
2 pice (H anna) *.
1 pice (H anna)..
H pice..................
1 pie (?$ pice) —
Metal of
chief value
Silver..
___ do..
___ do..
___ do..
Nickel.
___ do..
___ do..
Copper.
do.
do.
Fine Gross weight Silver content Diameter Thickness Grams Grains Grams Grains (mm)
(mm)
0. 916$$ 11.6633 180.00 10.6918 165.00
. 916?$ 5.8319 90.00 5.3459 82.50
. 916?$ 2.9160 45. 00 2.6730 41.25
. 916?$ 1.4575 22.50 1. 3365 20.625
* .250 6.8039
« .250 5.8319
« .250 3.8879
7.950 9. 7200
T. 950 4.8599
7.950 2.4300
7.950 1.6200
105.00
90.00
60.00
150.00
75.00
37.50
25.00
30.48
24. 13
19.05
25.00
21.00
19. 80-21.00
25. 40
21.33
17.27
1 Round.
* Being withdrawn from circulation. There were also ?$-rupee nickel coins, now not in circulation.
* Has 8 scalloped edges.
* Alloy: Copper, 0.750.
* Square in shape.
* Has 12 scalloped edges.
7 Alloy: Tin, 0.040, and zinc, 0.010.
1.524
1.213
.965
1.628
1.549
1.295
.990
.711
.711
HANDBOOK OF FOREIGN CURRENCIES
25
In 1930 Trade Commissioner J. Bartlett Richards reported the
devices used to prevent counterfeiting as follows:
Indian paper currency notes are printed by the offset lithographic process
from zinc plates on rotary machines. They are printed at the Currency Note
Printing Press at Nasik, Bombay Presidency, and designs for the photographic
plates from which they are lithographed are also prepared there. The paper
used is of British manufacture (Portals, Ltd.) and is of pure linen and cotton-rag
stock, animal sized. The inks used are ordinary offset lithographic inks of good
quality, with pigments fast to light. They are of Indian manufacture. The
chief protection in all notes is the relief portrait watermark of H. M. King George
on the paper. Reliance is also placed on multiple printing in colors which are
difficult to separate photographically. The design is varied as regards borders,
corner pieces, etc., so as to force the forger to resort as much as possible to re-draw
ing. The general intention is to make it necessary for the forger to use several
plates for the various colors which he will have to prepare with the maximum of
drawing, without much help from photography. He then has to surmount the
difficulty of making the plates fit. Rainbowing of one or more of the plates is
also used, which adds labor but not great difficulty otherwise to the forger’s
task. It helps somewhat, however, in photographic detection.
An additional precaution against forgery is the withdrawal and replacement
of the notes as soon as they come to the Government treasuries.
No actual record is available as to the circulation of metallic cur
rency in India. The only estimates at hand are those concerning
1-rupee coins. On the basis of the number coined since 1835 minus
the number melted, recoined, etc., the Hilton-Young Commission in
1926 estimated that the total number of 1-rupee pieces in existence,
including the Government stock totaling 880,000,000 rupees, was
approximately 3,250,000,000 rupees. Since 1923 no rupees have been
coined. From the foregoing figures it appears that rupees in the
hands of the public in 1926 totaled 2,370,000,000. According to
customs statistics, net imports of rupee coins from April 1, 1925, to
March 31, 1934, were 48,255,000. From April 1, 1926, to March 31,
1934, there was a net return from circulation of 737,600,000 rupees.
On this basis the rupees in the hands of the public on April 1, 1934,
totaled 1,680,655,000. On the same date rupees hold by the Cur
rency Department of the Government totaled 864,870,000.2
Silver rupees held by the Reserve Bank of India on June 14, 1935,
totaled 505,650,000. On March 31, 1934, the gross circulation of
paper money in India was 1,772,200,000 rupees. The average gross
circulation during the fiscal year 1933-34 was 1,781,300,000 rupees.
Notes in circulation on June 14, 1935, totaled 1,866,685,000 rupees.
The value of each denomination in circulation on March 31, 1934,
was as shown in the above table.
Gold coins are not currently issued, nor are they in circulation in
India. From August 1918, when a branch of the Royal Mint was
established at Bombay, to April 1919, when it was closed, there were
coined in India 1,295,000 British sovereigns and 2,110,000 gold
mohurs. (1 mohur equals 15 rupees and is, therefore, of exactly the
same weight and size as the British sovereign.)
The Reserve Bank of India, which was established on April 1, 1935,
is obligated to buy and sell sterling only, and, like the Government,
it is under no obligation to buy or sell gold.
Foreign notes and coins do not circulate and are not legal tender,
though there are no restrictions on the importation of either. Some*
* There are available estimates of rupees in circulation during various years, based upon the “rupee
census method.” This method was described by G. Findlay Shirras in the Journal of the Royal Statis
tical Society of July 1920. An estimate made according to this method by C. 8. Kangaswami, of Calcutta,
in 1931 placed the total of rupees in circulation at 1,433,000,000.
26
HANDBOOK OF FOREIGN CURRENCIES
of the native States have their own coins,3which circulate only within
the State that issues them. No estimate is available as to the
amount of these currencies in circulation outside the States where
they are legal tender. None of the native States has its own paper
currency, British Indian notes being legal tender in all of them.
In Pondicherry (French India), only notes issued by the Banque de
l’Indochine are legal tender. They are issued in denominations of 50
rupees, 10 rupees, and 1 rupee. In Portuguese India, notes of the
Banco Nacional Ultramarino are in circulation. British Indian notes
are accepted in both of these colonies.
NOTE-ISSUING AUTHORITY
The note-issuing authority is, since April 1, 1935, the Reserve Bank
of India. By the passage of the Reserve Bank Act the following acts
were repealed: The Indian Paper Currency Act, 1923 (X of 1923), the
Indian Paper Currency (amendment) Act, 1923 (XXXVI of 1923),
the Indian Paper Currency (amendment) Act, 1925 (II of 1925),
and the Currency Act, 1927 (IV of 1927).**
Control of the Reserve Bank is vested irf a central board of directors,
consisting of a governor, 2 deputy governors, 12 directors, and 1 gov
ernment official. The governor and the deputy governors are ap
pointed by the Governor General in Council, who also nominates
4 of the 12 directors and the government official. Eight directors are
elected on behalf of the bank’s shareholders. The powers of the
Governor General in Council to supersede the Central Board are
outlined in section 30 of the Reserve Bank of India Act, 1934, which
reads as follows:
If in the opinion of the Governor General in Council the bank fails to carry
out any of the obligations imposed on it by or under this act, he may by notifica
tion in the Gazette of India declare the Central Board to be superseded, and there
after the general superintendence and direction of the affairs of the bank shall be
entrusted to such agency as the Governor General in Council may determine, and
such agency may exercise the powers and do all acts and things which may be
exercised or done by the Central Board under this act.
RESERVE REQUIREMENTS
The Reserve Bank of India Act provides that the assets of the
Issue Department shall be as follows:
(1) The assets of the Issue Department shall consist of gold coin, gold bullion,
sterling securities, rupee coin, and rupee securities to such aggregate amount as
is not less than the total of the liabilities of the Issue Department as hereinafter
defined.
(2) Of the total amount of the assets, not less than two-fifths shall consist of
gold coin, gold bullion, or sterling securities: Provided, That the amount of gold
coin and gold bullion shall not at any time be less than 40 crores (400,000,000) of
rupees in value.
(3) The remainder of the assets shall be held in rupee coin, Government of
India rupee securities of any maturity, and such bills of exchange and promissory
notes payable in British India as are eligible for purchase by the bank under sub
clause (a) or subclause (b) of clause (2) of section 17, or under clause (1) of sec
tion 18: Provided, That the amount held in Government of India securities shall
not at any time exceed one-fourth of the total amount of the assets or 50 crores
(500,000,000) of rupees, whichever amount is greater, or, with the previous sanc
tion of the Governor General in Council, such amount, plus a sum of 10 crores
(100,000,000) of rupees.
* This is true also o( the Portuguese Colony of Goa.
* A number of amendments to the Imperial Bank of India Act of 1920 were made by the Reserve Bank of
India Act, 1934. These were listed in detail In the Reserve Bank inauguration number of Indian Finance,
April 1935, vol. XV, no. 18.
HANDBOOK OF FOREIGN CURRENCIES
27
(4) For the purpose of this section, gold coin and gold bullion shall be valued
at 8.47512 grains of fine gold per rupee, rupee coin shall be valued at its face
value, and securities shall be valued at the market rate for the time being obtaining.
(5) Of the gold coin and gold bullion held as assets, not less than seventeentwentieths shall be held in British India, and all gold coin and gold bullion held
as assets shall be held in the custody of the bank or its agencies: Provided, That
gold belonging to the bank which is in any other bank or in any mint or treasury
or in transit may be reckoned as part of the assets.
(6) For the purposes of this section, the sterling securities which may be held
as part of the assets shall be securities of any of the following kinds payable in
the currency of the United Kingdom, namely:
(a) Balances at the credit of the Issue Department with the Bank of England:
(b) Bills of exchange bearing two or more good signatures and drawn on and
payable at any place in the United Kingdom and having a maturity not exceeding
90 days;
(c) Government securities of the United Kingdom maturing within 5 years:
Provided, That for a period of 2 years from the date on which this chapter comes
into force, any of such last-mentioned securities may be securities maturing after
5 years, and the Bank may, at any time before the expiry of that period, dispose
of such securities notwithstanding anything contained in section 17.
The total note issue on June 14, 1935, was 1,866,685,000 rupees
and the reserve on that date was stated as follows:
A. Gold coin and bullion:
Rupees
Held in India________________________ 415, 519, 000
.
Held outside India___________________
28, 698, 000
Sterling securities________________________ 531, 927, 000
Total.......................................................... 976, 144, 000
B. Rupee coin______________________________ 505, 650, 000
Government of India rupee securities________ 384, 891, 000
Internal bills of exchange and other commercial
paper______________________________________________
Total of assets.......................................... 1, 866, 685, 000
Ratio of total of A to liabilities___ percent-.
52. 3
It will be noted that silver bullion is no longer included in the reserve.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
The movement of gold and silver bullion into and out of India is
unrestricted except in the following cases:
(1) The International Silver Agreement of 1933, entered into at London,
limits sales of silver by the Government of India to 140,000,000 fine ounces
during the 4 years commencing January 1, 1934.
(2) An import duty on silver was initiated in 1930 as a revenue measure.
The Indian budget of that year included a duty of 4 annas an ounce, effective
March 31, 1930. This was increased to 6 annas an ounce, effective March 1,
1931. A surcharge of 25 percent was made effective October 1, 1931, which
raised the duty to 7)4 annas an ounce from that date, and this remained effective
until March 1, 1934, when it was reduced to 5 annas an ounce. In the budget
for 1935-36 the rate was again reduced and since March 1, 1935, the rate has
been 2 annas per ounce.
(3) Prohibition of imports of silver bullion by land into Burma from China
was made effective on October 15, 1932.
(4) On October 15, 1932, the Government declared that silver bullion and
silver sheets and plates imported from China by land into India would be assessed
duty at the rate per ounce provided under schedule II, item 43-Bb of the tariff.
(5) The prohibition of the import of silver bullion and coin other than the
current coin of the Government of India by land from Afghanistan into British
India or into the Northwest Frontier Province and also from Persia into British
India or into Baluchistan agency territories was made effective July 21, 1934.
Smuggling has existed since the imposition of the import duty in
1930. In 1935 a Bombay Bullion Exchange estimate placed smug
28
HANDBOOK OF FOREIGN CURRENCIES
gling at 11,000,000 ounces yearly. The latest official estimate of
the amount smuggled into India is that for 1932, during which year,
the Currency Office has stated, smuggling did not exceed 1,000,000
ounces. The interposition of the hindrances outlined above, together
with the lowering of the import duty, has been successful in reducing
import smuggling to an insignificant point, particularly as the rise
in the world price of silver reduces still further the percentage of
profit obtainable on successful'import-smuggling operations.
GOLD
Gold reserves of the Issue Department of the Reserve Bank on
June 14, 1935, were valued at 444,217,000 rupees. Published state
ments do not make any distinction between gold coin and gold
bullion. Under the Reserve Bank Act gold coin and gold bullion are
valued at 1 rupee per 8.47512 grains of fine gold.
The Reserve Bank is authorized to buy sterling at a rate not higher
than Is. 6J(. per rupee and to sell sterling at not under Is. 5A%t per
rupee. Recent purchases (June 1935) by the Reserve Bank have
been made at Is. 6}£. The bank is buying no gold bullion, and it is
believed in India that such purchases will not be made in the near
future.
Gold hoarding is known to be practiced to a large extent by the
public, but no reliable estimates as to its extent are available. Ex
ports of gold from India since September 21, 1931, when England
suspended the gold standard, to June 15, 1935, have amounted to
2,297,371,299 rupees. This is believed to have come largely out of
small hoards and to represent but a small fraction of the total gold
so held.
THE GOLD CLAUSE
The gold clause is not used in domestic contracts in India. Domes
tic contracts are made in rupees. Rupees are pegged to the pound
sterling at Is. 6d. per rupee, and when England left the gold standard
the rupee automatically came into the sterling bloc.
SILVER
The present attitude of the Government of India as regards silver
is given in the budget speech of Sir James Grigg, Finance Member
of the Government of India, on February 28, 1935. In commenting
on the import duty on silver, Sir James said:
* * * We propose to reduce the duty to 2 annas an ounce. This action is
dictated by no theory as to the place to be taken by silver in the monetary
economy of the world nor has it any connection with the view sometimes ex
pressed that India should be encouraged to build up her hoards of the metal. It
is simply a matter of business. There is no doubt that at the present level
the duty is encouraging smuggling; there is no doubt that this smuggling is
extremely difficult to prevent; and there is no doubt that the honest trader is
being injured by the illicit trade which is being carried on. At the lower level
which we now propose, smuggling should become unprofitable and the honest
trader will come into his own. I propose to assume that we shall get the same
yield from the 2 annas as would have been obtained from the 5-anna duty, which
is, I think, fully justified by the circumstances in which the reduction is taking
place. The reduction will take place immediately by notification.
As regards the silver-redemption reserve of the Government of
India, the Finance Member, in the same speech, said:
The reserve is required mainly to meet the liability imposed by section 36 of
the Reserve Bank Act, under which the Government is under an obligation to
HANDBOOK OF FOREIGN CURRENCIES
29
pay full value for surplus rupees which may be transferred by the bank up to a
maximum of 5 crores a year. It was originally intended that the reserve should
be gradually built up to a maximum of 10 crores (100,000,000) of rupees, which
would be sufficient to meet a return of 25 crores (250,000,000) of rupees by the
bank. Owing to the large remittance which It has been possible to make during
the current financial year, the balances at the disposal of the Secretary of State
will now be sufficient to enable the fund to be constituted with the full amount
of 10 crores (100,000,000) of rupees, with effect from April 1, 1935.
Local opinion in June 1935 was unanimous that the Government of
India would continue to sell silver at a price which is considered
profitable and that the sales would be made up to the maximum per
missible under the silver agreement. The quantity of silver that
may be sold by the Government before the silver agreement expires
at the end of December 1937 is variously estimated by local author
ities at between 80 and 100 million ounces. Leading bullion brokers
are of the opinion that the sales of silver by the Government of India
will not depress the market, especially while it is dominated by a
“bullish” feeling. On the whole, the Bombay market does not antic
ipate that the policy of the Government of India with regard to
selling silver will be changed.
BRITISH MALAYA
The monetary unit is the Straits dollar (symbol $ or, sometimes,
S$), divided into 100 cents. The par value of the Straits dollar is
approximately $0.9613, as it is linked to the pound sterling at 2s. 4d.
The Straits dollar is employed not only in the Straits Settlements and
the Malay States but also in Sarawak, Labuan, and Borneo.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
Coins of British Malaya
Metal of Fine
Denomination chief
value ness
Gross weight
Amount
out
stand
Diameter Thick
ing Mar.
ness
(ram) (mm) 31, 1935
Grains
(millions
of Straits
dollars)
280.8000
2.4
34.0
130. (XXX)
33.5
2.0
140. 4000
28.3
2. 4
65. 0000
18.3
1.8
67. 0480
23. 1
1. 4
23. 5
33. 5240
23.0
1.4
33. 5200
17. 9
1.1
25. 1400
18. 0
1. 5
10.6
16. 7600
17. 8
1.. 75
16. 7600
12. 5700
15. 5
1.0
8. 3800
15.5
1. 0
19. 5
2.0
28. 4
2.0
*21 by 21
2.0
23. 0
1. 5
2.2
18.0
1. 1
*18 by 18
1. 1
15.9
Silver content
Grams Grains Grams
1 Straits dollars... Silver........ i 0.900 20.2173 312.0000 18.1955
1Straits dollars.... -..do.......... i .500 16. 84.80 260. 0000 8. 4240
50 cents.........
1 . 900 10. 1OS0 156. (XXX) 8. 9811
50 cents...........
1 .500 8. 4240 130.0000 4.2120
20 cents.............
i .800 5. 4300 83.8100 4. 3340
20 cents...............
i . 000 5. 4300 83.8100 3. 1580
20 cents...............
i . 400 6. 4300 83.8100 2. 6670
10 cents..........
i .800 2. 7151 41.9000 2. 1721
10 cents...........
i . 000 2. 7151 41. 9000 1. 6291
10 cents...........
l . 400 2.7151 41.9000 1.0864
5 cents.............
• . 800 1. 3575 20. 9500 1.0864
5 cents.............
1 . 000 1. 3575 20. 9500 .8145
5 cents................
1 . 400 1.3575 20. 9500 . 5430
5 cents.........
4.0000 61. 7300
1 cent...............
9.3313 144.0000
1 cent *...........
89. 9999
.950
5.8320
h cent..................
4. 6650 71. 8900
!< cent................
36. 0000
2.
3360
cent.............
2.9160 45. (XXX)
Total..........
1 Chief alloy is copper.
* A square l-cont piece. Alloy: Copper, 0.950; tin, 0.040; and zinc, 0.010.
* Square with rounded corners.
Note.—Silver dollars and half dollars are unlimited legal tender. Subsidiary silver and nickel coins
are legal tender in amounts not exceeding $2, and copper coins up to $1.
66111°— 36------ 3
30
HANDBOOK OF FOREIGN CURRENCIES
Paper Currency of British Malaya
Approximate dimensions
Denomination
Amount
outstanding
May 31,
1935 (mil
lions of
Straits
dollars)
3.50
5.30
3.63
1.21
33.33
14.92
14. 45
.03
.69
77.06
Total........................................................
• This represents the dimensions of the present (May 31, 1935) issue.
Note.—Notes of denominations less than $1 are legal tender to the amount of only $2.
NOTE-ISSUING AUTHORITY
The only notes in British Malaya are those issued by the Treasury
of the Straits Settlements. Formerly several banks had the right to
issue notes with the permission of the Treasury, but practically all
of their notes, it is understood, have now been called in.
RESERVE REQUIREMENTS
The reserves against the currency are composed of sterling balances
and investments in London and of silver coins held by the currency
commissioners. Should the value of these reserves fall below the
total amount of notes in circulation, the Government is under statu
tory obligation forthwith to make good the deficiency from the public
revenues.
The statute requires that the “liquid portion” of the reserve shall
be not less than two-fifths and the proportion of silver coins, not less
than one-tenth of the notes in circulation. The reserves on May 31,
1935, included 10,286,013 Straits dollars of current silver coins but no
bullion.
RESTRICTIONS ON BU1.LION AND COIN MOVEMENTS
There is no restriction on exportation or importation of gold and
silver bullion, but the importation of certain silver coins is restricted.
No smuggling is believed to exist.
GOLD
There is no hoarding of gold coin. Large amounts of leaf gold,
however, are held by natives, chiefly for ornamental purposes. At
the end of 1933 there was extensive trading in leaf gold, but natives
have since turned in considerable amounts to be melted, and in July
1935 trading in leaf gold was almost at a standstill.
THE GOLD CLAUSE
The gold clause is not used in domestic contracts in British Malaya.
31
HANDBOOK OF FOREIGN CURRENCIES
SILVER
There have been no new developments of any kind since Trade
Promotion Series No. 149, the Monetary Use of Silver in 1933, was
published.
The weight of silver in monetary use in British Malaya is estimated
at 13,399,057 fine ounces, of which the Government held 5,221,882
and the banks and the general public, 8,177,175.
BULGARIA
The monetary unit is the lev (abbreviation 1., plural leva), divided
into 100 stotinki. Under a plan drawn up by the Financial Committee
of the League of Nations for the stabilization of the Bulgarian cur
rency, which was approved by the Bulgarian Parliament on November
22, 1928, the value of the lev was declared to be equal to of a gram
of pure gold (or 0.010869+ gram or 0.167743+ grain). This gave
the lev a value of about $0.00722 in United States currency. For
nearly 4 yearn the rate of exchange for the lev had been stabilized on
a de facto basis at about that figure. With the revaluation of the
dollar in 1934 the par value of the lev became approximately $0.0122.
On October 15, 1931, all transactions in foreign exchange were
placed under the control of the National Bank of Bulgaria. The
currency is still protected by a rigid system of foreign exchange resstrictions and import quotas, the great bulk of the country’s foreign
trade being done on a compensation basis.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
Foreign currency may be freely imported, but none circulates in
Bulgaria.
In November 1933 it was announced that pursuant to article 8 of
the law of December 3, 1928, on Stabilization of the Lev and the
Regulation of the Currency, all paper currency in denominations of
100 leva and less would be withdrawn from circulation by December
31, 1933. It was understood that notes of 200 leva, hitherto unused,
had been printed for issuance as the smaller denominations were
withdrawn. Notes of 5, 10, and 20 leva had been rare, but the 50and 100-leva notes were still in common use. While recognized as
legal tender only until December 31, 1933, it was announced that
they would be accepted by the National Bank for exchange after that
date, probably until January 15, 1937. As will be seen from the
following statement, relatively small amounts of notes of 100-leva
denominations and less were still outstanding on January 1, 1935.
For several years the National Bank has held in its vaults a stock
of new bank notes of 200-, 250-, 500-, 1,000-, and 5,000-leva denomi
nations, but the American consul at Sofia reported on July 16, 1935,
that these notes had not been put into circulation, as it was found
expedient to issue the new silver 20-, 50-, and 100-leva coins, 0.500
fine, of 1934, of which 400,000,000 leva were authorized.
The dimensions of the new notes are as follows: Millimeters
200 leva
153 by 86
32
HANDBOOK OF FOREIGN CURRENCIES
The dimensions of the old notes which were in circulation in July
1935 are shown in the following table:
Paper Currency of Bulgaria
Denomination
Amount
outsanding
Jan. 1, 1935
(millions
of leva)
Dimensions
389
1,146
845
29
17
10
5
8
3>H« by 7lit..........
Coins.—With the introduction in 1925 of nickel-copper coins
(0.250 nickel) in denominations of 1 and 2 leva, and of 5 and 10 leva
in 1931, and with the minting of 20-, 50-, and 100-leva silver coins
(0.500 fine) in 1934, the coinage system of Bulgaria, has apparently
been greatly simplified. The aluminum coins of 1 and 2 leva which
were put into circulation in 1923 have apparently been withdrawn,
as have also the pre-war solid nickel coins of 10 and 20 stotinki and
the pre-war copper coins of 1, 2, 5, and 10 stotinki. The National
Bank reported that as of May 1, 1935, it held about 28,000,000 leva
of copper, nickel-copper, and nickel coins of denominations of 20
stotinki or less.
The following table contains a description of the coins now in
circulation:
Coins of Bulgaria
Denomination
100 leva.....................
Metal of
chief value Fineness
*0.500
*.500
*.500
*. 250
*. 250
*. 250
*.250
Gross weight
Silver content
Grams Grains
Grams Grains
20.0
10.0
4.0
10.0
8.0
5.0
3.0
308.640
154.320
61.728
154.320
123. 456
77. 160
46. 296
10.0
5.0
2.0
154.320
77. 160
36.864
Amount
Diam stand
ing,
eter 1
1,
(mm) May
1935
(millions
of leva)
34
27
21
30
26
23
20
150
404
168
75
47
41
37
922
» D ita on thickness not available.
* Alloy: 0.400 copper, 0.050 nickel, and 0.050 zinc.
* Alloy: 0.750 copper.
NOTE-ISSUING AUTHORITY
Only the National Bank is authorized to issue bank notes. The
Government has, both by law and in actual practice, a controlling
voice in the affairs of the bank.
RESERVE REQUIREMENTS
With the reorganization of the National Bank in 1927 (1928), its
statutes were amended in several important particulars. One amend
ment provided that the bank should maintain a reserve in gold and
HANDBOOK OF FOREIGN CURRENCIES
33
foreign exchange equivalent to at least 33 ^ percent of the notes in
circulation and other demand liabilities. In September 1934 the
Financial Committee of the League of Nations approved a proposal
of the Government to reduce the reserve ratio of the bank from 33K
percent to 25 percent. This proposal was not given legal effect until
the publication of a decree in the Official Gazette of January 13,
1936.
At the end of 1935 the note circulation amounted to 2,235,000,000
leva and the other sight liabilities of the bank amounted to 2,163,000,000 leva, while the gold reserves of the bank totaled 1,590,000,000,
offset by 119,000,000 leva of liabilities in gold exchange.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Gold transactions within the Kingdom are allowed without
restrictions, but commercial gold and silver transactions with foreign
countries are prohibited by the law of January 3, 1919, published in
the Official Gazette No. 297 of the same date. There has been some
smuggling of bullion, but such operations appear not to have been
extensive.
Ordinance no. 18, published in the Official Gazetto No. 283 of
March 18, 1933, was amended on July 5, 1933, to read as follows:
“Only the National Bank of Bulgaria is authorized to buy and sell
foreign silver, nickel, copper, and other coins of subsidiary currencies.
The exportation of such coins, as well as of raw silver and articles
made of silver, may be permitted only by license to be issued by the
National Bank prior to such exportation.”
GOLD
The gold reserves of the National Bank as of December 31, 1935,
amounted to 1,590,000,000 leva.
Gold is hoarded by the public, but it is impossible to estimate the
amount. Hoarding is not a recent phenomenon, and much of such
gold is in the form of old Turkish, Austro-Hungarian, French, and
English coins.
THE GOLD CLAUSE
The gold clause is frequently included in domestic contracts. For
satisfaction of claims, however, paper leva must now be used at the
rate of exchange fixed by the National Bank. Tliis situation is due
to the law restricting transactions in foreign exchange. Many
“gold clause” contracts are in terms of Swiss francs, with a stipu
lated rate of exchange, the Swiss franc being considered equivalent
to the gold lev. There is some uncertainty as to what would be the
policy of the National Bank in determining the amount of leva to be
paid in the event of a depreciation of the Swiss franc. Presumably
the calculation of about 27 paper leva as equivalent to 1 gold lev
would still be used.
SILVER
It has not been possible to assemble data showing separately the
weight of monetary silver held by the general public, the banks, and
the Government. (See Trade Promotion Series No. 149, The Mone
tary Use of Silver in 1933.)
34
HANDBOOK OF FOREIGN CURRENCIES
CANADA
The monetary unit is the Canadian dollar, divided into 100 cents.
The Canadian dollar has a par value of $1.6931 in terms of United
States currency.
DESCRIPTION AND CIRCULATION OF CURRENCY
The accompanying tables describe the metal and paper currency of
Canada in the early months of 1935. The weight and dimensions of
the coins are those established in The Currency Act, 1910. Legal
tender limits are as follows: Silver coin, $10; nickel coin, $5; bronze
coin, $0.25. There is no restriction on the importation of foreign
currency, and in normal times a certain amount of United States
currency is in circulation.
The Department of Finance formerly issued a statement of circu
lation of Dominion notes by denominations. The Bank of Canada,
which took over the note issue as of March 11, 1935, has not issued
regularly any statement of circulation in this detail.
On July 12, 1935, Assistant Trade Commissioner Avery F. Peter
son, Ottawa, made the following report:
Up to the end of June, 284,000 of the new silver dollars, minted in commemo
ration of the Silver Jubilee, had been issued, but the demand in Canada for the
new coins continued unabated.
In connection with coinage, it was recently mentioned in the House of Com
mons that the Canadian 5-cent piece was unattractive and that it was hoped a
more artistic design covdd be provided in the future.
There are two i-cent pieces in circulation; the most recent one is the same size
as the United States cent, but the older issue is larger than the 25-cent piece.
There are also two sizes of 5-cent coins; one is a diminutive silver piece, which
is a cause of annoyance because of its size and because it is easily bent.
Coins of Canada, Feb. 28, 1935
Denomination
50 cents 1...............
25 cents *___ ____
10 cents 1________
5 cents 1____ _____
Metal of
chief value
Amount
out
Gold or silver
standing
content
Diam Thick Feb 28,
Fine
eter
ness
ness
1935
(mm) (mm) (thou
sands of
Grams Grains Grams Grains
dollars)
Gross weight
Gold *.......... 0.900 16.7181 258.00 15.0463
.......do.*........ .900 8. 3591 129.00 7.5232
Silver *____ . 800 23.3276 360. 00 18.6621
.......do.*___ .800 11.6638 180.00 9.3310
.......do.*___ .800 5.8319 90.00 4.6655
.925 4,6500
.......do.*....... .800 2. 3328 36.00 1.8662
.......do.*___ .800 } 1. 1664 18.00 .9331
.925
1.000 4. 5359 70.00
.953 3.2399 50.00
.955 5. 6700
232.20
116. 10
288.00
144. (X)
72.00
28.80
14. 40
26.92
21.59
35. 56
29. 72
23. 62
22. 23
17.91
15.49
21.21
19.05
25.40
1. 73 J 2,705
1.35
2.38
1.63
2,571
1.30 11,033
.89
8,562
.58
4,925
1.42
2,209
1.26 1j 2.,27
1.22
34,741
1 The alloy is copper.
* The Currency Act provides for $20 and $2.50 sold pieces, but none have so far been minted.
* Until 1920 Canadian silver coins were minted with the former British standard fineness of 0.925, but
they have since been minted 0.800 fine.
* Alloyed with tiu (0.030) and zinc (0.015).
35
HANDBOOK OF FOREIGN CURRENCIES
Note Circulation, the Liability of the Bank of Canada on Apr. 30, 1935, by
Denominations 1
Denomination
Dimensions
$1...................................................................__
$2................................................... ....................
$4........ ...............................................................
$5___________________________________
$10.....................................................................
$20...................... ............................ ...........
$25___________________ _______ _______
$50................................................................
$100................
. ................. ....................
$500............................................................
$1,000............... ................................................
Fractional notes................................................
Notas for banks’ use: 7
$1,000...........................................................
$5,000 ................................................... .
$50,000.......................................................
Circulation
(thousands
of dollars)
20,963
14, 138
30
12, 591
10, 519
2,448
17
778
844
1,543
13, 093
28
1,282
1
2,970
6,350
»Including Dominion of Canada and provincial notes, liability for which has been assumed by Hank of
Canada.
* These are being rapidly retired.
Circulation of Notes of Bank of Canada and the 10 Chartered Banks, Mar.
30, 1935 >
Issuing authority
Chartered banks:
Dimensions
Circulation
(millions
of dollars)
» 96. 3
27. 6
11.0
5. 5
3. 5
25. 4
31. 2
6.6
6. 7
6.8
.3
4 221.0
1 For provincial and fractional notes, etc., see preceding table.
7 The dimensions of Dominion and chartered bank notes formerly were 7 by 3H inches; these are being
replaced rapidly by notes of the new size, 6 by 27A inches.
3 Includes Dominion notes—formerly issued by the Department of Finance—responsibility for which
has been transferred to the Hank of Canada. These are being retired.
4The discrepancy of $100,000 in the summation is due to abbreviation of the items.
Note.—The bank notes are engraved at Ottawa on paper of linen (75 percent) and cotton (25 percent).
In order to prevent counterfeiting, small planchettes are printed on the paper of most of the notes when it
is being made.
NOTE-ISSUING AUTHORITY
Notes are issued by the Bank of Canada (Central Bank of the
Dominion) and the 10 chartered banks. The note circulation of
these banks as of March 1935 was as shown in the preceding table.
The Bank of Canada Act, June 28, 1934, provides, however, that
after the establishment of the Bank of Canada the maximum note
circulation of the chartered banks should he not greater than their
paid-up capital, and that it should be reduced by 5 percent each year,
beginning January 1, 1936, for a period of 5 years; and then by 10
percent annually for a further period of 5 years until the limit of 25
36
HANDBOOK OF FOREIGN CURRENCIES
percent of the paid-in capital is reached. It is believed in official
circles that the privilege will be eventually withdrawn entirely.
The following excerpts from the Statutes of Canada comprise the
authority for note issue:
THE BANK OF CANADA ACT, 1934
Section 24 (1). On and after the day on which the bank is authorized to com
mence business (March 11, 1935) the bank shall, except as provided in the bank
act, have the sole right to issue notes payable to bearer on demand and intended
for circulation in Canada and may, subject to section 26 of this act,5 issue such
notes to any amount. Such notes shall be legal tender, and shall be the first
charge upon the assets of the bank.
THE BANK ACT, 1934 (CONTROLLING CHARTERED-BANK NOTE ISSUE)
Section 60. (1) The bank (a chartered bank) may issue notes payable to
bearer on demand and intended for circulation: Provided, That—
(a) The bank shall not, during any period of suspension of payment of its
liabilities, issue or reissue any of its notes; and
(b) If, after any such suspension, the bank resumes business without the con
sent in writing of the curator, hereinafter provided lor, it shall not issue or reissue
any of its notes until authorized by the Treasury Board so to do.
(2) No such note shall be for a sum less than $5, or for any sum which is not a
multiple of $5.
Subsections (3) to (18) of section 60 of the bank act repealed.5
Section 61 (1): Subsections 3 to 18, both inclusive, of the next preceding section
shall be repealed on and from the day on which the Bank of Canada is authorized
to commence business (Mar. 11, 1935).
(2) Notwithstanding anything contained in the next preceding section, on
and after the day on which the Bank of Canada is authorized to commence
business, the maximum amount of notes of a bank in circulation at any time
shall not exceed the amount of the unimpaired paid-up capital of the bank on
the said day on which the Bank of Canada is authorized to commence business,
and on the first day of January in each year for a period of 5 years commencing
on the first day of January 1936 the said maximum shall be reduced by 5 percent,
and on the first day of January in each year for a period of 5 years commencing
on the first day of January 1941 the said maximum shall be reduced by 10 percent
and thereafter until Parliament further enacts, the amount of notes of a bank in
circulation shall not exceed 25 percent of the amount of the unimpaired paid-up
capital of the bank. In the event of any reduction or impairment of the paid-up
capital, the maximum amount of notes of the bank which may be in circulation
shall be reduced to the amount which would have been authorized if the reduction
or impairment aforesaid had occurred on the day on which the Bank of Canada
was authorized to commence business.
GOVERNMENT CONTROL OF CENTRAL BANK POLICIES
While the Bank of Canada is a privately owned institution, one
of its objects—to give expert and impartial advice to the Government
of the day—naturally involves a certain element of reciprocal advice
from the Government. The Deputy Minister of Finance holds a
“watching” seat on the executive committee of the Central Bank.
However, when the Bank of Canada Act was given first reading in
Parliament, the Minister of Finance expressed this opinion:
In case of a conflict of opinion regarding control of credit in Canada between
the Government of the day and the directorate of the central bank, the authority
of the Governor and the board of directors of the bank would unquestionably
prevail over that of the Government.*•
» For sec. 2«. see Reserve Requirements, discussed below.
• The repeal of subsecs. 3 to 18 of sec. SO of the bank act is explained as follows: The 1934 Parliament
undertook two primary pieces of financial legislation—(1) A revision of the bank act, and (2) the formation
of statutory authority for a central bank. Since the authority of chartered banks to issue notes was to be
limited as soon as the central bank began to function, there was provided in subsecs. 3 to 18 of the bank
act the conditions under which chartered banks should issue notes during the interim period. When the
central bank began to function (Mar. 11, 1935), new provisions regarding chartered bank note issue came
into effect automatically. These provide a smaller maximum, and a sliding-scale reduction of charteredbank note circulation. Subsecs. 3 to 18, which were repealed, are contained in the bank act, as revised 1934.
HANDBOOK OF FOREIGN CURRENCIES
37
When the Bank of Canada measure was introduced in Parliament,
the policy of the party then in power was favorable to a privately
owned Central Bank, properly safeguarded by statutory limitations,
and this view prevailed in spite of opposition favorable to more
direct Government control of operations of the Bank of Canada.
RESERVE REQUIREMENTS
Bank oj Canada notes.—The Bank of Canada Act, 1934, provides
that the Central Bank shall maintain a reserve against notes and
deposit liabilities of 25 percent gold coin and bullion plus silver
bullion and foreign exchange. On tliis point the statutes read as
follows:
RESERVES
Section 26. (1) The bank shall always maintain a reserve, as hereinafter pro
vided, as security against its 6utstanding notes and deposit liabilities.
(2) The reserve required by this section to be maintained shall consist of gold
coin and bullion in the unrestricted ownership of the bank equal to an amount
not less than 25 percent of the notes and deposit liabilities aforesaid; and may
in addition include—
(a) Silver bullion received from the Minister under the next preceding section
or purchased under the authority of subsection 4 hereof, valued at the market
price of the fine silver content thereof; and
(b) Foreign exchange, which shall mean (i) balances with the Bank of Eng
land, the Bank for International Settlements, the Federal Reserve Bank of
New York, and a central bank in any country whose currency by law and in
fact is convertible on demand at a fixed price into exportable gold; (ii) Treasury
bills or other obligations of the United Kingdom or the United States of America
having a maturity not exceeding 3 months from the date of acquisition by the
bank; (iii) bills of exchange having a maturity not exceeding 90 days, excluding
days of grace, or not exceeding 90 days after sight, excluding days of grace from
the date of acquisition by the bank payable in London or New York or in a country
whose currency by law and in fact is convertible on demand at a fixed price into
exportable gold, less any liabilities of the bank payable in the currency of the
United Kingdom, the United States of America, or any country, whose currency
is by law and in fact convertible on demand at a fixed price into exportable gold.
(3) At the request in writing of the board, the Governor in Council may sus
pend the operation of this section insofar as it requires the bank to maintain a
reserve of gold equal to an amount not less than 25 percent of its notes and deposit
liabilities. Such suspension shall be for such period not exceeding 60 days as may
be specified by the Governor in Council, but on the further request in writing of
the board may be extended from time to time for further periods not exceeding
60 days each; provided, however, That no such suspension shall continue for a
period longer than 1 year without the sanction of Parliament.
(4) The bank shall during the years 1935, 1936, and 1937 purchase and hold
newly mined Canadian silver as and when required so to do by the Minister, but
the bank shall never be required to purchase more than 1,671,802 fine ounces in
any year.
Chartered Bank Notes.—The unimpaired paid-up capital of the
chartered banks provides a primary reserve against chartered-bank
note issues. In addition, under the Bank of Canada Act, every
chartered bank is required to maintain with the Central Bank a reserve
of not less than 5 percent of its deposit liabilites.
Holdings of Silver in Currency Reserve.—The statement of the Bank
of Canada as of March 30, 1935, valued its holdings of silver bullion
at $1,035,514.16. This includes purchases made by the Depart
ment of Finance under the London Silver Agreement and any other
accessions which the Bank of Canada has made in accordance with
its responsibility to continue purchases under that agreement. The
bank did not state the w'eight of the silver bullion which it holds.
38
HANDBOOK OF FOREIGN CURRENCIES
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Under section 4 of the Unemployment and Farm Relief Act, 1931,
an order in council was passed October 19, 1931, to bring all exports
of gold from Canada under the supervision of the Government. The
order in council provided that no gold coin or bullion or fine-gold bars
could be exported except under authority of a license issued by the
Minister of Finance. Such licenses were to be granted only to
chartered banks. Penalties were provided for infractions. The
control was taken under a “peace, order, and good government”
authority which expired March 1, 1932.7
On April 4, 1932 the Unemployment and Farm Relief Continua
tion Act provided: “Notwithstanding the expiration of the Unem
ployment and Farm Relief Act, 1931, the provisions . . . orders in
council and regulations . . . shall not be deemed to have expired
. . . but to have continued in full force . . until the 1st day of
May 1932. . .
On May 13, 1932, an act entitled the “ Gold Export Act” became
law. This gave the Governor in Council power to prohibit exporta
tion and make regulations. An order of May 17, made effective to
December 31, 1932, extended the effect of the original export control
by license.
In January 1933 the order under the Gold Export Act was extended
to December 31,1933. Subseqently extension was made to December
31, 1934, and to December 31, 1935.
In April 1935 Parliament amended the Gold Export Act to include
the Bank of Canada as an organization which might be licensed by
the Minister of Finance to export gold.
Export smuggling of gold is reliably understood to be of no great
consequence in Canada. Gold is difficult to obtain, and mining
associations are on the lookout for illegal export of raw gold as a
deterrent to “high-grading” among mine workers.8
There are no special laws respecting movements of silver into and
out of Canada.
GOLD
The stock of gold in Canada as of March 1935 was as follows, the
valuation in these figures being at $20.67+ per fine ounce troy:9
Held by—
Amount
Bank of Canada, Mar. 30, 1935____________________ ‘ $106, 586, 145. 90
Chartered banks’ holdings in Canada, Mar. 30, 1935___
352, 693. 00
Department of Finance, Mar. 30, 1935, reserve against
savings-bank deposits, including gold in excess of
statutory requirements__________________________
2, 443, 223. 80
Total (5,291 827 ounces) ........................................ 109, 382. 062. 70
1 In addition, the “standard value” of gold held abroad was $4,055,330.
7The Commercial and Financial Chronicle of Mar. 12, 1932, quoted the Montreal Gazette of Mar. 7 as
follows:
"The order in council of last October, prohibiting the exportation of gold from Canada, except under
license, expire«! last Tuesday without much comment. Technically, Canada is once more on a free gold
basis, but actually the situation remains unchanged, as the discount of more than 10 percent on the Canadian
dollar bears witness. In this market there was some mystification as to why the order in council was ever
resorted to. Before it went into effect Canada had long since given up the free export of gold, effective means
being found in one way or another to prevent advantage being taken of the discount in the exchange. Now
that the order has expired, the Finance Ministry continues to exercise surveillance over gold movements,
and no exports may be made except upon express permission.”
* “High-grading” means the secretion on the persons of mine workers of small pieces of high-grade ore.
• On June 13 a bill was presented before Parliament providing that all gold held as reserve by the Bank
of Canada should be valued by the bank at the current market price. This has become law.
HANDBOOK OF FOREIGN CURRENCIES
39
At present practically all purchases of gold by the Government
result from Canadian mining operations. The Government holds a
buying monopoly and returns to the producers the market value of
gold received, less gold tax, if any. The Central Bank is the market
ing agency and bullion is rapidly forwarded and sold in the highest
world markets—chiefly in the United States, but occasionally in the
United Kingdom when exchange factors make sales in that market
desirable. In effect, the Government and the Central Bank act as
brokers and forwarding agents in buying and selling newly mined
gold. Accordingly no gold is being bought for the account of either
the Government or the Central Bank.
No appreciable amount of gold hoarding has been noted. In fact,
with the present market premium on gold, considerable melting down
of jewelry and the like has taken place. Such gold is bought by
the mint. No estimates of public gold holdings are available, but
they are said to be unimportant.
THE GOLD CLAUSE
The exact legal status of the gold clause in domestic contracts in
Canada is somewhat difficult to define briefly. It may be said that
the gold clause is inoperative for three reasons:
(1) The embargo on the exportation of gold.
(2) The suspension of gold redemption of legal-tender Dominion notes and
Bank of Canada notes.
(3) The Currency Act states: “It shall not be lawful for any person except
under the provisions of a license granted by the Minister of Finance to melt
down, break up, or use otherwise than as currency any gold coin which is for
the time being current and legal tender in Canada.’1
There has been no supreme court decision on the gold clause in
domestic contracts and the following comments are based upon
lower-court actions only.10
The decision of the Court of Appeal in Ontario in the case of American Chicle
Company v. Somerville Paper Box Company, Ltd. (1931), 50 O. L. R. 517, is of
special interest in view of the restrictive measures now in force in Canada in
volving the withdrawal of gold from circulation. The decision in this case
involved the payment of a mortgage, in respect of mortgaged premises situated
in London, which contained a gold payment clause as follows:
“Provided this mortgage be void on payment in current gold at the option
of the mortgagees of $-------- dollars of lawful money of Canada with interest
thereon as follows:”
Hodgins, J. A., in delivering the opinion of the court of appeal, held that the
mortgage could be satisfied by payment in legal-tender Dominion notes. In
giving reasons for the judgment in this case, the justice said:
“I would therefore hold that both by presumed intention of the parties and
by force of the Currency Act, the right of the mortgagee is limited to requiring
payment in gold coins made in Canada for currency purposes; that the defend
ants are, while the Finance Act, 1914, and the proclamations under it remain in
force, unable to procure such gold coins and that their contract to pay it is
suspended while that state of affairs exists.”
In the case of bonded indebtedness in Canada, of which a large
part is payable in funds other than Canadian, important questions
have arisen regarding the liability of the debtor when exchange
values of foreign currencies are different from those prevailing at
the time the obligations were created. In the case of L a C orporation
des O bligations M u n ic ip a le s v. V ille de M on treal N o rd , 61 D. L. R.
10 A treatise, Contracts Payable in Gold Coin—Government Intervention—Gold Standard—Revaluation
of Gold—Legislative Authority of Dominion Parliament Re Legal Tender and Currency and Coinage,
has been prepirei by H. A. W. Plaxton, 1207 Canada Permanent Building, Bay St., Toronto. Cases
here quoted are from that study.
40
HANDBOOK OF FOREIGN CURRENCIES
(1921), it was decided that where interest coupons of a Canadian
corporation are made payable in the United States and the character
of the money in which payment is to be made is not specified, the
holder of such coupons, being a Canadian corporation, is entitled
to be paid in United States currency; and where payment in United
States currency has been refused, the holder is entitled in an action
in the Province of Quebec to judgment for an amount in Canadian
currency equal to what it would have received in United States
currency if payment had been made in the United States when it
was due.
In Canada a gold coin of $20 face value is legal tender for only
$20 and, if taken to a bank for conversion into paper currency,
yields only $20 in bank notes.
The Bank of Canada Act provides in section 25 that:
(1) The hank shall sell gold to an> person who makes demand therefor at
the head office of the bank and tenders the purchase price in legal tender, but
only in the form of bars containing approximately 400 ounces of fine gold.
(2) The Governor in Council, from time to time and for such period as he
may deem desirable, may suspend the operation of the next preceding sub
section and remove such suspension.
SILVER
Aside from the measures passed by Parliament to give effect to
the London Silver Agreement, the information given on page 35 of
Trade Promotion Series No. 149, The Monetary Use of Silver in
1933, still accurately describes the legal status of silver as currency
in Canada.
The London Silver Agreement became law on February 26, 1934,
when the House of Commons passed a resolution supporting the
commitments made by the Canadian delegates. Following this
resolution, the Dominion Notes Act was amended to require that
Canada purchase 1,671,802 fine ounces of newly mined Canadian
silver in each of the calendar years 1934-37, inclusive. Under the
Bank of Canada Act, the Central Bank is required to make the
actual purchases of the specified amount of silver. The act pro
vides that the “bank shall never be required to purchase more than
1,671,802 fine ounces in any year.”
While the liability for and the administration of the Dominion
note issue have been transferred from the Department of Finance
to the Bank of Canada, the Department of Finance is still responsible
for the issuance of subsidiary coin. With respect to the latter, the
Bank of Canada acts merely as agent for the Department of Finance.
Holdings of subsidiary coin of the Royal Mint, an institution still
under jurisdiction of the Department of Finance, have greatly
diminished. “Subsidiary coin” appears on the Bank of Canada
statement of assets as approximately $300,000.
No official or private statement of the weight of fine silver in
monetary use is at present available. Subsidiary coin outstanding
is reported to be distributed as follows:
The general public____ _____ __ _____ ______ $25, 122, 382. 53
The chartered banks__________________ _____ 6, 607, 086. 00
The Bank of Canada_________ ______________
304,489.00
The Government.....................................................
‘ 2,500.00
Total.......... .............................................. . . 32, 036, 457. 53
1 Approximate.
41
HANDBOOK OF FOREIGN CURRENCIES
CEYLON
The monetary unit is the rupee (abbreviation r., plural rupees),
divided into 100 cents. The rupee has a par value of approximately
$0.6180.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
Under the Ceylon Paper Currency Ordinance of 1884, section 6,
as amended by ordinance no. 13 of 1901, the holders of Ceylon cur
rency notes are entitled to obtain in exchange for them either Indian
silver rupees or legal-tender gold coins. Gold coin is not, however,
available in Ceylon at present.
Currency notes and Indian silver rupees are legal tender in Ceylon
for payments in any amount. The Ceylon 50-cent, 25-cent, and
10-cent pieces and the Indian one-half rupee and one-quarter rupee
are legal tender in amounts of 5 rupees. The 5-cent, 1-cent, and
K-cent pieces are legal tender in amounts of one-half rupee.
The Indian rupee, one-half rupee, and one-quarter rupee aro per
mitted to circulate, but few of them are seen in actual circulation.
There are no old issues of Ceylon coins or notes outstanding.
Foreign notes and subsidiary coins may be imported.
Paper Currency of Ceylon 1
Dimensions
Denomination (rupees)
1,000
500
100
50
10
5..
2 .
1..........
Amount
outstand
ing June
30, 1935
(millions
of rupees)
Inches
....................................... 8 by 6............................................................... .
'by 5H............................................................
GVi by AM.........................-........-......................
.................................. 5M by 3H............................................................
.............. ..................... 5 by 3..................................................................
............................................. AM by 2M....................................-.....................
7.5
.1
1.9
2.3
15. 1
9.8
3. 4
4.0
44. 1
* The Ceylon paper currency is engraved and is manufactured in England to the order of the Ceylon
Government.
Coins of Ceylon 1
Amount
out
stand
Diam Thick ing
Fine
eter ness June 30,
ness
1935
Grams Grains Grams Grains (inches) (inches) (mil
lions of
rupees)
Gross weight
Denomination
(cents)
50............
25............
10................
5.........
1.......
M 2..............
Total _
Metal of
chief value
Silver content
0.550 5.8319 90.0000 3.2075
.550 2.9160 45.0000 1.G038
.550 1.6664 18.0000 .6415
3.8879 GO. 0000
4. 7249 72.9160
2. 3625 36. 4580
1 The rupee coins in use are the British Indian.
1 Not in general circulation.
49.50
24.75
9.90
0.93
.70
.61
.72
.88
.70
0.06
.05
.02
.06
.05
.04
4.4
2.5
2.8
.7
LI
.4
11.9
42
HANDBOOK OF FOREIGN CURRENCIES
NOTE-ISSUING AUTHORITY
The only note-issuing authority in Ceylon is the Government.
There is no central bank in Ceylon.
RESERVE REQUIREMENTS
The currency ordinance originally required that the note circulation
should be covered by a reserve of silver rupees (the rupee of British
India is the standard coin of the island) amounting to at least onethird but not more than one-half of the value of the notes in circula
tion, the remainder being covered by British and Colonial Govern
ment securities. Subsequent legislation, however, removed the lower
limit of the silver reserve, and on June 30, 1935, it stood at 13,936,013
rupees, or 31.59 percent of the note circulation. Investments cover
ing the remainder of the note issue stood at 36,012,375 rupees, cost
price, or 41,476,711 rupees at latest available market rates. No part
of the silver reserve is held in the form of bullion.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
There is no restriction on imports or exports of bullion or coin.
It is not believed that smuggling exists to any appreciable degree. •
GOLD
No gold reserves are held in Ceylon, and no gold is being purchased
by the Government. It is believed that gold is not hoarded by the
public, although a certain quantity of gold is converted into orna
ments. It is impossible to estimate the quantity of gold that has
been so converted, but there is a small amount in nearly every family.
THE GOLD CLAUSE
Gold is not legal tender in Ceylon; therefore the question of a gold
clause in contracts does not arise.
SILVER
The amount of silver currency in circulation on June 30, 1935.
amounted to 9,723,961 rupees. The Indian rupee is the standard
coin used in Ceylon, its fine silver content being 165 grains.
CHILE
The monetary unit is the peso (symbol $), which is divided into
100 centavos. The peso contains 0.1*83057 grams of fine gold and has
a par value of $0.2061 in terms of United States currency. This unit
is referred to in Chile as the peso of sixpence gold. For practical
purposes, however, the value of the peso in exchange has been lowered,
in accordance with the provisions of law no. 5107 of April 19, 1932,
which authorized the Central Bank to fix international exchange
rates in accordance with the latest transactions handled by it. Imme
diately after the promulgation of this law the official rates of exchange
for the peso were set on the basis of threepence gold and were main
tained at that level until January 2, 1935, when the basis was changed
to one and one-half pence gold, or $0.0516 in United States currency.
43
HANDBOOK OF FOREIGN CURRENCIES
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the following tables:
Paper Currency of Chile 1
Denomination (pesos;
Amount out
standing on
May 31, 1935
(millions of
pesos)
Dimensions
10,000 *_____
5,000........................................ ............. .............
1,000...
500_______ _____ ____________ _______
100................................ ........................................
50.............................................. ............................
10...........................................................................
5________ ______________________________
1 » ......................................................... ...........
Total............................................................
20.3
21.9
47.0
59.9
153.8
99. 1
97.4
36.8
.9
530. 2
1 Engraved and printed by the Government Printing Office on paper of 75 percent linen and 25 percent
cotton bearing a uniform watermark which consists of three wavy lines forming a frame, and in the lefthand corner of each note the figures 5, 10,50, etc., appear inside a large star which is surrounded by 5 small
stars. In the center of frame is a watermark inscription “Banco Central de Chile.’'
* Probably all lost or destroyed.
Coins of Chile
Gold or silver
content
Amount
outstand
Diam ing on
eter Dec. 31,
(mm)1 1934 (mil
Grains Grams Grains
lions of
j>esos)
Gross weight
Denomination
Metal of chief Fine
ness
value
Grams
Gold............... 0.900 20. 3397 313. 8906
.900 10. 1698 156.9408
20 pesos.................... ....... do.............. .900 4. 0680 62. 7774
.400 6.0000 92. 5920
Nickel 3.......... .250 10.0000 154.3200
...do.3........... .250 4.5000 69.4440
10 centavos................ ___ do.»........... .250 3. 0000 46. 2960
... do.3.........
.250 2.0000 30. 8640
Total................
18.3057
9.1528
3. 2544
2. 4000
282. 5015
141.2467
56. 4997
37.0368
31.0
24.5
18.5
25.0
29.0
22.5
19.5
16.5
68. 76
6.30
1.70
1.90
30. 00
12.50
2.60
1.00
124. 76
’ Data on thickness not available.
3 Probably nearly all melted down.
1 25 percent nickel; 75 percent copper.
N ote.—The legal-tender limit of the silver and nickel coins is 50 pesos.
NOTE-ISSUING AUTHORITY
The Central Bank of Chile (Banco Central de Chile) is the sole
note-issuing authority.
The Government has definite control, both by law and in practice,
over the policies of the Central Bank. Through the operation of
law no. 5107 of April 19, 1932, which established exchange control in
Chile, the Government practically dictates all Central Bank policies.
During this period the bank has displayed relatively little
independence.
RESERVE REQUIREMENTS
On August 16, 1935, the gold reserve amounted to 142,154,353.78
gold pesos. Of this amount, 141,837,294.28 was held in the country
and 317,059.50 abroad. Silver is not held as reserve.
44
HANDBOOK OF FOREIGN CURRENCIES
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
No foreign exchange or claim on foreign exchange may leave the
country without fulfilling the provisions of law no. 5107, aforemen
tioned. Gold or silver may be exported only by the Central Bank,
but ores bearing these metals may be exported by others who have
obtained proper permit.
GOLD
Gold is purchased by the Government through its offices in charge
of gold placer mining. Gold from mines and plants is received by the
mint freely, but gold from placer mining cannot be sold or taken to
the mint by other than Government officers.
Gold bars are melted at the mint and exchanged for gold coins of
equal gold value. The Central Bank now pays a premium of 300
percent on gold coins; in other words, 400 paper pesos are paid for
100 gold pesos. Brokers and money changers pay 500 paper pesos
for 100 gold pesos.
Gold in hoardings and in transit is estimated at 1,400,000 paper
dollars United States money.
THE GOLD CLAUSE
Although the gold clause appears in many contracts, it is the
general belief that such contracts would not be upheld by the courts.
Although no decisions have been handed down, the Government
itself has refused to allow the public utilities companies to collect
their charges on a gold basis.
SILVER
Silver is no longer used in currency. The 1,900,000 pesos of
1-peso coins in circulation on December 31, 1934, had apparently
been melted down by October 1935.
CHINA
The monetary unit of the National Government is the yuan
(symbol $). It is divided into 100 fen (cents), and has a gross weight
of 26.2971 grams and a fineness of 0.880. Since it is a silver coin,
the yuan has no fixed value in terms of gold. Until October 15,
1934, China was on the silver standard, but the measures taken on
that date have prevented the exchange value of the currency from
following closely changes in the value of silver. By an official decree
of November 4, 1935, China abandoned the silver standard and
adopted a system of managed currency. The yuan was declared to
have a parity of 29.75 cents United States currency, and the gold
unit to be equal to 2.276 yuan ($0.6775 United States currency).
DESCRIPTION AND CIRCULATION OF CURRENCY
The Chinese currency system has long been complicated, and a
detailed description cannot be undertaken here.
The present standard fractional coins of silver are the 50-cent
(which is rare), 20-, and 10-cent pieces. All of them circulate at
discount. Various kinds of fractional Chinese silver money have
been minted in times past by the various provincial mints and by
HANDBOOK OF FOREIGN CURRENCIES
45
the central authorities.*11 Some of these have been called “small
money” and some “big-money small money.” The latter name
was given to subsidiary money circulating at its face value. Today
no subsidiary coins pass at their face value.
In February 1935 it was reported that the recently organized
special committee on subsidiary coinage of the Ministry of Finance
had decided upon the issuance of standardized subsidiary silver
coins. Although this committee decided that subsidiary coins were
to be of four denominations (5, 10, 20, and 50 cents), no action has
been taken as yet by the Ministry of Finance. The latter is said to
be giving this matter serious consideration, and the minting of sub
sidiary coins will probably be undertaken as part of the program for
the unification of Chinese currency.
Minor coins consist of the brass “cash”, the familiar coin with a
square hole in the center, and of coppers of various kinds, according
to mintage. The “cash,” which theoretically represents a fraction
of a tael,12 has largely disappeared from circulation in the last few
years, and coppers, which are not cent pieces but chiefly 10-cash
(or occasionally 20-cash) pieces, have replaced them. The domestic
exchange value of coppers varies with the silver price of copper plus
a premium representing the demand for them as currency.
The quantity of copper coins in circulation is still very large.
They are of various mintages and denominations, there being 200-,
100-, 50-, 20-, 10-, 5-, 2-, and 1-cash copper pieces. The only coins
accepted by the National Government are the 10-cash or 1-cent
piece, these being received in small amounts in payment of taxes or
public debts. The 10-cash piece used to play an important part in
the trade of the interior, where it was frequently the principal
medium of exchange, but more recently fractional notes have tended
to displace it. Retail prices of cheap commodities are quoted in
silver, but the actual payment is made in coppers at the current rate
of exchange.
Until a few years ago various foreign silver coins circulated in
China. The last to disappear have been the “Saigon dollar” and the
so-called Mexican dollar, a former Mexican-peso coin, still occa
sionally to be seen in China. The term “Mex.”, however, has sur
vived and is still frequently used to indicate Chinese yuan.
In 1929 a commission of American financial experts, under direc
tion of Prof. E. W. Kemmerer, visited China and, as part of its work,
submitted a report on the currency. The commission recommended
that China adopt the gold-exchange standard on the basis of a new
unit to be called the “sun” and to have a par value of 40 cents
United States currency. The chief recommendations of the Kem
merer Commission with reference to the currency have not been
adopted. However, in order to put the collection of import duties
11 According to the 1931 report of the Director of the (United States) Mint, p. 185, there were then 30
mints in China operating at different times, more or less independently of the National Government, since
they were under the direction of provincial authorities. Few of the mints reported fully their activities
to the National Government. The mint report stated that in 1930, 67,000,000 yuan silver pieces were coined
at the Hangchow Mint, 339,140,000 '20-cent silver pieces at the Canton Mint, and 3,000,000 50-cent pieces
in Yunnan Province. Another mint elsewhere reported to have been active in recent years is that located
at Foochow. But in 1930 a large mint, modern in every respect, was completed at Shanghai. From March
1933, when operations were begun, to the close of 1934 the production of this mint amounted to 150,000,000
yuan.
1110 cash (li) = l candareen (fen); 10 candareens=l inace (tsien); 10 mace=l tael (liang). The weights
of the various taels were all different. See Trade Promotion Series No. 27, Currency, Banking, and Finance
in China, p. 17.
66111 *— 36------ 4
46
HANDBOOK OF FOREIGN CURRENCIES
on a gold basis, there was established a so-called customs gold
unit (abbreviated C. G. U.) with a value of 40 cents United States
currency, which, since the devaluation of the United States dollar,
is equal to about $0,677 United States currency. Duties are collected
on this basis but are, for statistical purposes, recorded in silver.13
Customs gold unit notes have been issued in denominations of 1-,
5-, and 10-C. G. U. and 10- and 20-C. G. U. cents, but have not
developed much popularity as currency.14
Imports of bank-note paper are controlled by Customs Notifica
tion No. 1452 of June 18, 1935, which reads as follows:
The public is hereby notified that, in accordance with Government instruc
tions, the right to import bank-note paper from abroad has been vested solely
in the Trust Department of the Central Bank of China, through whom printing
establishments are to obtain the supplies they require, and that importations
of bank-note paper other than those purchased by the above department will
be detained by the customs.
NOTE-ISSUING AUTHORITY
Until the silver nationalization decree of November 3, 1935, in
addition to the Central Bank of China, various provincial, local, and
foreign banks issued notes. As late as 1935 there were rare instances
of notes issued by private commercial houses and used generally in
purely local transactions. The decree provided that henceforth only
notes of the three government-controlled banks wotdd be legal tender,
but other notes need not be immediately withdrawn from circulation.
The outstanding bank notes of nongovernment banks were to be
gradually retired and exchanged for Central Bank of China notes.
Note Circulation of Certain Chinese Banks
[In millions of yuan]
Bank
Circulation
Dec. 31, Apr. 30,
1934 1935
Bank
Joint Savings Bank........... ...........
Central Bank of China 1................ 86.0 /l 92.0
*-4 Ningpo Commercial <fc Savings
204.7 111.6
Bank of Communications 1.......... 112.5
44.3 Commercial Bank of China 1____
National Commercial Bank.........
8.4 Land Bank of China...................
26.6
Circulation
Dec. 31, Apr. 30,
1934 1935
29.7
16.2
16.0
6.3
5.6
1 Under government control, with chairman of the board of directors and general manager appointed
by the Ministry of Finance.
*373,324.7 customs gold units.
Notes are also issued by private banks in the interior, chambers of
commerce, guilds and associations, native banks, retail and wholesale
shops, private remittance agencies, and pawnshops.
Copper notes are issued by provincial governments and by native
banks and business organizations in the provinces. They circulate
only locally and are not recognized as legal tender by the National
13 See “The Ilaikwan Tael and the Customs Gold Unit” in Commerce Reports of May 18. 1931.
u For a description of the various taels and other former currencies of China, see Currency, Banking, and
Finance in China, Trade Promotion Series No. 27, published in 1926 and for sale at the Government Print
ing Office, Washington, D. C., at 30 cents a copy. See, also, The Currencies of China (Shanghai, 1926)
by Eduard Kaun.
HANDBOOK OF FOREIGN CURRENCIES
47
Government. They are issued in the following denominations:
1,000, 500, 300, 200, 100, 50, 20, and 10 coppers.
As to the notes of foreign banks, those of the following are in cir
culation: In South China, apart from Hong Kong bank notes, Bank of
Indochina notes circulate; in Tsingtao notes of the Yokohama Specie
Bank. Around Shanghai the notes of various foreign banks are in
active circulation, some of the banks represented being the Chartered
Bank of India, Australia, and China; the National City Bank of New
York; the Hong Kong and Shanghai Banking Corporation; the Mer
cantile Bank of India; the American-Oriental Banking Corporation
(now closed); the Chase Bank; and the American Express Co. An
estimate of the Bank of China placed the amount of notes of foreign
banks in China at 3,280,000 yuan on August 31, 1935. Foreign hank
notes are gradually being withdrawn. When, during the period of
credit stringency in the spring of 1935, the Hong Kong and Shanghai
Bank attempted to hand out its own notes over the counter they
were generally refused.
RESERVE REQUIREMENTS
In accordance with the law governing the issuance of currency
notes promulgated in 1931, the Central Bank of China, other govern
ment-controlled banks, and authorized note-issuing private banks are
required to maintain a reserve of at least GOpercent in coins or bullion.
This law is respected by the banks of issue in the principal cities,
although not by other note-issuing agencies in the interior, and not
entirely by interior banks.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
On May 15, 1930, the National Government prohibited the expor
tation of gold in any form, except by the Central Bank of China.
This measure is still in force.
On April 6, 1933, an export duty on outgoing sycee 16 or bar silver
was imposed by the Chinese customs. The duty was set at 2)\ per
cent ad valorem, but silver yuan and bars, the products of the mint
at Shanghai, were exempt, having already paid a 2% percent minting
charge.
On October 15, 1934, the present increased export duty on silver
became effective. The new rate is 10 percent on sycee and bars, and
7% percent on coins and bars manufactured by the Central Govern
ment mint at Shanghai. In addition, an equalization fee on silver
exports was imposed, equal to the deficiency, if any, existing between
the London market value as bullion of the silver content of the yuan
and a rate of exchange officially fixed each day by the Central Bank
of China.
In April 1935 all of the Chinese and foreign banks suspended the
exportation of silver under a “gentleman’s agreement.” No time
limit was set for that agreement, and it is still in operation. Thus,
apart from smuggling, a virtual embargo on silver exports exists at
present, freedom to ship being accorded only to the Central Bank ol
China.
. 14The word used in China to describe silver of a certain fineness. Sycee was formerly in general use but
is now seldom encountered in Shanghai. It appears in the form of irregular-shaped ingots called, in English,
“shoes.”
48
HANDBOOK OF FOREIGN CURRENCIES
Export smuggling of silver is occurring continuously, even though
the Government has announced that silver smuggling is a crime sub
ject to capital punishment or life imprisonment.
The amount of silver smuggled out of the country from October 15
to December 31, 1934, is estimated at 30,000,000 yuan. From
January 1 to May 31, 1935, the daily export through smuggling has
been estimated at 200,000 yuan, or a total of 30,000,000 yuan during
the 5 months.
GOLD
On April 30, 1935, the Central Bank of China had a gold reserve of
373,324.7 customs gold units, all held against its customs-gold-unit
notes outstanding. The present gold reserve of this bank is estimated
at 9,000 bars.16 No estimates are available of the total gold reserves
of China.
There is no official price of gold, and the Government does not
purchase gold at a premium. Gold is freely bought and sold on the
Shanghai Gold Bar Exchange.
Gold hoarding in China is practically nonexistent, but there are no
available data on the subject.
THE GOLD CLAUSE
The gold clause is not used in Chinese contracts.
SILVER
A detailed description of the position of silver in China’s monetary
system was published in Trade Promotion Series No. 149, the Mone
tary Use of Silver in 1933. This description is supplemented by the
information given in this publication. In addition, the following
should be noted regarding the Chinese attitude toward silver.
The rise in the price of silver in world markets in 1934 caused a
considerable outflow of silver from China and seriously threatened
the currency system. In attempting to check the flow, the authori
ties, as mentioned above, increased the export duty on silver and
imposed the equalization charge.
A period of great monetary uncertainty began in early autumn of
1935. During October the exchange value of the yuan declined from
the level of about 37.6 cents, United States currency, at which it had
been held for a considerable period, to less than 30 cents. This
decline was accompanied by the export of capital and firmer interest
rates.
On November 3, 1935, the Chinese Government issued a sweeping
decree nationalizing silver and definitely placing the currency on a
managed basis. All silver coins and bullion were to be surrendered
to the Central Government within 3 months. Only notes issued by
the Central Bank of China, the Bank of China, and the Bank of
Communications would henceforth possess full legal tender. The
following parities were established by the Bank of China: The price
of the Shanghai gold bar was placed at 1150.3 yuan and that of the
customs gold unit, at 2.276 yuan, or 33 pence in sterling and 67.75
cents in United States currency. The telegraphic transfer exchange
rates were officially declared to be as follows: One yuan equals Is.
16 Since Feb. 2, 1934 one gold bar of 0.978 fineness weighs 10 Shir Liang (market tael) or 9.82607 troy
ounces:
49
HANDBOOK OF FOREIGN CURRENCIES
d. or 29.75 cents United States currency and 100 yuan equal 450
French francs.
A separate currency board was created by the Ministry of Com
merce for the purpose of centralizing control over the note issue. The
board membership is to consist of the following representatives:
Three from the Ministry of Finance; two each from the Central Bank
of China, the Bank of China, and the Bank of Communications; two
from the Bankers’ Association; two from the Native Bankers’ Guild;
two from the Chamber of Commerce; and five from the various issuing
banks specially designated by the Minister of Finance.
2%
Silver Held by Shanghai Banks, 1934-35 1
Date
Jan. 1, 1931............................................................................
Jan. 1, 1935............................................................................
Sycee (in Coin (in
Total (in
Number of thousands
thousands thousands
of fine
of fine
bars
of
yuan)
ounces)
ounces)*
154, 373
23,146
328,050
* 294,108
11,719
7,980
413,525
253,034
1According to the Bank of China.
* Coin converted to ounces at 0.7553313 troy ounce per yuan; bars converted to yuan at 1,284 yuan each.
* Includes 42,818 mint bars at 1,000 yuan each.
According to a 1932 estimate by E. Knnn, the quantity of silver
yuan coin then circulating 17 in China was 1,627,225,000. In addi
tion, he estimated that 80,000,000 foreign silver “dollars” were in the
country.18
Dragon “dollars” out of a total of $286,350,000...
Republican “dollars” minted from:
Bar silver until 1930..........................................
Bar silver during 1931____________________
Sycee until 1930................................................
Sycee during 1931_______________________
Melted foreign “dollars” and silver imported
for the purpose________________________
Total......... .................................................
Estimated quantity of foreign “dollars” in circula
tion in China_____________________________
Grand total..................................................
COLOMBIA
$200, 000, 000
735, 443, 000
32, 720, 000
400, 000, 000
59, 062, 000
200, 000, 000
1,627,225,000
80, 000, 000
1, 707, 225, 000
The unit of currency is the peso (symbol $), divided into 100
centavos. By law of June 15, 1907, the weight of the gold peso is
fixed at 1.46447 grams fine, which gives it a parity of $1.6479.
DESCRIPTION AND CIRCULATION OF CURRENCY
Three types of notes are in circulation: Notes of the Bank of the
Republic, national currency notes, and silver certificates. Notes of
the Central Bank are by far the most important. The national
bills in circulation were first issued by the Government in 1910.
Upon the establishment of the Bank of the Republic in 1923, it was
provided that the national currency should be retired annually in an
amount equal to the dividends received by the Government in its
17 The table reads “ minted”, but Mr. Kann’s text stated “ circulating.” Cf. E. Kann in Chinese Eco
nomic Journal, vol. VIII, pp. 410-420, April 1931.
See Finance and Commerce, Shanghai, Jan. 27, 1932,
50
HANDBOOK OF FOREIGN CURRENCIES
shares in the Bank of the Republic. There have, however, been no
withdrawals since 1930, when 300,000 pesos were retired. According
ly, national notes to the value of 7,931,000 pesos were still in circula
tion as of June 30, 1935.
On June 30, 1935, 52,420,000 pesos of paper currency were in
circulation of which 39,120,000 pesos were notes of the Bank of the
Republic; 7,900,000 pesos were national currency notes; and 5,400,000
were silver certificates. The notes of the Bank of the Republic were
in denominations of 1, 2, 2%, 5, 10, 20, 50, 100, and 500 pesos. A
decree of May 1935 provides that the 2%-peso notes shall be discon
tinued and that a Ji-peso note shall be introduced. By the end of
November a small volume of the new )j-peso notes had been put into
circulation.
Coins of Colombia
Denomination
Metal of chief
value
Fine
ness
50 centavos 1................... Silver..................... 0.900
20 centavos 1.................... ----- do..................... .900
.900
Nickel *___ _____ .250
.250
.250
...do.*................
Total......................
Gross weight
Silver content
12.50 192.9045
5.00 77.1618
2.50 38.5809
11.25 173.6140
4.50 69.4456
2.25 34.7228
Outstand
ing as of
June 30,
1935
Grams Grains Grams Grains (millions
of pesos)
11.21
|
2.20
13.41
' By a decree of May 1935 the Government is authorized to retire all silver coins and to exchange them for
nickel minor coins and hank notes, including notes of J4-i>eso which may be issued.
3 The alloy is 75 i>ercent copper.
NOTE-ISSUING AUTHORITY
The organic act of the Bank of the Republic (Banco de la Repúb
lica) specifies, in article 16, paragraph 1 (law no. 25 of 1923), that the
bank shall have the exclusive right to issue bank notes for a period
of 20 years.
It may be said that the Government has both, by law and in
practice, a controlling voice in the determination of the policies of
the Bank of the Republic. Of the nine directors of the bank, three
represent the Government; one of these three being the Minister of
Finance and Public Credit, who serves ex officio.
RESERVE REQUIREMENTS
The present minimum legal reserve requirements of the Bank of
the Republic are those established by legislative decree no. 2091 of
1931, and by a provision of one of the two contracts between the bank
and the Government which is incorporated in law no. 7 of 1935. The
latter permits the bank to reduce the ratio of gold reserve against
notes in circulation to 25 percent; the former requires that the bank
shall maintain a reserve in gold or other kinds of money equivalent
to at least 25 percent of its deposits, subject to the restriction that
silver or silver certificates shall not compose more than 50 percent of
that reserve. The 7,931,000 pesos of national bills outstanding as
of June 1935 had no metallic backing.
Silver certificates in circulation must be backed by silver currency
to the full amount of the certificates in the hands of the public and
HANDBOOK OF FOREIGN CURRENCIES
51
commercial banks. The issuance of silver certificates was first
authorized by law no. 82 of 1931.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Restrictions on the movement of gold coin and gold bullion date
from the promulgation of decree no. 1683 of September 24, 1931,
when the Government instituted control of foreign-exchange opera
tions. That decree prohibited the exportation of gold in any form
except by the Bank of the Republic. The bank was given the
exclusive privilege of buying, selling, or exporting gold, and all banks
and individuals were required to deposit their monetary gold with
the bank.
The control of foreign exchange was strengthened by decree no.
1871, of October 21, 1931. This decree required that permits be
obtained for all shipments leaving the Republic and obligated the
exporter to return to Colombia the proceeds of his sale. This action
had no effect on gold movements since they already had been sus
pended by decree no. 1683, but silver was brought under control
and regulation.
To strengthen the control over gold movements, decree no. 421 of
March 7, 1932, requires in substance that:
1. Gold smelters refrain from accepting any gold for reduction unless the owners
present evidence showing that it has been reported to the Medellin Mint, the
Bogota Mint, or the Bank of the Republic;
2. Once the gold has been cast into bars, these must be delivered to the Medellin
Mint or the Bank of the Republic;
3. Owners of the gold shall be given certificates attesting its value and these
shall be liquidated in bills by the mint or the bank.
The official control of gold was further strengthened by decree no.
703 of April 6, 1933, which provides that no person in the Republic
may engage in the purchase of coined gold, gold in bar, or gold dust
without the permission of the Board of Export and Exchange Control
(the entity formed by the fusion of the organizations set up by
decrees nos. 1683 and 1871 of 1931). In granting such permits the
board must require purchasers to give guaranties that the gold
acquired will be delivered to the Medellin Mint or the Bank of the
Republic. All mining companies are required to obtain authoriza
tions from the board, the granting of the authorization being made
contingent on the promise to deliver their gold output to the Medellin
Mint.
Individuals or entities, other than the banks which already had
turned over their gold, holding gold coins of any kind or gold bars
were obligated to sell their holdings to the Bank of the Republic, or
deposit them with the bank prior to April 30, 1933. Holders of gold
dust likewise were ordered to deliver their holdings to the Medellin
Mint prior to April 30, 1933, for assay and conversion into bars to
be sold to or deposited with the Bank of the Republic.
Although the restrictions on the movement of gold were character
ized as temporary by the Government, the original curbs and those
subsequently imposed on the purchase, sale, and export of the metal
are still in effect.
GOLD
Estimates of the amount of gold and silver smuggled out of the
country vary widely. Some persons believe that about 10 percent of
the gold production finds its way abroad in contravention of the
52
HANDBOOK OF FOREIGN CURRENCIES
regulations. Other estimates run as high as 25 percent. It is
strongly suspected that during 1935 gold smuggling increased appre
ciably in spite of vigorous efforts to suppress it and might have been
as high as 25 percent of the total amount of gold taken from the
ground—a surmise that is supported to some extent by the official
statistics on gold production for 1935.
The October 31, 1935, balance sheet of the Bank of the Republic
showed gold holdings of 436,157.536 fine ounces. The bank also
had sight deposits abroad to the amount of $2,091,988 United States
currency. Decree no. 650 of 1935 permits the bank, for reserve
accounting purposes, to compute its holdings of gold at the price of
the metal in New York converted into pesos at the rate of exchange
for dollar drafts on the day the balance sheet is prepared. Accord
ingly, the bank, with its 436,157.536 ounces of fine gold, and its
deposits abroad of $2,091,988 which it computes as gold for reserve
purposes, had legal reserves, at the exchange rate of 1.7625, of
30,592,596.71 pesos.
To combat the clandestine trade in gold and to augment the metallic
reserves, the Bank of the Republic, by virtue of decree no. 404 of
February 24, 1933, commenced buying gold at a premium of 8 percent
over the exchange rate of 1.13 pesos to the dollar for drafts. Since
then the premium has risen in direct relation to the decline in the
foreign exchange value of the Colombian peso to the American dollar.
On December 12, 1935, the premium on gold was 66.975 percent.
It is doubtful if any sizable quantities of gold are in hoards. The
effect of the various regulations since 1931 has been, generally speak
ing, to divert the greater part of the gold stocks to the Bank of the
Republic. Those holdings which were not diverted appear to have
long since found their way out of the country. Whatever illicit gold
movements still persist (December 1935) are believed to consist
mainly of gold bullion and gold dust.
THE GOLD CLAUSE
The status of the gold clause in domestic contracts is largely deter
mined by law no. 46 of November 28, 1933, which states that obliga
tions contracted in Colombian gold coin (oro Colombiano acunado)
shall be paid at par in Colombian bills representative of gold or in
Banco de la Republica notes. Obligations contracted in other kinds
of gold coin will be paid in the same kind of bills or notes according to
the intrinsic parity of said coins in relation to Colombian coined gold.
Obligations originally contracted in foreign currencies will be paid,
capital as well as interest, in Colombian national currency, at the
rate of exchange for said foreign currencies on the date the obligation
was contracted except when the obligation originates with mer
chandise import transactions or purchase and sale contracts covering
products for export.
SILVER
With the sharp rise in silver prices abroad in 1935, the smuggling
of silver increased and there was widespread hoarding of silver coins
by the public. At the instance of the Government, the Board of
Exchange and Export Control in a resolution dated May 11, 1935,
suspended the issuance of permits for the export of silver in any form.
On July 30 law no. 8 was promulgated, authorizing the Government
HANDBOOK OF FOBEIGN CURRENCIES
53
to retire through the Bank of the Republic all 10-, 20-, and 50-centavo
silver coins, and silver certificates, and to issue in their stead Bank of
the Republic notes or minor fractional currency of other metal. This
statute also prohibits the melting of silver coins and the export of
silver either in the form of coins or in bars cast from melted coins or
silver objects. Provision was made, however, for permitting silver
producers to export their production under such regulations as the
Government might issue. Law no. 8 authorizes the Government to
issue 6,000,000 pesos, nominal value, in fractional currency of such
metals, weights, dimensions, and denominations as the Government,
in accord with the Bank of the Republic, may determine. Provision
likewise was made for the disposition of any profits that might
accrue through the retirement and sale of silver coins and the issue
of 6,000,000 pesos of base-metal fractional currency.
The Bank of the Republic is now retiring the coins in circulation
by exchanging them for base-metal fractional coins or its bank notes.
It was estimated that approximately 5,000,000 pesos, face value, of
silver coins had been exchanged by December 1, 1935. With these
coins and those held by the bank as backing for the silver certificates
still in circulation, the bank should have held on that date approxi
mately 10,000,000 pesos (face value) of silver aside from about 3,800,000 pesos of silver coins held in the legal reserve against deposits.
Since the total stock of monetary silver probably never exceeded
17,000,000 pesos, it is estimated that 3,200,000 pesos of silver currency
were still in the possession of the general public and banks, other than
the Bank of the Republic, on December 1, 1935.
COSTA RICA
The monetary unit is the colon (symbol $), divided into 100
centimos. By a law approved October 24, 1896, which was put into
effect by Presidential order of April 16, 1900, Costa Rica adopted
as its currency unit the colon, consisting of 778 milligrams of gold
0.900 fine. In terms of the present dollar this unit would have a
parity of $0.7879. By a legislative decree dated October 12, 1922,
the currency was, in effect, devalued and, at the same time, placed
on a gold-exchange basis. Article 3 of that decree provided that the
conversion office (Caja de Conversion) established thereunder as a
section of the Banco Internacional de Costa Rica “will change the
notes which it issues for gold or American notes and will pay them
on presentation with gold or American notes in the relation of 4
colones to the dollar.” Articles 4 and 5 further provided that the
Conversion Office should purchase and sell foreign drafts at the same
rate, less a discount or plus a premium, respectively, sufficient to
cover cost of handling the funds. Subsequently (December 1930),
an exchange control was established, but the rate for dollars has
varied considerably at levels somewhat above 4 colones to the dollar.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
Practically the only foreign currency circulating in the country is
that of the United States; although the amount of United States
currency in circulation cannot be readily estimated, it is fairly large.
54
HANDBOOK OF FOREIGN CURRENCIES
No legal tender limit for notes has been fixed but that for each
denomination of coins is 100 colones.
Paper Currency of Costa Rica
Amount
outstand
ing Dec.
31, 1935
(colones)
Dimensions
Issuing authurity and denomination
Banco Internacional de Costa Rica:
10,474,000
3.526.000
1.073.000
2,819, 500
2,648, 750
1,553,600
427,350
245, 750
48,050
162,700
21,850
11,900
27,640
19,605
33, 454
27. 450
8,000
23. 128,659
Conversión office:
Silver certificates:
Coins of Costa Rica 1*
Denomination
Metal of chief
value
2 céntimas (1903)4....................... Nickel....................
Fineness
0.250
.250
.250
.950
.950
1.000
1.000
.250
Gross weight
Grams
Grains
10.00
6.25
3.45
2.00
1.00
2.00
1.00
1.00
154. 320
96. 450
53. 240
30.864
15. 432
30.864
15. 432
15. 432
Diam
eter
(mm)
29
25
23
18
15
18
15
15
Thick
ness
(mm)
2.00
1. 24
1.14
.81
.81
* There exist silver coins 0.900 fine of 1 colon and of 50 and 25 céntimos, hut the circulation of these coins
is practically nil.
J These coins (alloy is copper) are now being put in circulation, as authorized by law no. 168 of Aug. 22,
1935. Notes of the Banco Internacional of 1 colon and 50 céntimos are now practically out of circulation.
* Only 125,000 colones, coined in the Philadelphia mint, were issued. Alloy is zinc, 0.400; and tin, 0.100.
4 They have disappeared from circulation.
NOTE-ISSUING AUTHORITY
The only issuing agency at present is the Banco Internacional de
Costa Rica. Its note issue on December 31, 1935, amounted to
22,816,000 colones.
The central government has both by law and in actual practice a
voice in the affairs of the bank of issue.
RESERVE REQUIREMENTS
The notes of the Banco Internacional de Costa Rica state that
they are convertible into coined gold. Subsequently, by law, these
notes were made inconvertible and the bank maintains no reserve
against them.
HANDBOOK OF FOREIGN CURRENCIES
55
For the notes of the conversion office, there was deposited in banks
abroad a reserve, as of December 31, 1935, equivalent to $69,287.25
(United States currency). At the rate of 4 colones to the dollar,
which was the rate fixed in the decree of October 12, 1922, establish
ing the conversion office, this reserve equals $"277,149, the exact
total of conversion notes then outstanding.
For the silver certificates, the Banco Intemacional held on Decem
ber 31, 1935, a deposit in Costa Rican silver coins of 1-, %-, and 14colon denominations, totaling $)35,510, which was the amount of
silver certificates outstanding.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
A law of April 3, 1935, prohibits the exportation of silver in the
form of either coined currency or bullion. Undoubtedly, in spite of
the law, some silver is being smuggled out of the country, but the
amount appears to be small.
GOLD
There are no gold reserves, and no gold is being purchased by the
Government.
Hoarding cannot be estimated, although there is undoubtedly a
considerable amount of gold in the country in the form of coins and
trinkets.
THE GOLD CLAUSE
The gold clause is not in use in Costa Rica.
SILVER
There have been no developments affecting silver since the publi
cation of Trade Promotion Series No. 149, the Monetary Use of
Silver in 1933, except the prohibition of exportation.
The amount of silver held in Costa Rica, as of December 31, 1935,
was estimated at 209,332.94 fine ounces troy, of which the banks
held 10,250.48 and the public, 199,082.46. Part of the silver reported
as held by the public may, however, have been smuggled out of the
country.
CUBA
The monetary unit is the peso (symbol $), divided into 100 centavos.
The par value of the peso is $1.00 in terms of United States currency.
Because the monetary laws and decrees have been so numerous,
these are tabulated in the accompanying list, which should be consalted in connection with the text.
MONETARY LEGISLATION OF CUBA SINCE 1930
Law no. 16 of May 1933 (Gaceta Oficial, May 16, 1933).—Providing for the
coinage of 6,000,000 silver pesos.
Authorizing the printing of silver certificates, redeemable in silver pesoR at
their nominal value, in denominations of not less than 1 peso or in excess of 10
pesos.
Decree no. 3788 of November 21, 1933 (Gaceta Oficial, Nov. 22, 1933).-—Pro
hibiting the exportation of Cuban or American gold coin, or gold in bars, lumps,
or any other form that may be roadily converted into money.
Conceding a premium of 5 percent to anyone reporting clandestine shipments
of gold.
Decree no. 3040 of December 8, 1933 (Gaceta Oficial, Dec. 9, 1933).-—Penalizing
infractions of regidations pertaining to shipments of gold by confiscating gold
and returning to the owner 50 percent of the value at par.
56
HANDBOOK OF FOREIGN CURRENCIES
Authorizing the coinage of 3,000,000 silver pesos and the emission of 17,000,000
pesos in silver certificates, secured by silver in bars; the Secretary of Finance to
contract for the coinage of silver pesos and printing of silver certificates with a
bank, or a syndicate of banks, preferably Cuban.
Decree no. 3161 of December IS, 1933 (Gacela Oficial, Dec. 15, 1933).—Authoriz
ing the Secretary of Finance to change the guaranty for the certificates provided
for in decree no. 3040 of December 8, 1933, instead of retaining it in bars or ingots,
by coining the silver.
Decree-law no. 93 of March S3, 1934 (Gacela Oficial, Mar. S3,1934)•—Derogating
decree no. 3040 of December 8, 1933;' also decree no. 3161 of December 13, 1933.
Decree-law no. 93 of March S3, 1934 (Gaceta Oficial, Mar. S3, 1934—Extraordi
nary Edition no. 31).-—Authorizing the coinage of 10,000,000 silver pesos, and the
emission of 10,000,000 pesos in silver certificates of various denominations.
Decree-law no. 153 of April 19, 1934 (Gaceta Oficial, Apr. 34, 1934)•—Permitting
the unconditional use of Cuban silver in payment of all duties, taxes, assessments,
and contributions to the State, provinces, or municipalities.
Decree-law no. 344 of May 33, 1934 (Gaceta Oficial, May 33, 1934).—Reducing
the gold content of the Cuban peso to 0.8886 grams and providing for the purchase
of all metallic gold offered to the Government at 35 pesos per troy ounce.
Declaring that only Cuban silver coins shall be legal tender and authorizing
the payment in silver of all obligations, regardless of the currency specified in the
contracts, whether the obligations were contracted before or after promulgation
of the decree-law.
Prohibiting the exportation of gold in any form and derogating decrees nos. 570
of April 21, 1917: 2788 of November 21, 1933; and clause no. 4 of item V of the
Cuban Customs Tariff of 1927.
Decree-law no. 356 of May 35, 1934 (Gaceta Oficial, May 36, 1934) ■—Amending
decree-law no. 244, to include Cuban and American gold coin as legal tender, in
unlimited amounts.
Decree-law no. 359 of May 38, 1934 (Gaceta Oficial, May 38, 1934).—Granting
the right to demand payment of obligations contracted before decree no. 244 in
the currency specified, provided that such currency is legal tender in Cuba. All
future obligations payable in legal tender, within the limits established with
respect to fractional coins.
Decree-law no. 368 of June 3, 1934 (Gaceta Oficial, June 3, 19 34—Prohibiting
the exportation of all money, and restricting drafts on foreign countries, with the
following exceptions:
(a) For payment of the purchase price of imported goods.
(b) For payment of obligations contracted prior to date of the decree-law.
(c) Up to a sum not to exceed $500 per annum for maintenance expenses of
Cubans or foreigners residing in Cuba who temporarily leave the country.
(d) For payment of interest and principal on bonds or dividends on stocks of
companies located in Cuba, the holders of which reside abroad.
(e) For payment of maintenance of offices, personnel, and services rendered in
foreign countries, with the object of promoting the exportation of Cuban products,
as well as for any other expenditure which has the same object in view.
(f) For payment of insurance premiums on existing or future insurance con
tracts.
(g) For payment or exportation of principal or interest of any amount imported
into the country after the promulgation of the decree-law.
(h) For all payments which for any reason must be made abroad by the State,
provinces, or municipalities.
Decree-law no. 339 of July 13, 1934 (Gaceta Oficial, July 14, 1934).—Derogating
decree-law no. 268 of June 2, 1934.
Decree-law no. 406 of August 10, 1934 (Gaceta Oficial, Aug. 11, 1934).—Modify
ing article IV of decree-law no. 93 of March 22, 1934, changing the inscription on
silver certificates whose printing was authorized in that decree-law.
Decree-law no. 410 of August 10, 1934 (Gaceta Oficial, Aug. IS, 1934).—Con
firming the gold content of the Cuban gold peso, stipulated in decree-law no. 244,
and making Cuban and American gold coins, Cuban silver, and American bank
notes legal tender, in unlimited amounts.
Prohibiting the circulation of Cuban or American gold, with a gold content
exceeding the amount specified in decree-law no. 244.
Providing that obligations contracted before decree-law no. 244 must be paid
in the currency agreed upon and in case it should be out of circulation, in United
States bank notes.
HANDBOOK OF FOREIGN CURRENCIES
57
Derogating law of October 29, 1914, with the exception of clauses b and c of
article II; b and c of article VI; decree 570 of April 21, 1917; and decree-laws nos.
2788 of November 21, 1933, and 244, 256, and 259, of May 22, 25, and 28, 1934.
Decree-law no. 670 of November 9, 1934 (Gaceta Oficial, Nov. 13, 1934).—Author
izing the coinage of 10,000,000 silver pesos in the denomination of 1 peso, and
naming of a delegate to be sent to the United States to open bids for purchase of
metal and contract for the printing of silver certificates already authorized.
Decree no. 2950 of November 9, 1934 (Gaceta Oficial, Nov. 14, 1934).—Desig
nating Sr. Eduardo I. Montoulieu as representative, to be sent on mission to the
United States to contract for metal and for coinage of 10,000,000 pesos authorized
by decree-law no. 670.
Decree-law no. 800 of January 8, 1935 (Gaceta Oficial, Jan. 9, 1935).—Author
izing the exportation of gold coin, gold bars, lumps, ingots, or gold in any other
manufactured form, subject to an export tax of 15 percent of its value.
Decree no. 161 of January 26, 1935 (Gaceta Oficial, Jan. 30 and Feb. 15, 1935).—
Containing regulations for the fiscalization and circulation of silver certificates.
Decree no. 211 of February 1, 1935 (Gaceta Oficial, Feb. 2, 1935).— Modifying
article XXIV of the regulations for the fiscalization18 and circulation of silver
certificates.
DESCRIPTION AND CIRCULATION OF CURRENCY
The accompanying table shows the currency of Cuba outstanding
on March 31, 1935. American currency circulates extensively in the
island. The distribution of American and Cuban currency in Cuba,
as of March 31, is shown in the second table. Silver money is legal
tender for payments up to 10 pesos, and to the extent of 8 percent on
larger payments; the fractional currencies of nickel are legal tender to
the amount of 1 peso.
Circulation of currencies other than Cuban and American is for
bidden by law. It is known, however, that there are hoards of Spanish
and French coins still held in Cuba, and in a campaign for savings
accounts a few years ago, one bank obtained a large amount in gold,
which was accepted at bullion value.
The paper currency of Cuba consists of United States notes, the
only Cuban paper currency being the silver certificates mentioned in
the tables following. Foreign notes (other than those of the United
States) do not circulate. Their circulation is prohibited by law, and
they have no legal status. The importation of foreign notes (other
than those of the United States) is prohibited. The use of checks is
common, particularly in commercial transactions.1
11See last paragraph of the following note.
N ote.—The law Is a general rule established by the sovereign power of the State to direct, reward, or
punish the actions of subjects. In modern, civil, or common law it is usually a rule of conduct brought into
being by a legislative body.
A decree is nothing more than a resolution, mandate, or written order, signed by the sovereign power of
the State, which has for its object to execute the laws of the country, to provide or make some declaration
respecting particular cases, or to establish measures of good government. In modern law a decree is used in
much the same way as we use administrative rulings—as a regulative measure for the carrying out of a law.
A decree-law is a writ or edict containing something of both the above-described enactments. It is
usually a decree of a regulative nature based upon and issued as a supplementary part of a duly enacted law.
Fiscalization, or fiscal control, signifies the financial supervision of the government of a State. The State
enjoys the sovereign right to supervise by financial control all tax and monetary laws within its jurisdiction,
for the general welfare of the country.
58
HANDBOOK OF FOREIGN CURRENCIES
Stock of Cuban Metal and Paper Currency, Mar. 31, 1935
Denomination
Total, silver
certificates . .
Metal of
value
Fine-
Gold or silver
Diam- Thick- Amount
(thou
et or
sands of
Grams Grains Grams Grains (mm) (mm) pesos)
Gross weight
Gold____ >0.900
>.900
>.900
>.900
>.900
>.900
33.4362
16.7181
8. 3591
6. 68723. 3436
1.6718
516.0000
258.0000
129. 0000
103. 2000
51.6000
25.8000
>0.900
>.900
>.900
>.900
26. 7296
10.0000
5.0000
2.5000
412. 4659
154. 32<X)
77.1600
38.1500
30. 0926
15.0463
7. 5232
6.0185
3.0092
1.5046
464.40 34.2900 2.4587
232.20 26. 9240 2.0320
116. 10 21.5390 1.4782
92.88
46. 44
23.22
38. 1000
29. 0576
23. 2664
17.8816
2. 8956
1.7780
1.3208
1.0922
(»)
(»)
(*)
<»)
« 0. 250 5.0000 77. 1618
.. do.......... «.250 3.5000 54. 0132
«.250 2.5000 38. 5809
21. 2090 1.8288
19. 3040 1. 6002
16.9672 1. 4732
54
529
109
50
6
(*)
>747
4 25,369
1,344
3,353
934
31,600
500
1.500
2.500
5,000
9,500
840
228
381
1,450
*Alloy is copper.
* 1 pesos.
* The bullion value of the visible stock of Cuban gold pesos amounted to $1,265,242 on Mar. 31, 1935,
as compared with the nominal value of $747,249. Hoarding and clandestine exportation of gold have been
practiced for several years, but it is impossible to estimate the amount involved. The figures on gold
coins are based upon the stocks of gold in the Treasury and in the banks.
4 Of this total, 9,500,000 silver pesos were held by the Treasury Department as guaranty for silver certif
icates with a nominal value of 9,500,000 pesos.
* Silver certificates.
* Copper 75 percent.
Estimated Circulation of Currency in Cuba, Mar. 31, 1935
[In thousands of pesos or dollars]
Item
Cuban currency.
Gold 4........................................................................
In circulation >
In
In
Treasury banks 1 Amount Pesos per
capita >
Total
stock
163
1,102
1.265
500
713
8. 787
9,500
2.20
>6,254
3,840
5.775
1.45 » 15.869
637
973
4,021
1.01
5,631
80
258
1. Ill
.28
1,450
Total.................................................. ............... . 8.252
5.769 19. 694
4.94
33.715
American currency:
Gold 4 . .......................... .......................................
7
45
52
35
105
.03
10
150
67
.02
70
(•)554 11,3772
13.880
3. 48
25.811
572 11,459 14.052
3.53
26.082
Grand total..........................................................
8.824 17,228 33, 746
8. 47
59,798
>Exclusively in banks connected with the Habana Clearing House.
* Amounts of American money in circulation are estimates only.
> Based upon a population of 3,988,160.
4 Revalued in accordance with the theoretical gold content of 0.8886 grams of fine gold per Cuban peso,
as per decree-law no. 410 of Aug. 10, 1934. The gold coins are not the amount outstanding, but only the
stocks of the Government and banks.
J This item does not include 9,500,000 pesos held in a special vault in the Treasury Department as guaranty
for silver certificates with a nominal value of 9,500,000 pesos. These certificated were in circulation and in
banks on Mar. 31, 1935.
• 450 pesos.
Source: Department of finance, currency section.
HANDBOOK OF FOREIGN CURRENCIES
59
NOTE-ISSUING AUTHORITY
The sole authority for issuing Cuban notes is the Cuban Govern
ment. On November 14, 1935, 20,000,000 pesos of silver certificates
were in circulation in Cuba.
RESERVE REQUIREMENTS
Cuban law requires that silver certificates in circulation be guar
anteed by an equivalent amount of silver pesos. The reserve consists
entirely of coins, there being no bullion in the Treasury.
RESTRICTIONS ON BULLION MOVEMENTS
The movement of gold and silver is negligible, apart from current
receipts on account of the new 10,000,000-peso silver-coinage program.
Until recently there was a steady clandestine exportation of gold
coins. At present that business is inactive, owing to the facts that
there is very little gold left in the country and that confidence in
the currency has been restored.
Decree law no. 800 of January 8, 1935, authorized the exportation
of gold on payment of a 15-percent tax. An official statement of the
amount of gold on hand in the Treasury and in banks is included in
the above table on Cuban metal and paper currency outstanding
March 31, 1935.
GOLD
Gold is not being purchased by the Government, but is occasionally
acquired by banks and brokers. However, the volume is very small.
THE GOLD CLAUSE
Obligations must be paid in the currency specified in contracts,
but, if gold is specified, the contract may be liquidated in American
currency.
SILVER
There has been no further information on silver since the publication
of Trade Promotion Series 149, The Monetary Use of Silver in 1933.
CZECHOSLOVAKIA
Czechoslovakia has for its monetary unit the Czechoslovak crown
(koruna; plural, koruny; abbreviation, kc. or cr.), divided into 100
hellere (singular haleru). The koruna contains 41.28 milligrams
of gold 0.900 fine (37.152 milligrams of fine gold), and thus has a par
value of approximately $0.0418 in terms of United States currency.
The par value was changed February 17, 1934, from $0.0502 to the
present par, through the reduction of the gold content of the koruna
by one-sixth. Prior to the devaluation of the United States dollar
on January 31, 1934, the par value of the koruna was $0.0296.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
Although foreign notes have no legal status, they are in circula
tion in small quantities along the borders of the country. There are
no prohibitions on the importation of foreign notes. Checks are not
generally used in Czechoslovakia, and the use of commercial paper is
not so widespread as in England and the United States.
60
HANDBOOK OF FOREIGN CURRENCIES
Paper Currency of Czechoslovakia 1
Denomination
Amount
outstanding
on Apr. 30,
1935 (mil
lions of
koruny)
Dimensions
315.9
2,013.0
593.9
2,134.6
442.6
327.0
50.9
5,877.9
Total........................................................
» The paper used is 80 percent rag, with cellulose and a small amount of viscose. The 10-koruna notes
are printed, the others engraved. The notes of 100 koruny and larger in denomination are engraved on
paper of foreign manufacture, the others on domestic paper.
* Engraved.
* Decreed “token money" in 1932.
4 Printed.
N ote.—The usual methods of preventing counterfeiting are used; I. e., special paper, ink, and printing.
Domestic ink is used and the formula is closely guarded.
Coins of Czechoslovakia
Amount
out
Di
Thick
standing
Metal of Fine
ameter
ness
Dec.
31,
chief value ness
Grams Grains Grams Grains (mm) (mm) 1935(milkoruny)
Gross weight
Denomination
Silver content
Silver'.... 0.840 12.0000 185.1883 10.0800 155. 5546
10 koruny.............. ...do.»........ .700 10.0000 154. 3236 7.0000 108.0265
...do.»........ .500 7. 0000 108.0265 3.5000 54.0133
Nickel »... .800 6. 6666 102.8824
.800 5.0000 77.1618
.800 4.0000 61. 7284
.800 3. 3333 51.4412
Copper ».. .920 2.0000 30. 8647
.920 1.6666 25.7206
Total............
34
30
27
25
22
20
18
16
1.60
1.70
1.70
1.85
1. 75
1.50
1.20
1.10
75.2
* 244. 9
116.8
96. 5
23.8
4.5
23.2
14.3
4.8
604.2
i Alloy is copper.
* Includes 10 ,000,000 jubilee coins held mainly by collectors.
* Alloy is zinc.
N ote.—5- and 10-haleru coins are legal tender for amounts not exceeding 10 koruny; 20- and 50-haleru
coins for amounts not exceeding 20 koruny; 1-koruna coin for amounts not exceeding 100 koruny; 5-koruny
coins for amounts not exceeding 250 koruny; 10-koruny coins for amounts not exceeding 500 koruny; 20-.
koruny coins for amounts not exceeding 500 koruny.
NOTE-ISSUING AUTHORITY
The right to issue bank notes in Czechoslovakia has been vested
solely in the National Bank of Czechoslovakia (Narodni Banka
Ceskoslovenska), since April 1, 1926, the date on which this institution
was placed in operation.
Legally the Government has a controlling voice in the policies of the
National Bank, which is Czechoslovakia’s Central Bank, since it owns
one-third of the capital stock and appoints the governor (for a term
of 5 years) and three of the nine members of the board of directors (for
terms of 6 years). Furthermore, the Government appoints a bank
commissioner (commissaire), who is a high official in the Treasury and
has the power to veto decisions of the board until a special ad hoc
arbitration tribunal arrives at a decision which carries ultimate
validity. In practice, however, the Government does not determine
the policies of the bank of issue.
HANDBOOK OF FOREIGN CURRENCIES
61
RESERVE REQUIREMENTS
Under law no. 25 of February 17, 1934 (the law authorizing the
reduction of the gold content of the crown by one-sixth), the legal
minimum reserve is required to be gold to a total of 25 percent of the
demand liabilities of the National Bank of Czechoslovakia. (Silver is
no longer included in the required reserve.) “Demand liabilities”
consist of bank notes in circulation, plus current accounts and other
sight liabilities. This law provides for a reduction in reserve require
ments below the ratio prescribed by the monetary law 23 of November
7, 1929, enacted in pursuance of the recommendation made in the
Report of the Gold Delegation of the Finance Committee of the League
of Nations, June 1932, regarding the conservation of gold. However,
since this later law became operative the ratio has never been below
40.8 percent and on May 31, 1935, stood at 42.3 percent.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Government decree no. 152 of October 2, 1931, reinstated Govern
ment decree no. 46 of February 29, 1924. The latter stipulated,
among other things, that the exportation of gold and silver bullion
should be subject to a permit by the banking office of the Ministry
of Finance.21 In restoring the validity of the 1924 decree, which had
been canceled on December 31, 1928,22 the only change made was to
designate the National Bank as the licensing agent, instead of the
extinct banking office. The licensing provision has operated as effec
tively as an outright embargo, and foreign-trade figures disclose that
there have been no recorded export shipments of monetary gold or
silver in the last 4 years. The decree of 1931 will remain in force until
canceled by the Government.
Imports of gold and silver bullion are unrestricted.23
According to officials of the National Bank, the smuggling of gold
and silver into and out of Czechoslovakia is thought to be virtually
nonexistent.
GOLD
On May 31, 1935, the National Bank held 2,686,970,000 crowns of
gold, having a fine weight of 99,847.61 kilograms. Neither the
Government nor the National Bank purchases gold at a premium.
Officials of the National Bank surmise that a certain amount of
gold hoarding has been and is still taking place. Although they
regard it as unimportant, they do not venture to estimate the total
amount involved. Since gold coins have not been in circulation
since 1914 in the territory now comprising Czechoslovakia, it is
likely that such hoards consist chiefly of old Austro-Hungarian
kronen and florins. Furthermore, Government decree no. 202—
dated September 10, 1934, and published in the Collection of Laws
and Decree of September 11, 1934--which provided for the com
pulsory registry with and offer to the National Bank of precious
metals, foreign exchange, claims on foreign countries, and foreign
securities, resulted in the actual surrender of private holdings of
gold and gold coins and tended to diminish the incentive to hoard.*1
80 See par. 2, p. 56 of the Handbook of Foreign Currency and Exchange, 1930, Trade Promotion Series No.
81 See par. 1, sec. 19, Government decree no. 46 of Feb. 29, 1924, published in the Collection of Laws and
Decrees of Mar. 4, 1924, effective on that date.
11 Decree no. 209 of Dec. 28, 1929, published in the Collection of Laws and Decrees of Dec. 31, 1928.
88 See par. 2, sec. 19, Government decree no. 46 of Feb. 29, 1924.
06111°— 36-----5
62
HANDBOOK OF FOREIGN CURRENCIES
THE GOLD CLAUSE
Czechoslovak courts have not ruled on a gold-clause case in many
years, but under civil law (1811), as interpreted by competent legal
authorities, a private contract specifying payment in tender of a
specific weight and fineness would be upheld. The gold-clause
question docs not arise with respect to the obligations of the Czecho
slovak Government, since none have been issued with such a clause.
SILVER
The following is intended to replace the information on Czecho
slovakia appearing in Trade Promotion Series No. 149, The Monetary
Use of Silver in 1933.
Present legal provisions.—The law of June 9, 1932, effective June 27, 1932,
lists three silver coins: The 5-, 10-, and 20-koruna pieces. The 5-koruna coins
are 0.500 fine; the 10-koruna coins, 0.700 fine; and the 20-koruna coins, 0.840
fine. Their respective gross weights are 7, 10, and 12 grams. . . .
Possibility of increased use of silver without new legislation.—The National
Bank is pursuing the policy of gradually replacing with silver coin the 10- and
20-koruna notes outstanding (Apr. 30, 1935) in a total amount of 377,913,196
koruny. Apart from this, it is estimated that 216,231,187 koruny 21*of silver
coins might be issued within the maximum token coin circulation of 1,200,000,000
koruny fixed by law. Completion of the replacement of the small bank notes
(10- and 20-koruna notes were decreed token coins in 1932) would require about
5,561,000 fine ounces troy of silver and the remaining 216,231,187 koruny—
if issued one-half in the form of 10-koruna pieces and one-half in the form of
20-koruna pieces—would require 3,893,051 fine ounces troy, making possible the
total additional consumption of 9,454,051 fine ounces troy.
Attitude toward silver.—It is believed unlikely that there will be any increase
in the monetary use of silver in the near future over and above that provided for
in the 1932 law. The general attitude continues to be against any additional
increase in the use of silver, particularly such as would involve any sort of re
monetization.
Weight of fine silver in monetary use.—The weight of fine silver contained
in Czechoslovak coins in circulation as of April 30, 1935, was 8,943,882 ounces
troy.25 The proportion thereof held by the general public and banks, com
mercial or other, is not ascertainable. On May 31, 1935, the National Bank of
Czechoslovakia had in its vaults in the form of silver coins and silver bullion
27,935 fine ounces troy. The State Treasury holds no silver whatsoever. Hold
ings of silver at the State Mint at Kremnica on May 31, 1935, aggregated 12,731
fine ounces troy, which, of course, represent potential rather than actual mone
tary stocks.
DANZIG, FREE CITY OF
The monetary unit is the Danzig gulden (abbreviation g. or dg.),
divided into 100 pfennigs, or pfennige. The gulden has a par value
of approximately $0.1899 in terms of United States currency.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
According to the bank-note law of May 1, 1935, legal tender in
Danzig is the gulden equivalent to 0.1687923 grams fine gold, 1
kilogram fine gold equaling 5,924.44 gulden.
There are no restrictions on the importation of foreign currency.
Checks are used to about the same extent as in Germany.
N This fleure represents the difference between the legal maximum token coin circulation of 1,200,000,000
koruny and »83,768,813 koruny (the actual token coin circulation 0(963,768,813 koruny as of Apr. 30. 1935,
plus 20,000,000 koruny which must be reserved for the minting of 1-koruna coins and smaller denomina
tions). The difference represents the maximum expansion of silver coinage under existing laws.
« Converted at 31.104 grams per ounce troy.
63
HANDBOOK OF FOREIGN CURRENCIES
Paragraph 4 of a decree of May 2, 1935, states that the total
amount of the new 10-, 5-, 1-, and K-gulden coins to be put into
circulation may not exceed 30 gulden per capita for those permanently
residing in the Free City, and that of the 10-, 5-, 2-, and 1-pfennig
pieces may not exceed 3 gulden per capita for residents of the Free
City. According to this ratio, the total issue will be limited to about
13,500,000 gulden. (The population of the Free City is approxi
mately 407,000.)
The same decree also stipulates that no one shall be obliged to
accept in payment more than 60 gulden in nickel coins or more than
3 gulden in coins of the other metals (aluminum and bronze and
copper).
Paper Currency of Danzig,1 Dec. 31, 1934
Denomination
Amount
outstanding
(thousands
of gulden)
Dimensions
500 guldens___________________________ 160 by 90 mm........... ........................................
20 guldens. ................................................... 130 by 75 mm.....................................................
Total............................................. .........
1,991.0
77.5
15,246.0
21,605.7
* 38,920. 2
i Engraved on paper of foreign manufacture. Information on the kind of paper used for notes is not avail
able for publication. Legal tender for private and Government debts; a technical exception to this is the
payment of customs duties. Danzig has been included in the Polish customs frontier, and the duties are
payable in zlotys. Actually, however, they are paid in gulden at the current rate of exchange. In 1930 it
was estimated that about 5 percent of the total circulation was composed of Polish, German, United 8tates,
and British notes.
1On July 15, 1935, 28,952,580 gulden.
Coins of Danzig 1
Denomination
Metal of chief value
10 gulden............. .........
5 gulden ......................
1gulden. .................. .
10 pfennigs ................... Aluminum-bronze.............
Fineness
Gross weight
Grams
Grrins
Diam
eter
Thick
ness 1
Milli Milli
meters
1.000 17.0000 262. 3501 meters
34.0
1.000 11.0000 169. 7560
29.0
1.000 5.0000 77.1618
23.5
1.000 3.0000 46. 2971
19.5
3.5000 54.0133
21.5
1.3
(*)
30. 8647
17.5
1.1
(3)♦.950 2.0000
2.5000 38. 5809
19.5
1. 1
«. 950 1.6607 25.7206
17.0
1.0
1According to a decree of the Danzig Senate dated July 15, 1935.
* Unofficial. The law does not specify the thickness of the coins.
*Copper, 0.915; aluminum, 0.085.
4Tin, 0.040; zinc, 0.010.
N ote.—N o statistics are available on the amounts outstanding, since the coins were first put into circu:
lation during the last week of July 1935. Paragraph 4 of the mint law provides, however, that the tota*
amount of the 10-, 5-, 1-, and ^-gulden pieces to be put in circulation may not exceed .'10 gulden per capita
for those permanently resident in the Free City, and that of the 10-, 5-, 2-, and 1-pfennig pieces may not ex
ceed 3 gulden per capita for residents of the Free City.
NOTE-ISSUING AUTHORITY
The Bank von Danzig (Bank of Danzig) is the sole note-issuing
authority. According to a report issued by the bank of July 15,
1935, the notes in circulation aggregated 28,952,580 Danzig gulden.
The Government of Danzig has by law a controlling voice, in the
policies of the bank.
64
HANDBOOK OF FOREIGN CURRENCIES
RESERVE REQUIREMENTS
The bank-note law of May 1, 1935, stipulates that at all times the
Bank of Danzig shall maintam a 30-percent coverage for its obligations
in gold or foreign exchange. No provision is made for the inclusion
of silver in the currency reserve.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
The decree of the Danzig Senate establishing a system for foreign
exchango control in Danzig, dated June 11, 1935, provides for an in
definite ban on the exportation of gold, currency, or precious metals
from the Free City without the permission of the office for Foreign
Exchange Control.
Smuggling of foreign currency and gold is believed to exist on a
moderate scale.
GOLD
The Bank of Danzig reports that its holdings of gold coin and bullion
on July 15, 1935, amounted to 16,675,394 Danzig gulden. Informa
tion is not available as to the weight of this gold.
Gold is not being purchased at a premium by the Government of
Danzig.
Gold hoarding is believed to exist, but this activity has been checked
by the operation of the law of June 11, 1935, establishing a strict
control over foreign exchange operations.
THE GOLD CLAUSE
By a decree of the Danzig Senate dated May 1, 1935, the gulden
was devaluated by 42.37 percent. Paragraph 1 of a decree issued on
May 2, 1935, regarding the regulation of obligations following the
reduction of the gold content of the gulden, provides:
Obligations in Danzig gulden, even if they are payable in gold gulden or con
tain a protection clause of any kind regarding the rate of exchange, can be
redeemed by the debtor, without any further claims against him, in gulden ac
cording to the decree for change in the mint law (devaluation decree), dated
May 1, 1935. The creditor has no right to make further claims.
It would appear from the above ruling that internal obligations in
gulden may be paid in the devaluated currency; that is, that the gold
clause in such contracts is not valid.
SILVER
See Trade Promotion Series No. 149, The Monetary Use of Silver
in 1933.
Information is not available as to the weight of the silver in
monetary use in the Free City.
On August 9, 1935, Consul W. J. Gallman reported from Danzig as
follows:
The Free City of Danzig is now withdrawing the last of its silver coins from
circulation and replacing them with coins minted from cheaper metals. Accord
ing to a decree of the Senate, dated July 23, 1935, the only silver coins in cir
culation in the Free City (5- and 2-gulden pieces) are to be withdrawn, beginning
August 1, and after October 1, 1935, they will no longer be considered as legal
tender. They will be accepted, however, until December 31, 1935, at the
Government cashier’s office in payment, or for exchange.
The annual report of the Bank of Danzig (bank of issue), issued on December
31. 1934, showed that the amount of 5-gulden pieces in circulation on that date
was 4,155,970 and of the 2-gulden pieces, 1,364,204.
HANDBOOK OF FOREIGN CURRENCIES
65
Announcement of the intention to mint new coins and to take the silver money
out of circulation was made by the Senate in a decree, dated May 2, 1935,
amending the mint law. Provision was made in the decree for minting the
following coins:
1. Nickel: 10-, 5-, 1-, and ^-gulden pieces.
2. Aluminum and bronze: 10- and 5-pfennig pieces.
3. Copper: 2- and 1-pfennig pieces.
Replacing the silver money with coins of cheaper metal is calculated to result
in a substantial gain for the Government treasury. The silver gulden pieces
will be melted, and the silver sold on the world market. The money derived
from this source will be more than sufficient to defray the cost of minting the
new coins from the cheaper metals.
DENMARK
The monetary unit is the krone (in English, crown) (abbreviation
kr. or cr.), divided into 100 0re. The plural of krone is kroner. The
par value of the krone is approximately $0.4537.
DESCRIPTION AND CIRCULATION OF CURRENCY
The accompanying tables describe the currency of Denmark.
Foreign currency may be freely imported. Checks are coming to
be widely used. A survey covering 2 days in 1928 indicates that of a
total of 483,800,000 kroner of transactions 215,100,000 were settled
by means of checks.
Paper Currency of Denmark, 1935 1
Dimensions (centimeters)
Denomination
Amount
outstand
ing July 31,
1935 (mil
lions of
kroner)
17.4 by 10.5........................ -..................................
15.6 by 10...............................................................
15.6 by 10................................................................
12.9 bv 8.9...............................-.............................
12.9 by 7.1..............................................................
34.4
120.4
43.0
143. 1
19.5
361.0
1 Printed and engraved on ramie and pure linen-rag paper. Inks are of domestic manufacture for intaglio
printing and letterpress printing. To prevent counterfeiting, copperplate printing combined with a threecolor letterpress printing and watermarks that are distinctive for each denomination are used.
Coins of Denmark, 1935
Gross weight
Denomination
Amount
Thick
Diam
ing July
Metal of chief value Fineness
eter ness 31, 1935
Grams Grains
(millions
of kroner)
25 0re »...................
Nickel......................
5 fire_____
2 0re...............
1 0re__________ .
Total.......................
»0.920
>.920
».920
». 250
s. 250
«. 950
«. 950
«. 950
13.0 200.6206
6.5 100. 3103
3.0 46. 2971
4.5 69.4456
3.0 46. 2971
7.6 117. 2859
3.8 58. 6430
1.9 29. 3215
Milli Milli
meters meters
2.5
31.5
25.5
2.0
20.0
1.6
23.0
1.7
18.0
1.8
27.0
1.9
21.0
1.6
16.0
1.3
9.5
11.0
2.3
5.0
3.8
.8
.7
.5
33.6
* Aluminum 0.060; nickel 0.020.
* Copper 0.750.
* Has a small hole in center.
* Tin 0.040; zinc 0.010.
N ote.—Legal tender limitations on coins are as follows: 2 kroner. 1 krone, and 50 fire pieces up to 20 kroner;
smaller denomination coins up to 1 krone. National and munidpal authorites, however, are obligated to
accept 2- and 1-krone coins without limit in receipt for taxes and uuties.
G6
HANDBOOK OF FOREIGN CURRENCIES
NOTE-ISSUING AUTHORITY
Nationalbanken i Kjobenhavn (the National Bank in Copenhagen)
is the sole note-issuing authority. The amount of notes outstanding
on June 8, 1935, was 371,749,330 kroner.
The Government has by law a controlling voice in the policies of
the National Bank. The original charter granted to the National
Bank in 1818 provided that the Government should appoint a com
missioner (at present this commissioner is always the Minister of
Commerce), who should bo the chairman of the board of directors of
the bank, with no vote but with the right to attend the meetings.
Further, if the bank should decide on a change in the discount rate,
the Minister of Finance was first to be advised, and he was also en
titled to take part in the deliberations of the board of directors, but
without a vote.
According to the law of September 29, 1931, when Denmark aban
doned the gold standard, the bank was exempted from redeeming its
notes in gold and was placed under the supervision of the Govern
ment, and the Minister of Commerce was delegated to exercise this
supervision, which amounts practically to control.
RESERVE REQUIREMENTS
In pursuance of law no. 157 of July 12, 1907, section 7, no. 1, the
reserve prescribed for the circulating note issue was a metallic reserve
fund equal to not less than one-half of the face value of the circulating
note issue. By royal decree of July 26, 1933, issued under act of
May 20, 1933, the reserve ratio was fixed at not less than one-third of
the circulating issue for a period expiring July 31, 1935.28 However,
a tax must be paid on the currency outstanding in excess of this ratio
at the end of each month. The tax must be computed for each
month separately on the basis of the bank rate ruling at the time.
The metallic reserve fund may consist of:
(а ) Legal tender currency at its face value (both subsidiary coins and standard
coins are legal tender).
(б ) Gold in bars and foreign gold coins, calculated at 2,480 kroner per kilogram
of fine gold.
(c) The amounts due the bank from the National Banks of Sweden and Nor
way, carrying no interest and payable on demand. However, the debt of the
Danish National Bank to the two banks named, contracted on the conditions
stated above, shall be deducted from the metal fund.
(d) The bank’s noninterest-bearing demand deposits with the German Reichsbank.
The legal tender in the metallic reserve must amount to not less
than one-fourth of the prescribed metallic reserve, and the parts of
the fund mentioned under (a) and (6) together amount to not less
than three-fifths of the prescribed metallic reserve. In pursuance of
the royal decree of July 26, 1933, the quantity of gold coins and gold
bars in the metallic reserve fund must amount to not less than 30
percent of the circulating note issue.
As stated above, subsidiary coins which formerly were minted of
silver are now made of a copper alloy as authorized by law no. 28 of
February 15,1924, and only a very small quantity of silver coin is now
in circulation.
*« The royal decree of Vug. 1, 1935, provides for a prolongation of this provision until further notice, but
not beyond July 31, 1937.
HANDBOOK OF FOREIGN CURRENCIES
07
Securities as reserve for that part of the circulating note issue not
secured by the metallic reserve must be held in the proportion of 125
kroner of securities for each 100 kroner of notes. The securities must
be easily realizable and safe. The law of July 12, 1907, section 7, no.
3, classes among such securities: Mortgage bonds, in particular, and
foreign bills of exchange, amounts due from correspondents abroad
payable on demand, bonds listed on the exchange according to ex
change notations, and mortgages on real property; but the last-men
tioned must not exceed 6,000,000 kroner.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Importation of gold is unrestricted, but there exists an embargo on
the exportation of gold, under the executive order issued by the Min
ister of Justice on September 2,1931. This order was for an indefinite
period.
There is no embargo on the exportation or importation of silver.
In fact, silver is on the free list of the import control established
January 31, 1932.
There have been no movements of gold during the past 4 or 5 years,
excepting in 1934, when the National Bank deposited 50,100,000
kroner in gold with the Bank for International Settlements at Basel.’7
Silver is imported for the manufacture, of silverware, and there is a
large export of such manufactures. In 1934 imports of silver for the
manufacture of silverware amounted to 29,641 kilograms, and the
exports of silver in the same year amounted to 32,245 kilograms. No
smuggling of gold or silver is believed to exist; if there is any, the
amounts are negligible.
GOLD
On January 15, 1935, the gold reserves amounted to 53,670 kilo
grams, all held by the National Bank. The bank is buying no gold
at present. The official purchase price is 2,480 kroner per kilogram,
and naturally none is offered to the bank, since the world price of
gold is equivalent (June 1935) to 5,000 kroner per kilogram. The
amount of gold hoarded is negligible.
THE GOLD CLAUSE
There has been no legislation in Denmark regarding enforcement
of the gold clause. In domestic contracts, payment in gold is taken
for granted unless it is clearly indicated that the parties to the con
tract intended that payments were to be made in money at current
value, and that it was merely the intention to safeguard the creditor
against a drop in the value of the crown at the time of the closing of
the contract through a rise in the cost-of-living figures. Under these
circumstances the courts, in special cases only, have disregarded the
gold clause.
Moreover, in contracts relating to rent, the gold clause has been
set aside when it would involve a violation of equity to maintain gold
payment, owing to the debtor’s dependence on the financially superior
creditor.
The attitude of the Danish courts is reflected in a proposal made by
an inter-Soandinavian commission for a law regarding letters of
r 15,100,000 kroner of this amount was sold in September 1935 for redemption of a short-term Swiss credit.
68
HANDBOOK OF FOREIGN CURRENCIES
indebtedness. This commission was established to regulate the
liquidation of debts between the citizens of the countries concerned.
The proposal contains the following provision:
A stipulation in a letter of indebtedness may be disregarded in its entirety or
in part if it would be improper or clearly in violation of good business customs
or ethics to apply the-same.
The Danish Supreme Court on October 8, 1933, upheld the gold
clause in a real-estate mortgage case. The mortgagor had, under
protest, paid upon demand, in 1932, the amortization and interest at
the dollar quotation rate, and then brought suit against the mortgagee
to have the gold clause canceled. The lower court held the gold
clause legal, and the Supreme Court affirmed that decision. The
Supreme Court found that the decline of the krone against foreign
currencies had not been of such character or meaning, that all or part
of the decline from the agreed value in a real-estate transaction might
be availed of; since the appellant’s own lawyer drew up the instru
ment, the appellant was presumed to have understood perfectly its
contents and terms.28
SILVER
There is no silver in monetary use at present. By a law of 1873,
silver was abandoned as standard money in Denmark. From 1873
to 1924 it was used in small coins, but after 1924 it was entirely
abandoned. The amount held by the general public is negligible.
DOMINICAN REPUBLIC
The monetary unit is the United States dollar.
DESCRIPTION AND CIRCULATION OF CURRENCY
United States currency was adopted as the monetary standard of
the Dominican Republic in 1897, and since that time United States
paper money and coins have constituted the chief circulating medium
of the Republic. The old Dominican coins which were in circulation
at the time the American dollar was adopted as the standard were
retained, and their ratio of value to the new standard defined. These
old coins are for the most part still in circulation. It is said, however,
that recently there has been a tendency on the part of the public to
withdraw them from circulation, because their bullion value is
allegedly higher than their nominal value. A law is being enacted to
prevent their exportation, but it is not believed that either their
exportation or withdrawal for hoarding purposes has reached impor
tant proportions.
No official data are available regarding currency in circulation.
The following statement is, therefore, based largely on the opinion of
bankers in the Dominican Republic.
The estimated amount of metallic currency in circulation is $400,000. While no separate estimates of the amounts of United States
and old Dominican coins can be obtained, it is probably safe to assume
that they are about equal. The stocks of coins in the hands of the
banks at the end of 1933 amounted to $184,300, of which $106,628
were American and $77,672 old Dominican coins. Since there is a
»•Summary translation from Okonoraisk Revue (The Norwegian Financial Weekly), published in
Oslo, Norway, Oct. 31, 1933.
HANDBOOK OF FOREIGN CURRENCIES
69
tendency on the part of banks to pay out Dominican coins and retain
United States silver for their stocks, it is probable that the total
amount of each in circulation is about the same.
The amount of paper currency in circulation at the end of 1933 was
estimated by bankers of Santo Domingo as about $3,000,000. No
information is available concerning the denominations of bills, all of
which are United States currency, but there are few of higher denom
ination than $20.
NOTE-ISSUING AUTHORITY
There is at present no note-issuing authority in the Dominican
Republic.
RESERVE REQUIREMENTS
Since all of the notes are United States currency, no reserve for their
redemption is held in the Dominican Republic.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
There are no restrictions on the importation and exportation of gold
or silver bullion.
There have been some exports of gold. These represent, in part,
the output of placer mining which is carried on by natives on a
limited scale. The customs statistics indicate that exports of mined
(placer) gold amounted to 115 kilograms valued at $54,721 in 1933,
and to 240 kilograms valued at $185,905 in 1934. In addition, there
were exports of old (scrap) gold amounting to $55,241 in 1933 and to
$189,284 in 1934. The total amount of mined gold exported from the
country in 1933 and 1934 was perhaps twice as high as indicated by
the official figures, since a large part of this gold is exported without
customs declaration in order to avoid the payment of export taxes.
A law is now being enacted to prohibit the exportation of the Do
minican silver coins that are in circulation, on the ground that their
value as bullion at present silver prices exceeds their nominal value.
The largest of these coins, the so-called clavado, has a current value
of 20 cents. It weighs about 25 grams and contains from 0.333 to
0.350 percent of silver. These coins do not appear to be uniform
either in weight or in silver content.
GOLD
So far as can be ascertained, no gold reserves are held in the Repub
lic. The banks operating there are branches of American and Cana
dian institutions and their reserves, if any, are carried by the parent
organizations.
Gold is purchased entirely by private individuals or merchants from
the natives who carry on the placer mining.
Hoarding is not engaged in to any appreciable extent, and no esti
mates of amount hoarded can be obtained.
THE GOLD CLAUSE
So far as can be learned, the status of the gold clause in domestic
contracts has not been legally determined. While contracts fre
quently stipulate United States gold, or the gold peso, it is believed
that no attempt has ever been made to enforce the clause and that
payment in United States currency, which is the currency of the
70
HANDBOOK OF FOREIGN CURRENCIES
country, has always been accepted in the discharge of public or pri
vate obligations.
SILVER
No stocks of silver are held in the Republic and no silver is being
mined at the present time. Since the total amount of metallic
currency in circulation is estimated to be only about $400,000, and
this includes copper and nickel coins, it will be seen that the total
fine silver in monetary use is limited to that contained in the sub
sidiary coins in circulation, the nominal value of which probably
does not exceed $300,000.
See Restrictions on Bullion and Coin Movements above; also
Trade Promotion Series No. 149, The Monetary Use of Silver in 1933.
ECUADOR
The monetary unit is the sucre (abbreviation s/.), divided into 100
centavos. The sucre has a par value of approximately $0.3380.
DESCRIPTION AND CIRCULATION OF CURRENCY
The metallic currency in circulation in Ecuador, in accordance
with the monetary law of March 1927, is described in the table on
Coins of Ecuador. According to the latest bulletin of the Banco
Central, the total value of gold, silver, and nickel included in the
circulating medium on May 31, 1935, amounted to 8,177,722 sucres.
Gold coins of 25 and 50 sucres were authorized by the monetary law
of March 1927, but have not been coined.
There is no prohibition on the importation of foreign notes, but
they have no legal status.
Checks are used comparatively little, but their use is increasing.
Silver coins are legal tender in individual payments not exceeding
10 sucres in amount; nickel coins, in payments not exceeding 2 sucres;
and copper coins, in payment not exceeding 20 centavos. The Gov
ernment, however, accepts all classes of coins in unlimited amount
in payment of taxes, dues, and other fiscal charges.
A decree of December 29, 1935, authorized the issue of 10,000,000
1-sucre silver coins of a gross average weight of 5 grams, containing
20 percent silver, 45 percent copper, and 30 percent nickel. The new
coins will replace the 1-sucre silver coins of 0.720 fineness then
outstanding.
Paper Currency of Ecuador 1
Denomination
Dimensions
Amount
outstand
ing, May
31, 1935
Sucres
42,160,665
*The notes are produced in the United States on special bank-note paper. Among the protective devices
used on the bank notes may be mentioned the use of various and delicate colors interwoven or blended,
much fine and intricate engraving, many serial numbers and letters, and indelible colored dots irregularly
placed.
71
HANDBOOK OF FOREIGN CURRENCIES
Coins of Ecuador
Denomination
value
Fineness
«0. 720
» .720
• . 720
1.000
1.000
1.000
4.950
Gross weight
Grams
Silver content
Diam- ThicketerGrains Grams Grains (mm) (mm)
10.0000 154.3236 7.2000 111. 1133
5.0000 77. 1618 3.6000 55. 5566
2.5000 38.5809 1.8000 27. 7782
4.0000 61. 7294
3.0000 46. 2971
2.5000 38.5809
3.5000 54. 0133
28.75
23.50
18.00
21.50
19.50
18.50
20.50
1.90
1.40
1.20
1.60
1.50
1.40
1.60
i Alloy is copper.
* Used only in small communities.
8 Very seldom used.
4Alloy is tin and zinc.
NOTE-ISSUING AUTHORITY
According to chapter VII of the law of March 4, 1927, the solo
note-issuing authority is the Central Bank, known as the Banco
Central del Ecuador. In accordance with a decree of December 30,
1932, control of the bank is vested in a board of five directors chosen
as follows: One by the National Congress, approved by the Council
of State; one by the President of the Republic; one by the class A
stockholders, which are the associated banks of the country; one by
the class B stockholders; and one each by agricultural, commercial,
and industrial interests. The seat of the bank is in Quito, with its
main branch (which transacts the greater volume of ordinary business)
at Guayaquil. This branch is controlled by three officials—a director
chosen by the Government, a director elected by the central board of
directors, and a manager chosen by that board. There are branch
offices in eight other cities.
The Government exerts considerable influence over the bank, and
in recent years the bank has come to be considered a governmental or
semi-governmental institution. The Government has felt free on
various occasions to request loans from the bank, and on more than
one occasion has exerted influence in the form of proposed legislation
if these loans were not forthcoming. The debt of the Government to
the bank is now over 30,000,000 sucres.
The wording of chapter 1, article 4 of the law of March 4, 1927,
which established the bank, is of interest. It states:
The Central Bank of Ecuador is a private institution, and consequently the
Government of Ecuador contracts no pecuniary responsibility for its operations,
except in cases specially determined by law.
RESERVE REQUIREMENTS
The minimum legal reserve of the Central Bank is placed at 25
percent of its note circulation and deposits (art. 3 of the legislative
decree of Dec. 16, 1932, Registro Olicial No. 21, Dec. 29, 1932).
Article 3 reads as follows:
This reserve shall consist of gold coin and bars, held in its vaults or deposited
in first-class banks abroad, or in transit for account of the Central Bank, and of
deposits at sight or 30 days time in currency convertible into gold in any firstclass bank abroad.
Silver is thus not included in the bank’s legal reserve.
72
HANDBOOK OF FOREIGN CURRENCIES
The legal gold reserve, according to the statement of the hank for
May 31, 1935, comprised the following (stated in book value, at the
old rate of 5.06 sucres to the dollar):
Sucres
Gold in vaults.............................. ........................... 10, 351, 933. 87
Gold in transit or marked for transit (mobilizable) _ 5, 934, 234. 90
Funds immediately disposable abroad__________ 5, 043, 491. 06
Total............................... __________ _____ 21,329,659.83
On May 31 the combined total of note circulation (42,160,665
sucres) and deposits (23,787,948.35 sucres) was 65,948,613.35 sucres,
making the legal gold reserve ratio, 32.34 percent.
In accordance with recommendations of a conference of bankers and
other business men held in Quito in April 1935, the Central Bank also
indicates the value of its reserves on the basis of the current price of
gold in the international market. It was also recommended that
certain other funds be included in the reserve. The statement, as of
May 31, 1935, follows:
Sucre»
Gold in vaults...............
Gold in or for transit________________________
Funds immediately disposable abroad__________
Funds not immediately disposable_____________
Foreign bank notes__________________________
Exchange control funds______________________
Total— ........................................... -.............
36, 538, 340.38
5, 934, 234.90
5, 043, 491.06
5, 132, 487.40
158, 702. 98
1, 473, 752. 20
54, 281, 008. 92
The legal reserve computed on this basis is thus 82.3 percent.
While the statement of reserves in this form is not sanctioned by
law, it indicates that the actual value of the reserves is considerably
higher than the legal requirement.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
By the emergency decree of February 8, 1932, Ecuador abandoned
the gold standard; and the exportation of gold, except by the Govern
ment itself, was prohibited. The text of this decree is published in
the bulletin of the Banco Central for February 1932, and in the
Registro Oficial No. 96 of February 9, 1932.
Complete control of foreign exchange was authorized by the decree
of April 30, 1932 (Registro Oficial No. 161, Apr. 30, 1932), which was
modified by the decree of December 3, 1933 (Registro Oficial No. 47,
Dec. 16, 1933). During that period all foreign exchange not acquired
in illegal channels was controlled by a committee of the Central Bank.
The later decree provided that only 25 percent of the foreign exchange
derived from current export transactions should be delivered to the
Central Bank and that this should be utilized for liquidating “frozen
accounts” due to foreigners. The Central Bank wras permitted to
buy and sell gold within the country, but was prohibited from export
ing it. From all decrees mentioned in this section there has been
exempted the product of an American mining company which makes
exports in the form of cyanide precipitates.
The decree of December 3, 1933, was modified by a decree of De
cember 7, 1934 (Registro Oficial No. 96, Dec. 28, 1934), which permits
the Central Bank, and this institution only, to export gold above its
legal reserve requirement.
HANDBOOK OF FOREIGN CURRENCIES
73
By a decree of May 17, 1935, the exportation of silver in any form
is prohibited. The product of the American mining company is,
however, exempted.
Smuggling of gold and, lately, of silver is known to exist, but its
extent cannot be estimated. Practically all shipments smuggled out
of the country consist of newly obtained gold from placer workings
or gold washings operated by individuals in obscure and distant
parts of the country. It is smuggled over land frontiers or brought
to some port and taken out by a departing passenger who may escape
the customary search made by customs authorities.
The export of silver has been prohibited only since May 1935,17, so
that no large amounts have been smuggled away. There has been
an evident shortage of silver coins in daily circulation for some time
owing to hoarding by the public.
GOLD
The amount of gold held in the vaults of the Central Bank on
May 31, 1935, amounted to 10,351,933.87 sucres in book value.
Gold held by commercial banks was negligible, being only 5,505
sucres. No gold is in circulation. The status of the reserves of the
Central Bank has been discussed previously in this report.
Gold is purchased by the Central Bank when offered but at prices
based on the New York market. Purchases are made from persons
who obtained the gold from individual placer mines and gold washings.
It is estimated that a relatively small proportion of this gold is sold
to the Central Bank.
THE GOLD CLAUSE
By article 16 of the legislative decree of December 16, 1932 (Registro
Oficial No. 21, Dec. 29, 1932, p. 3) any gold clause which may exist
in domestic contracts is invalid. This has not been contested in the
local courts. The article reads as follows:
While this law is in force, the notes of the Central Bank shall have full power.
Consequently all debts contracted within the country shall be extinguished by
payment with notes of the Central Bank, notwithstanding any stipulation to the
contrary.
The remainder of the article concerns foreign obligations.
Debts contracted in foreign currencies shall be paid in notes of the Central
Bank, at the official rate of exchange fixed at the date of the contract. There are
excepted bills of exchange drawn abroad and those debts for which the creditor
proves that payment has been made in foreign currency; in these cases they shall
be paid in notes, but at the rate of exchange existing at the time of payment.
No obligation may be stipulated except in the domestic currency, except the
obligations of international commerce.
SILVER
There are no precise figures to show the exact amount of silver held
in Ecuador. However, the bulletin of the Central Bank lists gold,
silver, and nickel to the amount of 8,177,722 sucres as an item forming
a part of the circulating medium on May 31. The superintendent of
banks estimates that silver is valued, roughly, at 7,000,000 sucres
of this total; the remainder being nickel, since there is no gold in
circulation.
The statement of the Central Bank for the close of May lists hold
ings of 899,201 sucres in silver and other currency (not including gold),
while the consolidated statement of the commercial banks of the
74
HANDBOOK OF FOREIGN CURRENCIES
country includes holdings of 256,865 sucres of silver. The sup
erintendent of banks estimates that the combined holdings of all
banks is, roughly, 1,000,000 sucres of silver, leaving about 6,000,000
sucres in the hands of the public. None is held by the Government.
The exact weight of fine silver in monetary use is not known but,
based upon the legal requirements for coinage, an estimate can be
given. The silver sucre, by the monetary law of 1927 consists of
5 grams of silver, with 0.720 fineness. The 7,000,000 sucres of silver
held in the country would thus be slightly over 25,000,000 grams of
fine silver.
EGYPT
The monetary unit is the Egyptian pound (symbol £E), divided
into 100 piasters; 1 piaster equals 10 milliemes. The par value of the
Egyptian pound is $8.3692, being pegged at approximately 102%
percent of the pound sterling.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
Commencing in December 1935, the Ministry of Finance, through
the National Bank of Egypt, will put into circulation 50-piaster bank
notes to replace a large quantity of silver coinage in circulation.
Paper Currency of Egypt
Denomination
Amount
outstand
ing Nov.
19, 1935
(thousands
of Egyptian
pounds)
Dimensions
2, 759. 2
502.6
6,917.9
6,003.4
8,075. 7
}
332.4
8.4
24,600.0
Total.......................................-......................
Coins of Egypt
Amount
out
standing
Aug.
Diam Thick 193531,
Metal of Fine
eter ness (thou
chief value ness
Grams Grains Grams Grains (mm) (mm) sands of
Egyp
tian
pounds)
Gross weight
Denomination
100 piasters ____
50 piasters................
20 piasters...............
10 plasters...............
5 piasters.................
2 piasters.................
1 millième........... ..
Gold........
...do....... .
Silver.......
...d o _____
...do........
...do..........
Nickel___
0.8750
.8750
.8333
.8333
.8333
.8333
».250
».250
».250
»250
Ho millième_____ Copper__ ». 950
Ho m illième......... ...do.......... ». 950
1 Alloy: 0.750 copper.
8.5000
4. 2500
28.0000
14.0000
7.0000
2.8000
5.5000
4.0000
3.0000
2.5000
4.4000
3.3333
123.5220
65. 5875
432.1060
216.0530
108. 0265
43.2106
84.8780
61.7294
43.5960
38.5809
67.9024
51.4412
Silver content
7.4375
3.7188
23. 3333
11.6666
5.8333
2.3333
114.7678
57. 3896
360.0883
180.0442
90.0221
36.0088
24
20
40
33
26
19
23
21
20
18
23
20
* Alloy: 0.040 copper and 0.010 tin.
1.44
1.09 None
2.25
2.11 5.956.1
1.67
1. 29
1.82
1.58
865.4
1.47
1.47
1. 47
50.7
1.42
6,872. 2
HANDBOOK OB FOREIGN CURRENCIES
75
NOTE-ISSUING AUTHORITY
The National Bank of Egypt is the only note-issuing agency. Its
notes are legal tender by decree of August 2, 1914. The Government
has a controlling voice in the policies of the National Bank, both by
law and in actual practice.
RESERVE REQUIREMENTS
Legal requirements as to reserves against the currency are con
tained in an agreement between the Ministry of Finance and the
National Bank of Egypt, whereby the latter is obligated to maintain
a gold reserve equal to at least 50 percent of the total bank notes in
circulation. This requirement was modified by an inconspicuous
announcement in the Journal Officiel of October 30, 1916, in which
the Minstry of Finance brought to the attention of the public that,
in view of the considerable increase in the demand for bank notes
caused by the requirements of the cotton crop, and, in view of the
lack of opportunity of accumulating a gold reserve beyond the limit
imposed by prudence and foresight, it had been decided to temporarily
cancel the obligation on the part of the National Bank to maintain a
gold reserve equal to at least 50 percent of its total bank-note issues
in circulation. The announcement further stated that the National
Bank had been authorized to include in its currency reserve British
and Egyptian Government short-term securities as backing for any
issue of notes in excess of the gold held by the bank.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
The decree of November 7, 1916, prohibiting the exportation of
either gold currencies or bullion except by special permission of the
Ministry of Finance is still in force. Permission is obtainable only on
condition that an equal amount of gold is imported into Egypt.
There are no restrictions on the importation and exportation of
silver coin or bullion. The supply of silver is sufficient to meet trading
requirements.
Very little gold or silver smuggling exists in Egypt because of the
vigilance of the customs administration in cooperation with the
coast guard, frontier, and other administrations.
GOLD
The note issue of the National Bank of Egypt on October 31, 1935,
amounted to £E25,232,625, and its currency reserves were composed
of the following items:
Gold (46,402,336 fine kilograms)_______________1 £E6, 240, 583
Egyptian Government securities or securities
guaranteed by it__________________________
1, 500, 000
British Treasury bonds______________________
9, 492, 042
British 3 ^-percent war-loan bonds_____________
8, 000, 000
Total...................................................................... 25, 232, 625
’At the mint par ot 7.4375 grams of fine gold per Egyptian pound.
Gold is purchased locally by the Government at about 2 percent
less than the London price. Gold purchased during 1934 was valued
at £E632,704, of which £E364,702 have been sold since December 31,
1934.
76
HANDBOOK OF FOREIGN CURRENCIES
Gold held by the Government (excluding gold held against cur
rency) amounted to £E48,408 on November 10, 1935. The Govern
ment is continuing to purchase and export gold as needed.
Very little gold is hoarded by the public, and bankers and Treasury
officials state that it is impossible to estimate the amount.
THE GOLD CLAUSE
A recent agreement between the Government and the various mort
gage institutions in regard to the land debt problem has been made
possible only by the cancelation of the gold clause. Being thus freed
from the anxiety of having to pay principal and interest on their bonds
in gold, these institutions have agreed to make large concessions to
their creditors. The decree abolishing the gold clause was published
on May 2, 1935, and stipulates that:
The gold clause included in contracts which involve international payments,
and are reckoned in Egyptian pounds, or in any other coinage legally current in
Egypt (francs or Turkish pounds) is declared null and void. This does not
apply to payments to be effected in virtue of arrangements or dispositions relating
to the postal, telegraph, and telephone services.
SILVER
With the object of eliminating surplus old coins, the Egyptian
Government, between March 1 and June 30, 1935, exported silver
coins aggregating in nominal value £E600,000, and containing 67,500
fine kilograms of silver. The metal was sold at prices determined by
averaging the London price on the contract date and the price on the
date of arrival of each shipment.
There is no intention of substituting base-metal coins or of reducing
the fineness of the silver coins remaining in circulation.
The fluctuation of silver in circulation is not influenced by the world
price of silver, but consists of nominal variations in the amount of
coins in circulation according to business requirements.
Silver, Nickel, and Bronze Coins, Sept. 30, 1935
Coins
In store
Silver...................................................................................... » £E l, 786.660
29, 405
5,147
In circulation Total face value
£E 4,169, 479
S39.009
45,577
£E 5,956,139
865,414
50, 724
1 At Ministry of Finance and other Government departments, £E 1,455,652, and at the National Bank
of Egypt, £ K3d 1,008.
ESTONIA
The monetary unit is the kroon (crown) (abbreviation kr., cr., or
ekr.), divided into 100 senti. The par value of the kroon is approxi
mately $0.4537.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
Although there are no restrictions on the importation of foreign
notes, none are in circulation. The exportation of foreign notes,
however, can take place only with the permission of the Bank of
Estonia.
Checks are in common use.
77
HANDBOOK OF FOREIGN CURRENCIES
Notes of the Bank of Estonia are legal tender for payment in any
amount. Paragraph 12 of the monetary law of Estonia provides that
1- and 2-kroon coins and equivalent token paper money shall be legal
tender in amounts not exceeding 50 krooni; 50- and 20-cent coins
(the 25-cent pieces are being gradually withdrawn from circulation)
and equivalent token paper money, in amounts up to 10 krooni; and
coins of smaller denominations, up to 2 krooni.
All notes, with the exception of the 1,000-marka issue, are printed
domestically. The paper used for the kroon notes has a resistance of
700 to 1,000 double bendings on a Shopper machine. To prevent
counterfeiting, the front side of the new bank notes is printed in deepset, protected by two Guillache designs and the iris impression. The
reverse side is made out in bank print, with the Guillache design
executed in duplex print on a two-color machine.
Paper Currency of Estonia
Denomination
Amount
outstanding
Juno 1,
1935 (thous
ands of
krooni)
Dimensions
Treasury bills:1
Notes to remain in circulation:
20-kroon.............................................................
5-kroon...............................................................
2,700
9,809
5,074
18, 409
4, 183
39, 675
35
65
15
37
40
Notes being withdrawn:
5,000-marka- .................................................
1,000-marka (former Treasury bills)..............
' Former 100-marka bills bearing an overprint. The amount outstanding on June 1, 1935, consisted of
exchange money in circulation plus exchange money on hand at the Bank of Estonia and its branch offices.
Coins of Estonia
Gross weight
Denomination
Metal of
chief value
Amount
out
standing
Fine
Diameter June 1,
ness
(mm) 1935 (mil
Grams Grains Grams Grains
lions of
krooni)
0. 500
.500
.500
i .920
» .700
20 senti 3................... . .......do........... « .900
10 senti.......................
* .900
6 senti...........................
5.955
3 mark a...................... .
2.700
2 senti........................... ....... do........... » .955
1 sent............................
» .955
Total..................
1 kroon (old)..............-
12.00
12.00
6.00
6.00
8.50
4.00
2.50
3.40
5.00
3.40
1.90
1 Alloy is aluminum, 0.060; and nickel, 0.020.
* Alloy is zinc, 0.20u; and nickel, 0.100.
*This coin was placed in circulation on Oct. 15, 1935.
* Alloy is nickel. 0.100.
1 Alloy is zinc, 0.015; and tin, 0.030.
GG111°— 36-
6
Silver content
185. 184
185. 184
92. 592
92. 592
131.720
61. 728
38. 580
52. 469
77.160
52. 469
29. 728
6
6
3
92. 592
92. 592
46. 296
30.00
29. 75
25. 25
25. 25
27. 50
21. 25
17. 75
20.00
23 25
1G.00
.2
.1
5.7
78
HANDBOOK OF FOREIGN CURRENCIES
NOTE-ISSUING AUTHORITY
The only currency-issuing authorities in Estonia are the Govern
ment and the Central Bank of issue, the Bank of Estonia.
Under the monetary law, the treasury is authorized to mint and
put into circulation subsidiary coins and paper currency of small
denominations to be used until metal coins of the same denominations
have been issued. The total treasury issue on June 1, 1935, was
8,421,270 krooni, of which 4,986,714 was in circulation and 3,434,556
was on hand as cash in the Bank of Estonia and its branches.
The Central Bank is known officially as the Eesti Pank, or Bank of
Estonia. Paragraph “o” of its statutes endows the bank with the
exclusive privilege of issuing bank notes in Estonia for a period of 25
years, reckoned from the date on which its statutes entered into force
(Jan. 1, 1928). The total note issue of the bank outstanding as of
June 1, 1935, was 37,184,341 krooni.
Paragraph 46 of the statutes of the bank stipulates that it shall not
he subject to any special regulations of the Government or of the
Government’s subordinate authorities during the period for which
it is endowed with the sole privilege of note issue, except those pro
vided for in the statutes of the bank.
According to paragraph 37 of the statutes, the president of the bank
is appointed by the Government for a period of 5 years. Paragraph
15 states that “every shareholder, who has been inscribed in the
register of the bank for not less than 6 months and who owns at least
10 shares, is entitled to speak and vote at the general meeting, each
share conferring upon the holder the right to 1 vote, subject to the
proviso that no one shareholder is entitled to have more than 1,000
votes in his own name. As proxy for other shareholders he may have
the right to cast further votes not exceeding 1,000.”
Approximately 70 percent of the shares of the bank are at present
owned by the Government, the remaining 30 percent being in the
hands of private individuals.
RESERVE REQUIREMENTS
No legal reserve needs to be held against the subsidiary coins and
paper currency issued by the Treasury Division of the Estonian Minis
try of Economic Affairs. As to hank notes, paragraph 58 of the
statutes of the Bank of Estonia siptulates that “the bank shall main
tain a reserve of not less than 40 percent of the amount of its notes in
circulation and demand liabilities.” Paragraph 59 provides that the
reserve shall include only: “ (a) gold coin and bullion owned by the
bank, either in the custody of the bank or deposited in other Central
Banks and earmarked for the Eesti Bank’s account, or in any mint, or
in transit to or from the Eesti Pank; (6) foreign exchange in the un
restricted ownership of the Eesti Pank, provided that in practice and
in fact such exchange shall at all times be convertible on demand into
exportable gold at the center where the exchange is held.”
Neither the Government nor the bank possesses any reserves in
silver.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Under the provisions of paragraph 2 of the law for regulating the
movements of foreign exchange and precious metals, passed on
November 18, 1931, the Government is authorized to issue regula
79
HANDBOOK OF FOREIGN CURRENCIES
tions restricting the exportation from Estonia of precious metals, such
as gold, silver, and platinum, in any form and of any fineness.
The term “ precious metals,” according to paragraph 2 of the meas
ures for regulating movements of foreign exhange passed by the Gov
ernment on June 28, 1933, is construed to mean gold and silver in
bullion and in foreign coin.
Imports of gold, silver, and platinum, whether in bullion, wire, or
sheets, are free of restrictions and are admitted into Estonia without
payment of duty.
It is not believed that smuggling of precious metals out of Estonia
exists.
GOLD
According to a statement of the Eesti Pank dated June 7, 1935, the
bank’s total gold reserves as of that date were valued at 32,566,702
krooni. The weight of the gold holdings of tbe bank is not published.
No gold reserves are maintained by the Government.
Gold in Estonia is purchased by the Central Bank at the world
market price, according to the requirements of the bank.
It is suspected that there is a certain amount of hoarding of gold
by the public. Estonian gold coins have never been minted, but
gold coins, principally old Russian coins, have at times been purchased
from the public by local banks and other institutions. It is believed
that the amount of old Russian and other foreign gold coins still
hoarded by the public is not large.
THE GOLD CLAUSE
According to a law published in the Official Gazette No. 19, of 1934,
any agreement calling for payment in Estonian krooni or in a foreign
currency, whether entered into before or after the enactment of this
law, may be carried out by payment in Estonian legal tender (notes
of the Bank of Estonia) of the sum agreed upon, regardless of any
provision by which it may have been intended to guarantee a speci
fied rate of exchange for the Estonian kroon.
SILVER
The weight of fine silver contained in the subsidiary silver coins
issued by the Estonian Treasury Division that were in circulation as
of June 1, 1935, was as follows:
Kilograms
Held by the general public__________ ________ ______ 5, 376. 0
Held by the Central Bank__________________________3, 261. 5
Held by the Government___________________________ 654. 0
Total.......... — ...................................................... .. 9,291.5
FINLAND
The monetary unit is the markka (plural markkas; abbreviation
mk. or FMK), divided into 100 pennia. In English the markka is
referred to as mark (plural marks). The markka has a par value of
approximately $0.0426.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
There are no old issues of notes in circulation.
80
HANDBOOK OF FOREIGN CURRENCIES
The use of checks in Finland is increasing, but for the most part
Finns are reluctant to accept checks, because the population does not
use commercial banking facilities to any great extent.
The coins are, in private transactions limited in legal tender as
follows:
Copper coins, to 10 markkaa.
Nickel coins, 25 and 50 to 20 markkas.
Nickel 1-markka coins, to 100 markkaa.
Bronze 5-, 10-, and 20-markka coins, to 500 markkaa.
No old issues of coins are in circulation. The nickel 25- and 50penni coins and the silver 1- and 2-markka coins issued under the
Grand Ducal regime may be used, but as these coins have a higher
value than the present currency they are not generally seen.
Paper Currency of Finland 1
Denomination
Dimensions
Amount
outstanding
Dec. 31,
1934
(millions of
markkaa)
381.3
223.8
473.4
103.2
59.2
1.3
1.0
1,243.2
‘ Engraved on rag paper of domestic manufacture. The protective designs used to prevent counterfeiting
of bank notes are said to be in secret markings in the design as well as other secret devices.
N ote.—No legal tender limit is specified for notes.
Coins of Finland 1
Gross weight
Denomination
Metal of Fine
chief value ness
Gold content
Amount
out
Diam Thick standing
eter ness Dec. 31,
(mil
Grams Grains Grams Grains (mm) (inrn) 1934
lions of
markkaa)
200 markkaa ......... Gold......... ‘0.900 8.4210 129. 9567 7.5789 116.9610 22.50
100 markkaa. - ....... ...do........ . ‘.900 4.2105 64.9783 3.7895 58.4805 18.50
20 markkaa............. Copper__ >. 920 13.0000 200. 6206
31.00
>.920 8.0000 123. 4589
27.00
*.920 4.5000 69. 4456
23.00
/*21.00
‘.250 4.0000 61.7294
1 markka............... Nickel___
V24.00
‘ .250 2.5500 39.3525
18.50
‘ .250 1.2750 19. 6763
16.00
10 pennia................. Copper__ >.950 5.0000 77.1618
22.00
>.950 2.5000 38.5809
18.00
».950 1.0000 15. 4324
1 pen ni.....................
Total.............
1.67 }
1.75
1.37
.88
1.87
1.37
1 Alloy is copper.
* These coins are referred to as aluminum bronze, containing aluminum 0.050 and nickel 0.020.
* 1928 issue.
* According to the law of 1920, the gross weight of this coin is 5.1829 grams.
* Tin 0.040; zinc 0.010.
0.6
.4
5.6
30.6
27.7
28.5
8.3
7.5
3.4
3.4
.7
116.7
HANDBOOK OF FOREIGN CURRENCIES
81
NOTE-ISSUING AUTHORITY
According to the law dated December 21,1925, the Bank of Finland,
the Central Bank (official name in Finnish is Suomen Pankki) has
the sole right to issue notes within the Republic. The management
and operation of the bank is supervised by representatives of the Diet,
“who shall observe the regulations and instructions of the Diet in
performing their functions.” The actual operation of the bank is,
however, conducted by a board of managers consisting of a chairman
and maximum of four members (there are three at present), all
appointed by the President of the Republic. In case of a vacancy on
the board, the Diet’s bank representatives shall propose to the
Government the appointment of a proper person for the position. In
actual practice the Government controls the bank’s policies.
RESERVE REQUIREMENTS
The legal requirements as to reserves against the currency are
explained on pages 21, 22, and 25, and in table 1 of the Bank of
Finland Yearbook for 1934. It will be noted that the law does not
specify that silver may be used as legal reserve against the amount
of outstanding currency. The Bank of Finland is reported to possess
very little, if any, silver in the form of coins or bullion.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
There are no restrictions on the importation or exportation of gold
or silver. The customs tariff stipulates that gold and silver bullion
may be imported duty-free.
As there are no embargoes or restrictions on gold and silver imports
and exports, there is no cause for smuggling.
GOLD
On June 14, 1935, the gold reserve held by the Bank of Finland
totaled 12,202.741 kilograms, and was carried on the balance sheet
at a value of 323,600,000 markkaa, or at about 50 percent of its
present market value.
Small quantities of gold are purchased by the Bank of Finland
from time to time on the London market at prevailing prices. During
1934 the bank purchased 6,000,000 markkaa of gold and sold, prin
cipally to goldsmiths, 6,100,000 markkaa. At the end of 1934 the
gold reserve was valued at 322,500,000 markkaa.
For bookkeeping purpose the gold reserve on hand as of June 15,
1935, was valued at 26.38888 markkaa per gram. The bank’s selling
price for gold is at present 54.9 markkaa per gram, or slightly above
the rate quoted in London. The leading users of gold are therefore
making their purchases in the London market rather than from the
Bank of Finland.
Hoarding is not being practiced to any extent, if at all, for the
following reasons: (1) There are few persons with sufficient means;
(2) interest rates are comparatively high in Finland, and, therefore,
there would be no justification for keeping available funds inactive;
(3) there have been no gold restrictions in effect since the end of 1931,
and there is, therefore, no tendency to invest funds in gold; and (4)
business conditions have improved appreciably during the past 2
years and the amount of foreign exchange held by the Bank of
Finland has increased; hence there is no fear that financial condi
tions will become unstable.
82
HANDBOOK OF FOREIGN CURRENCIES
THE GOLD CLAUSE
There is no law in Finland concerning the legal status of the gold
clause in domestic contracts. The only pertinent legislation con
cerns the release of the Bank of Finland from the liability to redeem
its notes in gold or foreign currency. This legislation has been issued
and renewed for terms of 1 year since 1931. On December 8, 1934,
the President of the Republic issued the latest decree, effective to
the end of 1935, releasing the bank from the obligation of redeeming
its notes in gold.
SILVER
No changes affecting the status of silver have occurred since the
publication of Trade Promotion Series No. 149, The Monetary Use
of Silver in 1933. The Bank of Finland is reported to hold very
little, if any, silver.
Silver is not used in the monetary system of this country, and
there is no information available as to the amounts held privately.
FRANCE
The monetary unit is the French franc (abbreviation f. or fr.),
divided into 100 centimes. The franc has a par value of approxi
mately $0.0663.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
The notes are unlimited legal tender.
Paper Currency of France, Dec. 26, 1934
Denomination
Dimensions
Amount
outstand
ing (bil
lions of
francs)
47.20
7.46
23. 76
13.18
.02
.08
. 10
81.86
1 Includes both old and new models, for which no separate statistics are available at present.
* The 5-, 10-, and 20-irauc notes are still in circulation but are being progressively withdrawn.
83
HANDBOOK OF FOREIGN CURRENCIES
Coins of France
Denomination
Metal of
chief value
Gold or silvor
content
Amount
out
stand
Diam
ing
on
Legal
Fine
eter tender Aug. 1,
ness
(mm)1 (francs) 1935
(mil
Grams Grains Grams Grains
lions of
francs)
Gross weight
Gold............. 0.900 6. 55 101.0820 5.895 90. 9738
.680 20.00 308. 6472 13. 600 209. 8801
10 francs............. -- ..do.......... .680 10.00 154.3236 6.800 104.9400
1. 000 6. 00 92. 5941
1. 000 12. 00 185. 1882
8. 00 123.4588
(8)
4. 00 61. 7294
(8)
2. 00 30. 8647
(8)
5. 00 77. 1618
(•)
4. 00 61.7294
(•)
2.00 30.8647
....... do........... m
21
35
28
24
31
27
23
18
24
21
17
246. 0
(*)250 « 789.3
250 2, 121.8
1(H) • K00. 4
100 • 377. 5
50
359. 3
50
522. 2
50
330.1
10 « 76.0
10 • 57.8
10 «23.2
1 Data on thickness not available.
* Not yet in circulation (Aug. 10, 1935). In both gold and silver coins the alloy used is copper.
* Unlimited.
* Minted but unissued.
* Provisional coins.
*July 1. 1935.
f Coins for permanent circulation.
* Copper 0.910; aluminum, 0.90. These coins are referred to as aluminum-bronze.
* Copper, 0.750; nickel, 0.250. These coins are referred to as nickel-bronze.
NOTE-ISSUING AUTHORITY
The sole right of note issue is vested in the Bank of France. The
state intervenes in the affairs of the Bank of France only in an
indirect manner, namely: (a) The governor and two assistant gover
nors of the bank are nominated by the state; (b) three treasurersgeneral-paymasters, Government officials, must form part of the
council of regency.
The council of regency of the Bank of France is made up of a
governor and 2 assistant governors nominated by the state, 3 general
paymasters, and 12 other directors who represent different industries
and trades and are elected by the stockholders. The only strong
influence the Government can exert on the council is in the appoint
ment of governors, but new nominations can be made only when the
entire council of regency opposes the policy followed by the governor.
The governor has the right to veto any measure taken by the
council of regency but can take no action alone nor impose his will
upon the council. The Government’s policy up to the present seems
to have been to leave the Bank of France more or less on its own
initiative and not bring pressure on the council of regency.
RESERVE REQUIREMENTS
The Bank of France is obliged to hold a reserve in gold bars and
coin equal to at least 35 percent of the note issue and demand liabili
ties (monetary law of June 25, 1928, art. 4).
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
The Bank of France is obliged to convert its notes into gold on
demand. It may do so either through legal gold currency, or in
gold bullion at the rate of 65.5 milligrams of gold, 0.900 fine, per
franc. The bank may, if it so desires, limit redemption to its head
84
HANDBOOK OF FOREIGN CURRENCIES
offices and to minimum quantities fixed by agreement between the
Minister of Finance and the bank—at present 215,000 francs.
Tiie Bank of France must purchase gold at its head office and such
branch offices as it may designate, on the basis of 1 franc per 65.5
milligrams 0.900 fine, without charging interest. It may oharge the
seller the cost of coining at the Paris Mint’s rate (40 francs per kilo
gram of fine gold, or 44.44 francs per kilogram 0.900 fine). Assay
costs, also, are charged to the seller.
Importation and exportation of gold and silver is unimpeded.
GOLD
The gold reserves of France are given in the Federal Reserve Bulle
tin of January 1936, as about $4,395,000,000 as of December 31, 1935.
No official estimate on gold hoarding is available. However,
according to one prominent banker the amount would be approxi
mately 10,000,000,000 francs, while another banker estimates the
amount between 10 and 12 billion francs.
THE GOLD CLAUSE
There is no French legislation prohibiting the gold clause in con
tracts.29 The financial law of June 25, 1928, canceled contracts
previously made on a gold basis, stating that these could validly be
discharged by payment of their face value in new francs. Article 2
of this law, however, exempted from these provisions international
payments contracted for before promulgation of the law and in which
payment in gold had been stipulated. This applied particularly
to bonds.
Up to the present time, 27 cases on this question have been passed
upon by the courts. Seven of these, including those of the Credit
Foncier Canadien, the Port de Rosario, and the City of Tokyo, have
come before the Court of Cassation; 7 others, the most outstanding
of which are the Credit Foncier Mexicain, Est-Lumiere and the Chemins de Fer Portugais, before the Court of Appeals; and 13 cases, in
cluding those of the Etat de Rio Grande, the Port of Para, the
Chemins de Fer de Buenos-Ayres, before the lower courts.
The courts have found the gold clause valid in all cases where it
was proved that there was an international factor and where there
had been intent to repay in such a form as to protect investors from
currency fluctuations. This was determined by examining legal
notices, advertising and descriptive matter, etc.
The courts had, therefore, to determine two questions: (1) What
was the nature of the contract—that is, whether it did or did not
contain an international element; and (2) admitting that there was
an international element, whether the terms of the contract showed
that the parties had in fact intended a repayment in gold. Where
the court ruled the contract was international and that the parties
had in view a payment on a gold basis, the debtors were held respon
sible for payment as specified in the contract. In domestic contracts,
in accordance with the law of 1928, the gold clause was held to be
w It might be well to note that although a contract which obligates the debtor to pay in gold is at present
quite valid, it would most probably be of little help to the creditor in the event of devaluation of the franc;
in that event a provision similar to that contained in the law of 1928 would probably be enacted.
HANDBOOK OF FOREIGN CURRENCIES
85
invalid and payment in new paper francs was held to be a valid
discharge of the debtors’ obligation.
In the Port of Rosario case, the port company was formed to work
in a foreign country with funds borrowed and raised in France,
returns to be made by paying the bond coupons and stock dividends.
This differs from the case of the Compagnie du Gaz Lebon or that of
the St. Gobain Co., which have factories abroad but only as branches
of their establishments in France. The Societe du Port de Rosario
invested practically all of its capital abroad for the construction and
operation of the port works in Rosario. The money borrowed was
sent abroad in two forms: As merchandise exported to Argentina for
the company, and as cash for the salaries of the employees of the com
pany in Argentina. The Court of Cassation held that payments should
be made in gold as provided in the contract, stating that the company
had solicited and obtained funds mostlv in France by stipulating
payment in gold and had invested such funds abroad—obtaining
foreign currency for them—to be employed in the payment of interest
in France, this being of the nature of an international settlement.
A similar case was that of the Credit Foncier Franco-Canadien,
whose bonds were issued in Switzerland and France and were payable
in Paris and Geneva, and were negotiable on stock markets in both
cities. The court ruled that these bonds should be repaid in Swiss
francs as the choice of two currencies was given to subscribers in order
to protect them from currency fluctuations.
In the case of the City of Tokyo, the bonds issued amounted to
£9,175,000 sterling and were simultaneously issued in London, New
York, and Paris. As the basic currency used in the loan was the
pound sterling, this was an international contract, and the French
court ruled that payment must be made in pounds sterling. The
City of Tokyo, however, has defaulted this payment.
In the Est Lumiere case, the court ruled that the gold clause con
tained in the contract was invalid, as the money was mostly borrowed
in Franco, used in France, and the distribution of electricity was
made in France. This was therefore to be considered as a domestic
contract.
SILVER
Silver for coinage is purchased as required. The coinage of
3,500,000,000 francs of silver is authorized by the laws of June 25,
1928, and December 23, 1933. On December 31, 1934, 2,700,000,000
francs of silver coins were outstanding.
Since June 1928 France has been on the gold standard and the notes
of the Bank of France are covered by gold. The Bank of France does
not, accordingly, keep any silver in its monetary reserve.
When the present monetary system went into effect in 1928, the
old silver coins were recalled from circulation and turned over to the
mint. The total amount was 3,551 metric tons (0.900 fine), of which
1,470 metric tons came from the Bank of France. Of this amount, the
mint sold 1,015 tons and used 121 tons in minting operations for
foreign countries. The rest was used in making silver coins for France
and the colonies, excepting 130 tons, which remains in the vaults of
the mint.
86
HANDBOOK OF FOREIGN CURRENCIES
FRENCH INDOCHINA
The monetary unit is the piaster, divided into 100 cents. The
piaster has a par value of 10 French francs, or approximately $0.6630.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
No official statistics concerning the total metallic circulation in
French Indochina are available. The only definite information at
hand concerns the exports and imports of silver piasters and frac
tional currency since 1884. Coins minted during the period 1884 to
1935 amounted to 27,400,000 piasters. Small coins withdrawn from
circulation during this period amounted to 8,232,834 piasters, leaving
a balance of 19,167,166. It is impossible to obtain any definite
figure as to the total value of fractional currency still in circulation,
but expert opinion estimates it to be about 11,500,000 piasters.
On the basis of the foregoing figures, the following estimate of
metallic currency in circulation, in the Treasury, and in the banks,
as of December 31, 1934, is submitted:
Piasters
Sapeques_____________________________________
1-cent bronze pieces____________________________
5-ccnt bronze pieces____________________________
10-cent silver pieces____________________________
20-ccnt silver pieces____________________________
1-piaster silver pieces___________________________
Total.....................................................................
This estimate is based upon the following figures:
100, 000
1, 699, 833
500, 000
8, 050, 000
7, 413, 000
16, 000, 000
33,762,833
Estimated Metallic Circulation in French Indochina
ITeld by
Treasury
Classification
Total.............................................................-
Held by
banks
In circula
tion
Total
1 2,170,056 » 12.012,800 i 1, 787,144 i 16,000,000
» 5, 662,833
i 600,000 * 11, 500,000 * 17, 762,833
7,832,889 12,642,800 13, 287, 144 33, 762,833
1 Authenticated figure.
* Estimate based upon information supplied by leading bankers.
Paper Currency of French Indochina 1
Denomination
Dimensions
Amount
outstand
ing June
30, 1935
(millions of
piasters)
1178 by 192 millimeters (old).............................. }
}
Total. ....................................................
» There are no legal tender limits on notas.
38.9
17.8
25.8
31.3
113.8
87
HANDBOOK OF FOREIGN CURRENCIES
Coins of French Indochina 1
Denomination *
Metal of chief
value
Silver
Fine
ness
3 0.900
3. 680
3. 680
3. 250
«. 950
<.950
li cent3..................... « ........................ o
Gross weight
Silver content
Diam Thick
eter ness
Grams Grains (mm) (mm)
Grams
Grains
20. 0000
5.4000
2. 7000
5. 0000
5.0000
4.0000
«
308. 6472 18.0000 277. 7825
83.3347 3. 6720 56. 6676
41.6674 1.8360 28.3338
77. 1618
77.1618
61.7280
(0
(0
35
26
19
24
26
21
2.50
1.13
1.04
1.50
1.20
1 Regarding circulation figures, see text.
* Unlimited legal tender for 1 piaster; 20-, 10-, 5- and 1-cent legal tender to 2.50 piasters; ^j-cent legal
tender to 2 piasters.
3 Alloy is copper.
*Tin 0.040; zinc, 0.010.
* Specifications determined by Governor General by proclamation of July 5, 1935.
4 Contains center hole 5 millimeters in diameter.
TTo be determined by Governor General according to decree of May 8, 1934.
NOTE-ISSUING AUTHORITY
The only note-issuing agency in French Indochina is the Bank of
Indochina, which for a period of 25 years from March 31, 1931, is the
bank of issue in the French colony. Its notes are legal tender through
out the Union. Attached to the law of March 31, 1931, which was
promulgated in French Indochina May 26, 1931, is a convention
between the French Government and the bank, and the statutes
constituting the bank and regulating its operations.
The French Government has the right to nominate 6 of the 20
directors and owns in its own name or in that of the French colonies,
48,000 shares out of a total of 240,000 shares. It also has the right
to approve the nomination of the managing director and to keep a
control over the bank’s operations through the commissioner of the
Government.
RESERVE REQUIREMENTS
The Bank of Indochina is required to keep a reserve in silver or
gold, or in currencies payable in "silver or gold, amounting to at least
one-third of its liabilities on outstanding notes and accounts current.
On June 30, 1935, the bank held to cover its note issue and accounls
current the following:
Piasters
Silver................. .................................................... .......
Currencies payable in gold francs________________
Various currencies_______________ _____________
Total...................................................... ............
These reserves were to cover:
Currency circulation_______________________
Current accounts__________________________
Treasury account current___________________
Total.................................................................-
12,042,752
50, 013, 316
7,004,836
69,061,104
102, 185, 455
13, 433, 275
2, 758, 617
118,377,347
In other words, the Bank of Indochina held reserves equivalent to
58.3397 percent of its liabilities.
88
HANDBOOK OF FOREIGN CURRENCIES
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
There appears to be no regulation restricting the exportation of
gold or silver from French Indochina. A decree dated May 28, 1925,
restricts the export of coins of bronze and aluminum to France,
French colonies, and French protectorates.
The importation of silver coins and other metal coins, with the
exception of gold, is prohibited by the French decree of June 29, 1929.
There is no restriction upon the importation of gold and silver in
bullion form.
GOLD
It is believed that neither the Government nor the Bank of Indo
china holds any gold in its coffers or earmarked in other banks. The
bank does hold in its note fund some 57,000,000 piasters in other
currencies, most of which are payable in gold. Of this sum 50,000,000
piasters are in French francs which are convertible into gold at the
Bank of France.
No premium is being paid for gold in French Indochina, and there
is no hoarding of gold. The natives are, however, accustomed to
invest their surplus wealth in jewelry. An estimate of the amount of
gold in the hands of natives in this form cannot be made. During
recent years it is certain that such holdings have decreased, the
native finding it necessary to sell his jewelry in times of stress. Ex
ports of melted-down jewelry during the years 1931, 1932, and 1933
were as follows:
Exports of Melted-Down Jewelry
Destination
Quantity (kilograms)
1931
1932
1933
1,610
8,088
415
8,503
1,245
1,245
1,610
Value (thousands of francs)
1931
1932
1933
25,358
132, 545
6,381
138,926
17, 225
17,225
25,358
THE GOLD CLAUSE
The gold clause has not been used in domestic contracts and, so
far as the American consulate can learn, no decision concerning a
contract involving payment in gold has ever been made by the local
courts. The silver piaster is legal tender without limit.
SILVER
As stated under “Description and Circulation of Currency”, no
definite information as to the total amount of silver coins in circula
tion in French Indochina is obtainable. The only reliable statistics
are those showing the coins held in the Treasury of French Indo
china and the metal stocks held by the Bank of Indochina. Based
on these figures, the American consulate at Saigon, after consulting
leading bankers, prepared an estimate of the total weight of silver,
in kilograms fine, used for monetary purposes in French Indochina.
This estimate is as follows:
89
HANDBOOK OF FOREIGN CURRENCIES
Amount of Silver Used for Monetary Purposes
[AU weights shown in fine kilograms]
Coins
Silver piaster...........................................................
1Authenticated figure.
* Estimate.
Govern
ment
Banks
General
public
Total
»39.061
»43.913
i 51,614
« 134, 588
» 216. 770
* 4.627
* 5,508
3 226, 905
«32. 169
* 87. 563
* 90. 676
* 210, 408
i 288.000
* 136. 103
* 147, 798
* 571,901
GERMANY
The monetary unit is the reichsmark (abbreviation RM), divided
into 100 reichspfennige. The reichsmark has a par value of approxi
mately $0.4043.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables and also
under the heading “Silver”, below.
Silver coins are legal tender for payments not exceeding 20 reichs
marks; and nickel and copper coins, for payments not exceeding 5
reichsmarks. Gold coins were minted before the World War and are
legal tender without limitation (art. 4 of the bank law of Aug. 30,
1924), but they are now out of circulation.
Foreign notes may be freely imported, but none are in circulation
as, according to a 1935 decree, they must immediately be surrendered
to the Reichsbank.
Coins of Germany
Denomination
Metal of Fine
chief value ness
20 reichsmarks >... Gold.........
10 reichsmarks »___ ...do..........
5 reichsmarks 1__ Silver3__
5 reichsmarks 4__ ...do-3........
3 reichsmarks *__ .. .do-3........
2 reichsmarks 4__ ...do-3.......
2 reichsmarks 2 ...do.3........
l reichsmark 4....... ...do-3.......
1 reichsmark____ Nickel___
50 reichspfennige.. ...d o ........ .
10 reichspfennige.. Copper 8. .
5 reichspfennige...
4 reichspfennige ...do®.......
2 reichspfennige... ...do.8........
1 reichspfennig___
Total...........
0.900
.900
..500
. 900
.500
. .500
.625
.500
1.000
1.000
'.915
’.915
*.950
».950
'.950
Grams
7.9650
3.9825
25.000
13.8890
15.0000
10.0000
8.0000
5.0000
4. 8000
3.5000
4.0000
2.5000
3. 3333
2.0000
Gold or silver
content
Amount
out
standing
Diam Thick J une 30,
eter ness
1935
(millions
Grains Grams Grains
of reichs
marks)
Gross weight
122.9180
61.4590
385. 8089
214.3406
231.4853
154. 3236
123. 4589
77.1618
74. 0736
54.0132
61.7294
38. 5809
51. 4412
30.8647
7.1685
3. 5842
12.5000
12. 5000
7. 5000
5.0000
5. 0000
2.5000
110.6262
55.3131
192.9015
192.9045
115. 7427
77. 1618
77. 1618
38. 5809
22.5
19.5
36.0
30.0
26.0
22.6
20.0
1.40
.90
3.00
2.40
2.59
2.20
1.57
1.50
1.80
1.50
1.40
1.10
0)
0)588.4
364. 6
10 8.3
213.5
12. 6
100.0
198. 1
74 0
29. 2
4. 5
7.3
“ 1.663. 0
[ Prewar coin; not in circulation.
* Old.
3 Alloy is copper.
4New.
J Withdrawn since Jan. 1, 1935. v
: Called aluminum-bronze coins.
' Alloy is aluminum.
* Withdrawn since Oct. 1, 1933.
* Tin, 0.040; zinc, 0.010.
!° Withdrawn from circulation since Jan. 1, 1935. Actual total as of June 30, 1935, is, therefore, 1,654.7
reichsmarks
90
HANDBOOK OF FOREIGN CURRENCIES
Paper Currency of Germany 1
Denomination
Reichsbank:
Total...............................................................
Notes of private banks: *
In rentenmarks: *
1,000....................................................................
600.....................................................................
100-............................................. -............
60.........................................................................
10.........................................................................
6..................................... ....................................
Dimensions
Amount
outstand
ing July
31, 1935
(millions.
71.
814.
1,573.
1,332.
87.
3,877.
34.
127.
161.
4, 2G7.
34/
42.!
287.4
19.',
5.1
390.1
1 Printed on domestic fiber-faced paper specially watermarked. To prevent counterfeiting special color
combinations are used and ornamental bands are printed on the notes.
*The four state banks of Bavar.a, Baden, Saxony, and Württemberg possess the right of issue up to
Jan. 1. 1936. These notes have not yet been recalled.
* One rentenmark equals 1 reichsmark. The circulation of rentenmarks is gradually decreasing.
NOTE-ISSUING AUTHORITY
No Government notes are issued in Germany. The chief noteissuing authority is the Reichsbank (the Central Bank). Other note
issuing banks are The Deutsche Rentenbank, Berlin, which issues
so-called rentenmark notes, secured by first mortgages in gold marks
on the entire German landed property. In addition there are the
so-called private note banks, the Bayrische Notenbank, Muenchen;
Badische Bank, Karlsruhe; Saechsische Bank zu Dresden, Dresden;
and Wurttembergische Notenbank, Stuttgart. These banks have the
right to issue notes in denominations of 50 reichsmarks and upward
on the same terms as the Reichsbank. The notes of the Reichsbank
and the Deutsche Rentenbank circulate in the whole country, the
latter, however, not being legal tender. The circulation of the private
bank notes has been limited, and the note-issuing right of the private
note banks will expire at the end of 1935. The amount of Renten
bank notes outstanding on July 15, 1935, was 371,000,000 renten
marks; and that of private bank notes, 160,000,000 reichsmarks.
There is no other note-issuing agency in Germany. According to
article I of the law of August 30, 1924, the Reichsbank is independent
of the Reich Government; but article VI gives the President of the
Reich, now the Fuehrer, the authority to nominate and to recall the
Reichsbank President and members of the board of directors. In
actual practice, since 1933 the Reichsbank has not been independent
of the Government, as was originally intended. The Government
possesses a decisive influence on the policies of the Reichsbank,
especially in view of the fact that the Reichsbank President is also
Acting Minister of Economics.
91
HANDBOOK OP FOREIGN CURRENCIES
RESERVE REQUIREMENTS
German currency is governed by the law of August 30, 1924, and
its amendments. The notes of the Reichsbank (as well as those of
the private-note banks) must have a minimum cover of 40 percent
of their nominal value in the form of gold and foreign exchange.
Three-quarters of this cover must consist of gold and the remainder
must be of good commercial paper, but silver cannot be used as cover
for the notes issued. Under exceptional conditions these provisions
can be suspended. For the present, the convertibility of bank notes
has been discontinued.
RESTRICTIONS ON BULLION AND COIN MOVEMENT
According to the “Gesetz lieber die Devisenbewirtschaftung” of
February 4, 1935, the purchase, importation, and exportation of gold
and silver is permitted only with permission of the Foreign Exchange
Board (Reichsstelle fuer Devisenbewirtschaftung). The duration of
the law is not limited.
As far as gold and silver are concerned, smuggling is not believed
to exist to any appreciable extent, but attempts to smuggle mark
notes and foreign currency out of the country are discovered from
time to time.
GOLD
Gold Reserves, Dec. 31, 1934, and June 30, 1935
Dec. 31, 1934
Held by—
Value (RM)
79,102,000
73, 098,000
Total........................................................................... 152, 200,000
June 30, 1935
W eight1
Weight1
(kilo Value (RM) (kilo
grams)
grams)
28,400 85,613,000
26, 200 * 73, 100,000
54,600 155, 497,000
30,700
» 26, 200
56,900
12,784 reichsmarks equal 1,000 grams fine gold.
*Estimated.
Gold is not being purchased at a premium by the Goverhment or
the Central Bank.
Gold hoarding by the public is forbidden, and hoarded gold must
be delivered to the Rcichsbank. The amount of gold outside the
Reichsbank and the private banks is believed to be insignificant.
THE GOLD CLAUSE
The gold clause in private contracts is permissible and is strictly
respected in German judiciary practice. (As to existing provisions
for the conversion of ‘gold marks ’ in private contracts, see emergency
decree of Oct. 10, 1931—Reichsgesetzblatt 1931, pt. I, p. 569.)
SILVER
Silver coins can be put into circulation only by the Reichsbank.
Since the law of 1931, the per capita circulation of silver has been
extended to 30 reichsmarks, so that a total of about 2,000,000,000
reichsmarks in silver may be issued, including the Saar district. The
weight of silver held in the form of coin is negligible.
The replacement of the old silver coins by new coins of 5 and 2
reichsmarks, as reported in the addendum of Trade Promotion
92
HANDBOOK OF FOREIGN CURRENCIES
Series No. 149, is now in the course of execution. On June 30, 1935,
silver coins in circulation were as follows:
Silver Coins in Circulation in Germany on June 30, 1935
Old issues
Denomination
6 reichs 3 reichs 2 reichs
marks marks 1 marks
New issues
1 reichs 5 reichs 2 reichs
mark
marks marks
Total
Amount *.......................... 588.404.000 8, 284, 602 213, 493, 570 100, 046, 112 364,621,505 12,598,002 1,287,447,791
Number of coins.............. 117,680,800 2, 761, 534 106, 746, 785 100.046,112 72,924,301 6,299,001 406,458,533
Weight of fine silver
(kilograms)................... 1,471,010 20,712 533, 734 250,115 911,554 31,495 3, 218,620
i Withdrawn as of Jan. 1, 1935.
* Deutscher Keichsanzeigor u. Preussischer Staatsanzeiger of July 8. 1935.
The weight of fine silver in monetary use is as follows: Silver held
by the general public, 3,218,620 kilograms; held by the banks,30 1,494
kilograms.
GREECE
The monetary unit is the drachma (abbreviation d. or dr.), divided
into 100 lepta. The drachma has a parity of $0.0220.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
The circulation of coins in Greece is governed by laws nos. 3424 and
4502, and a decree of August 21, 1930. The maximum limit for the
circulation of 20-, 10-, and 5-drachma coins is 150 drachmai per
capita, or a total of 930,000,000 drachmai, based on the latest (1928)
official census of 6,200,000 inhabitants; and of 2- and 1-drachma
coins, and 50-, 20-, and 10-lepton coins, 20 drachmai per capita, or a
total of 124,000,000 drachmai.
The importation of foreign notes is not prohibited, but foreign notes
do not circulate in Greece.
The use of checks is very limited. Banks make every effort to
encourage the use of checks, but are handicapped by the conservatism
of the public and by the heavy stamp taxes. It is estimated that 90
percent of current payments is made in currency.
Paper Currency of Greece 1
Denomination
1.000 drachmai..................................................
50 drachmai.......................................................
Dimensions
Amount
outstanding
Apr. 30,
1935 (mil
lions of
drachmai)
729.5
3,132.3
732.5
843.0
268.9
6,706.3
i The notes are engraved and printed in London and New York on special note paper. Secret signs are
used to prevent counterfeiting, the details of which are not available for publication. They have unlimited
legal tender.
» Most of this Is in coins withdrawn and held by the Reichsbank.
93
HANDBOOK OF FOREIGN CURRENCIES
Coins of Greece
Gross weight
Denomination
Metal of chief Fine
ness
value
i 0.590
10 drachmai.............. ....... do........... 1.500
. 991
J. 250
>.250
*. 250
*. 250
». 900
Total...............
Silver content
Monetary
stock of
Diam Thick coins on
eter ness May 31,
(mil
Grams Grains Grams Grains (mm) (mm) 1935
lions of
drachmai)
11.3333
7.0000
10.0000
7. 5000
5.0000
3.0000
1.8000
1. 5000
174. 848C 5.6667 87.5015 28.5
108. 0265 3. 5000 54.0133 25
154.3236
30
115. 7427
27
77. 1618
23
46. 2971
HI
17. 25
27. 7782
23.1486
21.25
2.16
1.93
1.85
1.83
1.68
1.40
1.07
2. 11
230
75
125
44
35
20
4
12
« 545
i Alloy: Copper. 0.400; zinc, 0.050.
* Alloy is copper.
* Zinc, 0.090; copper, 0.010.
* Of this total, 5,190,400 drachma! were held in the Treasury and 187,658,447 drachma! were held by the
Bank of Greece, leaving 352,151,147 drachma! in actual circulation.
NOTE-ISSUING AUTHORITY
Since May 14, 1928, the Bank of Greece has had the exclusive right
of issuing bank notes in Greece. The Greek Government has, both
by law and in actual practice, considerable control over the policies
of the Bank of Greece. A Government commissioner is permanently
attached to the bank to supervise the execution of fiscal policies,
existing laws, and the bank’s statutes.
RESERVE REQUIREMENTS
According to article 61 of the statutes of the Bank of Greece, the
total of notes in circulation plus sight obligations must be covered by
gold and foreign exchange to the extent of at least 40 percent. Tins
requirement was suspended by law 5422 of April 26, 1932, and redemp
tion in gold was officially abandoned as of that date. Since then there
has been no specific coverage requirement. No silver is included in
the currency reserves.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Since the official suspension of gold payments by Greece on April 26,
1932, all transactions in gold, whether bullion or coins, have been
under the complete control of the Bank of Greece. Fifteen of the
larger commercial banking institutions act as its agents in this connec
tion. Importation of bullion is permitted, but exportation other
than by the bank itself is prohibited.
By an emergency law published in the Official Gazette of May 11,
1935, the Ministers of Finance and National Economy were authorized
to establish a control over importation and exportation of gold and
foreign coins and exchange. Importation of gold and silver coins
other than Greek has been strictly prohibited, as has the exportation
of coins of any kind.
Smuggling was very extensive in Greece for some time before and
after the official suspension of gold payments in 1932. The rapid
depreciation of the drachma in relation to gold, which began in Sepconi"—3e -7
94
HANDBOOK OF FOREIGN CURRENCIES
tember 1931, resulted in an active market both for gold bullion and
coins. Following the pegging of the drachma on January 24, 1933,
however, and the satisfactory rates offered for gold ever since by the
Bank of Greece, “black bourse” transactions have dwindled to
unimportance.
GOLD
The gold reserves of the Bank of Greece, held in Greece and abroad,
included 547,768.620 fine ounces of bullion as of December 31, 1934,
plus the following gold coins:
Pounds sterling_______________________________ 527, 155. 10s.
Napoleons____________________________________ 518, 411. 75
United States dollars__________________________ 804, 541. 00
Turkish pounds_______________________________ 282, 246. 50
Rubles.............................. ............................................- 43,017.50
Reichsmarks_________________________________ 49, 845. 00
Florins______________________________________ 3, 955. 00
Austrian crowns______________________________ 15, 900. 00
Italian liras_________
3, 803. 20
Egyptian pounds_____________________________ 1, 036. 35
Mexican pesos________________________________
629. 00
Danish crowns_______________________________
40. 00
Norwegian crowns____________________________
20. 00
Austrian schillings____________________________
25. 00
Finnish marks________________________________
10. 00
Pesetas______________________________________
125. 00
The price paid for gold bullion hy the Bank of Greece is fixed by
the bank in terms of French francs per gram. On June 10, 1935, the
buying rates of the Bank for bullion were as follows:
F r en c h fr a n c s
p e r gra m
Carats:
12___ _____ 8. 34
13___ _____ 9. 05
14___ _____ 9. 95
15.. _ _____ 10. 45
16___ _____ 11. 15
17___ _____ 11.85
18___ _____ 12. 55
F ren ch fr a n c s
p er g ra m
Carats:
19___ _____ 13.25
20___ _____ 13. 95
21___ . . . . 14. 65
22___ _____ 15. 38
23___ ____ 16. 07
23w__ _____ 16. 42
24___ _____ 16. 77
Payment for bullion is made in drachmai converted at the current
rate for the French franc, as in the case of gold coins.
No estimates are available as lo the amount of gold held by the
public in Greece, but during 1934 a total valuation of 303,605,000
drachmai of gold coins were offered to and purchased by the Bank of
Greece. During that year the bank purchased in Greece and shipped
to New York City, United States paper currency totaling $730,717, as
compared with more than $2,000,000 in 1933. The latter figure
included considerable amounts that had been hoarded.
THE GOLD CLAUSE
Law 5422 of April 26, 1932, prohibited the contracting of loans in
drachmai secured by collateral consisting of gold, foreign currency
foreign exchange, or foreign securities. This clause was supple
mented by a legislative decree of July 14, 1932, under which the
contracting of obligations in Greece in terms of foreign currencies is
prohibited, except for loans of mortgage banks in Greece and loans
contracted for the financing of imports; insurance policies also are
excepted. For domestic contracts in general, therefore, the gold
HANDBOOK OF FOREIGN CURRENCIES
95
clause is no longer permitted, but there is still considerable uncer
tainty as to the future treatment of obligations containing such a
clause that were incurred prior to the official suspension of the gold
standard on April 26, 1932. In the case of the capitalization of
corporations, the validity of the gold clause has been sanctioned by
a decree published in the Official Gazette of May 10, 1935.
SILVER
The following paragraphs bring up to date the section on Greece in
Trade Promotion Series No. 149, The Monetary Use of Silver in 1933:
P resent leg a l'p ro visio n s. —The law provides for subsidiary silver
coins in denominations of 10 and 20 drachmai, 0.500 fine. All Greek
coins are legal tender for all private and public debts.
P o ssib ility o j in creased use o f silver w ithou t new legislation . —The
present circulation of silver coins appears adequate to meet current
needs and the authorities have considerable quantities in reserve
which could be used if necessary. Additional coinage is not in
prospect; it would require new legislation as well as the approval of
the International Financial Commission in Athens.
A ttitu de tow ard silver. —Greece produces virtually no silver, and
there appears to be no prospect of new legislation unless the world
price of silver should rise above $0,835 per fine ounce, this being the
approximate melting point of the 10-drachma coins now in circulation.
The melting point of the 20-drachma coins is about $1,032 per fine
ounce.
P resent em ploym en t o f silver. —The 10- and 20-drachma coins m
actual circulation, which were minted in England in 1930, total about
190.000. 000 drachmai, while the Bank of Greece holds approximately
115.000. 000 drachmai of the same coins which may be placed in
circulation as required. The total face value of this silver coinage,
issued and unissued (230,000,000 drachmai in 20-drachma pieces and
75.000. 000 drachmai in 10-drachma pieces), is equivalent to slightly
more than 5 percent of all the currency circulating in Greece. The
20-drachma coins weigh 11.33% grams and the 10-drachma coins, 7
grams. Both are 500/1000 fine; hence the total weight of silver
involved is approximately 2,940,000 fine ounces.
GUATEMALA
The monetary unit is the quetzal (abbreviation q.), divided into
100 centavos. The quetzal has a par value of $1.6931.
DESCRIPTION AND CIRCULATION OF CURRENCY
The accompanying tables describe the currency.
Under chapter III of the monetary law of Guatemala, gold quetzal
coins are legal tender in any amount; silver quetzal coins are legal
tender in amounts not exceeding 10 quetzales; and copper coins in
amounts up to 1 quetzal. As the Central Bank controls the circu
lation of money in accordance with the needs of the public, the ques
tion of using silver or copper coins in extraordinarily large quantities
m payments of taxes, etc., has never arisen, and such coins are gener
ally accepted without limitation. Under article 22 of the statutes of
the Central Bank, quetzal notes will be accepted by the Government
96
HANDBOOK OF FOREIGN CURRENCIES
without limitation as long as the Central Bank converts such notes
at par.
United States paper currency circulates in relatively small quan
tities, the Central Bank accepting such currency at par less 1 percent
for commission. United States coins are accepted by local mer
chants from tourists, although not by the bank. The estimated
total of United States money entering Guatemala is about $300,000
a year.
The only legal restrictions on the importation and exportation of
foreign money are those which legislative decree no. 1984 of April 20,
1934, and executive decree no. 1659 of May 6, 1935, impose upon
exports of gold and silver.
Paper Currency of Guatemala
Denomination
Amount
outstand
ing June
11, 1935
(millions of
quetzales)
Dimensions
»8.4
i Of this amount 2,081,000 quetzales were held by the Central Bank.
The notes are engraved and printed in England. In order to
prevent counterfeiting, watermarked paper with silk threads is used
with three colors on the face of the note.
In June 1935, new notes were in the process of being engraved.
All will be 2% by 6K inches (or 75 by 165 mm), with the exception
of the 50-centavo note, which will continue to be 2%6 by 5% inches
in size.
Coins of Guatemala 1
Denomination
(centavos)
Metal of
chief
value
Amount out
standing
May 31, 1935
(thousands
Diam Thick quetzales) of
Fine
eter ness
ness
(mm) (mm)
Held In
Grams Grains Grams Grains
in circu
bank lation
Gross weight
Silver content
25.........................
*0.720 8.3333 128.6030 6.0000 92.5941 27.00
10.........................
». 720 3.3333 51.4412 2. 4000 37.0377 20.00
5...........................
>720 1.6067 25. 7200 1.2000 18.5188 5.25
2........................... Copper__
1...........................
».
950 3.1100 47.9948
2Ö.ÖÖ
H ......................... ...do.......... >.950
Total.........
1.75
1.00
1.00
1.00
281 709
60 242
50 295
24
36
3
60
4
26
434 1,456
1 In addition to the coins shown, there is a limited amount of old copper “peso” and “centavo” coins in
circulation.
1 Alloy is copper.
* Tin, 0.040; and zinc, 0 .010.
97
HANDBOOK OF FOREIGN CURRENCIES
NOTE-ISSUING AUTHORITY
The only note-issuing authority is the Banco Central de Guatemala.
The Government owns 40 percent of the shares and lias two seats
on the board of directors. This board consists of nine members
appointed for 2 years.
RESERVE REQUIREMENTS
Article 27 of the statutes of the Banco Central requires the bank
to maintain a reserve in gold and silver in its vaults or in sight depos
its abroad payable in gold equivalent at least to 40 percent of its
notes in circulation. Not less than one-third of the 40 percent reserve
must be kept in its own vaults, but this may include Guatemalan
silver coins in an amount not exceeding 10 percent of the notes
outstanding.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
By legislative decree no. 1984 of April 20, 1934, tho exportation of
gold in any form, except articles of personal use, is prohibited unless
it is effected tlirough the Central Bank under a special permit of the
Department of Currency and Banking.
By executive decree no. 1659 of May 6, 1935, the exportation of
silver in any form, excepting articles of personal use, was prohibited
unless effected under authority of the Department of Currency and
Banking and through the Central Bank. The alienation and acquisi
tion of silver in any form by persons or companies except the bank
was also prohibited.
There is little or no smuggling of gold or silver.
GOLD
The gold reserves as of May 31, 1935, were as follows:
National gold coins___________ _______________
Gold purchased locally since 25-percent premium was
allowed........ .............................................................
American gold coin___________________________
Gold bars in New York_______________________
Q u e lza le t
1, 201, 835. 00
450,054.75
690, 190. 00
712, 423. 18
Gold is being purchased at a premium of 25 percent under a decree
issued in March 1934.
The Central Bank is aware that certain individuals are holding
gold coin, but the precise amounts are not known.
THE GOLD CLAUSE
There has been no legislation regarding the gold clause in contracts.
By means of foreign exchange operations the quetzal is being main
tained at parity with the American dollar, and the gold clause is
considered as in suspense.
SILVER
For information on silver, see Trade Promotion Series No. 149,
The Monetary Use of Silver in 1933.
Silver coins of 1 quetzal and silver coins of 50 centavos have been
demonetized. These coins had a fineness of 0.720 and weighed 33X
and 16% grams, respectively.
98
HANDBOOK OF FOREIGN CURRENCIES
HAITI
The official unit of currency of Haiti is the gourde (abbreviation g.
or gde.), divided into 100 centimes. The gourde is pegged to the
United States dollar at the fixed rate of 5 gourdes to the dollar.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the following tables.
No old issues of notes are in circulation. United States notes and
coins enjoy considerable circulation.31
The use of checks is limited.
Paper Currency of Haiti
Denomination
Amount
outstanding
Sept. 30,
1935 (in
gourdes)
Dimensions
417,200
925, 250
125, 180
457. 310
988,675
} 3,761,713
6.675,228
Total........................................................
‘Approximately 50 percent of all notes in circulation consist of 1- and 2-gourde notes.
Coins of Haiti
Gross weight
Denomination
Total...........................
Metal of chief value
Diam
eter
(milli
Grains meters)
Grams
9.8800
7. 5500
4.0000
2.6500
152.5680
116.5110
61. 7280
40. 9140
29
26
22
20
Amount
Thick ing Oct.
ness
(milli 15, 1935
meters) (millions
of
gourdes)
1.93
1. 83
1. 33
1.14
3.6
NOTE-ISSUING AUTHORITY
The Banque Nationale de la Republique d’Haiti (the Central Bank)
is the only agency that has the authority to issue notes. The Gov
ernment has a controlling voice in the policies of the bank.
RESERVE REQUIREMENTS
The notes issued by the National Bank of Haiti must be fully
secured by United States currency and two-name commercial paper
maturing in not more than 120 days. The United States currency
portion of the reserve must be not less than one-third of the out
standing note circulation of the bank; at least one-half of such cur
rency must be held in the vaults of the bank, which may deposit the
31 The National Bank of Haiti estimated that on Sept. 30, 1931, there was about $680,000 United States
currency, or approximately 24.4 percent of the toial currency in circulation.
HANDBOOK OF FOREIGN CURRENCIES
99
remainder locally or in an approved bank in the United States.
Haitian Government bonds may be substituted in an amount not
exceeding $600,000 for two-name commercial paper constituting the
balance of the reserve.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
By proclamation of the President of the Republic, on January 16,
1935, the exportation of gold in bullion, money, jewelry, or other form
was prohibited.
Smuggling is not believed to be extensive.
GOLD
On September 7, 1935, the Banque Nationale de la Republique
d’Haiti had on hand United States gold pieces having a face value of
$171,487.50. This money consisted of $5, $10, and $20 gold pieces.
Gold is not purchased at a premium by the Government or Central
Bank of Haiti, and it is not hoarded to any extent.
THE GOLD CLAUSE
There is no gold clause covering Haitian contracts.
SILVER
The only silver coins in circulation in Haiti are those of the United
States. It is difficult to determine the amount of such coins in the
hands of the banks and the general public.
HONDURAS
The monetary unit of Honduras is the lempira (abbreviation 1.),
divided into 100 centavos. The par value of the lempira is $0.50.
DESCRIPTION AND CIRCULATION OF CURRENCY
Details of the currency circulation are shown in the accompanying
tables.
Gold coins, although not in circulation, are full legal tender. They
have been issued in denominations of 20 and 10 lempiras.
The data given on pages 65 and 66 of Trade Promotion Series No.
149, The Monetary Use of Silver in 1933, is correct at the present
time, with the following exceptions: (1) Subsidiary coins of denomina
tions below .50 lempira are legal tender up to 5 percent of tho total
payment being made, and (2) copper .02-lempira pieces are legal
tender only up to 1 percent.
Although the lempira currency is theoretically hacked by gold, the
backing is actually as indicated under reserve requirements, below.
Since 1931, the coinage of subsidiary metal currency has been author
ized in order to bring the total up to 4,000,000 lempiras.
Some American 1-cent pieces are in use. No other foreign coins,
except gold, are on hand in Honduras at the present time, and the
gold coins are not in actual circulation. The old foreign silver coins
were all melted and made into Honduran currency. The only foreign
currency now in circulation is an indefinite and varying amount of
United States paper money which is imported by the fruit companies
from time to time with the permission of the Exchange Control
100
HANDBOOK OP FOREIGN CURRENCIES
Commission in order to meet pay rolls when sufficient lempira cur
rency is not available. This American paper circulates freely only on
the north coast and is rarely seen in other parts of the country.
No old Honduran coins except the 2-centavo piece are now in
circulation. No 2-centavo pieces have been minted in recent years.
The use of checks has increased considerably since 1931.
Paper Currency of Honduras Outstanding Apr. 30, 1935
Value
(thousands
of
lempiras)
Denomination
1
Issuing authority
1,700 Banco Atlantida.
500 Banco de Honduras.1
• About 5,000 pesos in old Banco de Honduras 50- and 100-peso notes are still outstanding, redeemable in
lempira coins.
N ote.—Notes of the Banco Atlantida measure 16.4 by 7.1 centimeters; those of the Banco de Honduras,
15.5 by 6.5.
Coins in Circulation in Honduras on Apr. 30, 1935
Gross weight
Denomination
Metal of chief Fine
value
ness Grams Grains
Amount
out
Diam Thick standing
eter ness (thou
Grams Grains (mm) (mm) sands of
lem
piras)
11.250 173. 6140
31
2.0
2, 550
24
5. 625 86. 8070
1.8
’ 800
2.250 34. 7228
18
1.2
350
26
1.8
150
21
1.8
150
19
1.3
4,000
Silver content
0.000 12. 50 192.9045
.900 6. 25 96. 4523
.900 2. .50 as. 5809
Nickel......... >. 250 7.00 108. 024
•.250 5. (X) 77. 1618
2 centavos................... Copper____ *. 950 3.00 46. 2971
ing copper.
1 Alloy is copper.
*Alloy is tin and zinc.
NOTE-ISSUING AUTHORITY
* Unknown.
The Banco Atlantida and the Banco de Honduras, two private
banks, are the sole note-issuing authorities. They operate under
Government concessions.
RESERVE REQUIREMENTS
The metallic currency is backed by reserves of United States dollars,
gold coin, and lempira deposits in local banks. On April 30, 1935,
these reserves were as follows:
United States dollars
Dollar deposits abroad___________________________ 860, 396
Dollars in local banks____________________________ 33, 998
Gold coin in local banks__________________________ 59, 270
Lempira deposits in local banks___________________
49, 873
Total............................. ......................................... 1, 003, 537
The reserves against the bank notes are in lempira coinage and are
fixed at 40 percent for the Banco de Honduras, and 50 percent for
the Banco Atlantida, According to the banks’ charters, the reserves
should be in gold; but since the Government does not redeem the
lempira in gold, the banks are permitted to keep their reserves for
HANDBOOK OF FOREIGN CURRENCIES
101
note issues in lempira silver coin. Silver bullion may not be included
in the reserves.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
By decree no. 141 of March 27, 1934, the exportation of gold from
Honduras was placed under control of the Exchange Control Com
mission, and no shipment can be made without its approval. How
ever, since the Honduras Government has not been able to purchase
the gold produced in the country, permission was granted for the
exportation of 6,202 ounces from June to November 1934, and larger
quantities appear to have been exported since that time. There
appears to be no actual restriction of normal exports.
There are no restrictions upon the exportation of silver, nor upon
the importation of bullion.
Although the provision of law prohibiting the importation of silver
coins of other countries appears never to have been repealed, such
coins no longer have any monetary value in Honduras and there is
no incentive for their importation.
GOLD
The official gold reserve against the metallic currency was, on
April 30, 1935, $59,270. Private gold holdings are not known, but
they are believed to have been considerably depleted, owing to
unusually large exports.
Larger commercial houses and banks buy from prospectors small
quantities of gold at the rate of 50 lempiras per troy ounce. This
gold is probably exported by the purchasers at a profit.
THE GOLD CLAUSE
By decree no. 141 of 1934, all contracts specifying payment in
foreign money (including United States gold) are legally payable in
lempiras at the current rate of exchange. According to actual prac
tice, contracts in American gold dollars are converted on the basis of
the devalued dollar.
SILVER
Since silver coin, but not silver bullion, is used for reserve purposes,
the only such bullion in the country is that held by the mining com
panies pending exportation.
The position of silver in the monetary system of Honduras is as
described in Trade Promotion Series No. 149, The Monetary Use of
Silver in 1933, subject to the changes mentioned above.
HONG KONG 32
The unit of currency is the Hong Kong (British) dollar (symbol
HK$), divided into 100 cents. The Hong Kong dollar was” on a
silver standard until November 1935 when an embargo was placed
on the export of silver. Following this action, further steps were
taken to control the currency and exchange situation. On December
5, 1935, the colony nationalized silver, requiring the surrender of all
silver in excess of 10 Hong Kong dollars.
Henceforth, only notes of the three issuing banks would be legal
tender. Arrangements were made to exchange notes for silver coin
at par, and for bullion at an established rate. Likewise, foreign1
11 For details not here included, see Trade Promotion Series No. 149, The Monetary Use of Silver in 1933.
102
HANDBOOK OF FOREIGN CURRENCIES
currency in common use in the colony (British dollars and Mexican
dollars) was to be turned over to the authorities. A word of expla
nation regarding the latter is necessary.
According to an order in council of February 2, 1895, the Mexican
dollar, in general use for several decades, was proclaimed the standard
currency. The Hong Kong dollar was to conform to it in weight and
fineness. Although the silver content of the Mexican dollar has been
slightly in excess of the Hong Kong dollar the difference has not been
great enough to prevent a parity in value in local transactions. The
so-called British dollar has the identical dimensions and silver content
of the Hong Kong dollar and is distinguished from the latter by the
English inscription “One dollar.” It has been minted in London and
in Bombay.
The monetary decree of December 5, 1935, placed the currency on
a managed basis. No official parity was declared, although during
December 1935 and January 1936 the rate fluctuated between 32.2
and 32.7 cents United States currency, which was therefore assumed
to be the pegged rate pro tempore. During this period substantial
amounts of silver were sold in London by the Colonial Government
for the purpose of establishing an exchange equalization fund.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
Paper Currency of Hong Kong 1
Denomination (Hong Kong dollars)
Amount outstanding on Oct. 30, 1935
Chartered
Kong and Mercantile
Bank of India, Hong
Bank Bank of India
Australia, and Shanghai
ing
Corporation
China
500 ................ - -................................................................. II K$4.185.000
4. 496.900
1,835,225
50............................... -..................................................... .
25 * ............................................. ...........................................
H) ................................................................ .........................
5,297,730
5..............................................................................................
1,002,595
1 *............................................................................................
Total............................................................................
16,817, 450
<■ )
(■ )
(■ >
e»
(>)
«
O
II K$l, 351,800
124,500
6, 700
140.770
39,940
1,669, 760
i The notes are engraved in England on watermarked parier. There are no standard dimensions. A
1930 report gave the sizes of notes in common circulation as follows: Hong Kong and Shanghai Hanking
Corporation, new issue, I1K$1, 3A, by 5M inches: HK$5, 4 by 7 inches; HK$10, 4J..» by inches. Old
issue, H K$l, 3H by inches; II K$10, 4"£ by 81/* inches. Chartered Bank of India, Australia, ami China:
II K$5, 4's by 8 inches; HK$10, 5 by 8 inches; IIK$50, 5 by 7£s inches. The notes in most common circu
lation were, in 1930, the new issue of the $1, $5, and $10 notes of the Hong Kong and Shanghai Banking
Corporation.
1 Not available.
* Rarely encountered.
Coins of Hong Kong
Denomination
1 dollar * ..................
50 cents3 --..............
20 cents 3...................
10 cents.....................
5 cents.......................
Metal of chief Fine
value
ness
Gross weight
Grams Grains
Silver.............. 0.900 26.9563 416.0000
....... do.............. . 8C0 13. 5757 209.5200
....... do.............. .800 5. 4307 83.8100
....... do.............. .800 2.7153 41.9000
___ do.............. .800 1.3577 20.9500
7.5005 115.7500
Silver content Diam
Thick
Grams Grains eter ness *
mm mm
24.2607 374.4000 39.090 2.6924
10.8613 167.6160 31.013 2. 0244
4. 3445 67.0*64 23. 139 1. 5443
2. 1723 33.5232 18. 034 1.3157
1.0861 16. 7616 15. 596 .9677
27.661 1.7094
1 Measurement at edge. The thickness at the center is slightly less.
*0.78 fine ounce troy.
* Comparatively rare.
HANDBOOK OF FOREIGN CURRENCIES
103
NOTE-ISSUING AUTHORITY
The only note-issuing agencies in Hong Kong, are the three com
mercial banks of British nationality, whose charters authorize them
to issue notes. These banks are: Hong Kong and Shanghai Banking
Corporation; Chartered Bank of India, Australia, and China; and
Mercantile Bank of India, Ltd.
Theoretically the banks of issue in Hong Kong are independent of
Government control, except that the Chartered Bank and the Mer
cantile Bank must deposit with the Government a sufficient amount
of silver and/or readily salable securities to redeem their notes, while
the Hong Kong and Shanghai Bank must cover by a similar deposit
all notes issued in excess of its paid-up capital of 20,000,000 Hong
Kong dollars. Because the Government lacks storage facilities for
the very considerable amount of silver, the metallic backing of the
notes is actually left in the vaults of the note-issuing banks; but as
the Government holds the keys to these vaults, the silver may be
removed only with the consent of the Government, and in emergencies
it would be within the power of the Government to control the use of
the silver so deposited.
RESERVE REQUIREMENTS
The statutes of the Hong Kong and Shanghai Banking Corporation,
which were adopted with the consent of the local Government of
Hong Kong and the Colonial Office in London, permit the issuance
of notes up to the amount of its capital without other security. Any
amount above the capital must be secured by silver dollars to the
extent of 100 percent, or by acceptable securities deposited with the
Government agents. The other two banks must secure all notes by
depositing actual silver dollars or bullion, or acceptable securities
with the Government agents. It is thus clear that silver may be and
is included as the sole basis of note issues.
According to a statement of the Treasurer of the Crown Colony of
Hong Kong, the Government of the Colony held in August 1935
$64,150,539 in coins and 37,159,539 fine ounces of bar silver.
According to the latest regular statment of the Colonial Secretary,
returns of the average amount of bank notes in circulation and of
specie in reserve in Hong Kong, during the month ended September
30, 1935, as certified by the managers of the respective banks are
shown in the following table:
Returns of Average Amount of Bank Notes in Circulation and of Specie in Reserve,
in September, 1935
[Hong Kong dollars]
Bank
Average
amount
Specie in
reserve
Chartered Bank of India, Australia, and China.............................................
14,071,657
114,852,851
1,693,503
130,618,011
» 8.300,000
»89. 2<X>. 000
* 1.350,000
98,850,000
1 In addition, sterling securities are deposited with the Crown agents valued at £765,000.
* In addition, securities deposited with the Crown agents and Straits Government valued at £3,284,000.
* In addition, securities deposited with the Crown agents valued at £190,000.
104
HANDBOOK OF FOREIGN CURRENCIES
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
On June 8, 1935, the Hong Kong Government issued a decree in the
following terms restricting the dealing in silver coin and bullion:
No person shall, after midnight of Saturday, June 15, 1935, except under an
export permit granted in his discretion by the Superintendent of Imports and
Exports, export from the Colony to any country or place other than China:
1. Any silver coin minted in China; or .
2. Any silver bullion other than silver bars, the product of refineries outside the
Colony of Hong Kong or China.
The restrictions introduced in June, however, did not prove
sufficient in view of the serious monetary conditions fomenting in
China. Hong Kong was unable to escape the pressure on the Chinese
currency which began with accelerated intensity in September 1935.
From an average exchange rate of approximately 50 cents, United
States currency, the Hong Kong dollar fell to 36.5 cents in November.
The decree of December 5, nationalizing silver, prohibited any
exportation thereof but permitted holders of silver to store the metal
pending arrangements for delivery to the colonial authorities.
Although it is naturally not possible to estimate the amount of
silver which has been smuggled out of China into Hong Kong, it is
generally believed that until the enactment of the recent stringent
laws by the Chinese Government smuggling was very general, and,
indeed, the rather large exports of silver coin from this Colony tend
to substantiate these rumors.
GOLD
No gold is held either by the Government or by any of the banks in
Hong Kong as reserve against currency issues.
Gold is not being purchased at a premium by the Government or by
any bank.
The hoarding of gold in Hong Kong is practically nonexistent.
Very few gold coins are offered by the many money changers in the
city; and although occasional shipments of gold to Europe and to the
United States are made by the banks of Hong Kong, all such metal
represents purchases made in other parts of the world. The source of
the gold exported cannot be learned definitely, and it is believed that
the major portion of the gold exported from this Colony is brought in
unmanifested, perhaps much of it carried by incoming passengers.
At any rate, the manifested shipments of gold bars, ingots, and coin
greatly exceed the amounts shown as imported into the Colony. It is
known also that a certain amount of the gold bars arise from the
melting of jewelry and old coins by local dealers in precious metals.
THE GOLD CLAUSE
Inasmuch as gold has no legal status as money in Hong Kong,
domestic contracts are reported on good authority never to contain
the gold clause.
SILVER
The Treasurer of the Crown Colony of Hong Kong states that it is
impossible to obtain accurate and complete information as to the
silver stock held in Hong Kong. However, he estimates (as of Aug.
1, 1935) the amounts of silver held by various owners, in millions of
Hong Kong dollars, as follows:
105
HANDBOOK OF FOREIGN CURRENCIES
Face value
The general public__________________________________
In bank vaults (not in circulation)____________________
Government________________________________________
Subsidiary coinage__________________________________
Total...............................................................................
50. 0
50. 0
142. 4
4. 0
246. 4
In connection with the foregoing figures, the Colonial Treasurer
emphasizes that, with the exception of the amount held by the Govern
ment, these figures are merely estimates, and bankers interviewed in
connection with this report all stated that it is impossible to ascertain
accurately the amount of money which is in the hands of the public or
of the banks. As to subsidiary silver, the Colonial Treasurer stated
under date of August 1, 1935:
There is also the silver subsidiary coin to be taken into account. I put this at
somewhere about $18,000,000, but here again it is impossible to say how much is
in Hong Kong. A great deal we think is in Kwangtung, and it may be that a
great deal of this $18,000,000 has been melted down. Indeed, this is more than
probable. So that it is really impossible to estimate what subsidiary coin is in
circulation. In Hong Kong itself I would say about $3,000,000 to $4,000,000.
Most of this is in 10-cent pieces; and as the other silver subsidiary coin bears
practically the same relation in value and silver content, it can be assumed that
$4,000,000 of subsidiary coin equals 40,000,000 10-cent pieces. A 10-cent piece
is 0.800 fine and weighs 41.90 grains.
HUNGARY
The monetary unit is the pengo, (abbreviation p.), divided into 100
fdlcrs. The pengo has a par value of approximately $0.2961. The
plural form of pengo is the same as the singular.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
There are no prohibitions on the importation of foreign notes, but
no foreign notes are in circulation. The use of checks is limited.
Paper Currency of Hungary 1
Denomination
Dimensions
191 by 112 millimoters..........................................
Amount
outstand
ing Sept.
30, 1935
(millions of
pengo)
1.9
200. H
42.6
69.2
74.2
388.7
1 Engraved on domestic cotton, hemp, and linen paper. The bank note paper is of high quality and has
excellent durability and adaptability. Counterfeiting of notes is prevented by diversification of motives
in engraving, complicated details, and fine gradations in color backgrounds. The intricacy of design and
color are insured by a second impression.
106
HANDBOOK OF FOREIGN CURRENCIES
Coins of Hungary
Gross weight
Metal of Fine
Denomination chief
value ness
5.00 pengö............
2.00 pengö............
1.00 pengö............
.50 pengö............
.20 pengö............
.02 pengö............
Silver___
...d o ..........
...d o ..........
Nickel___
...d o ..........
Copi>er__
Grams
Grains
Amount
out
Di Thick standing
ameter ness Sept. 30,
(mm) (mm) 1935
Grams Grains
(millions
of pengo)
Silver content
»0.640 25.0000 3S5. bus? 16.0000 246. 9176
» .640 10.0000 154. 3235 6. 4000 98. 7670
>.640 5.0000 77.1617 3.2000 19 :*S35
» .250 5.0000 77.1617
* .250 4.0000 61.7294
1.250 3.0000 46. 2970
*. 950 3. 3333 51.4406
* .950 1.6667 25.7211
36
27
23
22
21
19
19
17
2.87
2.11
1.17
1.40
1.30
1.19
1.35
0.81
17.7
12.6
28.8
3.4
4.0
3.2
2.1
0.6
72.4
1 Alloy is copper.
* Tin, 0.040; zinc, 0.010.
N ote.—Legal tender limits are as follows: 5 pengo, silver, 250 pengo; 2 pengo, silver, 100 pengo; 1 pengo.
silver, 50 peugd; 0.50 pengo, nickel, 20 pengo; 0.20 pengo, nickel, and 0.10 pengo, nickel, together 10 pengo;
0.02 pengo, copper, and 0.01 pengo, copper, together 2 pengo. In the case of the 5-, 2-, and 1-pengo coins the
Treasury, Public Cash Offices and the National Bank of Hungary accept them in unlimited amounts.
NOTE-ISSUING AUTHORITY
The only note-issuing authority is the National Bank of Hungary
(Magyar Nemzeti Bank).
The Governor of the National Bank is nominated by the Minister
of Finance and appointed by the Head of State. To exercise the
Government’s right of supervision, a Government commissioner and a
deputy commissioner are nominated by the Minister of Finance and
appointed by the Head of State.33
RESERVE REQUIREMENTS
The organic act of the National Bank requires that the entire
amount of its notes in circulation—to which are added demand lia
bilities (deducting, however, the sum represented by the debt of the
State)—must be covered during the first 5 years (up to 1929) to the
extent of 20 percent, during the next 9 years (up to 1938) to the
extent of 24 percent, during the next 5 years (up to 1943) to the extent
of 28 percent, and during the remainder of the charter period to the
extent of 33% percent by the metallic reserve, the latter to include
foreign currencies, foreign exchanges, and token money.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Order in council no. 4500 (M. E. ex 1931), which became effective
August 8, 1931, prohibited the taking out of the country without the
consent of the National Bank of Hungary, any money, coined or
uncoined, and unworked gold and silver and platinum. A later
order (Mar. 5, 1935) concerns the declaration of gold holdings and
the restrictions of legal transactions relating to gold.
u Ou the proposal of the Government to be made in accordance with the suggestion of the High Com
missioner of the League of Nations . . . the Head of State shall appoint an adviser to be attached to the
National Bank of Hungary (art. 121 of Statutes of National Bank of Hungary).
The adviser is entitled to be present in an advisory capacity at all meetings of the General Assembly,
the Board of Directors, the Executive Committee and the Board of Management.
The adviser is entitled to protest against any decision of these bodies, which protest shall have the effect
of sust>ending proceedings . . . The final decision respecting the protest shall, after consultation with
the management of the bank, rest with the High Commissioner of the League of Nations . . . (art. 123
of Statutes of National Bank of Hungary).
HANDBOOK OF FOREIGN CURRENCIES
107
There is a certain amount of smuggling of gold and silver out of
the country, but it is not believed to be extensive. Estimates are not
obtainable.
GOLD
The gold reserves held by the National Bank of Hungary as of
September 30, 1935, were 78,900,000 pengô, which corresponds to
20,805 kilograms fine gold.
Order in council no. 2360 (M. E. ex 1935) issued on March 5, 1935,
provides that all dealings in gold, except for restricted commercial
purposes, are illegal unless the permission of the National Bank is
obtained. The Central Corporation of Banking Companies (Penzintexeti Kôzpont), however, is authorized to buy gold offered at a
price which it fixes from day to day, and on March 7, 1935, it began
to buy gold at the price of 6,000 pengô per kilo (parity rate 3,800
pengô). This price was gradually reduced and in October 1935 ranged
from 5,760 to 5,800 pengô per kilo.
There may be a certain amount of gold hoarding by the public; a
very considerable amount has been offered for sale to the Central
Corporation of Banking Companies since the above-mentioned order
in council was issued. No data on the amount of gold hoarded at
present are available.
THE GOLD CLAUSE
The legal provisions in Hungary regarding the gold clause in
contracts may be summarized in the following paragraphs.
According to orders in council nos. 4660 (M. E. ex 1931) and 4600
(M. E. ex 1931), all debts incurred prior to the day of the establish
ment and publication of a future modification, if any, of the present
parity (1 gold pengô =1 pengô), as well as public contributions, are
to be regarded as established in terms of gold pengô, if the agreement
contains no stipulations to the contrary.
According to order in council no. 410 (M. E. ex 1932) liabilities
based on commercial transactions, bills of exchange, or on any civil
law title that are payable in gold or gold coins may be legally satisfied
by the debtor by tendering pengô currency. The creditor is not,
however, obliged to accept payment in currency ; if gold is not tendered,
he may ask that payment be postponed. In that event he is not
entitled to demand payment in legal tender while that order in
council continues in force. For the conversion 0.26315789+ grams of
fine gold must be taken as the equivalent of 1 gold pengô. These
provisions have been renewed periodically, the last renewal being
made by order in council no. 10810 (M. E. ex 1935) to December 22,
1935. At every renewal, opportunity has been given to creditors
who have exercised their option to postpone payment, to demand,
within 30 days, payment in legal tender.
The provision that the debtor may, but is not obliged to, pay in
actual gold and the creditor is entitled to refuse payments not offered
in gold, has been modified by order in council no. 2360 (M. E. ex.
1935), to the effect that payments in gold or gold coins are subject to
the authorization of the National Bank.
According to order in council no. 7600 (M. E. ex. 1933) debtors are
obliged to deposit pengô against amounts due in dollars at the National
Bank’s published selling rate for dollars 34 on the business day imme
MFixed by the National Bank on the basis of the theoretical gold content of the pengd.
108
HANDBOOK OF FOREIGN CURRENCIES
diately preceding the deposit. This stipulation applies even if the
obligation calls for payment in gold dollars.
SILVER
No silver bullion is held in the reserves of the National Bank, but
these reserves include 5-, 2-, and l-pengo silver coins. The subsidiary
money is coined by the Government and taken over at its nominal
value by the National Bank.
The weight of fine silver in monetary use, as of September 30, 1935,
was as follows:
Kilogram»
Held by the general public_________________________ 189, 156
Held by the National Bank of Hungary______________ 9, 684
Held by the Government___________________________ 2, 368
Total........................................................................... 201, 208
IRAN (PERSIA)
By law of March 13, 1932, the then existing monetary imit, the
kran, was superseded by the rial, which is divided into 100 dinars.
A gold pahlavi (100 rials) and a gold %-pahlavi piece were simulta
neously introduced into the currency system of the country. There
was at that time a great deal of discussion among Government and
banking officials regarding the desirability of abandoning the silver
standard in favor of the gold standard, but up to the present time
(February 1936) this has not been done. No definite parity has been
established for the rial and the currency is on a managed basis, the
Melli Bank maintaining varying rates between the rial and the pound
sterling, as policy dictates.
DESCRIPTION AND CIRCULATION OF CURRENCY
The metallic currency is described in the accompanying table.
Notes of 1,000, 500, 100, 50, 10, and 5 rials issued by the National
Bank of Iran circulate freely. The dimensions and circulation figures
on these notes are unavailable.
Coins of Iran 1
Denomination
Metal of chief Fineness
value
Gold................
pahlavi (50 rials)*....... ....... do..............
5 rials*.............................. Silver..............
1 rial
*................................
rial *..............................
Nickel.............
0.900
.900
. 828
.900
.828
.900
.828
.900
.900
.250
.250
.250
.950
.950
Gross weight
Grams
Grains
8.1360
4.0680
25. 0000
23. 2000
10.0000
9. 2800
5.0000
4. 0400
2.3200
5. (XXX)
4. 0000
2.0000
2. 7500
1.667
125. 555
62. 777
385.800
358. 022
154. 320
143. 209
77.660
71. 604
35.802
77.160
61. 728
30.864
42. 438
25.617
Gold or silver
content
Grams
Grains
7.322 112.993
3. 670 56.635
20. 700
19. 209
8. 280 127. 776
8. 352 128.888
4.140 63.888
4.176
2.088 32.222
Diameter
(mm)
22
19
37
26.5
22.5
24. 0
18. 0
16.0
1 Data regarding the thickness of the coins and the amount in circulation are not available. In addition
to the silver coin of rial there is a copper coin of the same denomination. In addition to the nickel coins
of 25, 10, and 5 dinars, there are copper coins of the same denominations in circulation. No data are avail
able regarding the fineness and weight of these copper coins.
* The gold pahlavi and the Vi gold pahlavi are objects of value rather than units of exchange, and when
they do circulate, the exchange value is considerably above 100 and 50 rials, respectively.
* Ilarely found in circulation.
HANDBOOK OF FOREIGN CURRENCIES
109
NOTE-ISSUING AUTHORITY •
The sole note-issuing authority in Iran today is the National
(Melli) Bank of Iran. The original capital of the bank was entirely
subscribed by the Government, and the Government has control
over the affairs of the bank both by law and in actual practice. The
special committee charged with the administration of the bank’s
reserve is composed, by authority of a law of March 15, 1932, of
seven Government officials, namely, two members of Parliament, a
delegate of the Council of Ministers, the Prosecutor General of the
Supreme Court, the Director of the National Bank of Iran, the
Treasurer General, and the Government’s agent at the bank.
RESERVE REQUIREMENTS
Article 6 of the law of March 15, 1932, requires the Government
to keep a reserve equal to 100 percent of the value of the bank notes
in circulation and the nickel coins issued. This reserve was to be
in the form of gold coin and bullion, silver coin end bullion, and the
bank notes of countries in which the purchase, sale, exportation, and
other transactions in gold are unrestricted. The Government is
also required to have in circulation coins equal to at least 60 percent
of the value of the bank notes in circulation. The law of September
11, 1934, authorized an increase in note issue from 468,000,000 rials
to 1,100,000,000 rials and reduced the gold and silver reserve require
ments from 100 to 60 percent.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
By a law passed by Parliament on March 13, 1932, gold can be
freely imported, but the exportation of gold and silver and the
importation of silver is forbidden, except by the National Bank.
This law was effective from the date passed and will remain in effect
until repealed. Provisional figures, furnished by the National Bank,
for the fiscal year ended June 21, 1934, are as follows:
Importations:
Rialt
Gold bullion............................................................ 42, 813, 536
940, 100
Gold coins________________________________
Silver coins________________________________ 675, 664
Exportations:
Silver coins__________________________________
71,600
During the spring and summer months of 1935 the bullion value
of the silver coins in circulation rose above their currency exchange
value and smugglers were very active in exporting them. At present,
however, smuggling is believed to be less active, as the profits there
from have decreased as a result of the rise in the value of the rial
on foreign exchange markets. Moreover, the risk in connection
with smuggling has been increased by the passing of a law which
makes it possible for the courts to impose the death sentence on
smugglers.
GOLD
The National Bank on September 30, 1935, held gold reserves to
the amount of 21,264,873 grams. The Bank purchases all gold
offered, but pays no premium for it. Private bankers and the
public pay a small premium, which rarely exceeds 1 percent. Con
siderable hoarding is engaged in by the public during times of wide
00111°— 30------8
110
HANDBOOK OF FOREIGN CURRENCIES
fluctuations in the exchange value of the rial, but when the rial is
not fluctuating very little gold is hoarded.
THE GOLD CLAUSE
Article 3 of the law of March 15, 1932, states that a rial equals
0.07322382 gram of fine gold, and that the Imperial Mint must
strike from 1 kilogram of pure gold 136.5675 pieces of 1 Palilavi
(100 rials). The same article states that the silver rial is legal tender,
and that each silver rial is equal to 4.1427 grams of pure silver and,
moreover, that the Imperial Mint must strike off 241.548 pieces of
1 rial from a kilogram of pure silver. In view of the changing
ratio of the value of silver to gold on the world markets and to the
statement in the above-mentioned law that the silver rial is legal
tender, the gold clause is not a feature of domestic contracts.
SILVER
On September 23, 1935, the National Bank held silver to the value
of 401,757,214 rials. According to estimates made by the National
Bank, the Pahlevi and Ottoman Banks held on this date silver to
the value of 1,242,786 rials, and the Imperial Bank of Iran, to the
value of 14,000,000, making the total held by banks, 417,000,000
rials. The public is believed to have held about 15,000,000 rials.
As this silver is in the form of coins of various fineness, it is impossible
to ascertain the weight of fine silver held by the banks or by the
public.
IRAQ
The monetary unit is the Iraq dinar, divided into 1,000 fils. The
dinar has a par value of approximately $8.2397, as it is pegged to the
pound sterling.
DESCRIPTION AND CIRCULATION OF CURRENCY
Control of the currency is vested in a board, known as the Iraq
Currency Board, which at present has its seat in London, and acts on
behalf of the Iraq Government.
The currency is described in the accompanying tables.
All coins are accepted as legal tender without limitations for the
payment of all government debts. For private debts the coins have
the following limitations as legal tender: 50-fil coins up to 5 dinars;
20- and 10-fil coins up to 200 fils; coins less than 10 fils for an amount
not exceeding 100 fils.
Paper Currency of Iraq 1
Denomination
Dimensions
Amount
outstand
ing on
Mar. 31,
1935 (mil
lions of
dinars)
0.1
.3
.3
1.8
.3
Total............................................................
*3.5
»The currency notes are engraved, and the head of King Ghazi I, watermarked, with no overprint is a
protective device to prevent counterfeiting.
* Increased to 3.6 millions as of July 31, 1935.
111
HANDBOOK OF FOREIGN CURRENCIES
Coins of Iraq 1
Gross weight
Denomination
Metal of chief Fineness
value
Grams
Grains
Silver content
Grams
Grains
20.00 308.6400 18.000 277.77C0
200 fils (riyal) *________ Silver............ 0.900
.500
9.00 138.8912
50 fils (dirham) i.......... . ___ do..............
4.500 69.4458
.500
3.60 55. 5566
1.800 27. 7783
Nickel
1.000
6. 75 104. 1660
1.000
4.00 61.72.s0
4 fils.......... ....................
2 fils...............................
5.00 77.1600
<*>
2.50 38. 5800
1 fil
(*)
Total.......................
• One riyal is one-fifth of a dinar; and one dirham is one-twentieth of a dinar.
* Copper, 0.955; tin, 0.030; zinc, 0.015.
Amount
outstand
ing on
Mar. 31,
1935
(thou
sands of
dinars)
63
388
41
35
29
6
7
570
NOTE-ISSUING AUTHORITY
The Iraq Currency Board is the only institution authorized to issue
currency notes. Iraq has no national bank; the banking transactions
of the Iraq Government are done with the Eastern Bank Limited, of
Baghdad, a British concern.
RESERVE REQUIREMENTS
The Currency Board is authorized to invest the assets of the
currency reserve fund in securities of, or guaranteed by, States with
a currency convertible directly into gold or sterling, except such por
tion as it may be necessary to retain in cash. The currency law does
not specify that silver may be included in the reserves against the
currency.
The currency reserve fund on March 31, 1935, amounted to
£3,683,258 3s. ($17,605,974).
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
There is no legislation imposing embargoes or restrictions on bullion
movements. Gold is believed to be entering Iraq, smuggled from Iran
despite the gold-export restrictions there.
GOLD
There is no gold reserve. Gold is not purchased hy the Government.
The public has always in the past been engaged in gold hoarding, but
after the World War, and especially during the last 5 years, the general
tendency has been to sell gold in view of the increase in value of that
metal. During the years 1930 to 1934 Iraq exported gold coins
(mostly Turkish liras) to the value of 1,445,930 dinars and gold metal
to the value of 2,170,808 dinars. During this period Iraq imported
gold currency to the value of 554,327 dinars and gold metal to the
value of 21,533 dinars. The country does not at present possess a
large amount of gold; a rough estimate places the gold holdings of the
people in both currency and metal at about 2,000,000 pounds sterling
(or dinars).
THE GOLD CLAUSE
Article 2 of the Iraq currency law no. 44 for 1931 contains the
following provision:
Every contract, sale, payment, bill, note, instrument, and security for money,
and every transaction, dealing, matter, and thing whatsoever relating to money
112
HANDBOOK OF FOREIGN CURRENCIES
or involving the payment of, or the liability to pay, any money, shall, in the
absence of express agreement to the contrary, be deemed to be made, executed,
entered into, done, and had in Iraq according to the standard of currency estab
lished by this law.
Domestic contracts are ordinarily not drawn in terms of gold cur
rency; but if gold is specified, payment must be made in gold. The
connection between the Iraq Government and the petroleum com
panies operating in the country provides for the payment by the latter
of a royalty which is expressed in terms of gold shillings. The Gov
ernment receives the same in local currency at the current market rate
for gold shillings.
SILVER
There has been no new development in the silver situation since the
publication of Trade Promotion Series No. 149, The Monetary Use
of Silver in 1933. The weight of fine silver in monetary use on March
31, 1935, was 1,455,927.56 ounces troy. Details as to the quantity
held by the general public, the banks, or the Government are not
available.
IRISH FREE STATE
The monetary unit is the Saorstat pound (symbol £), divided into
20 shillings (s.) of 12 pence (d.) each. The Saorstat pound has a
par value of approximately $8.2397.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency of the Irish Free State is described in the accom
panying tables.
Although the minting of gold coins was authorized by the Currency
Act of August 20, 1927, none have been minted. Silver coins are
legal tender to 40 shillings.
Foreign notes may be freely imported. Only British bank notes
are in circulation and these are used only occasionally. British coins
are also used.
The use of checks is common.
The Currency Act of 1927 provides in part V, section 45, that
legal tender notes shall be current in the same manner and to the
same extent as gold coins and legal tender to any amount.
Coins of Irish Free State, Mar. 31, 1935
Gross weight
Denomination
2Hs. (half crown).........
2s. (florin).....................
is. (shilling).................
6d. (sixpence)...............
3d. (threepence).. __
Id. (penny)..................
Hd. (halfpenny)------Hd. (farthing).............
Total..................
Silver content
Metal of Fine
chief value ness
Amount
outDiam Thick standng
eter ness (thou
(mm)
(mm)
Grams Grains Grams Grains
sands of
pounds)
Silver........
---do..........
Nickel___
. .do..........
Copper1...
.do.*........
..do.*........
14.13S0
11.3104
5. 0552
4. 5359
3.2400
9. 449S
5.6699
2. 8350
* Tin, 0.030; zinc, 0.015.
0.750
.7.50
.750
1.000
1.000
.955
.955
.955
218.1818 10. 0035 163. 6364 32.28
174.5455 8.4828 130.9091 28.37
87. 2727 4. 2414 65. 4545 23.80
70.0000
20.98
50.0000
21.05
145.8333
30.83
87.5000
25. 45
43. 7500
20.22
2.16
2.28
1.70
1.85
1.S0
1.90
1.73
1.34
363.8
272.5
170.0
73.3
23.0
51.8
5.7
1.2
967.3
113
HANDBOOK OF FOREIGN CURRENCIES
Paper Currency of Irish Free State, Mar. 30, 19351
Amounts outstanding *
Denomination
£100............................................
£50.............................................
£20...............................................
£10...............................................
£5................................................
£1................................................
10s................................................
Dimensions (inches)
Legal
tender
notes
Consoli
dated
bank notes
£1,400
4M by 8.............................................. £87, 700
80,8.50
4M by 8.............................................
650
40.400
4M by 8............................................
2,540
624, 200
4M by 7M.......................................... 1,206,220
3H bÿ 6M.......................................... 3.045, 570 1,515,195
/>Me by ¿‘Me..................................... 2. 307,976 2, 735, 445
3Mo by 5Jrie ..................................... 961, 366
Total
£89,100
81. 500
42,940
1,830, 420
4,560, 765
5,043, 421
961, 366
» Engraved on rag linen watermarked paper of foreign origin. The watermark and high-class printing
with color protection are used to prevent counterfeiting.
*In addition to these notes, £1,116,723 is given as the proportion of old all-Ireland notes attributed to the
Irish P'ree State. Such notes ceased to bo issued in May 1929 and have since been in course of with
drawal from circulation and replacement by consolidated bank notes.
Note Circulation and Legal Tender Note Fund, 1931-35
[In millions of pounds]
Note fund
Average of Saturday figures during—
Note circu British
lation
Govern
ment se Other assets
curities
1931..............................................................................................................
1932.............................. ............................................................................
1933....................................................................... .......................-..........
1934................... .................... ................................................ ................ .
1935 (March)..............................................................................................
7.1
7.1
7.5
7.3
7.6
6.8
6.8
7.3
7.0
7.3
0.3
.2
.2
.3
.3
NOTE-ISSUING AUTHORITY
The sole note-issuing authority is the Currency Commission which
consists of three persons appointed by the Minister for Finance and
three by the eight principal commercial banks known as the “responsi
ble” banks,36 and of a chairman selected by the six other members,
or by the Minister for Finance in case of a tie.
The circulating medium consists of legal-tender notes and consoli
dated bank notes. Legal-tender notes are issued in the name of the
State by the Currency Commission and secured by a fund which
consists chiefly of British Government securities (see preceding
table) but which, of course, may include gold, balances in London, etc.
The consolidated bank notes are issued by the Currency Commis
sion to the responsible banks in proportion to the extent of their
respective assets. The total of such notes may not, however, exceed
£6,000,000. They are secured by the entire assets of the banks and
by a reserve held by the currency commission.
RESERVE REQUIREMENTS
The legal currency reserve requirements are that the assets shall
be in the form of gold coin or bullion, legal-tender money of Great
Britain, sterling bank balances, and British Government securities.
Silver is not included.
u These include the Bank of Ireland, Provincial Bank of Ireland, the Northern Bank, the Ulster Bank,
Munster and Leinster Bank, the Royal Bank of Ireland, the Hibernian Bank, and the National Bank.
114
HANDBOOK OF FOREIGN CURRENCIES
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
There are no embargoes or restrictions on bullion movements.
GOLD
According to data furnished by the Department of Finance and by
the Currency Commission, the gold reserves of the Irish Free State
are negligible. Gold is not being purchased at a premium by the
Government.
Hoarding of gold is negligible, according to the above sources of
information.
THE GOLD CLAUSE
There has been no determination by law of the legal status of the
gold clause in domestic contracts.
SILVER
For information concerning the monetary use of silver, see Trade
Promotion Series No. 149, The Monetary Lse of Silver in 1933.
The weight of domestic issues of silver coin in monetary use as of
December 31, 1934, is reported as follows by the Department of
Finance:
Kilograms
The general public_________________________________ 52, 948
The banks________________________________________ 15, 324
The Government___________________________________ Nil.
Total_____________________________ _________ 68, 272
These figures relate to domestic issues only. In addition, an unascer
tained amount of British token coin is in circulation.
ITALY
The monetary unit is the lira (abbreviation 1.), divided into 100
centesimi. The par value of the lira (plural, lire) is approximately
$0.0891.
DESCRIPTION AND CIRCULATION OF CURRENCY
Coins and notes in circulation are described in the accompanying
tables.
The legal-tender limits on coins are as follows: Gold, none; silver
20-lira, 1,000 lire; silver 5- and 10-lira, 500 lire; nickel 2- and 1-lira,
50 lire; 50-centesimo, 10 lire; 20-centesimo, 5 lire; 10- and 5-centesimo,
1 lira. (Regarding the silver coins, see paragraphs under Silver.)
Foreign notes and coins may be imported, but none circulate in
Italy.
The paper currency is unlimited legal tender.
Protective devices against counterfeiting are: Secret mixing of
coloring matter in the watermarked paper used for notes, special
varnish, and red ink used for printing the control stamp.
115
HANDBOOK OF FOREIGN CURRENCIES
Paper Currency of Italy
Denomination
20lire
Composition
Dimensions
Amount
outstand ing
(millions
of lire)
4,738
2,407
4, 290
1,356
(4)
(«) ’
................-........ m ....................................................
(*)....................................................
>Sometimes mixed with hemp.
on light gray, watermarked paper,
s Dimensions do not take in the margins.
<Ministerial decree of June 15, 1935, published in the Official Gazette of July 15, 1935, authorizes a cir
culation of 850,000,000 lire for these 2 issues.
2 Printed
Coins of Italy
Circulation,
May 31. 1935
(millions
Diam- Thick- of lire)
Metal of Fine
chief value ness
(mm) (mm)
Au- Outthor* standGrams Grains Grams Grains
ized ing
Gross weight
Denomination
10lire
2lire .......................
>0.800
». 835
». 835
Nickel___ .999
.999
i. 975
». 975
Copper— «. 950
<.950
Silver content
231.4854 12.000 185.1883
154.3236 8. 350 128.8602
77. 1018 4. 175 64. 4301
154.3236
8.00
123.4589
6.00
92.5941
4. 00 61.7294
5. 40 83. 3347
3. 25 50.1552
15.00
10.5.0000
10. 00
35.5 2.24
27.0 2.22
23.0 1.70
29. 0 2. 05
26. 5 2. 05
24.0 2. 00
21.5 1.55
22.5 1.88
19.5 1.55
200
650
875
215
170
50
61
45
25
190.8
636. 7
807. 6
199. 3
151. 6
37.6
60.2
38.5
21.9
11Alloy
is nickel.
Alloy is copper.
* Zinc, 0.010; tin, 0.0-10.
<The old 20-centesimo coins are being withdrawn from circulation.
Note.—By decree no. 1148, July 18, 1930, the characteristics of new 100-lira and 50-lira gold coins were
established, having a gross weight, respectively, of 8.7990 and 4.3995 grams, but these coins were never
struck or placed in circulation.
NOTE-ISSUING AUTHORITY
The Bank of Italy (Banco d’ Italia) is the only private institution
in Italy authorized to issue notes. The Government has a controlling
voice in the policies of the bank, both by law and in actual practice,
and its representatives and inspectors are permanently installed in
the bank.
The State is authorized to issue notes to replace the silver coinage.
(See Silver, below.) The Gazetta Ufficiale of June 15, 1935, con
tained regulations for the issuance of the State notes. These relate
to technical details of their manufacture, which is to be carried out
by the Instituto Poligrafico dello Stato; centralization in the Treasury
of the service of the new notes; procedure relating to worn-out notes;
safeguards against counterfeits, etc. The regulations do not specify
the denominations of the new notes. However, it was reported on
June 30 that a ministerial decree was under preparation, calling for
the issuance of 10-lira notes to be used in retiring the 10-lira and
20-lira silver pieces. According to the same report, the existing
5-lira coins will not as yet be retired.
116
HANDBOOK OF FOREIGN CURRENCIES
The declared reason for the new measure is that the cumbersome
nature of the coins impedes their circulation, with the result that
they accumulate in the banks. While the point is not referred to,
the issuance of State notes will make possible a larger circulation of
fractional currency, since the latter can be issued not only against
the retired coins but also against silver stocks in the Royal Mint.
RESERVE REQUIREMENTS
The Currency Act of December 21, 1927, required that a reserve
of at least 40 percent should be maintained against notes in circula
tion and other sight liabilities. This reserve must be in gold or in
exchange on foreign countries whose currency is convertible into
gold (art. 4 of royal decree law of Dec. 21, 1927, no. 2325). The
40-percent requirement was temporarily suspended in July 1935, and
is not now in effect. Silver may not be included, excepting as
described below in connection with decree law no. 874.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
To export gold, a permit must be obtained from the Bank of
Italy, but in actual practice this is not obtainable. Hence an
effective embargo exists on the exportation of gold. The exportation
of silver in any form is proliibited by ministerial decree of May 7,
1935, published in the Official Gazette of May 13.
Smuggling activities are considered to be negligible.
GOLD
The Bank of Italy’s 5,828,000,000 lire gold reserve on May 10,
1935, was equivalent to approximately 461,113,000 kilograms. The
Federal Reserve Bulletin gives the gold holdings of Italy (Central
Bank and Government) on November 30, 1935, as $351,000,000.
No premium above the statutory price for gold is being paid by
the Central Bank or the Government.
Gold hoarding is negligible.
THE GOLD CLAUSE
Articles nos. 1821-1823 of the Italian Civil Code cover the gold
clause in domestic contracts as follows:
A r t . 1821. The obligation resulting from a loan in currency is always for the
specific amount stipulated in the contract. Should an increase or a decrease
occur in (the value of) the currency before the period of the loan expires, the
debtor must return the specific amount loaned, and he is not obliged to repay
this sum other than in the currency in circulation at the time of payment.
A r t . 1822. The rule contained in the preceding article has no effect when
the loan has been made in gold or silver, and where it has been stipulated to
return the same species and quantity. If the intrinsic value of the currency
is changed, or if it cannot be procured or has been withdrawn from circulation,
the equivalent intrinsic value of the money at the time the contract was drawn
up must be returned.
A r t . 1823. If bullion or merchandise has been loaned, the debtor must only
return the same quantity and quality, irrespective of any increase or decrease
in their price.
SILVER
The monetary use of silver in Italy was described in Trade Pro
motion Series No. 149, The Monetary Use of Silver in 1933. The
principal change has been the royal decree law no. 874 dated May
117
HANDBOOK OF FOREIGN CURRENCIES
20, 1935, and published in the Official Gazette of June 15, 1935. This
decree authorizes the Finance Minister to withdraw silver coins from
circulation and issue paper money (biglietti di Stato) in their stead,
using the coins thus withdrawn, plus stock of silver now held by the
mint, as coverage therefor. The hoarding of silver coins is forbidden,
under penalty. Persons found in possession of Italian silver coins
after the period fixed for their exchange will be subject to fines
ranging from 100 to 2,000 lire. The date when coins will cease to
be legal tender was established as December 31, 1936, by a decree
of the Finance Minister dated June 15, 1935, and published July
15. The coins are exchangeable, however, until December 31, 1937.
The weight of silver coins outstanding on May 31, 1935, was as
follows:
Kilograms
20-lira coins____________________________________ 1, 144, 986
10-lira coins____________________________________ 531, 709
5-lira coins____________________________________ 674, 380
Total____________________________________ 2, 351, 075
This was equivalent to approximately 75,587,001 fine ounces troy.
The Bank of Italy estimates the amount of silver held by the
public in the form of bullion at 2 (^000,000 to 21 ,000,000 lire. The
amount of silver held by the mint is not available, this information
being considered confidential.
JAPAN (INCLUDING CHOSEN AND TAIWAN)»»
The monetary unit is the yen (symbol ¥), divided into 100 sen.
The yen has a par value of approximately $0.8440.
DESCRIPTION AND CIRCULATION OF CURRENCY
Details of metal and paper currency outstanding in Japan are
shown in the accompanying tables. Data on the outstanding cir
culation of the various kinds of coins and of the various denomina
tions of notes are not available in detail. (For data on silver coins
see “ Silver” below.)
Coins of Japan
Denomination
Metal of chief Fineness
value
20 yen............................. Gold................
10 yen..............................
5 yen.................................
Silver..............
Nickel______
6 sen.............
1 sen.............
0.900
.900
.900
.720
.720
».250
*.250
». 950
Gross weight
Grams
Grains
16.6667
8.3333
4.1667
4.9500
1.9800
3. 7500
2. 6250
3. 7500
257.2059
128.6030
64. 3015
76. 3902
30. 5561
57. 8713
40. 5099
57.8713
Gold or silver con
tent
Diame
ter i
(mm)
Grams Grains
15.0000 231.4853
7.5000 115. 7127
3. 7500 57.8713
3. 5640 55.0009
1. 4256 22. 0004
28.7850
21. 2100
16.9680
23.4977
16. 9983
22.1190
19.0890
23.0280
1 Data as to thickness of the coins are not available.
1 Copper 0.750.
1 Tin 0.040; zinc 0.010.
MThe currency system is described in detail in The Currency System of Japan, Trade Information
Bulletin No. 673, by Herbert M. Bratter, sold at 10 cents per copy by the Government Printing Office,
Washington, D. C. See also Japanese Banking, Trade Promotion Series No. 116, by Herbert M. Bratter,
sold at 50 cents a copy.
118
HANDBOOK OF FOREIGN CURRENCIES
Paper Currency of Japan
Issuing authority and denomination
Dimensions
Circulation.
May 31,
1935 (mil
lions of
yen) ‘
Government:
Bank of Japan:
/188 by 97 millimeters.................................. ........
180.28.*» by 104.232 millimeters . __ ____
139.38 by 79.386 millimeters..............................
f136.35 by 78.78 millimeters............................ .
\130.593 by 73.679 millimeters *.........................
11.2
> 1,201.6
1Totals published monthly in Hank of Japan’s Monetary Statistics,
i New.
* Excluding 79,234,000 yen held as reserves by the other banks of issue.
In addition to the notes of the Government and of the Bank of
Japan, there were in circulation on May 31, 1935, 146,700,000 yen
of notes issued by the Bank of Chosen and 55,200,030 yen issued by
the Bank of Taiwan.
Japanese paper currency is engraved, the plates being made at
the Government Printing Bureau. Special note paper is manufac
tured in the Government paper mills. The paper is made from a
certain kind of mulberry tree. The quality of the paper and ink and
the type of print are distinguishing points to prevent counterfeiting.
Foreign currency may be imported, but none circulates in Japan.
NOTE-ISSUING AUTHORITY
With the exception of Government fractional notes issued during
1916-18 and now obsolete, all bank notes in Japan proper are the
issue of the Bank of Japan, the central bank. In Chosen, the Bank
of Chosen has the sole right of note issue, and in Taiwan, the Bank of
Taiwan.
The Bank of Japan is a limited stock company. Theoretically, the
Government does not have the controlling voice in the policies of the
bank. In fact, however, the bank’s policy is always in accordance
with that of the Government. By a law of June 1932 there was
created an advisory council, the members of which are appointed by
the Minister of Finance from men engaged in industry or finance.
The function of the council is to act in consultation with the governor
of the bank on matters relating to the policy and operation of the bank.
RESERVE REQUIREMENTS
The Bank of Japan may issue its bank notes to any amount against
specie reserve of gold and silver, provided that the value of silver shall
not exceed one-fourth of the total. The bank is also authorized to
HANDBOOK OF FOREIGN CURRENCIES
119
make fiduciary issues against Government bonds or other specified
securities up to 1,000,000,000 yen. An additional fiduciary issue over
and above this limit may be made, provided, however, that in case
such an excess issue is to continue beyond 15 days the bank shall
obtain the approval of the Minister of Finance therefor, and that
it shall pay a tax on the same as from the sixteenth day at a rate of
not less than 3 percent per annum.
Actually, the official reserve of the Bank of Japan is all in gold.
The Bank of Chosen may issue notes to an unlimited amount
against gold specie or Bank of Japan notes, but its fiduciary issue is
limited to 50,000,000 yen, which must be secured by national and
other bonds and commercial bills of a reliable nature. In case of
necessity, the bank may be allowed to issue additional fiduciary notes
subject to a tax of at least 5 percent per annum.
The Bank of Taiwan may issue notes to an unlimited amount
against gold specie. The bank is authorized to make fiduciary issues
in an amount not exceeding 20 ,000,000 yen, which must be secured
by Government paper money and securities, notes of the Bank of
Japan, and other bonds and commercial bills of a reliable nature.
Additional issues are permitted subject to a tax of at least 5 percent
per annum.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
An embargo on the export of gold was declared on December 13,
1931, and is still in force. No restrictions exist on imports of gold
or on the movement of silver.
Export smuggling of gold from Japan is believed to exist on a very
limited scale. Considerable silver finds its way into Japan from
China and Manchuria by way of Chosen. It is then refined and
exported to London. During the first 8 months of 1935, recorded
exports of silver from Japan were valued at 123,185,000 yen compared
to 5,944,000 yen in the corresponding period of 1934. Officially
recorded imports during the same period were only 860 yen as against
331,000 yen for the first 8 months of 1934.
GOLD
The gold reserves of the Bank of Japan on June 1, 1935, were
valued at 477,882,304 yen. The statutory value of gold in Japan is
five yen per momme of 3.75 grams. On this basis the 477,882,304
yen of gold was equivalent to 95,576,476 momme, or 358,411,784
grams. One momme = 0.12057 ounces troy.
The Gold Purchase Law of March 1934 became effective April 7,
1934. This law was enacted to compensate the Bank of Japan for
losses incurred in acting as the Government’s purchasing agent and
depository for newly mined gold. It provides: ( 1) That the purchase
of all gold for the Government’s account shall be made through the
Bank of Japan at a price approved by the Minister of Finance;
(2) that such gold shall be added to the bank’s note-issue reserve;
(3) that losses incurred by the bank through buying gold at prices
above the statutory purchase price and entering it on its books at the
statutory price of 5 yen per momme shall be borne by the Government
and covered by noninterest-bearing Government notes limited in
amount to 100,000,000 yen; and (4) that all profits to be later realized
on the gold shall go to the Government.
122
HANDBOOK OF FOREIGN CURRENCIES
Coins of Latvia
Gross weight
Metal of Fine
Denomination chief
value ness
Circulation June 1,
1935 (millions of lats)
Silver content
Diam- Out
oter 1
In
(mm) stand
ing in Bank
Grams Grains Grams Grains
general of Lat Total
circula via
tion
5 lats......... .........- Silver....... 0.835 25.0000 385.8089 22.5000 347.2280
.835 10.0000 154. 3236 8.3500 128. 8602
2 lats....... ............
1 lut ................. ...d o .......... .835 5.0000 77.1618 4.1750 64.4301
50 santimi______ Nickel. .. 1.999 6.5000 100.3103
1.999 4.0000 61.7294
1.999 3.0000 46.2971
5 santimi............ Copper__ 3. 950 3.0000 46. 2971
». 950 2.0000 30. 8647
*. 950 1.8000 27. 7782
Total..........
35
27
23
25
21
19
22
19.5
17
12.8
8.6
4.7
.9
.9
.7
.3
.4
.2
29.5
5.2 18.0
5.4 14.0
5.3 10.0
2.8 3.7
1.9 2.8
.6 1.3
.6
.3
.5
0)
.2
(4)
21.5 «51.0
1 Details as to thickness are not available.
* Alloy not stated. One source describes these coins as pure nickel.
» Tin 0.040, zinc 0.010.
« 29,073 lats.
» 4,249 lats.
• The slight discrepancy in the summation is due to abbreviation of the items.
NOTE-ISSUING AUTHORITY
The only note-issuing authorities are the Treasury and the Bank of
Latvia (Latvijas Banka), which is under direct control of the Govern
ment. Treasury notes in circulation as of June 1, 1935, amounted to
41,364,760 lats, while notes of the Bank of Latvia amounted to
37,396,410 lats.
RESERVE REQUIREMENTS
The currency laws of Latvia provide that issues of paper currency
by the Bank of Latvia up to 100 ,000,000 lats must be covered by
gold and stable foreign currencies to the extent of 50 percent; issues
in excess of 100 ,000,000 lats by gold and foreign currency to the
extent of 75 percent; and those in excess of 150,000,000 lats,
entirely by gold and foreign currency. Treasury note issues may
not exceed 48,000,000 lats and must be covered by gold to the
extent of 25 percent.
Latvia has no gold coinage. Foreign gold coin held in the reserves
on January 1 , 1935, amounted to 5,246,079 lats, and gold bullion
on the same date to 219,922 lats.
No legal provision is made for including silver in the currency
reserves. Latvia has no holdings of silver bullion, nor has it a mint.
The silver currency in use is made by the British Royal Mint.
The legal tender limit for silver coins is 25 lats. There is no
legal tender limit for the various denominations of bank notes.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Under a law which became effective March 15, 1935, only the
Bank of Latvia is permitted to import and export gold, silver, and
paper currency. Considerable smuggling of paper currency is
believed to exist, but it is doubtful that there is much smuggling of
gold or silver.
HANDBOOK OF FOREIGN CURRENCIES
123
GOLD
Gold coin and bullion held as reserves in the Treasury and in the
Bank of Latvia, and held abroad as foreign exchange, were valued
on January 1, 1935, at 46,334,109 lats. No figures as to its weight
are available; but taking as a basis the Government’s official price
of 3,850 lats per kilogram, the weight of gold reserves may be
estimated at 12,034 kilograms.
Gold is not being purchased at a premium by the Government.
No figures are available as to gold hoarding by the public, but
hoarding is not believed to be extensive, one reason being that Latvia
has no gold coinage.
THE GOLD CLAUSE
There is no legal provision for the gold clause in domestic contracts.
SILVER
Coinage of silver is limited to 30 lats per capita.
The nominal value of silver coins in monetary use on June 1, 1935,
was 41,978,161 lats, of which 26,100,202 were in general circulation
and 15,877,959 were held by the Bank of Latvia.
Since the fine silver content of the coins is 4.175 grams per lat,
the total amount of fine silver in the coins in circulation on June 1,
1935, may be estimated at about 175,259 kilograms.
LITHUANIA
The monetary unit is the litas (abbreviation 1.), divided into 100
cents. The litas (plural litu) has a par value of approximately
$0.1693. In the United States the unit is generally referred to as the
lit.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
American paper dollars sometimes, though rarely, appear in circu
lation. They are generally received as remittances from emigrants
in the United States and are almost always deposited by recipients at
the banks. No other foreign currency is in circulation. There are no
restrictions on the importation of foreign notes.
The use of checks is negligible. The people are very skeptical of
payments made in checks.
Paper Currency of Lithuania 1
Denomination (litu)
Dimensions *
1,000............................... ..................................
500...............
7‘Vio by VA inches...
100...............
50.................................
20..........................
10......................................................................
5 3.........
Total........................................................
Amount
outstand
ing June 1,
1935 (mil
lions of
litu)
35. 7
13 3
96.9
1 Printed on paper of foreign manufacture. Details of the bank-note paper and the protective devices
used against counterfeiting are considered confidential and are not available for publication.
1 Not official, but taken from notes in circulation.
3 Notes of this denomination are quickly worn out, and the policy of the Government is to replace them
with coins.
124
HANDBOOK OF FOREIGN CURRENCIES
Coins of Lithuania
Gross weight
Silver content
Amount
out
Diam Thick standing
Metal of Fine
eter
ness
June
chief value ness Grams Grains Grams Grains (mm) (mm) 19351,
(millions
of litu)
Denomination
2 litu..........................
i 0. 500
>.500
«.500
2.900
2 .900
2.900
2.900
2.900
13.5000
5. 4000
2. 7000
5. 0000
4.0000
3. 0000
2. 1000
1. 6000
208. 3368 6. 750 104.1684 29.5
83. 3347 2.700 41. 6674 23.0
41.6674 1.350 20. 8337 20.0
24. i»93C
77. 1618
25.0
61. 7294
21.0
46. 2971
19.0
32. 1079
24.6918
10.0
2.0
1.3
1.0
1. 62
1.57
1.45
1.22
1.27
4.3
3.5
3.2
1.2
.9
.7
.4
4 14.0
» Alloy is copper.
2 Aluminum, 0.090; other, 0.010.
* 49,997 litu.
4 The discrepancy in the summation is due to abbreviation of the items.
NOTE-ISSUING AUTHORITY
According to paragraph 11 of its organic act—published in the
Lithuanian Official Gazette (Vyriausybes Zinios) No. 104 of August
29, 1922, serial no. 818—the Bank of Lithuania (Lietuvos Bankas)
was granted the exclusive right of issuing bank notes during a period
of 20 years. This period may be extended by law upon application of
the bank’s shareholders.
The exclusive right of minting coins was given to the Treasury, in
accordance with paragraph 1 of the monetary law published in Official
Gazette No. 167, dated August 8 , 1924, serial no. 1169.
The Bank of Lithuania was formed as a private joint-stock bank.
The Government, however, owns 85 percent of the shares of the bank,
and the President of the Republic, upon the recommendation of his
Cabinet, appoints, and has the power to remove, the governor of
the bank. The governor, assisted by an advisory board, maintains
supervisory control over the bank’s directors, who are elected by the
shareholders for a period of 3 years. The governor may veto the
decisions of the board of directors and of the advisory board. In
case of a variance in opinions the final decision rests with the Minister
of Finance.
RESERVE REQUIREMENTS
The bank notes in circulation must be covered by gold to the extent
of 33'3 percent at least, and by stable foreign currencies and easily
negotiable securities in a proportion not exceeding 66 % percent. No
provision has been made for including silver in the currency reserve.
The bank holds no silver bullion. It receives Lithuanian silver
and copper coins as needed directly from the Treasury, and purchases
small quantities of foreign silver for its current needs. The latter
holdings are not counted as bank-note cover.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
A law of February 29, 1920 (published in Official Gazette No. 21 of
March 10, 1920) prohibited the exportation of gold and silver in any
form, oxcept with the permission of the Minister of Finance. How
ever, this law ceased to have any significance within a few years after
its passage. Lithuania thereafter remained on the gold standard
HANDBOOK OF FOREIGN CURRENCIES
J25
until October 1, 1935, when an exchange control law went into effect.
In practice, a permit for the exportation of precious metals has never
been refused.
The importation of gold and silver into Lithuania is not regulated.
Since the trade in precious metals is virtually free, no smuggling
of gold or silver is believed to exist. This is specifically true of gold
and silver bullion and gold and silver coins, imports of which are
exempt from duty in accordance with sections 1 and 9, respectively,
of paragraph 148 of the Lithuanian import tariff. There is no export
duty on precious metals.
GOLD
On June 15, 1935, the gold reserves of the Bank of Lithuania
amounted to 43,397,274 litu. The weight of the gold was 6,530
kilograms.
Purchases of gold are made by the bank on world markets; no
premium is paid.
Gold hoarding is not widely engaged in by the public, despite
political uncertainties in Europe at the present time. Local bankers
estimate the total value of gold holdings of the population at 5,000,000
to 10,000,000 litu. Most of the gold so held consists of old Russian
coins.
THE GOLD CLAUSE
The gold clause has generally not been resorted to in drawing up
contracts. According to a recent decision of the Supreme Tribunal,
contracts drawn in dollars must be settled cither in dollars or in litu
at the rate for the dollar prevailing on the date of payment, but
contracts calling for payments in dollars at the rate of 10 litu to
$1, namely, at the former gold value of the dollar, must be paid at
this rate. This decision will serve as a precedent in future settle
ments of domestic contracts.
Payments in gold, if stipulated in contracts, have the same force,
from a juridical point of view, as settlements involving other legally
recognized commodities.
In a report dated July 15, 1935, the American consul at Kaunas
referred to a decision by the Lithuanian Supreme Tribunal in June
1935, in the case of D iem a n a s v. Ilen igsbergas. This litigation
related to a loan of 120,000,000 litu to be repaid in dollars. The
Tribunal ruled that the loan may be repaid in dollars or at the rate
of exchange prevailing on the date the loan fell due. It is believed
that this case will be used as a precedent in future litigations involving
contracts calling for payments in dollars. Regarding payments of
interest, the Supreme Tribunal, in a decision handed down in August
1935, ruled that in dollar contracts where no specific stipulation was
made regarding interest payments, such settlements may be made
either in dollars or litu at the rate of exchange prevailing on the day
the interest falls due.
SILVER
Silver is a legally recognized commodity in Lithuania, and there are no
restrictions on purchases or sales. However, according to article III,
paragraph 9, of the monetary law, no one shall be obliged to accept
more than 50 litu in silver coins in payment of a debt, or otherwise.
Total holdings of silver, as of Juno 1, 1935, are estimated at 19,161
kilograms (fine), of which 15,778 are in general circulation and 3,383
are held by the Bank of Lithuania.
66111"— 36-------9
126
HANDBOOK OF FOREIGN CURRENCIES
MANCHURIA
The monetary unit is the Manchurian yuan (symbol $ or Y),
divided into 100 fen or 10 chiao. The Manchurian yuan has no fixed
par value in terms of gold.
DESCRIPTION AND CIRCULATION OP CURRENCY»'
The currency is described in the accompanying tables. The coins
are legal tender to 100 times their face value. The notes of the
Central Bank of Manchou are unlimited legal tender.
As a result of the policy followed by the Central Bank, of substi
tuting its own notes and coins for the bewildering variety of currencies
previously in circulation in Manchuria, the only currencies of import
ance at present are the notes and coins of the Central Bank and the
Japanese notes and coins which circulate principally in the South
Manchuria Railway zone. The Japanese notes in circulation are
chiefly those issued by the Bank of Chosen. Old Chinese copper
coins and notes are still to be found in the rural areas, but are rapidly
being replaced by new Manchurian currency. (The position of
silver coins and bullion is discussed under “Silver”, below.) Accord
ing to the mos.t recent report of the Central Bank of Manchou, the
total value of the coins it had issued up to January 1, 1935, is shown
in the accompanying table.
Paper Currency of Manchuria
[Issued by Central Bank of Manchou]
Denomination
Dimensions
182 by 103 mm.
162 by 93 mm.
152 by 87 mm.
142 by 81 mm.
Denomination
Dimensions
H Manchurian yuan (5 chiao)__ 122 by 70 mm.
Manchurian yuan (newly
118 by 65 mm.
Tho total amount of bank notes of the Central Bank outstanding
on June 18, 1935, was 134,500,000 Manchurian yuan and consisted
chiefly of 10-yuan notes.
The paper for the Central Bank notes is manufactured in Japan.
It is not linen, and is slightly inferior to the paper used in yen notes.
The notes are engraved. The devices to prevent counterfeiting are
not disclosed by the bank officials, but in general they are the same
as used in the yen notes.
Coins of Manchuria
Oross weight
Denomination (Manchurian Metal of chief value Fineness
yuan)
.006 (5 11).................................
t Details as to thickness are not available.
*0.250
*.250
*. 950
*.950
Grams
Grains
5.0000
3.5000
5.0000
3.5000
77. 1600
54.0120
77. 1600
54.0120
* Alloy is copper.
Amount
outstand
Jan. 1,
Diame ing
(mil
ter 1 1935
lions of
Manchur
ian yuan)
mm.
12.7
23.0
1.6
20.0
1.3
24.0
.2
21.0
15.8
* Tin, 0.040; tine, 0.010.
* See also Trade Promotion Series No. 140, The M onetary Use of Silver In 1033, pp. 42 and 43.
HANDBOOK OF FOREIGN CURRENCIES
127
NOTE-ISSUING AUTHORITY
Aside from the Japanese currency issued by the Bank of Chosen,
the Central Bank of Manchou is the sole note-issuing agency in
Manchuria. The Government of Manchuria owns one-half of the
shares of the bank (which total 15,000,000 Manchurian yuan at
present), and it exercises plenary control over its personnel and
policies under ordinance no. 26 of June 11, 1932, which established
the bank.
The Governor and Vice Governor of the bank are appointed by the
central regime, and the directors may not assume office without the
approval of the Government (art. XX). Article XLII provides
that the Government may issue necessary orders for the supervision
of the bank, and article XLIII requires the bank to render monthly
reports to the central regime.
RESERVE REQUIREMENTS
Article X of the currency law promulgated June 11, 1932, provides
that “the Central Bank of Manchou shall hold as reserve a sum equiva
lent to 30 percent or more of the total amount of notes issued in gold
and silver bullion, reliable foreign currencies, and deposits with foreign
banks in gold and silver accounts.” In its semiannual condensed
statements, the bank shows gross totals under the heading of “bullion”
and “deposits with other banks”, the figures for December 31, 1934,
being as follows: Bullion, 38,538,535.76 yuan; deposits with other
banks, 50,439,837.05 yuan.
The bank, however, has never published more detailed statements
showing the nature of its bullion holdings. It is known, however,
that the bank, at the time of its formation, took over the bullion and
silver yuan holdings of the former Fengtien Provincial Bank, the
Kirin Provincial Bank, the Heilungkiang Provincial Bank, and the
Frontier Bank, the value of whose aggregate holdings local bankers
have roughly estimated at 30,000,000 Chinese silver yuan. Local
bankers also state that the Central Bank has recently sold several
million silver yuan at current market rates in exchange for its own
notes, in order to contract the note issue and support the exchange
value of the notes against speculative raids. According to reports
published by the bank, it had purchased a total of 1,917,948 grams of
Manchurian-mined gold up to January 1, 1935.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
The exportation of either gold or silver from Manchuria, with the
exception of limited quantities of silver yuan which migratory laborers
were permitted to take out with them, had been prohibited for many
years under the Chang Hsueh-liang regime, and these restrictions
have been continued by the present regime. On June 14, 193-3, the
Ministry of Finance promulgated order no. 13 prohibiting the exporta
tion from Manchuria of gold in any form (with the exception of
personal ornaments of travelers) without the permission of the
Ministry, under penalty of confiscation and a fine double the amount
of the confiscated gold. Apparently, no legislation has been enacted
by the present regime prohibiting the exportation of silver, the present
prohibition laws being based on the customs regulations of the former
regime.
128
HANDBOOK of
foreign currencies
Despite these prohibitions, the smuggling of silver yuan and bullion
has gone on continuously, and in large proportions during 1935 as a
result of the rise in the international price of silver. The local press
has reported a smuggling trade of large volume from Manchuria to
Chosen, in the vicinity of Antung. It is believed that a minor propor
tion—perhaps 20 percent—of this silver originated in Manchuria; the
balance, it is understood, came from North China.
GOLD
Gold reserves .—A minor portion of the bullion holdings which the
Central Bank of Manchou acquired from the former provincial banks
consisted of gold bars and coins, but no estimate of the amount now
held is available. As stated above, the bank reports that it had
purchased 1,917,948 grams of locally mined gold up to January 1,
1935.
P urch ases by central regim e .—On June 14, 1933, the Ministry of
Finance promulgated an ordinance requiring the Central Bank of
Manchou to purchase all gold mined in Manchuria at prices to be
fixed weekly by the Ministry. The order also prohibits gold miners
from selling newly mined gold to purchasers other than the Central
Bank without the permission of the Ministry of Finance. For the
week beginning June 22, 1935, the bank’s gold purchase rate was 3.45
Manchurian yuan ($1,026 United States currency at current market
rates) per gram.
G old h oardin g .—Although silver has traditionally been the favorite
metal of the Clunese for hoarding purposes, the depreciation of silver
after 1930 increased the popularity of gold among the public, and the
active trading in gold bars at Shanghai was reflected to some extent
in the provincial money centers. Because of its greater value, how
ever, the hoarding of gold was confined principally to the wealthier
bankers, merchants, and military officials, and the total value of gold
holdings of the banks and private hoards, is probably small in com
parison with the silver holdings. No estimates of such holdings are
available.
THE GOLD CLAUSE
Since both Chinese and Manchurian currencies have been based on
silver, and since the Japanese yen has been divorced from gold since
1931 (although the term “gold yen” continues to be used to distin
guish it from the “silver yen” which circulates in the Kwantung
Leased Territory), the gold clause is not used in domestic contracts.
L egal sta tu s .—Those
SILVER
who set up the present Manchurian regime
apparently intended that the currency be on a silver, or at least a
silver-exchange, standard. Article 2 of the currency law states that
“ 23.91 grams of pure silver in wreight shall be the monetary value to
be called a yuan.” The Central Bank, however, has never minted
such a coin, or any other silver coin. For some time after the founding
of the bank, its paper notes circulated approximately at par with the
Chinese silver yuan (which contains approximately 23.9333 grams of
pure silver) and with Tientsin and Shanghai yuan notes, which were
then convertible into silver. But the Central Bank has never under
taken to sell either silver yuan or Shanghai yuan drafts at parity writh
HANDBOOK OF FOREIGN CURRENCIES
129
its notes; instead it has made such sales at prevailing market rates.
This temporary de facto parity was apparently made possible by
trade conditions, and by exchange operations conducted by the
Central Bank. During this early period, therefore, although the
notes were inconvertible at home, the currency was so managed as
to give Manchuria the silver exchange standard.
When, in October 1934, the Chinese Government imposed restric
tions on the exportation of silver, and the value of both Chinese yuan
and silver continued to rise—although unevenly—on the international
market, the Manchurian authorities apparently decided to abandon
further attempts to keep the currency at parity with silver. After
that date, the value of the Manchurian yuan in terms of foreign
currencies declined while Shanghai exchange continued to rise.
The policy of the bank in October 1935 appeared to be to maintain
the yuan at parity with the yen. During 1934 the yuan was at a
premium of from 9 to 15 percent over the yen. This disparity was
steadily reduced during the spring and summer of 1935, and since the
first week of September the Central Bank has exchanged yen and
yuan at par. No official announcement of this pegging has been
made, and the vice governor of the bank stated that while the bank
regarded parity as desirable, it did not, in view of the instability in
world currencies, wash through public announcement to take a position
from which it might be embarrassing to retract if parity proved
difficult to maintain. Maintenance of the two currencies at par has,
however, been long demanded by Japanese investors and business
interests; and it would greatly simplify bookkeeping in the already
unified Manchukuo and Japanese railway, telegraph and telephone
systems, and would equally facilitate the proposed unification of the
Manchukuo and Japanese postal and taxation systems in Manchuria.
If trade conditions should in the future make it difficult for the
Central Bank to exchange yen and yuan freely at par, it seems prob
able, in view of the many advantages of parity, that the bank will
restrict the volume of such exchanges rather than abandon the present
de facto parity.
The divorce of the Manchurian yuan from silver was made more
definite by the promulgation on May 30, 1935, of order no. 4 of the
Department of Finance outlawing the silver clause in contracts, and
requiring that creditors must accept Manchurian yuan in payment
of both existing and future contracts. Since silver yuan are now
(October 1935) at a 70-percent premium over Manchurian currency,
the effect of this ordinance is to prohibit the use of silver as currency
and to give it the same commodity status as gold.
The principal object of the ordinance probably was to unify the
currency by eliminating silver; a secondary result has been the relief
of debtors who would have suffered severe losses because of the rise
in the value of silver, and the avoidance in Manchuria of the deflation
which has had such serious results in China. The Central Bank has
not yet required private banks to turn in their silver stocks, and it is
improbable that the metal will be nationalized, as gold and silver have
been in the United States.
Silver stocks.—Local bankers state that an estimate of silver stocks
in Manchuria is not obtainable. It is impossible to evaluate the
amount hoarded by the public. The private banks do not publish
130
HANDBOOK OF FOREIGN CURRENCIES
their silver holdings, and the Central Bank, as stated above, does not
indicate in its reports what portion of its reserves consists of silver.
It is believed that Manchuria’s silver stocks are suffering small net
losses as the result of the smuggling operations.
The following information bulletins were issued by the Department
of Foreign Affairs of the Manchurian regime and published, January
1935, in a volume entitled “Information Bulletins, February 16, 1934,
to January 15, 1935”:
Bulletin No. 16, April 26, 1934—Government to Abolish Chenping Silver in
Line with Currency Unification Program
The Department of Finance issued a departmental notice under the date of
April 20, 1934, 1st year of Kante, announcing the decision of the Government
to undertake the redemption of Chenping silver, the silver ingot currency which
still enjoys a limited circulation in the Antung district, in line with its program
to unify and stabilize the currency situation in this country. According to the
notice all commercial transactions in terms of Chenping silver will be forbidden
after September 30, 1934, and the silver ingots will be bought up by the Central
Bank of Manchou at the officially fixed rate of 100 yuan of the new Manchoukuo
currency for 70.2 taels of the former up to December 31, 1934. The public assay
ing office for the Chenping silver currency known as the Antung Kungkuchu,
moreover, will be closed after April 30, 1934, by order of the Government for the
purpose of expediting the change from Chenping silver to the Manchoukuo
currency.
Legally the circulation of Chenping silver has been forbidden since July 1,
1932, under the provisions of the regulations governing the adjustment of old
currencies (ordinance no. 38, June 28, 1932) but the regulations insofar as they
affect Chenping silver were not immediately enforced because of various cir
cumstances, internal and external, existing at the time of the establishment of
the new regime. Among them was the fact that the foundation of the nation
in those days still lacked solidarity. The Government consequently feared that
any drastic measures to regulate the currency at such a time might cause a seri
ous financial disturbance in the Antung district.
The situation, however, is greatly changed today. With the growing soladarity of the new State, the people have come to place full confidence in the new
Government and its central financial institution, the Central Bank of Manchou,
which is reflected in the remarkable success which the Government has achieved
in reforming the currency situation and establishing a uniform and stabilized
national currency now accepted without question in every part of the country.
These encouraging changes, and the fact that the Chenping silver currency
recently has been often subject to fluctuations owing to speculative activities
and rumors of various sorts, prompted the Government to make the present
decision. Abolition of Chenping silver and its replacement by the Manchoukuo
currency will not only stabilize the financial situation in the Antung district, but
will also be another step toward the goal of currency unification.
In connection with the present currency reform the Government announces
that it is prepared to grant every possible financial assistance to the Antung
district. It, therefore, hopes that the financiers, business men, and the general
public of Antung will continue to place their confidence in the Government and
cooperate with it in putting through the reform project.
The success of the new administration’s currency unification program may be
seen from the fact that already 82 percent of the depreciated paper notes of the
former banks under the control of the old Northeastern Government have been
withdrawn from circulation through the agency of the Central Bank of Manchou.
Furthermore, the geater half of some 100 different varieties of the “ssutieh” or
privately issued bearer-notes found in more than 60 hsien in Manchuria have
been redeemed in exchange for new Manchoukuo notes. The adjustment of the
Kuoluyin system of transfer based on Yingping silver, a local currency of limited
circulation in the Yingkow (Newchuang) district, which is one of the latest tasks
undertaken in the currency unification program, has also been completed.
Chenping silver and another minor currency known as the Hsiaoyangchien,
which consists of round silver coins of small denominations, are today the only
two old forms of currency still enjoying a limited local circulation. The former, as
mentioned in the foregoing, will be abolished within this year. As regards the
latter, the Government is intending to devise appropriate measures for its with-
HANDBOOK OF FOREIGN CURRENCIES
131
drawal in the near future. Its regulation is somewhat complicated, as the cur
rency is circulated in the Antung district, as well as in districts adjacent to and
in the Kwantung Leased Territory.
Bulletin No. 25, June 12, 1934—Finance Department’s Notice Regarding
Old Notes
Notice has been issued by the Department of Finance under date of June 8,
1st year of Kangte (1934) regarding the validity of the old notes hitherto in cir
culation and the special arrangement made for the exchange of these old notes
for Manchoukuo currency.
The notice calls the attention of the public to the fact that, in accordance
with the provisions set forth in ordinance no. 38, issued in June 1932, the old
notes in question lose their validity and are prohibited from circulation after
June 30, 1934.
But for the benefit of persens, especially those living in remote outlying dis
tricts, who may have had no opportunity to exchange their old money for the new
Manchoukuo currency and who thereby may incur losses, arrangement has been
made whereby the Central Bank of Manchou will exchange such old notes for
the new ones during the period of one year only, i. e., from July 1, 1934, to June
30, 1935, at the exchange rates officially fixed in 1932 and in force at present.
In order to offer further convenience to persons still holding these old notes,
the notice says that taxes and other forms of Government revenues may be re
ceived in old notes during the period aforementioned, but that payments by the
different Government offices are to be made strictly with the new notes.
MEXICO
The monetary unit is the peso (symbol $), which is divided into
100 centavos. According to article 1 of the monetary law of July
25, 1931, the unit is the peso, equivalent to 75 centigrams of pure
gold, but article 2 of that law provided that circulating money (las
monedas circulantes) shall consist of (a) notes legally issued by the
Bank of Mexico; (b ) silver 1-peso pieces authorized by the law of
October 27, 1919; and (c) silver fractional coins of 10, 20, and 50
centavos and bronze coins of 1, 2, and 5 centavos, authorized by
laws of March 25, 1905, April 25, 1914, October 27, 1919, and April
29, 1925.
Article 4 of the law of July 25, 1931, provided that only the silver
peso coins of the type created by the law of October 27, 1919, should
be legal tender in unlimited amounts. Fractional silver coins were
declared to be legal tender in payments not exceeding 20 pesos, and
fractional bronze coins, in amounts not exceeding 2 pesos (art. 5).
The law of Jidy 25, 1931, decreed the discontinuance of gold coin
age. Moreover, it provided (art. 7) that “the obligation to pay any
sum in Mexican currency shall be satisfied by delivery, at their
nominal value, with the limit of their legal-tender power, silver and
bronze coins of the minting retained in this law.”
As a result of the rapid rise in the price of silver in the spring of
1935, a decree was issued on April 26, 1935, effective the following
day, which declared that the silver coins, 1 peso, 50 centavos, 20
centavos, and 10 centavos, then in circulation would cease to be
legal tender but could be exchanged for legal circulating media.
Subsequently, the date for putting the decree into effect was post
poned until July 27, 1935.
The only silver coins that are now legal tender are the newly
minted tostones. The only other coins in circulation are of nickel
and bronze.
Although the par value of the theoretical gold peso is $0.8440, the
exchange value of the Mexican peso is now $0.2785.
132
HANDBOOK OF FOREIGN CURRENCIES
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency in legal circulation at present is further described in
the accompanying tables.
Paper Currency of Mexico
Denomination
Circu
lation,
Apr. 26,
1935
(mil
lions of
pesos)
Dimension
7 by 3 inches..
7 by 3 inches. _
7 by 3 inches. .
7 by 3 inches..
7 by 3 inches.
9.5
10.0
13.4
14.0
44.0
Denomination
Total........................
Circu
lation,
Apr. 76,
Dimension
1935
(mil
lions of
pesos)
7 by 3 inches..
7 by 3 inches..
7 by 3 inches .
69.0
89.4
45.0
295.1
Coins of Mexico
Gross weight
Denomination
Silver content
Diam Thick
Metal of Fine
ness,
eter average
chief
ness
value
Grams Grains Grams Grains (mm) (mm)
50 centavos (1 toston). Silver '. 0.420 7.9733 123.042 3.3488 51.680
Bronze.. .950 15.1X00 231.480
.950 12.0000 185.184
...d o ....... .950 9.0000 138.888
1.000 5.0000 77.1«0
Nickel
.950 6.0000 92. 592 .............
Bronze
.950 3.0000 46. 296
Total..................
» Alloy Is copper.
27
32« *
SOU
28
20
25
20
2.41
2.11
2.05
2.15
1.80
1.50
Amount
out
stand
ing
Sept . 30,
1935
(mil
lions of
pesos)
35.4
3.7
.2
4.0
a. 7
.7
2.4
48.1
NOTE-ISSUING AUTHORITY
The Bank of Mexico has the exclusive authority for the issuance of
paper currency.
The Federal Government has a controlling voice in the policies of
the bank. The Government owns the controlling A stock in the
bank, and the organic act provides that the holders of A stock shall
have the right to appoint five members of the board of directors while
the owners of B stock can appoint only four.
RESERVE REQUIREMENTS
According to the decree of April 26, 1935, the commercial value of
the metallic reserves of the Bank of Mexico must at no time be less
than 50 percent of the currency in circulation. The reserves of the
Bank of Mexico may consist of gold and silver coins or bars, including
foreign gold and silver coins. However, there is no law which specifies
the proportions of gold and silver in the reserves; apparently the
administration of the bank is free to decide this matter. Neither
the Secretary of the Treasury nor the Bank of Mexico have disclosed
the silver and gold content of the reserves for some time.
HANDBOOK OF FOREIGN CURRENCIES
133
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
There is no prohibition on the importation or exportation of gold
and silver bullion except that a decree of April 26, 1935, prohibits
the exportation of bullion resulting from the melting of silver coins
demonetized by that decree. However, since that date the Bank of
Mexico has extended its influence over foreign trade in these two
metals and is the sole exporter and importer of gold and silver bullion,
except in those few instances where the institution may think it advis
able to grant permission to other parties.
Officials express the opinion that smuggling exists to a very limited
extent.
GOLD
Information is not available in regard to the gold portion of the
reserves of the Bank of Mexico. The latest data on the subject are
contained on page 64 of the Annual Economic Review of Mexico for
1934.
Officials of the Bank of Mexico state that gold hoarding is very
limited, because the present price of gold has caused the withdrawal
and sale of much of the gold that had been hoarded.
THE GOLD CLAUSE
Article 3 of the transitory provisions of the monetary law of July
25, 1931, supplements article 7 of the law itself (which was quoted
above), by stipulating that “all obligations contracted prior to the
date of this law in national currency of any kind, shall be satisfied by
delivery of moneys of the types provided for in the law within the
respective limits of their legal tender power.” In other words, domes
tic contracts containing a gold clause can be satisfied by paying peso
for peso in existing legal currency.
SILVER
The new toston is the only silver coin that is in legal circulation.
It contains 3.3488 grains of pure silver.
The total amount of fine silver in legal monetary use on September
30, 1935, was 7,622,654 troy ounces, of which the general public held
7,407,325 and the banks, 215,329.
NETHERLAND INDIA
The monetary unit is the guilder (or florin), divided into 100 cents.
The guilder has a par value of approximately $0.6806. The Dutch
plural of guilder is gulden.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
The Straits dollar circulates to a very limited extent on the east
coast of Sumatra.
The use of checks is generally limited to the wholesale trade.
According to the official Staatsblad No. 295, of June 28, 1935, the
date on which the silver coins of % 1, and 2% gulden of the old fine
ness cease to be legal tender has been extended to January 1, 1936.
The present fineness of Netherland Indian coins, namely, Ô.720, was
established by the law of November 27, 1919. The volume of coins of
the old fineness, 0.945, outstanding in November 1935 was negligible.
134
HANDBOOK OF FOREIGN CURRENCIES
During the year ended March 31, 1935, the Java Bank delivered
coins of the old fineness, valued at 1,563,329 gulden to the Govern
ment for transmission to the Royal Mint at Utrecht; and the Govern
ment of Netherland India delivered coins valued at 16,130,000 gulden.
From the annual reports of the Java Bank it appears that the total
nominal value of old silver coins delivered to the Royal Mint at
Utrecht since the promulgation of the law of November 27, 1919, is
135,230,000 gulden, while net imports of new silver coins (0.720 fine)
from that date to the end of March 1935 totaled 97,700,000 gulden.
Paper Currency of Netherland India
Amount
outstanding
June 29,
1935 »
(millions of
gulden)
Dimensions
Denomination
(*)
22.0
10.1
5.2
36.5
14. 1
.3
.3
24.4
.2
31.7
27.5
172.3
» Including notes held by Treasury.
*85,800 gulden.
All notes are legal tender.
No detailed information is available as to the kind of paper used
in the currency of Netherland India.
The 20-, 30-, 40-, and 300-guilder issues are being withdrawn from
circulation.
Coins of Netherland India
Amount
out
Diam standing
eter « Mar. 1,
Metal of Fine
(milli 1935 *
chief value ness
Grams Grains Grams Grains meters) (millions
of
gulden)
Gross weight
Denomination
10 gulden (gouden tientje).'...
5 gulden (gouden vijfje).........
Ducaat or ducat 4
.........
24 gulden (rijksdaalder).......
1 guilder (gulden)------- -----50 cents (halve gulden)..........
25 cents (kwartje)..................
10 cents (dubbeltje)................
5 cents (stuiver)..................
Gold........
- do..........
do_____
Silver.......
do..........
- -do..........
-do..........
- - do..........
Nickel___
Topper__
*0.900
*.900
*.983
*.720
*.720
*.720
*.720
*.720
*.250
.750
.750
.750
6. 7200
3.3600
3. 4940
25.0000
10.0090
5.0000
3.5750
1.4000
4.5000
4.0000
2.5000
1.2500
103.7054
51.8527
S3.9207
385. 8089
154. 3236
77. 1618
55. 1707
21.6053
69. 4444
61. 7294
38.5809
19. 2904
Gold or silver
content
6.0480
3.0240
3. 4346
18.0000
7.2000
3.6000
2.2880
.8960
93.3349
46. 6674
53. 0040
277. 7824
til. 1130
55. 5565
35. 3092
13.8274
22.5
18.0
21.0
38.0
28.0
22.0
19.0
15.0
21.0
31.0
23.5
17.0
15.4
26.2
8.8
6.7
15.2
3.2
11.0
86.4
i Information as to thickness is not readily available.
» Excluding coins held by the Government and the Java Bank.
8 Alloy is copper.
<This is a trade coin and has no face value.
N ote.—The legal tender limit for coins of 25 and 10 cents is 10 gulden; for 5-cent nickel coins, 5 gulden;
and for copper coins, 2H gulden. All other coins are unlimited legal tender.
135
HANDBOOK OF FOREIGN CURRENCIES
NOTE-ISSUING AUTHORITY
Only the Java Bank (De Javasche Bank) is authorized to issue
bank notes. In 1919 the Government began to issue currency notes
in denominations of %, 1, and 2)i gulden, but practically all of these
notes have been withdrawn from circulation since June 1, 1933.
The Government does not have a controlling voice in the policies
of the Java Bank, either by law or in actual practice.
RESERVE REQUIREMENTS
The status of the Java Bank is fixed by the Java Bank law of
March 31, 1922, last amended in 1930. The principal regulation
with reference to currency reserves is to be found in article 28, which
states that the Governor General shall determine the minimum ratio
of the bank’s holdings of gold and silver coin and bullion to its out
standing sight liabilities. This ratio was fixed at 40 percent by res
olution of the Governor General of Juno 25, 1928. On July 20, 1935,
the metallic cover of the Java Bank consisted of the following items:
Gulden
Gold coin........................................................................... 80, 482,820
Silver coin__t_________________________________ 22, 832,030
Gold bullion___________________________________ 17, 520,221
Silver bullion_________________________________
76
Total.................................................................... 120,836,047
The sight liabilities on the same date amounted to 200,147,408
gulden. The ratio of gold to sight liabilities was 48.97 percent and
of gold and silver combined 60.42 percent.
The Java Bank made the following commitment to the Government
of Netherland India in 1922 and renewed it on April 29, 1925:
The president and directors of the Java Bank promise the Government of
Netherland India to uphold and continue the gold policy which the bank has
so far f jllowed by, inter alia, the following measure, viz: Should rates of exchange
on foreign countries rise above the parity of the gold value, it will—except under
extraordinary circumstances to be decided upon by the Governor General after
consultation with the Java Bank, and except for arbitration of exchange—if
necessary, and as long as it is in its power to do so without infringing the stipula
tions of the Java Bank law, make its gold supply available for issue on the basis
of 1,653.44 gulden per fine kilogram for bars and at corresponding prices for
minted gold.
Gold mav be sold to the bank at the fixed price of 1,634 gulden per
kilogram fine, for delivery at Batavia—and at the fixed price of 1,638
gulden for delivery at Amsterdam.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
No restrictions on bullion or coin movement exist. The gold and
silver output of the mines is exported freely.
As the exportation of gold and silver bullion is neither prohibited
nor subject to duty, there’s no reason for smuggling.
GOLD
On July 20, 1935, gold totaling 98,003,041.39 gulden, weighing
59,272.209 kilograms, was held by the Java Bank.
Gold is not purchased by the Government or by the Central Bank
at a premium.
136
HANDBOOK OF FOREIGN CURRENCIES
The natives have always been accustomed to invest their savings
in gold. Owing to the unfavorable economic conditions prevailing
since 1931, the population has sold a great portion of its gold holdings.
As to the amount that still remains in the possession of the natives,
no data are available. However, gold hoarding in the ordinary sense
of the word does not occur in Netherland India.
THE GOLD. CLAUSE
Gold clauses are very unusual in Netherland India. The question
of their validity has never come before the courts. There is no law
that prohibits the employment of the gold clause.
SILVER
There has been no new development affecting silver since Trade
Promotion Series No. 149, The Monetary Use of Silver in 1933, was
published.
Holdings of monetary silver in Netherland India on March 1, 1935,
were distributed as shown in the following table:
Silver coins >
In circulation (general public and banks):
In the Government'Treasury:
In the vaults of De Javasche Bank:
•
Gulden
50,31«, 000
21.884.000
24.100.000
23.895.000
28,202, 537
211,038. 40
148,690,575.40
Fine kilo
grams of
silver
362,866
198,020
172,800
217,241
203,0.58
1,920
1,155,905
* See Description and Circulation of Currency.
NETHERLANDS
The monetary unit is the florin or guilder (abbreviation fl., g.),
divided into 100 cents. The par value of the florin is approximately
$0.6806. The Dutch plural of guilder is gulden.
DESCRIPTION AND CIRCULATION OF CURRENCY
The accompanying tables show the most recent data on metallic
and paper money of the Netherlands in circulation. Figures on the
paper currency are reported regularly in the annual reports of the
Netherlands Bank.
Coins are full legal tender for private and Government debts, with
the exception of 25- and 10-cent coins, the legal tender of which is
limited to 10 florins; 5-cent coins, limited to 1 florin; and
1-, and
K-cent copper coins, limited to 25 cents. Notes of the Netherlands
Bank are redeemable in other forms of legal-tender money.
No old issues of coins or notes are in circulation, other than those
mentioned above; nor do any foreign coins or notes circulate, although
there is no restriction on their importation.
Special guaranties to prevent counterfeiting are to be found in
the watermark and in the special qualities of the paper and in the
fact that for printing and engraving different processes are simul
137
HANDBOOK OF FOREIGN CURRENCIES
taneously used. Mention should be made of the handmade engrav
ings in copper or steel, the geometric lathe, and the engravings in
flattened relief. Various kinds of ink are used which are mixed by the
printers.
The paper money is printed, engraved, and lithographed in the
Netherlands. The paper for the 20-florin notes is made of pure
linen, while that used in other notes is made from new linen rags
(from 50 to 70 percent) and unworn white cotton rags.
Details of Netherlands Paper Currency Outstanding Mar. 31, 1935
Denomination t
Dimensions
Number of Value Percent
bills (in (millions of total
round
thousands) of florins) value
192
26
95
121
2, 34«
r>H
898
91
5, 153
2. 350
16,902
28. 246
Total.
191.6
12.8
28.4
24 2
234. 0
4. 1
44.9
3. 7
129. 1
47.0
169. 0
88K. 7
21.55
1 44
3. 2«
2. 72
26. 33
.4«
5. 05
. 41
14 53
5. 29
19. 02
100.00
i During the World War small denomination notes called zilverbons wore issued by the Central Gov
ernment to replace hoarded silver coins. Of these notes, only some 2^-florin ones are still in circulation,
the total at the beginning of 1934 being 1,400,000 florins.
Source: Netherlands Bank Report for 1934-35.
Metallic Currency Outstanding Jan. 1, 19351
Silver content
Gross weight
Amount
Metal of Fine
Diameter Thickness outstand
ing
Denomination chief
(mm)
(mm)
ness
(m'lhons
value
Grams Grains Grains Grains
of florins)
2H florins.........
1 florin..............
50 cents.............
25 cents.............
10 cents.............
Silver... 0. 720 25.009 385.8089 18.000 277. 7824
...do....... .720 10.000 154. 3236 7.200 111. 1130
...do....... .720 5.000 77. 1618 3. 690 55. 5565
...do....... .640 3. 575 55. 1707 2.288 35. 3092
...do....... .640 1.400 21.6053 .896 13.8274
38
28
22
19
15
2.1
1.9
1.8
1.6
1.2
49.2
59.3
7. 1
11.9
11.9
7.5
146.9
1 The 5-cont coin, square in shape, is made of nickel (25 percent) and copper (75 percent). The small
coins (2J$, 1, and h cent) are of copper (95 percent), tin (4 percent), and zinc (1 percent).
NOTE-ISSUING AUTHORITY
Only the privately owned Netherlands Bank (De Nederlandsche
Bank N. V.) has the note-issue privilege in the Netherlands proper.
This privilege was granted in the original charter in 1814, and renewed
at intervals of 25 years, and occasionally modified. The charter is
now running indefinitely on a yearly renewal basis.
The Government has no voice in the policies of the Netherlands
Bank, either by law or in actual practice. Modifications of the
bank’s charter in 1868 and 1903 required the bank, in view of its
position as fiscal agent of the Government and as sole bank of issue,
to advance the Government on demand at any time, free of interest,
138
HANDBOOK OF FOREIGN CURRENCIES
amounts up to a maximum of 15,000,000 florins on security of Treas
ury notes. The bank may, however, refuse to discount Treasury
paper if it considers such action unsound, but in practice, it does
discount such paper from time to time, usually in modest amounts.
The president and secretary of the bank are appointed by the Crown,
but this power gives the Government only a negligible influence over
the bank, and is not used for that purpose.
RESERVE REQUIREMENTS
The Netherlands Bank is required to maintain a metallic reserve of
40 percent against its demand liabilities. Foreign exchange as a
form of reserve has never been permitted since the establishment of
a legal reserve ratio. The obligatory minimum of 40 percent dates
from 1864, and was constantly in force until the World War. On
July 31, 1914, it was reduced to 20 percent “in order to allow the
bank greater liberty of action, in view of the extraordinary circum
stances then prevailing” (Netherlands Bank Annual Report 1928-29,
p. 25), but was restored to 40 percent by royal decree of January 4,
1929 (idem, p. 24).
Metallic reserve, defined literally, is coin and coin material, mean
ing gold and silver coin and bullion and other legal-tender coin.
There is nothing in any legislation affecting the Netherlands Bank
which specifies the proportion of gold or silver coin or bidlion that
must be maintained in the metallic reserves; but in practice it has
been largely gold; in recent years, well over 90 percent. At the end
of the last fiscal year, March 31, 1935, gold bars and coin represented
97.43 percent of the metallic reserve. The bank may include in its
reserves earmarked gold held abroad and so-called sailing gold (gold
in transit), but not less than eight-tenths of the obligatory 40 percent
cover must be held aetually in the bank’s vaults. (Netherlands
Bank Report 1928-29, p. 24.) Demand liabilities are defined to
include deposits on current account, whether Government or private,
in addition to notes in circulation.38
All of the silver held by the Netherlands Bank is in the form of
coin. The bank is not permitted to purchase silver except by specific
authority of a royal decree. New coinage is ordinarily effected by
the reminting of retired coins.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Since April 29, 1925, there has been no legal restriction on move
ments of gold or silver into or out of the Netherlands. The following
statement was made by Minister of Finance Colijn (in the Second
Chamber of the States General) on April 28, 1925:
I hereby inform the chamber that the Minister of Labor, Trade, and Industry
has, in accordance with the act of September 1, 1917 (State Gazette No. 578),
granted dispensation, as from tomorrow, April 29, and until further notice:
1. Of the prohibition of the export of gold included in the export prohibition
of all metals in any form whatsoever, promulgated by roval decree of April 7, 1917
(State Gazette No. 279);
1! The method of calculating reserve requirements is believed to be of considerable advantage to the
Netherlands Bank, in connection with maintenance of a high reserve ratio. A demand for gold inevitably
leads to a contraction of the note issue. An export demand for gold tends to reduce deposits, since the
Netherlands Bank is a bankers' bank. Accordingly, when the Netherlands Bank is losing gold thero is
often a corresponding shrinkage of demand liabilities, greater than the shrinkage of note issue alone. Pos
sibly the Government might help out in a tight situation by converting demand liabilities into time
deposits.
HANDBOOK OF FOREIGN CURRENCIES
139
2. Of the export prohibition of gold coin and bullion, promulgated by royal
decree of August 8, 1914 (State Gazette No. 403).
While, at the same time, measures have been taken in order to render per
manent, by the withdrawal of the aforesaid royal decree, the temporary situation
brought about by the dispensation (Netherlands Bank Annual Report 1924-25,
p. 55).
This has left trade in gold and silver entirely free. In practice
there are certain important restrictions on the free outflow of gold
from the Netherlands, because the gold holdings of the Netherlands
Bank, which represent the great bulk of metal held in the country,
are not released as readily as those in private hands. The restrictions
referred to are not contained in any legislation, but are announced
from time to time by the bank as its policy, or are put into effect
by various administrative acts. The procedure which has been
evolved in recent years has proved highly effective in slowing down
and even checking outflows of gold which have developed from time
to time since 1930. This control has its foundation in the statement
of policy issued in 1903 which reads:
The management of the Netherlands Bank undertakes, vis-a-vis the Govern
ment, to maintain and continue the gold policy it lias so far pursued, by continu
ing to deliver gold for export from its stock, as long as it will be able to do so,
at the rate of 1,653.44 florins per fine kilogram for bullion and at corresponding
prices for gold specie, whenever the rates of exchange on foreign countries should
rise above gold parity.
The final clause of this statement enabled the Netherlands Bank to
announce, in connection with Holland’s return to the gold standard
on April 29, 1925, that it was returning to its traditional policy, since
it felt itself obliged to release gold only to countries definitely on the
gold standard. The 1925 announcement of its policy reads as follows:
* * * The Netherlands Bank will as before, not issue 10-guilder and
5-guilder gold pieces for home circulation. For export to foreign countries,
however, it will deliver gold from its stock against payment of 1,053.44 florins
per fine kilogram for bullion, and at corresponding prices for gold coin. The
bank does not, however, propose to deliver gold for export before the rates of
exchange have risen above gold parity. * * * The Netherlands Bank will
for the present, when determining the moment when gold shall be delivered for
export, only take into account the rates of exchange on these countries (those
which have returned to the gold standard) and not the rates of exchange on those
countries which still have restrictions on the importation and exportation of gold,
and consequently have not yet fully introduced the gold standard, and whose
currency does therefore not yet possess, for the time being, an independent fixed
gold value or gold parity. The Netherlands Bank, when delivering gold for
export, reserves the right to exercise control on the shipment (Netherlands Bank
Report 1924-25, p. 56).
Since 1925 the Netherlands Bank has interpreted its policy strictly
and has felt obliged to release gold only for shipment to Central Banks
which, if so required, have to buy or sell gold at fixed prices and on
certain, previously published conditions (Netherlands Bank Annual
Report 1929-30, p. 9). Between 1925 and 1930 a number of countries
returned to the gold standard in one form or another, but the bank
released gold under pressure of the exchange rates to relatively few of
them, notably Great Britain, France, and the United States. During
that period the bank voluntarily entered into gold transactions with
certain Central Banks which had not met its announced requirements,
in order to assist in the better distribution of gold stocks in Europe.
The bank’s avowed policy of not issuing gold for home circulation
was modified when it was decided from November 17, 1925, to issue
140
HANDBOOK OF FOREIGN CURRENCIES
10-florin gold pieces to the public, with a view to creating an addi
tional gold reserve in private hands, as well as satisfying the private
demand for gold which had not been met for a number of years.
During 1925-2G some 24,000,000 florins were so issued in the Nether
lands, and 10,000,000 florins in Netherland India. After a few
months, however, it developed that the gold coins were being exported
and so the amount made available at one time was limited to 250
florins per person. In 1926-27, 7,51)0,000 florins, net, went into cir
culation in this way, but as the coins continued to flow abroad the
limit was further reduced on July 26, 1927, to 50 florins per person,
and in 1927-28 only 1,300,000 florins went into circulation. Only
small amounts were so taken up in subsequent years, and in 1930-31
the issuance of gold coins was discontinued.
The number of countries to which the Netherlands Bank would
release gold freely in response to exchange fluctuations reached its
ieak about 1930, and since then has been greatly reduced. In the
atter months of 1933 only France and Belgium remained on the
eligible list, the free gold market in Paris being utilized for indirect
shipments of Netherland gold to England and the United States, as
well as for securing gold for domestic requirements of the Netherlands.
(Artbitrage operators purchased gold in Paris; the consequent demand
for francs put the franc above the gold import point and the Nether
lands Bank had to release gold to France.) The United States again
became eligible to receive direct gold shipments from the Netherlands
Bank on September 12, 1934, when the bank decided:
f
* * * to resume issue of gold to that country if the rate of exchange should
justify it. The duration of this decision is made dependent on the condition that
the arrangement concerning release of gold [by the United States] valid on that
date continued unchanged, especially that tiie gold value of the dollar is not
i educed further and that release of gold on the basis of that gold value is con
tinued. In general, this arrangement is equivalent to that in effect in Holland
(Netherlands Bank Report 1934-35, Dutch edition, p. 16).
The above announcements, most of them recorded in the bank’s
annual reports, represent the only published declarations of policy
affecting the freedom of gold movements in the Netherlands. In
effect thev now permit the release of gold for export to the Central
Banks of France and the United States, because only these two coun
tries meet the requirements of the Netherlands Bank.
In addition to measures tending to restrict the channels through
which Netherlands gold can move, the Netherlands Bank controls
gold movements through its control of credit. This control is exer
cised partly in its capacity as a rediscount institution, but to a much
greater extent through its moral influence over the commercial banks.
The Netherland banking system is highly integrated, the balance of
power resting with about a half dozen large institutions which work
m close cooperation with the Netherlands Bank. In times of stress
the bank makes known its desires to these commercial banks bv means
of circular memoranda, and they generally cooperate in carrying out
its suggestions. At times, also it calls a meeting of the heads of the
large commercial banks, when a general policy is formulated to meet
a given situation. Furthermore, the banks periodically report to the
Netherlands Bank their gold and foreign exchange holdings, which
aids in determining policy at any given time. During the past 2 or
3 years various aspects of policy have in this way been evolved, at
times when the florin has been under pressure.
141
HANDBOOK OF FOREIGN CURRENCIES
1. The Netherlands Bank may refuse rediscount facilities to banks
which hold excessive quantities of gold, and can thereby compel them
to release gold so as to relieve the pressure on the florin.
2. The bank raises its rediscount rates promptly when a demand
develops for credit to finance speculation and is prepared to carry the
rate to any level necessary to check demands of this nature.
3. In times of stress the bank directly appeals to the commercial
banks to refuse credit for speculation against the florin.
4. The bank may abstain from reissuing currency utilized to pur
chase gold, thus tending to contract the circulation and to increase
credit stringency.
5. In times of stress it is the policy of the bank and the commercial
banks to refrain from financing speculation by entering into forward
exchange transactions. Accordingly, forward rates go to extremely
high premiums. (Some hold that at times the rates are purposely
manipulated in order to cause speculators a maximum of loss.)
All of this relates, of course, only to the gold situation of the Nether
lands Bank. There is a private gold market, the extent of which is
indicated elsewhere, which is entirely free of restrictions.
There is no smuggling of bullion into or out of the Netherlands.
GOLD
On March 31, 1935, the Netherlands Bank held reserves as follows:
Gold bars.....................................................................
Foreign gold coins____________________________
Netherland gold coins_________________________
Total gold reserve______________________
Netherland silver and minor coins______________
Total metallic reserve___________________
Florins
504,181,187
179, 981, 157
102, 586, 695
786, 749, 039
20, 769, 819
807, 518, 858
The weight of the gold in the metallic reserve, converting at the
rate of 1,650 florins per fine kilogram, is 476,817.6 fine kilograms.
With the exception of 16,991,350 florins held abroad for account of
the Netherlands Bank, all the gold in the reserve was held in the
bank’s own vaults or was en route to the bank (gold being with
drawn from Belgium).
On June 3, 1935, the gold reserve of the Netherlands Bank con
sisted of 113,593,910 florins in gold coin (practically all Netherland
coin, the foreign gold coin—gold marks—having been exported dur
ing April and May), and 507,659,165 in gold bullion or a total of
621,253,075 florins. This represents a weight of 376,517 fine kilo
grams. The sum of 1,193,034 florins of this was held abroad.
Since 1 kilogram equals 32.150742 fine ounces troy, the troy equiv
alent of the gold holdings on June 3, 1935, was approximately 12,100,000 ounces.
Premium on gold.—The Netherlands being on the gold standard,
gold is not bought at a premium above the statutory price. The
following details may be of interest: * * * The bank is as a
rule passive in selling gold bullion and in purchasing it. In such
transactions the Bank maintains a purchase price of 1,647.50 florins
and a selling price of 1,653.44 florins per kilogram for bullion and of
1,657 florins and 1,660 florins for current (foreign) coins which can
again be issued in the country of origin. This latter fluctuation in
66111
°—
36— 10
142
HANDBOOK OF FOREIGN CURRENCIES
the selling price of coins is due to the variable weight of the coins
themselves. Seeing that coins are also sold per fine kilogram and
not by number of coins, a kilogram of light pieces will naturally be
more advantageous for the purchaser than a kilogram of heavy coins,
because both the light and heavy coins are accepted at the same
value in the foreign country. This accidental advantage is neutral
ized by the above-mentioned difference in price so that gold in what
ever form or (of) whatever weight is always sold at practically the
same price as gold coin and bullion in the foreign country is sold here.
In this manner the bank tries to secure as great a degree of stability
as possible in the import and export points of gold in relation to the
florin in international traffic (Netherlands Bank Report 1925-26,
pp. 13-16).
H o ardin g o f gold .—Since all the restrictions on importation and
exportation of gold were removed in 1925, there has been a free gold
market in the Netherlands, quite independent of the operations of
the Netherlands Bank. At times this gold market has initiated gold
imports and at other times exports at prices representing trading
profits for operators, rather than reflecting the exchange rates pre
cisely. At other times the private gold market has tended to hoard
gold, under the influence of nervousness regarding the stability of
the florin, and doubtless even now (June 1935) an important quantity
of gold is held for hoarding purposes. No estimates can be obtained
with reference to the value of such hoarded gold, and even the
Netherlands Bank knows only the amounts held by the commercial
banks as part of their cash. No one has estimated how much gold is
accumulated in safe-deposit vaults or held elsewhere. However, a
rough estimate of the quantity of gold in existence in the private gold
market may be made by calculating the differences between move
ments of gold in foreign trade and the changes in the Netherlands
Bank statement, assuming that private gold holdings were insignifi
cant at the end of 1925. The calculation is as follows:
Estimated Privately Held Gold Stock of the Netherlands
[In millions of florins]
Year
1925...........................
1926...........................
1927...........................
1928..........................
1929........................
1930.....................
1931...........................
1932...........................
1933..........................
1934..........................
1935*.........................
Net gold
Private stock of gold
Central
movements
Bank’s stock, Gold coin Earmarked
(—)
or
re
in
increase (—) issued leased from tradeforeign
imports Year’s in Cumulative
or decrease
earmark (+) (+) or ex crease (+) or net change
(+)
ports (-) decrease (—) since 1925
+36
+30
+-3413
-13
+21
-473
—134
+ 112
+79
+197
+24
+7
+2
(■ >
<>)
(i)
” +72
+5
-108
+3
+34
-50
-16
+ 12
-15
+34
—28
-19
+494
+286
-68
-163
-198
* +20
+<6
+5
+2
—41
+7
+93
+44
+47
-50
-51
+66
+71
+73
+32
+39
+132
+176
+223
+173
+122
Florins
» Netherland Bank stock on Apr. 27, 1935...................................................................................... 479,473,000
Netherland Bank stock on Dec. 28, 1935..................................................................................... 442,985, GCO
+36, 488,000
Net exports of gold.......................................................................................................................... —16,401,000
Net added to private stock............................................................................................................ +20,087,000
* Negligible.
*January-April.
HANDBOOK OF FOREIGN CURRENCIES
143
In the calculation, decreases in the gold holdings of the Nether
lands Bank are shown as plus items, i. e., these amounts are theo
retically added to the private stock, as are the coinage issues. The
corrections for earmarkings (taken from the balance of payments
published in Maandschrift of Oct. 31, 1934, p. 1455) are shown as
minus items if they represent credits, and as plus items if they repre
sent debits, for the reason that credits represent decreases in the
Netherlands Bank figures, and consequently theoretical increases in
the private stock, which did not actually take place and which must
be compensated accordingly, while the reverse is true of debits.
This calculation is far from exact because: (1) The net foreign
trade figures did not include parcel-post shipments until 1933; (2) no
data on changes in the earmarked holdings of the Netherlands Bank
are available prior to 1930, and the figures for 1934 and 1935 are
incomplete; and (3) the calculation omits from consideration the
absorption of gold for industrial purposes. Nevertheless, it is fairly
safe to assume that something like 100,000,000 florins of gold is at
present privately held in the Netherlands either for hoarding pur
poses, as part of commercial bank reserves, or as stocks for use in
connection with private gold arbitrage operations.
THE GOLD CLAUSE
The gold clause in Netherland contracts in tenus of Netherland
currency has never been questioned and is still valid. There have
been a number of lawsuits in connection with contracts executed by
Netherland firms or public bodies in terms of United States dollars,
and decisions have been handed down both for and against tho
maintenance of the gold clause, depending on circumstances.
SILVER
The position of silver in the Netherlands as described in Trade
Promotion Series No. 149, The Monetary Use of Silver in 1933,
still obtains.
The weight of fine silver in monetary use, based upon Netherland
mint figures for January 1, 1935, is 999,231.4 kilograms, equivalent
to about 32,000,000 fine ounces troy. It is impossible to secure
statistics, or even estimates, of the proportion of the circulation
held by the general public, and the banks. The Government holds
no silver. The Netherlands Bank on January 1, 1935, held silver
coin totaling 17,936,198 florins face value, as shown in the following
statement:
Face value in florine
9, 487, 197. 50
2)4 florins_________________
1 florin___________________
8, 022, 852. 00
florin_______________ __
109, 794. 00
inor silver coins__________
300, 673. 20
&
Minor nickel and bronze coins
15, 680. 97
Total........................................ ......... ............. 17, 936, 197. 67
The silver content of the coinage held by the Netherlands Bank,
on January 1, 1935, was 127,004.9 kilograms, or about 4,083,000 fine
ounces troy. The coin holdings of the Netherlands Bank amounted
to 20,876,810,04 florins on June 3, 1935,
144
HANDBOOK OF FOREIGN CURRENCIES
NEWFOUNDLAND
The monetary unit is the Newfoundland dollar (symbol $), divided
into 100 cents. The Newfoundland dollar has a par value of 1.6931.
DESCRIPTION AND CIRCULATION OF CURRENCV
The present monetary system was established by an act passed
January 7, 1895. Under this act all British coins and United States
gold coins are legal tender.
The following tables describe the currency.
Any coins struck prior to the date of the coinage order of March
30, 1917, continue to be legal tender in Newfoundland. The quantity
of such old coins in circulation is not known.
Foreign metal currencies in circulation consist of small quantities
of British silver and copper coins.
Coins are legal tender for all private and Government debts with
the following limitations: Silver coins in amounts to $10 and copper
coins in amount of 25 cents.
Only a very small amount of Newfoundland gold coins were ever
minted, and none are now in circulation. In June 1935 the volume
of silver coins in circulation amounted to approximately $2,046,600,
but the records do not show how much of each denomination was in
circulation. There were also in circulation bronze 1-cent coins to the
value of $38,860.
Coins of Newfoundland 1
Denomination
Metal of Fine
chief value ness
0.925
.925
.925
.925
.925
Copper__ 1.950
Gross weight
Grams
Silver content
Grains
Grams
Grains
11.6638 179.9958
5.8319 *9 9979
4. 6655 71.99S0
2.3328 35.9998
1. 1664 17 9999
5.6699 87.4979
10.7890
5.39t5
4.3156
2. 1578
1.0789
166.4958
83. 2479
66. .5983
33. 2992
16.6496
Diam
eter
(mm)
29.72
23.62
17.91
15. 49
25.40
Thick
ness
(mm)
1.63
1.30
.89
.59
1.23
1Total amount of coins outstanding in June 1935 was $2,085,460. The amount of 1-cent coins was $38,860,
but amounts of other coins are not available.
* Tin, 0.040; zinc, 0.010.
NOTE-ISSUING AUTHORITY
Treasury notes of the Newfoundland Government in 1- and 2-dollar
denominations were in circulation on June 10, 1935, to the total
value of $56,823. No issues have been made by other governmental
units, and there is no Central Bank in Newfoundland. Branches of
four Canadian banks have offices in this country, namely, Bank of
Montreal, Bank of Nova Scotia, Canadian Bank of Commerce, and
Royal Bank of Canada. The notes of these Canadian banks, in
denominations of 5 dollars and upward, are legal tender in Newfound
land. It is impossible to state, nor can the banks tell, the value of
the Canadian bank notes in circulation in Newfoundland. There is
no other note-issuing agency.
The Treasury notes are engraved and printed in Canada on paper
which consists of linen (75 percent) and cotton (25 percent). These
notes are 7}f by 3% inches in size.
HANDBOOK OF FOREIGN CURRENCIES
145
RESERVE REQUIREMENTS
There are no specified currency reserves, but an amount equivalent
to the value of the Treasury notes in circulation less the original cost
of printing them, is deposited with the Bank of Montreal.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
The Currency Act, 1932, prohibited the export of gold from New
foundland, save under license of the Government, but this prohibition
was withdrawn by Act No. 31 of August 4, 1934. Smuggling is not
believed to exist.
GOLD
There is no reserve of gold held in Newfoundland, and no gold is
being purchased by the Government. It is not believed that New
foundland gold currency is hoarded to any great extent by the public.
The total amount of gold issued between 1865 and 1888 was $197,000,
all in 2-dollar pieces, and none has been issued since. It is believed
that most of this gold has been exported, as none is now in active
circulation.
THE GOLD CLAUSE
No information regarding the legal status of the gold clause in
domestic contracts, as determined by law, is available.
SILVER
The local branches of the Canadian banks hold large stocks of
silver currency. No information is available regarding the weight of
fine silver in monetary use.
NEW ZEALAND
The monetary unit is the New Zealand pound (symbol £), divided
into 20 shillings (s.) of 12 pence (d.) each. The New Zealand pound
has a par value of approximately $8.2397, but is at present (Novem
ber 1935) depreciated, being pegged to the pound sterling at a rate
altered from time to time. The rate in November 1935 was approxi
mately £125 New Zealand per £100 sterling.
DESCRIPTION AND CIRCULATION OP CURRENCY
The currency is described in the accompanying tables.
Subject to the modifications of the Now Zealand Coinage Act,
1933, the legal coinage of New Zealand is the same as that of Great
Britain, as determined from time to time by royal proclamation under
the British Coinage Act of 1870.
Gold coins have disappeared from circulation.
Certain coins, namely—the crown, double florin, and farthing have
never circulated to any appreciable extent, and are almost never seen.
Coinage of distinctive New Zealand design was first put into circu
lation toward the end of 1933. This coinage was authorized by the
Finance Act, 1932-33, and was minted by the Royal Mint in England.
In accordance with the New Zealand Coinage Act of 1933, the follow
ing denominations were put into circulation: Half-crown, florin,
sliilling, sixpence, and threepence.
146
HANDBOOK OF FOREIGN CURRENCIES
Coins of New Zealand
Silver content Diam
Gross weight
Amount
Metal of Fine
outstand
eter Thick
ness
chief ness
ing on
(mm) (mm) Sept
value
. 30,
Grams Grains Grams Grains
1935
Denomination
Half crown (2Hs.)..
Florin (2s.)..............
Shilling (is.)...........
Sixpence (fid.).........
Threepence (3d.)...
Silver.. 0.500 14.1380 218. 1818
...do__ .500 11.3104 174.5455
...d o __ .500 5. 6552 .87. 2727
...do__ .500 2. 8276 43. 6364
...d o __ .500 1.4138 21.8182
7.0690
5. 6552
2.8276
1.4138
.7069
109.0909
87. 2727
43. 6364
21,8182
10.9091
32.50
28. .50
23.59
19. 40
16.25
2.41 £666,500
2.41 570. 500
1.91 354,1)00
1.65 179.000
1. 14 150.000
1,920,000
N ote .—Of the amounts shown as outstandinp, £306,928 of half-crowns (2s.fid.), £289,350 of florins (2s.),
£159,093 of shillings, £91,805 of sixpence, £82.718 of threepence were held by the public. The remainder
were i n possession of the Reserve Bank and trading banks. Silver coin has legal tender to an amount not
exceeding £2.
NOTE-ISSUING AUTHORITY
The Reserve Bank of New Zealand has the sole right to issue bank
notes. Its notes are described in the following table.
Before the Reserve Bank commenced business on August 1, 1934,
the six trading banks in New Zealand exercised the power to issue
bank notes, but that right ceased on August 1, 1934. About £622,122
of the notes issued by the trading banks prior to that date (including
notes lost or destroyed) are still outstanding. The denominations of
notes hitherto issued by the trading banks were the following: 100,
50, 20, 10, 5, and 1 pound, and 10 shillings.
Notes of the Reserve Bank of New Zealand
Denomination
Dimensions
Amount out
standinp Sept.
10, 1935
£291,700
3.917, 545
4,064,712
584,526
8,958, 483
N ote.—T he above total comprises notes held by the public and by the trading banks. Reserve Bank
notes have unlimited legal tender.
The total amount of notes in circulation on October 21, 1935, was
as follows:
Notes issued by the Reserve Bank:
In the hands of the public___________________ £5, 664, 221
Held by the trading banks___________________ 3, 294, 262
Total................................................................. . 8,958,483
Notes hitherto issued by the trading banks and still
outstanding_________________________________
622, 122
The board of the Reserve Bank consists of the governor and deputy
governor, three directors representing the State, and four represent
ing the shareholders, with the Secretary to the Treasury, an ex-officio
member without voting rights. The three State directors are
appointed by the governor in council, who was also required to make
the first appointments of the governor, deputy governor, and the
four shareholder directors, subsequent appointments of the latter
HANDBOOK OF FOREIGN CURRENCIES
147
to be made by the shareholders and of the former, by the governor in
council on the recommendation of the board of directors.
Decisions of the board on any proposal are in accordance with the
majority of the valid votes given thereon.
The governor of the bank, at the first ordinary general meeting of
shareholders, stated:
It must be clearly understood that the Reserve Bank should always maintain
an entirely nonpolitical attitude. The board accepts the view that the ultimate
responsibility for the monetary policy of the Dominion must rest with the Govern
ment of the day, but holds that it is the duty of the bank to tender to the Govern
ment impartial advice on monetary matters and to exercise its own judgment in
carrying out those functions entrusted to it.
RESERVE REQUIREMENTS
The Reserve Bank of New Zealand is required to maintain a mini
mum reserve of not less than 25 percent of the aggregate amount of
its notes in circulation and other demand liabilities. The composi
tion of the reserve is prescribed in section 17 of the Reserve Bank
of New Zealand Act as follows:
(2) For the purposes of this section the term “reserve” includes only—
(a) Gold coin and bullion in the unrestricted ownership of the bank.
(b) Sterling exchange comprising—(i) Deposits at the Bank of England;
(ii) British Treasury bills with an unexpired currency of not more than 3 months;
(iii) bills of exchange payable in London, bearing at least two good signatures,
with an unexpired currency of not more than 3 months.
(c) Net gold exchange (as hereinafter defined in this paragraph) in the unre
stricted ownership of the bank, if such exchange is on a country the currency of
which by law and in fact is convertible on demand at a fixed price into exportable
gold. For the purposes of this paragraph the expression “net gold exchange”
means—(i) Balances standing to the credit of the bank at the central bank of the
country of origin of the currency in question; (ii) bills of exchange payable in a
gold currency, maturing within 3 months, and bearing at least two good signa
tures; less any liabilities of the bank in currencies other than New Zealand
currency.
Section 18 of the act provides that the minimum reserve require
ments may be suspended by the Minister of Finance at the request in
writing of the board of directors of the bank for such period, not
exceeding 30 days, as may be specified by the Minister, but an exten
sion may be granted for further periods not exceeding 15 days at
any one time.
Whenever the reserve maintained by the bank falls below the mini
mum legal limits, the bank is required to pay a graduated tax on the
amount of the deficiency as follows: (a) One percent per annum of
the deficiency where the reserve falls below 25 percent but not below
20 percent; (6) when the reserve falls below 20 percent the tax shall
be 1 percent plus 1% percent per annum for every 2}i percent or
part thereof by which the reserve falls below 20 percent.
Regarding balances which the banks must maintain with Reserve
banks, section 45 of the act provides that within 12 months after the
Reserve Bank begins operations all other banks must establish bal
ances in the Reserve Bank of not less than 7 percent of their demand
liabilities in New Zealand other than in the form of bank notes and
of not less than 3 percent of their time liabilities in New Zealand as
shown in the last preceding monthly returns furnished by the several
banks. Member bank reserves must consist of gold, sterling, or
notes of the Reserve Bank, or, with the consent of the board, of any
Government or other securities in which the Reserve Bank is author
ized to invest its funds.
148
HANDBOOK OF FOREIGN CURRENCIES
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
There are no restrictions on bullion movements, but gold bullion
exports are subject to an export duty.
The exportation of gold coin has been restricted since 1914. The
current restriction, dated December 7, 1934, and issued under the
authority of the finance act (no. 3), 1934 (to remain in force until
repealed), prohibits the exportation of coined gold except with the
consent in writing of the Minister of Finance.
By order in council dated July 21, 1933, the importation or exporta
tion of silver coin is prohibited except with the consent of the Minister
of Customs, subject, however, to the provisions contained in order in
council dated July 20, 1931, to the effect that:
(a) Any person arriving in New Zealand may bring with him coined silver not
exceeding £2 in amount.
(fc) Any person leaving New Zealand may take with him coined silver not
exceeding £2 in amount, unless he is proceeding to Great Britain or Ireland by
direct route, without transshipment en route, in which case, he may take £5.
An order in council dated July 23, 1935, provides that the exporta
tion of coined copper from New Zealand, except with the consent of
the Minister of Customs, is prohibited.
GOLD
Gold coin is held by the Reserve bank in accordance with section
15 (2) of the Reserve bank of New Zealand Act, which reads as follows:
On the date proclaimed by the Governor General in accordance with the last
preceding subsection, or within such time thereafter as may be prescribed by
the Governor General in the same or in a later proclamation, every bank carrying
on business in New Zealand shall transfer to the Reserve bank, in exchange for
the equivalent value of banknotes of the Reserve bank, or for credit with that
bank, all gold coin or bullion then held by it on its own account.
The total amount of gold now held by the Reserve bank (all in
coin) is £2,801,732, equivalent to approximately 59,960 pounds troy.
Gold is not purchased at a premium by the Government or the
Reservo bank.
Any hoarding which may exist is not believed to be extensive.
THE GOLD CLAUSE
The gold clause is not applicable in New Zealand.
SILVER
The weight of fine silver, subject to the qualification mentioned
below, held in New Zealand in the form of coins (0.500 fine) is esti
mated as follows:
Ounces troy
Held by the general public_______________________ 1, 690, 718
Held by the banks______________________________ 1, 800, 194
The above figures do not include British and Australian coin still in
circulation, particulars of which are not available.
The Government does not carry stocks of silver; its holdings, which
are for ordinary requirements, are included in the amount shown
above as held by the general public.
149
HANDBOOK OF FOREIGN CURRENCIES
NICARAGUA
The monetary unit is the cordoba (symbol C$), divided into 100
centavos. The nominal gold parity is $1.6933, as the cordoba theo
retically possesses approximately the same gold content as the former
United States dollar.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
The notes of the National Bank of Nicaragua are unlimited legal
tender. The notes are engraved and printed in the United States on
paper made in the United States of new rags, 75 percent linen and
25 percent cotton. The wet intaglio process of printing is used.
Subsidiary silver and minor coins are legal tender up to 10 cordobas.
The importation of foreign minor coins is permitted. There are
no old issues of coins in circulation.
No restrictions are placed on the importation of foreign notes.
The only foreign notes that circulate to any considerable extent are
those of the Ùnited States. There are no old issues of notes in
circulation.
Paper Currency of Nicaragua
Dimensions
Denomination
Amount out
standing
May 31. 1935
(millions of
cordobas)
0.2
.7
.3
.3
.6
(*) .8
* 2.9
Total...............................................................
1 Being retired from circulation.
*7,130 cordobas.
* The discrepancy in the summation is due to abbreviation of the items.
Coins of Nicaragua
Denomination
Metal
of chief
value
Amount
outstand
Thick
Diame
ing
May
Fine
ter
ness 31, 1935
ness
(mm)
(mm)
(thousands
Grams Grains Grams Grains
of
cordobas)
i 0.900
>.800
>.800
1.800
i. 250
». 950
Vi cenUvo........ ...do....... *. 950
1 cordoba_____
50 centavos........
25 centavos........
10 centavos........
Silver.
...do.......
.. .do.......
.. .do.......
Gross weight
Silver content
25.00 385.8089
12.50 192. 9045
f>. 25 96. 4522
2.50 38. 5809
5. 00 77. 1618
4.00 61.7291
2.50 38.5809
22. 50 347. 2280 38.0000 *3.500
10. 00 154. 3236 30. 0228 2.286
5.00 77.1618 24.0538 1.778
1.346
2.00 30. 8647 17.907
21.2)9
1.981
20.320
1.651
17.00
1.50
1 Alloy is copper.
1 At rim.
* Alloy is tin and zinc
4 The discrepancy in the summation is due to abbreviation of the items.
11
28
122
184
85
64
19
4 511
150
HANDBOOK OF FOREIGN CURRENCIES
NOTE-ISSUING AUTHORITY
The Banco Nacional de Nicaragua is the only bank of issue. The
Government has by law and in actual practice a controlling influ
ence in the affairs of the bank.
RESERVE REQUIREMENTS
The monetary law of 1912 governs the circulation of currency in
Nicaragua.
It is stated that the gold reserve is at present about 15 percent of
the amount of currency in circulation. Approximately $450,000 is
said to be deposited in New York City and London as a reserve against
the currency. Silver is not included in the reserve, and no silver is
held in the form of bullion.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Decree no. 180 of August 16, 1935, provides that owners or exploit
ers of gold mines might, under the supervision of the Exchange Con
trol Commission, dispose of up to 70 percent of the net production,
provided that this amount was necessary to cover interest, dividends,
and amortization on capital known to be newly invested, or for salaries
of technicians or other foreign employees, or for other expenses
necessarily incurred abroad for the exploitation, improvement, or
expansion of the mines. The balance of the exchange was to remain
at the disposition of the commission, to be negotiated by the miner or
direct exploiter with the National Bank of Nicaragua, at the official
rate of exchange.
On November 9, 1935, there were published in the Office Gazette
new regulations restricting the purchase of gold and making it unlaw
ful for any person or organization in Nicaragua, other than the
National Bank and its authorized agents, to deal in gold.
GOLD
It is stated that about 3,000 ounces of gold are now being held in
Managua by the National Bank.
In February 1935 the bank began to purchase gold at 45 cordobas
per ounce.
It is believed that gold hoarding by the public is negligible.
Under a regulation of the Exchange Control Commission published
on November 9, 1935, only the National Bank may buy or sell gold.
The price is to be that agreed upon by the bank and the seller, if
payment is made in cordobas. If payment is made in foreign money,
the price is to be the world price, less necessary expenses.
THE GOLD CLAUSE
'When a gold clause exists in domestic contracts, payment can be
made legally at the rate of 1.10 cordobas per dollar.
SILVER
The position of silver is described in Trade Promotion Series No.
149, The Monetary Use of Silver in 1933. No additional information
is available.
A total of 344,662 cordobas of silver coins is in circulation in
Nicaragua.
151
HANDBOOK OF FOREIGN CURRENCIES
NORWAY
The monetary unit of Norway is the krone (abbr. kr., plural,
kroner), divided into 100 0re. The krone has a par value of $0.4537.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables. The
present system of currency was established by the Norwegian mone
tary law of March 18, 1924.
The use of checks, while general in Norway, is not as widespread
as in the United States. As a rule all cash purchases and most
small accounts are settled by currency payments. This is perhaps
due, in part, to the facts that banks render accounts to their cus
tomers only once a year and that they do not return canceled checks.
Paper Currency of Norway
Denomination
Amount
outstand
ing June
80. 1086
(millions
of kroner)
Dimensions
127 by 72 millimeters............................................
51.1
8.0
104.0
48.0
102.0
19.0
332. 1
Coins of Norway
Gross weight
Denomination
Metal of chief
value
Amount
Diameter
Diame of inhole Thick Ming
arch
ter
center ness
1935
Gran s Grains (mm) of coin (mm) (millions
(mm)
Of
kroner)
7.0
4.8
2.4
1.5
8.0
4. 0
2.0
108.024
74.073
37. 036
23. 148
123. 450
61.728
30.801
25
22
17
15
27
21
16
5
4
3
3
1.6
1.4
1.2
1.0
2.0
1.7
1.4
9.5
2.7
2.1
2.5
.9
.6
1.1
19.4
N ote. The nickel coins consist of 25 parts nickel and 75 parts copper. The copper coins consist of 95
parts copper, 4 parts tin, and 1 part zinc. Silver coins of 2 kroner, 1 krone, 50, 25, and 10 0re were minted
prior to 1924, but are no longer in circulation.
NOTE-ISSUING AUTHORITY
The Norges Bank possesses the exclusive right of issuing bank
notes. Although the bank is a joint stock company, it is controlled
by the Government. The bank is managed by a board of repre
sentatives consisting of 15 members and a board of directors con
sisting of 5 members. The board of representatives is elected by
Parliament. The president and vice president of the bank are
152
HANDBOOK OF FOREIGN CURRENCIES
appointed by the Crown, whereas the other three members of the
board of directors are elected by Parliament. Each branch of the
bank has its local board consisting of three members. The managers
of the branches are selected by a committee of Parliament.
By law the profits of the bank must be distributed as follows:
(1) A dividend of 6 percent per annum to the stockholders; (2)
one-half of the remaining profits to the Treasury; (3) an additional
amount equivalent to 3 percent on their shares to the stockholders;
(4) of the balance then remaining, three-fourths to the Treasury
and one-fourth to the stockholders.
RESERVE REQUIREMENTS
The Norges Bank may issue notes to the value of 250,000,000
kronor in excess of its gold reserve. The latter may be in coin or in
bullion, which the bank has in its vaults or in the Royal Mint. It is
interesting to note that in July 1935 the outstanding note circulation
of the bank amounted to 330,000,000 kroner as compared with total
gold holdings of 105,000,000 kroner. In other words, the note circu
lation at that time exceeded gold holdings by 165,000,000 kroner.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
On September 27, 1931, with the suspension of the redemption of
notes in gold, an embargo was placed upon gold exports. This
embargo is still in effect.
It is unlikely that smuggling of gold occurs, as there has been
practically no gold in private hands.
GOLD
In addition to 118,800,000 kroner of gold held as cover for its notes
on July 8, 1935, the Norges Bank had, as part of its holdings of foreign
exchange, funds provisionally placed in gold amounting to 46,200,000
kroner.
The Norges Bank has no fixed buying rate for gold. The price
depends upon the value of the Norwegian crown in relation to foreign
gold currencies. The bank is presumably the only buyer of gold in
Norway.
It is believed that no gold hoarding exists.
THE GOLD CLAUSE
A law of December 15, 1923, gives the debtor the right to demand
postponement of date of payment if the debt is fixed in gold kroner and
the creditor refuses payment in Bank of Norway notes. Paragraph I
of this law, as translated, reads as follows:
If the debtor has legally undertaken to pay a money debt in kroner in gold
and the creditor refuses to accept payment in Bank of Norway notes at their
nominal gold value, said debtor may demand postponement of the date of pay
ment so long as the Bank of Norway is exempt from the obligation to redeem its
notes at their face value as expressed thereon. If the creditor withdraws his
refusal, he cannot then claim payment, as above stated, before the expiration of a
three months’ period. During the time of postponement interest shall be paid
at 4 percent per annum in bank notes at their face value. The right to claim
postponement cannot be waived in advance except by the State, municipalities,
the Bank of Norway, and other banks wholly guaranteed by the State.
SILVER
There is no longer any silver in monetary use in Norway.
153
HANDBOOK OF FOREIGN CURRENCIES
PALESTINE
The monetary unit is the Palestine pound (symbol £P), divided
into 1,000 mils. The Palestine pound is the exact equivalent of the
pound sterling and has, therefore, a par value of approximately
$8.2397.
DESCRIPTION AND CIRCULATION OF CURRENCY
The accompanying tables describe the currency.
Each note has its denomination and value printed on its face in
three languages: English, Arabic, and Hebrew.
No old issues of notes are in circulation. Foreign notes are not in
general circulation.
There are no prohibitions on the importation of foreign notes, but
they are not legal tender.
The use of checks and paper bills is not widespread.
Silver coins are legal tender for payments not exceeding 2 pounds;
coins of 10 and 20 mils, for payments not exceeding 200 mils; and
coins of less than 10 mils, for payments not exceeding 100 mils.
Paper Currency of Palestine 1
Dimensions
Denomination
1 Palestine pound
Amount
outstanding
May 31,
1935 (thou
sands of
Palestine
l>ounds)
191 by 102 millimeters ............................
191 by 102 millimeters..........................105 by 89 millimeters__________ ...
............
Total ............................................................
12
80
1,014
1,677
1,913
300
6,002
» Printed in London on linen-rag paper. Watermarks, including an olive sprig in the circular panel, are
used as protective devices against counterfeiting.
Coins of Palestine
Gross weight
Denomination
Metal of Fine
chief value ness
100 m ils.-............. Silver........
5C mils.................. .. d o .........
Nickel___
do 2 mils.........
Copper ...
20 mils *
1 Alloy is copi>er.
* Has a 7 mm hole in the center.
s Tin 0.030; zinc 0.015.
' 0.720
i .720
>.25C
». 250
i. 250
». 955
». 955
Silver content
Amount
out
standing
Diam Thick May 31,
eter ness
1935
(thou
Grams Grains Grains Grains (mm) (mm) sands
of
Palestine
pounds)
11.6638
5.8319
11.3398
0. 4799
2.9100
7. 7759
3. 2399
180.0 8.3979 129.00
90.0 4. 1990 04.80
175.0
100.0
45.0
12C.0
50.0
29
23.6
30.5
27
20
28
21
2. 24
1. 68
2.29
1.76
1.50
1.84
1.40
233
225
25
30
20
2
4
639
154
HANDBOOK OF FOREIGN CURRENCIES
NOTE-ISSUING AUTHORITY
The sole agency for the issuance of notes in Palestine is the Palestine
Currency Board, a quasi-independent department of the British
Government functioning under the immediate supervision of the
Secretary of State for the colonies, with offices in London.
RESERVE REQUIREMENTS
The reserves consist of British currency and securities held in
London. The currency board may purchase securities of the Govern
ment of any British Dominion in such amounts as the Secretary of
State may approve.
On March 31, 1935, a total of 6,037,719 Palestine pound:; was held
in the currency reserve fund. Of this amount, 5,044,297 Palestine
pounds was invested in securities.
EMBARGOES AND RESTRICTIONS OF BULLION MOVEMENTS
No embargo or restriction on bullion movements exists, and there
is no evidence of smuggling.
GOLD
Gold hoarding is believed to exist only in isolated cases.
THE GOLD CLAUSE
The status of the gold clause in Palestine is the same as in the
United Kingdom.
SILVER
The Government of Palestine maintains no silver reserves of any
nature. The amount of silver in monetary use in Palestine is thus
limited to that in circulation, namely, 458,000 Palestine pounds.
PANAMA
The monetary unit is the balboa (abbreviation b.), divided into 100
centesimos. Although the balboa is nominally equivalent to the
United States dollar, its legal gold content is slightly greater.
DESCRIPTION AND CIRCULATION OF CURRENCY
The coinage is described in the accompanying table. There are no
Panamanian notes.
The President was authorized by law no. 37 of 1934 (see Gaceta
Oficial No. 6959 of Dec. 19, 1934) to coin up to 10,000 balboas of 1and 2-centesimo pieces. These coins will be minted out of an alloy
composed of 95-percent copper and 5-percent zinc and tin. The
1-centesimo piece will weigh 48 grains and the 2-centesimo piece, 72
grains. (The original decree quoted the above figures as grams, a
typographical error.) No mention is made as to the thickness or
diameter, but the Government has specified that the 1-centesimo
coins will be of the same diameter and thickness as the American 1-cent
piece. So far, no 2-centesimo pieces have been minted and it is doubt
ful that any wall be for some time to come.
Law no. 37 of 1934, under article 4, prohibits any further coinage of
2%-centesimo pieces which are commonly referred to locally as
HANDBOOK OF FOREIGN CURRENCIES
155
“medios.” This is an awkward coin, and not only makes additional
work for bookkeepers but has always been unpopular with residents
of the Canal Zone. It is quite likely that after the Government has
had a sufficient quantity of 1- and 2-centesimo pieces minted, the
2K-centesimo pieces will be called in and melted.
United States notes are the only notes in circulation. There are
no prohibitions on the importation of foreign notes, but only United
States notes are legal tender.
The use of checks is general.
Coins of Panama1
Amount
out
standing
Diam Thick on May
Metal of Fine
eter ness 31. 1935
chief value ness
Grams Grains Grams Grains (inches) (inches) (thou
sands of
bullions)
Gross weight
Denomination
1 balboa.................... Silver___
25 centesimos............ ...d o ..........
10centesimos............ ...d o ..........
Nickel___
2*4 centesimos *____ ...d o ..........
Copper__
»0 900
». 900
i. 900
3.900
*. 250
». 250
». 950
26. 7290
12. 5000
6. 2500
2. 5000
5. 0<XX)
3. 3333
3. 1100
412.5000
192. 9000
96. 4500
38. 5800
77. 1600
51.4400
48. 0000
Silver content
24.0561
11. 2500
5. 6250
2. 2500
371. 2500
173.6100
86. 8050
34. 7220
1. 500 0.114 425
.086 3 286. 500
1. 205
. 955
.067 196
. 705
.053 102.5
.835
.078 41.640
. 7086 .069 25
.750
.062
2
1,078. 640
1 Does not include American coins in circulation (see text).
1 Alloy is copper.
3Information as of Oct. 15, 1935.
<See text under Description and Circulation of Currency.
*Alloy is zinc and tin.
NOTE-ISSUING AUTHORITY
Panama’s entire monetary stock is composed of metallic coins.
Although during the last session of the national assembly a bill was
passed authorizing the Banco Nacional to issue up to 4,000,000 balboas
in notes, the President vetoed it. Since American paper currency
circulates freely in all sections of the Isthmus, it is hardly likely that
Panama will attempt to issue any paper currency in the near future.
RESERVE REQUIREMENTS
In order to guarantee the parity of the Panamanian silver coins so
that they will circulate freely in the Panama Canal Zone, the Pana
manian Government must keep on deposit with New York banks 15
percent of the dollar value of such coins. (This deposit at present
is divided almost equally between two large banks.)
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Both gold and silver may be purchased, sold, and exported without
any restriction. In this connection, it is worth noting that the
Government’s entire monetary stock at the time the United States
suspended the gold standard was composed of silver and nickel coin.
So far as is known, the Government has not attempted to maintain
reserves in gold.
156
HANDBOOK OF FOREIGN CURRENCIES
GOLD
No official estimates as to the quantity of gold now hoarded in the
country are available, hut the amount is believed to bo very small.
After the United States went off the gold standard, a fairly large
amount of gold came out of hiding and was sold.
THE GOLD CLAUSE
Until the United States suspended the gold standard, practically
all domestic contracts called for the payment in gold, either United
States dollars or balboas. Since then, as far as is known, no one
has resorted to law to collect in gold. The banks report that a few
of their customers in Europe have demanded payment in gold, but
without success.
The Government lias taken no legal action either to uphold the
gold clause in domestic contracts or to repudiate it. The 1903 treaty
between the United States and Panama called for canal annuity pay
ments to be made in gold dollars. After some delay the Government
of the United States acceded to the request that this provision be
complied with. On the other hand, although Panama’s public debt
calls for payment in gold, interest and amortization payments have
been made in current dollars, and there is no indication that the
Government’s policy in this regard will be altered.
SILVER
The amount of silver in the hands of the general public, the banks,
and the Government, cannot be ascertained. lx>cal bankers state
that approximately as much American as Panamanian silver circu
lates on the Isthmus.
During recent years several attempts have been made to determine
the amount of American currency in circulation on the Isthmus, but
no one has been able to arrive at a reliable figure. The paymaster
of the Panama Canal estimates that the total monetary stock,
including balboa currency, ranges between $4,500,000 and $5,000,000.
PARAGUAY
The monetary unit is the peso (symbol $), divided into 100 centavos.
As the currency of Paraguay is fiduciary in character, it is impossible
to give an official parity for the Paraguayan peso in terms of foreign
currency.
DESCRIPTION AND CIRCULATION OF CURRENCY
The circulating medium consists of paper notes issued by the
exchange office (oficina de cambios) and nickel coins issued for the
account of the Treasury, in addition to Argentine paper and metallic
currency which has long had an extensive circulation in Paraguay and
is largely used in foreign transactions although it has no legal-tender
status.
Because of Paraguay’s intimate economic relationships with
Argentina, foreign exchange operations in Paraguayan currency have
long been based on the Argentine peso. For example, by a law enacted
in March 1923, it was provided that the Paraguayan peso should be
converted into Argentine paper pesos at the ratio of 18.75 to 1. On
157
HANDBOOK OF FOREIGN CURRENCIES
August 17, 1935, the official exchange rate of the Paraguayan peso for
the Argentine peso was raised to 25 to 1.
In recent years the currency issues of the exchange office have been
greatly expanded with the result that the great bulk of the currency
in circulation now consists of Paraguayan pesos, and the foreign
exchange value of the peso has greatly declined.
For a considerable period only the Government has been able to
purchase foreign exchange at the official rate (since Aug. 17, 1935, 25
Paraguayan pesos per Argentine paper peso); and the Government
requirements have absorbed practically all of the exchange available
at the official rate. As a result, private individuals have been obliged
to resort to the curb market which, though technically illegal, is
permitted to operate freely. At the beginning of December 1935,
the curb rate for Argentine pesos was about 91; and for dollars,
between 330 and 341.
Paper Currency of Paraguay 1
Denomination
Dimensions
Denomination
Dimensions
159 by 85 millimeters
148 by 75 millimeters
142 by 75 millimeters
180 by 107 millimeters
170 by 102 millimeters
169 by 95 millimeters
100 pesos............................. 160 by 88 millimeters
i Engraved. The notes are printed abroad on paper of 75 percent linen and 25 percent cotton.
Coins of Paraguay
Denomination
Gross weight
Metal of chief value
Grams
i 0. 250
». 250
».250
Grains
4. 0900 61.7280
3.0100 46. 4500
2.0700 31.9440
(mm)
23.3012
19.3040
17. 2720
Thickness
(mm)
1.3716
1.3970
1. 2192
• Alloy is copper and a very small amount of tin.
The amount of 2-peso, 1-peso, and 50-centavo nickel coins in circu
lation in September 1935 was about 8,000,000 pesos. It is reported
that the Paraguayan Congress has passed a bill authorizing the
executive to issue, through the exchange office, 43,000,000 pesos of
new' metallic currency in the following denominations, amounts, etc.
Denomination
Metal of chief value
___ do............................
Fineness
»0.750
».750
(*)
(*)
(>)
Diameter Thickness Number of
(mm)
(mm)
pieces
28.0
25.0
(*)
(*)
(>>
(*)
«
«
1.6
1.0
2,000,000
2,500,000
2, 5<X). 000
3, 500, OCX»
4,000,000
1 Alloy is to he copper. Weight o( coins to be determined by executive.
>The law is said to prescribe that these coins shall have the same characteristics as those issued pursuant
to law no. 743, but the executive is authorized to fix their weight and thickness.
06111*— 36------ 11
158
HANDBOOK OF FOREIGN CURRENCIES
The new coins of 10 and 5 pesos, it is reported, must he exchanged
for notes of the same denominations. The other new coins must be
exchanged for notes and coins issued under law no. 742. The bills
taken in exchange must be incinerated, while the old coins so re
ceived must be demonetized within a period to be determined by the
executive.
NOTE-ISSUING AUTHORITY
The Exchange Office has complete control of the monetary system
of Paraguay, although it also engages in commercial banking. It is
the only note-issuing authority in Paraguay. It operates on capital
supplied by the Government, and is controlled by a board of gover
nors appointed by the President and confirmed by the Senate.
RESERVE REQUIREMENTS
There has never been any legal requirement regarding reserves
against the currency. However, from the statements which it
issued at regular intervals for a number of years, prior to the outbreak
of the war between Paraguay and Bolivia, the Exchange Office
apparently regarded its holdings of foreign currencies as a reserve
against its issues of Paraguayan currency. As these foreign curren
cies were then freely redeemable in gold on demand, and as the Ex
change Office was successful during that period in its efforts to estab
lish a fixed rate of exchange for the Paraguayan peso in terms of the
Argentine peso (42.61 Paraguayan paper pesos per Argentine gold
peso or 18.75 Paraguayan pesos per Argentine paper peso), it would
appear that the Paraguayan currency was then on a gold-exchange
standard. During the war with Bolivia, the available supplies of
foreign exchange in Paraguay were heavily drawn upon to meet the
Government’s expenditures abroad for military purposes. At the
same time the currency was greatly expanded. As a result, the
open-market rate of exchange declined to such an extent that in
November 1935 the rate on Buenos Aires was as low as 91 Paraguayan
paper pesos per Argentine peso, as compared with the declared
official rate of 25 to 1.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
There are no legal restrictions on the importation of gold and
silver into the country, but there can be no exportation of gold by
the public. A bill is now under consideration in the Chamber of
Deputies whereby the exportation of gold would be specifically
prohibited by law. It is believed that there is no extensive smuggling
of gold.
GOLD
Data concerning present gold reserves are withheld, as a matter
of Government policy. During the early stages of the war with
Bolivia, gold was exported privately in rather large quantities.
This was checked by the purchase of gold by the Exchange Office at
prices above those previously obtained by private exporters.
No gold hoarding exists.
HANDBOOK OK FOREIGN CURRENCIES
159
THE GOLD CLAUSE
The gold clause in private domestic contracts has been suspended
by a moratorium law which has twice been extended. The last
extension expires on May 31, 1936.
SILVER
Silver is not used for any monetary purpose.
PERU
The monetary unit is the sol (abbreviation s/.), divided into 100
centavos. The sol has a par value of approximately $0.4741.
The sol was established by law no. 7126 of April 18, 1931, as con
sisting of 42.1264 centigrams of fine gold. The gold-exchange stand
ard was continued until May 14, 1932.
DESCRIPTION AND CIRCULATION OF CURRENCY
No gold coins are in circulation.
The history of the present silver coins is as described in Trade
Promotion Series No. 149, The Monetary Use of Silver in 1933.
Between 1930 and the end of 1933 the volume of silver in circu
lation increased from 17,743,416 to 18,123,416 soles. In April 1934
Peru became a party to the London Silver Agreement, under which
it was to absorb from its domestic production during the 4 years
beginning January 1, 1934, an average of 1,095,325 fine ounces per
year. Since on January 1, 1934, the silver coins in circulation
amounted to 18,123,416 soles, only 4,876,584 soles of coins could be
issued under the coinage laws of 1922, which fixed the total at 23,000,000 soles. The fine silver content of 4,876,584 soles is 1,959,821 fine
ounces. Silver disks to this amount were purchased in London and
coined in the National Mint at Lima, 2,855,000 1-sol pieces being
put into circulation in 1934. In the first 4 months of 1935, 695,000
1-sol pieces and 2,653,000 )(-sol pieces were coined and issued, raising
the total by April 30, 1935, to the legal limit of 23,000,000 soles.
With the sharp rise in the world price of silver in the spring of 1935,
the value of the 1-sol and K-sol pieces passed the melting point. At
one time, with silver at 77 cents United States currency per fine
ounce, the 1-sol piece had a bullion value of 1.31 soles. That is,
while the foreign exchange value of the sol was around 23 cents
United States currency, the sol silver coin was worth 31 cents as
bullion. After the newspapers editorially pointed out this fact,
there was considerable hoarding and melting. On May 2, 1935, a
decree was issued prohibiting hoarding, selling, and exportation of
any silver coins. Exportation of silver in bars, whether combined
with other metals or not, was also prohibited, unless it was proved
they came from mining concerns.
In order to remedy the resultant scarcity of subsidiary currency,
two decrees were issued on May 4. One authorized the Banco Central
de Reserva to coin and issue 10,000,000 50-centavo pieces in debased
coins, which were to be an obligation of the bank and to enjoy the
same guaranties as the paper notes of the bank. The new coins were
immediately ordered from London, and the specifications (later set
by a decree of May 27) are shown in the accompanying table. To
tide matters over until the new coins could arrive, the other decree
160
HANDBOOK OF FOREIGN CURRENCIES
of May 4 authorized the bank to issue temporarily locally printed
50-centavo notes.
About 2,000,000 of these 50-centavo notes were in circulation at
the end of May 1935. To make up for the scarcity of 1-sol pieces,
the Central Bank, under authority of its statutes, made arrangements
to issue 10,000,000 1-sol notes, which were ordered from the United
States, to arrive in August 1935. .
Existing laws authorize the minting of fractional nickel coins to
the total amount of 6,500,000 soles. The monetary law of April 18,
1931, provided that nickel coins shall be legal tender in payments not
exceeding 1 sol but that (except as otherwise specifically provided by
law or government contract) nickel coins as well as silver coins should
be receivable at par in unlimited quantities in payment of all taxes
and other Government dues. The sum of 200,000 soles in 5-centavo
pieces was issued in 1934. In view of the scarcity of fractional cur
rency in May 1935, when the price of silver rose to a point at which
it became profitable to melt the coins for their bullion value, the
Government made arrangements with the Central Bank for the issu
ance of 300,000 soles more of nickel coins, thus bringing the total up
to the 6,500,000 soles authorized.
Copper coins are legal tender up to 5 centavos.
Paper Currency of Peru
Denomination
Amount
outstand
ing on Apr.
30, 1935
(millions of
soles)
Dimensions
8.8
24.4
28.2
10.9
72.3
Total............................................................
Coins of Peru
Denomination
Amount
out
standing
Diam
Thick
Metal of Fine
Apr
eter ness 193530,
chief value ness
Grams Grains Grams Grains (mm) (mm) (mil
lions of
soles)
0.500
.500
.790
1.250
*.250
»250
i. 950
>.950
Gross weight
Silver content
25.0
12.5
7.5
7.0
4.0
3.0
10.0
5.0
12.50 192.9095
6.25 96. 4523
385.8089
192. 9045
115. 7427
108.0265
61. 7294
46. 2971
154. 3235
77. 1618
37
30
27
24
20
17
24
19
2. 50
1.90
1.93
2.00
1.60
2. 25
2.00
15.4
7.6
3.3
1.9
1.1
(«)
(>)
i According tc decree of May 27, 1935, alloy was to be 0.200 zinc and 0.010 nickel.
* Alloy, 0.750 copper.
* Allov, 0.030 tin, and 0.020 zinc.
* 41,934.16 soles.
*69,489.61 soles.
N ote.—T he limits of tolerance for the 1-sol piece are as follows: Weight (before issuance), 0.075 gram;
fineness, 0.003; abrasion, 1.25 grams; and for the ^-sol piece: 0.0625 gram, 0.003 and 0.625 gram, respectively.
The tolerauce in weight for the nickel coins is as follows: For the 20-centavo piece, 0.01 gram; for the 10centavo piece, 0.015 gram; and for the 5-centavo piece, 0.017 gram.
HANDBOOK OF FOREIGN CURRENCIES
161
Peruvian bank notes are engraved in the United States on paper
of domestic origin consisting of linen (75 percent) and cotton (25
percent). Among the protective devices used on the notes may be
mentioned the use of various delicate colors interwoven or blended,
much fine and intricate engraving, serial numbers and letters, and
indelible colored dots irregularly placed.
Foreign notes may be freely imported, but none circulate in Peru.
NOTE-ISSUING AUTHORITY
Article 54 of law 7137 of April 18, 1931, states:
The Central Reserve Bank of Peru shall have the exclusive right of issuing
bank notes for the 30-year period of its charter. During this period neither the
National Government nor any of its political divisions, nor any banking or other
corporation, business concern, private individual, or other entity whatsoever,
shall issue any paper money or any other documents whatsoever that shall circu
late as money in Peru.
The Government has, neither by law nor in actual practice, a con
trolling voice in the policies of the Central Bank. It has, however,
considerable influence, especially during emergencies such as the late
dispute with Colombia, but it should be noted that even during this
dispute the bank several times refused to extend financial assistance
as requested by the Government.
RESERVE REQUIREMENTS
The statutes of the Central Bank, as amended by law 7701 of Feb
ruary 22, 1933, provide that the bank’s notes and deposits must be
secured by a reserve of at least 50 percent in gold and gold-exchange,
bank acceptances, and Peruvian silver coins, the latter not to exceed
one-tenth of the reserve. Since early in 1934, the reserve ratio has
ranged from 42 to 45 percent, although the gold declared “intangible”
by law 7526 of May 18, 1932—when Peru went off the gold exchange
standard—is calculated at the par rate of 2.3738 soles per fine gram.
If this gold were calculated at prevailing prices, the reserve ratio
would be approximately twice as high as it is now shown. The
original statutes of the bank provided for a tax on the note circulation
whenever the reserve ratio fell below 50 percent, but this provision
was suspended by law 7760 of June 9, 1933, which authorized a loan
of 30,000,000 soles by the bank to the Government.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
According to law 7833 of October 13, 1933, trading in and exporta
tion of gold bullion is permitted, subject to the payment of regular
taxes. The exportation of gold coin is prohibited except, in certain
instances, by the Central Bank.39
The Central Bank collects the export tax on gold, since this source
of revenue is pledged to the service of the 35,000,000 soles loaned to
the Government in 1933 and 1934 under laws 7760 and 7877.
Under law 7833 the Government is authorized to substitute for the
export taxes a flat charge of 5 percent ad valorem, whenever the price
of gold or rates of exchange make it more profitable to do so. This
law also permits the Central Bank to buy locally produced gold, if
s# Art. 2 of law 7833 was modified by law 7879 of Apr. 26, 1934, so that all domestically produced gold must
pay the taxes mentioned in law 7833.
162
HANDBOOK OF FOREIGN CURRENCIES
deemed convenient, at the world price minus expenses (commission,
transportation, insurance, refining, etc.). When the bank buys such
gold, the Government may and does insist that the export duties shall
he deducted from the price paid.
There are no restrictions on the importation of gold and silver
bullion and coins, and such imports are duty free.
Government control of outward movements of silver was made
necessary when the value of the silver coins passed the melting point.
A decree of May 2, 1935, prohibits hoarding, buying, selling, and ex
portation of silver coins. The export of silver in bars or other forms
is also prohibited, unless it is proved that this silver comes directly
from mining operations in Peru. Travelers leaving Peru may take
with them only 20 soles in silver coin. Silver necessary for industry
or the arts may be obtained by special permission from the Treasury
Department.
Export smuggling of gold is known to exist, especially across the
Bolivian border, but is not believed to be extensive.
In June 1935 a considerable quantity of silver coins was hoarded.
Later, however, these coins began to appear in circulation in small
quantities. Considerable smuggling of silver coins was believed to be
going on, although definite information on this subject is not available.
Persons attempting to smuggle gold or silver are subject to heavy
fines and other penalties, in addition to the confiscation of the metal.
GOLD
The Central Bank valued its gold holdings on December 31, 1934,
as follows:
1.
2.
3.
4.
Coined gold or gold bullion at the legal rate of 2.3738 soles per
Sotea
fine grain 1________________________________________ 38, 784, 832. 53
Coin or bullion—balance bought in 1934—at cost2________
336, 873. 37
Gold en route to London 2_____________________________
510, 021. 00
Gold bought in London and held by Midland Bank, Ltd.2___ 1, 929, 030. 14
Total..................................................................................... 41,560,757.04
» Gold under item 1 was declared “intangible” by law 7526 of May 18, 1932, which authorized the suspen
sion of the gold-exchange standard. Since that date the bask has carried this gold at the legal rate.
* The weight of items 2, 3. and 4 together was 641,640 fine grams.
In addition to the above, the bank held 296,000 grams of fine gold
for the Banco Industrial which was to be established later. On
December 31, 1934, the other banks in Peru held 680,414 soles of gold,
valued at the legal rate of 0.421264 grams of fine gold per sol.
The total weight of all this gold, as of December 31, 1934, is thus
calculated as follows:
Visible gold reserves of Peru on Dec. SI, 1934
Fine grams
“Intangible” supply of gold coins and bullion in Central Bank____ 16, 338, 654
Gold held by Central Bank for Banco Industrial________________ 296, 000
Other gold held by Central Bank in Lima or abroad_____________ 1 641, 640
Gold held by other banks___________________________________ 286, 634
Total gold stock of Peru______________________________ 17, 562, 928
>About 70,000 grams in Lima and the rest in London.
The latest available figures for the visible supply of gold—those as
of March 31, 1935—are not quite as detailed as those above.
HANDBOOK OF FOKEIGN CURRENCIES
Visible gold reserves as of Mar. SI, 1935
“Intangible” supply of gold coin and bullion in Soles at par
Central Bank..'____________________________ 38, 784, 833
Other gold held by Central Bank abroad, in Lima,
and for Banco Industrial____________________ 2, 332, 167
Gold held by other banks______________________ 636, 000
Total
41, 753, 000
163
Fine grams
16, 338, 654
982, 458
267, 924
17, 589, 036
As mentioned above under beading “Restrictions on Bullion and
Coin Movements” the Central Bank (but not the Government) buys
gold at the world price minus deductions for commission, transporta
tion, refining, taxes, etc. In 1933 the bank bought 2,871,100 fine
grams. In 1934, 1,758,300 grams were bought at a cost of 9,632,272
soles. On June 13, 1935, the bank’s price for locally produced gold
was 4.58 soles per fine gram, less a tax of 20% centavos, or a net price
of 4.3725 soles. The tax referred to is that set by law 7833 of October
1933, and is levied at the rate of £10 sterling per fine kilogram.
It is known that some gold is boarded by the public, although it is
impossible to estimate the amount so held.
THE GOLD CLAUSE
The legal status of the gold clause in domestic contracts is not
clearly defined. Two relatively important cases were decided by the
courts with quite opposite judgments. The decisions were deter
mined by special circumstances surrounding each case. A gold clause
in domestic contracts is very rare, although contracts in a foreign
currency, especially sterling and the dollar, are not uncommon. The
Peruvian Congress on several occasions in recent years has endeavored
to have laws enacted specifying that “mutuum contracts” 40 in for
eign currencies may be liquidated in local currency at the rate of
exchange ruling at the time the contract was made, but these attempts
have so far been unsuccessful.
SILVER
Developments affecting silver since Trade Promotion Series No. 149,
The Monetary Use of Silver in 1933, was published have been pre
viously described under “Description and Circulation of Currency”
and “Restrictions on Bullion and Coin Movements.”
At the end of 1934, fractional coins of silver and nickel totaled
27,178,000 soles, of which 20,978,000 soles were silver and 6,200,000
were nickel. The 27,178,000 soles were held: 3,547,000 by the Central
Bank, 727,000 by the commercial banks, and 22,904,000 by the gen
eral public. The Central Bank held 988,000 soles in nickel and it is
estimated that the commercial banks held 200,000 soles in nickel,
leaving 5,012,000 soles in nickel in the hands of the public at the end
of 1934. On this basis the bank held 2,559,000 soles in silver and
the commercial banks, 527,000 soles.
The total circulation of fractional coins of silver and nickel on April
30, 1935, was 29,200,000 soles of which 23,000,000 soles were silver
40A mutuum contract is a loan of personal chattels to be consumed by the borrower and to be returned
to the lender in kind and quantity, as a loan of corn, wine, or money, which is to be used or consumed
and is to be replaced by other corn, wine, or money. (Bouvier’s Law Dictionary.)
164
HANDBOOK OF FOREIGN CURRENCIES
and 6,200,000 were nickel. The distribution of silver coins on that
date, has been estimated as follows:
Distribution of Peruvian Silver Coins by Face Value in 1934 and 1935
(In thousands of soles]
Dec. 31,
1934
Coins—
Apr. 30,
1935
4,104
8C0
18,096
23.000
2,559
527
17.892
20.978
Since silver is not held in bullion form, and since the coins contain
12% grams of silver per sol, the distribution of silver by weight was
as follows:
Distribution of Peruvian Silver Coins, by Weight, in 1934 and 1935
[In troy ounces]
Coins—
Total..................................................................................................
Dec. 31,
1934
Apr. 30,
1935
1,028,398
211,788
7.190, 348
8. 430, 534
1,649,295
3^. 590
7, 272,330
9,243. 125
PHILIPPINE ISLANDS
The monetary unit is the peso (symbol P or P), divided into 100
centavos. The peso has a par value of $0.50. The treasurer of the
Philippine Islands is required by law to sell exchange on the United
States at the rate of 2 pesos for $1, charging three-fourths percent
premium for demand drafts and 1/(-percent premium for telegraphic
transfers. The premiums may be temporarily changed by order of
the secretary of finance, if, in his judgment, conditions should
require such action.
DESCRIPTION AND CIRCULATION OF CURRENCY
The metal and paper currency is described in tbe accompanying
tables.
The legal-tender limits of the currency are set forth in act S. no. 112,
of March 16, 1935, as follows:
S ec . 1612. Legal tender.—The Philippine silver peso and half peso, and gold
coins of the United States at the rate of $1 for two pesos, shall be legal tender
for all debts, public and private, unless otherwise specified. Philippine subsidiary
coins of 20 centavos and 10 centavos shall be legal tender in amounts not exceeding
20 pesos. Philippine minor coins of nickel and copper shall be legal tender in
amounts not exceeding 2 pesos.'1
No foreign coins or notes are in circulation in the Philippines, except
United States coins and United States Federal Reserve notes, which
mav be found, in relatively small amounts, in the hands of local banks
and transients.
The use of checks is rather limited.41
41 Since Philippine treasury certificates can be exchanged for silver pesos they are, for all practical pur
poses, equivalent to legal tender.
165
HANDBOOK OF FOREIGN CURRENCIES
0. 900 26. 956S 416. 0000 24. 2611 374. 4000
.800 20. 000 308. 6471 16. 0000 246.9177
.900 13. 4784 .03. 0000 12. 1305 187. 2000
.750 10.000 154.3236 7.5 115. 7427
.900 5. 3848 84. 100C 4.8463 74. 7900
.750 4. 000 61. 7294 3.0 46. 2971
. 900 2. 0924 41. 550C 2.4231 37. 3950
.750 2.000 30. 8647 1.5 23. 1485
» .250 4.870 75. 1556
« .950 5. 184 80. 0000
Vi centavo........... ...d o ___ •.950 2. 5920 40.0000
Total.........
1 peso 3.................
Do.4...............
50 centavos 3----Do.4..............
20 centavos 3----Do.4 ._.........
Do.4..............
Silver...
...d o ___
...d o ___
.. .do---...d o ___
.. do___
1UÎ4
F9c<
l^i>2
1?$2
=952
%
n*2
44io
3^2
•96,
Amount minted
(millions of pesos)
Amount in treas
ury available for
c i r c u l a t i o n >3
(millions of pesos)
Amount outstand
ing (millions of
pesos) 4
Thickness (inches)
Diameter (inches)
Grains
Grams
Grains
Grams
Gross weight Silver content
Fineness
Denomination
Metal of chief value
Coins of the Philippine Islands, May 31, 1935
1.5
0.112
. 0985 20.3
.1
. 0685
. 0655 6. 1
.0485
.3
11
. 0455 5.3 /i 11
.2 l
. 0-105
o
.03625 3.6
. 0625 1.5
.2
.1
.0475 1.7
.045
. 1 (9
3.7
1.3
1.6
.1
• 18.6
>Old and new issues combined.
1The amount held in the treasury vaults as shown above includes 13,901,251 silver pesos and 3,183,000
pesos in silver half pesos (50 centavos) held in the treasury-certificate fund, in addition to 4,559,708.76 pesos
in silver and other subsidiary coins held in the exchange standard fund which are not considered as avail
able for circulation under section 1625 (f) of the Administration Code of 1917. The silver coins in the treas
ury-certificate fund may be released for circulation, however, by substituting therefor dollar currency or
dollar deposits in tho American Treasury or American banks.
3 Old issue. Act of United States Congress of Mar. 2, 1903.
4 New issue.
11.33 pesos.
» Alloy is copper.
* Of this, 100.000 pesos is estimated
• Alloy: Zinc, 0.040; tin, 0.010.
to have been destroyed.
Circulation of Paper Currency of the Philippine Islands, by Denominations,
Aug. 31, 1935 1
A. Outstanding and on H and
Issuing authority and denomination
Philippine treasury (treasury certificates):
Less treasury certificates in treasury vaults and in
hands of various tellers (denominations not stated).
Total........................................................................
Bank of the Philippine Islands:
Dimensions
Amount
outstand
ing and
available
for circu
lation
(millions
of jiesos)
36 0
11.8
4.6
14.6
10.8
8.2
8.6
6.9
101.5
24.8
76.7
0.2
.3
.2
1.0
1.7
1.4
4.3
.4
4.4
1 Printed from engraved plates made by the United States Bureau of Engraving and Printing. The paper
is the same as that used for United Stales paper currency.
166
HANDBOOK OF FOREIGN CURRENCIES
Circulation of Paper Currency of the Philippine Islands, by Denominations,
Aug. 31, 1935—Continued
A. Outstanding and on H and—Continued
Issuing authority and denomination
Amount
outstand
ing and
available
for circu
lation
(millions
of i>esos)
Dimensions
Philippine National Bank:
2.0
.ü
3.5
1.9
1.0
.7
10.0
2.0
8.0
Thousa nds of
pesos
19. 4
16.5
3.0
16.9
89.6
Total .......................
Total..........................................................................
Emergency notes:
B. N et, After Allowing for N otes D estroyed (M illions of P esos)
Issuing authority
Total avail
Gross cir
for cir
Net circu able
culation as Estimated
culation
destroyed
lation
above
and out
standing
76.7
4. 4
8.0
89. 1
0.35
. 04
.15
.54
76.4
4.4
8.0
88.4
101. 5
4. 8
10.0
116.3
NOTE-ISSUING AUTHORITY
Treasury certificates are issued by the insular Government and
bank notes by the Philippine National Bank and the Bank of the
Philippine Islands.
RESERVE REQUIREMENTS
Treasury certificates in circulation and available for circulation
must be backed peso for peso by silver pesos and silver half pesos held
in the treasury vaults, or by dollar deposits in the United States
Treasury or American banks. The act governing the issuance of
treasury certificates provides that the treasury-certificate fund shall
be constituted of silver coins received in exchange for the treasury
certificates, provided that when the Government’s supply of silver
coins is insufficient to meet the demands of trade, legal-tender currency
of the United States may be temporarily substituted for silver pesos
to the extent found necessary pending the purchase of bullion and the
coinage of silver. It is also provided that, until the Governor General
directs the purchase of silver bullion and the coinage of silver, the
treasury-certificate fund may be composed of dollar deposits with the
167
HANDBOOK OF FOREIGN CURRENCIES
Secretary of the Treasury or with banks in the United States (sec.
1626 of Act No. 4199).
Actually, in recent years the treasury-certificate fund has not been
composed entirely or even mainly of silver coins. On May 31, 1935,
it was made up as follows:
Item
Demand deposits with the United States Treasury.............................
Total.................................................................................................
Am ount1
Equivalent in
pesos
$9, 572,440. 44
32,650, 000. 00
16,363.06
42, 238,803. 50
13,901,251.00
3,183, 000. 00
17,084,251.00
84,477,607. 00
17,084,251.00
101,561,858.00
i Last 2 items in this column are in pesos.
No silver bullion is held in the treasury-certificate fund.
The Philippine currency, being on the dollar-exchange standard, is
protected by an exchange-standard fund described in sections 1622,
1623, and 1624 of Act No. 4199 of March 16, 1935. That fund must
be maintained at not less than 15 percent of the total stock of Philip
pine currency in circulation and available for circulation, including
both coins and treasury certificates. Profits from seigniorage, sales
of exchange, and other sources listed in the apt must be added to the
fund until it reaches 25 percent of the total circulation, including tho
amount available for circulation. Any surplus beyond 25 percent
may be transferred in full or in part to tho general fund of the insular
treasury on recommendation of the secretary of finance and'with tho
approval of the Governor General. The exchange-standard fund
amounted to 48,297,849.36 pesos on May 31, 1935, the details being
shown in the following statement:
Exchange Standard Fund—Balance Sheet, May 31, 1935
{In pesos unless otherwise specified]
Cash:
ASSE.TS
In treasury vaults:
In Philippine currency.........................
In U n i t e d S t a t e s c u r r e n c y
($2,384,286.81)*.................................
4, 559, 708. 76
4, 768, 573. 62
Petos
--------------------- 9, 328, 282. 38
On deposit with authorized depositories in
the United States (in dollars):
Chase National Bank, New York City
(demand)_____________________ $2, 414, 153. 31
Treasury of the United States, symbol
19-695 (demand)_______________ $1, 345, 630. 18
Treasury of the United States, symbol
19-694 (time)................. .................. $15, 725, 000. 00
$19, 484, 783. 49 38, 969, 566. 98
Total cash on hand in treasury vaults and
on deposit with United States deposi
tories__________________________________________ 48, 297, 849. 36
1 Include» the profit of $650,475.95 from the revaluation of the 938,460 United States gold dollars now held
In the treasury vaults.
168
HANDBOOK OF FOREIGN CURRENCIES
Exchange Standard Fund—Balance Sheet, May 31, 1935—Continued
[In pesos unless otherwise specifiedl
assets—continued
Pesos
626. 32
Accounts receivable___________
70. 96
Supplies in stock_____________
8, 272. 50
Mint supplies and materials----1, 516. 58
Work in process—new coinage...
122, 427. 12
Work in process—recoinage____
44, 716. 30
Finished products—new coinage.
14, 922. 25
Finished products—recoinage__
Total assets______________________________________ 48, 490, 401. 39
LIABILITIES
126, 109. 27
Outstanding warrants_____________________
3, 061. 06
Accounts payable________________________
2 666 68
Supply vouchers payable------- ------------------3. 72
Surcharges, division of purchases and supply..
Total liabilities_______ _________ _______ ____ _____
131, 840. 73
Excess of assets over liabilities, May 31, 1935_______________ 48, 358, 560. 66
Total....................................................................................... 48, 490, 401. 39
,
.
As the total circulation on May 31, 1935, amounted to
120,711,334.20 pesos, the reserves held in the exchange-standard
fund were 18,120,015.81 pesos in excess of the amount required on a
25-percent reserve ratio and 30,191,149.23 pesos over the amount
required under the legal ratio of 15 percent.
The charter of the Philippine National Bank requires that it
keep on deposit with tin i'Asular treasurer at all times a reserve equal
to 25 percent of its circulation. Since it has outstanding and avail
able for circulation 10,000,000 pesos, it keeps a cash deposit of
2,500,000' with the insular treasurer. Its actual circulation on May
31, 19?5, was 9,239,356.47 pesos.
The charter of the Bank of the Philippine Islands also requires a
deposit with the insular treasurer of 25 percent of its maximum cir
culation which is at present 4,800,000 pesos. Deducting the amount
held in the vaults of the bank, there was outstanding on May 31,
1935, a net circulation of 4,569,927.50 pesos. The act extending the
charter of the hank provides that it must pay annually to the insular
treasurer 600,000 pesos toward the redemption of its circulation.
The circulation has thus been decreased from 9,000,000 pesos on
January , 1928, to 4,800,000 pesos on January , 1935, and will
continue to be decreased at the rate of 600,000 pesos per year for
the next 8 years.
1
1
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Act No. 2711—the Revised Administrative Code of the Philippine
Islands—passed in 1917, includes two sections, nos. 2710 and 2711,
restricting the exportation and importation of silver coin or bullion
made therefrom. The two sections read as follows: .
S ec. 2710. Unlawful exportation of coin or bullion.—It shall be unlawful to
export or attempt to export from the Philippine Islands any Philippine silver
money coined under the authority of any law of the United States, or bullion
made therefrom, except as such money may be carried away by departing travelers
in ordinary course and in sums not exceeding 25 pesos or as such coin or bullion
may be exported in the course of the lawful operations of the Philippine Treasury;
HANDBOOK OF FOREIGN CURRENCIES
169
and any person who effects or attempts the exportation of such coin or bullion
contrary to law shall be punished by a fine not exceeding 2,000 pesos or by
imprisonment for not more than 1 year, or both; and the coin or bullion in question
shall be forfeited.
Sec. 2711. Unlawful importation of silver coin.—It shall be unlawful to import
or to attempt to import into the Philippine Islands silver money not on a gold
basis, except as the same may be brought in by incoming passengers in ordinary
course of travel and in sums not exceeding 06 pesos for a first-class passenger,
20 pesos for a second-class passenger, and 10 pesos for a third-class passenger;
and any person who effects or attempts the importation of such coin contrary to
law shall be punished by a fine not exceeding 2,000 pesos or by imprisonment for
not more than 1 year, or both; and the coin in question shall be forfeited.
Executive orders of the President of the United States dealing
with gold in the United States apply equally in the Philippine Islands.
On July 2, 1935, the American Trade Commissioner reported that the
Manila Supreme Court, reversing a decision of the lower court, had
just handed down a decision that gold, other than United States gold
coin, situated in the Philippines may be exported therefrom to a
foreign country without the necessity of obtaining a license therefor,
provided that the gold is owned and exported by a person not
domiciled in the continental United States.
There is no evidence of smuggling of gold or silver, but it is probable
that some is carried on.
GOLD
The gold reserves of the Philippine Islands totaled 938,460 old
gold dollars, all in gold coin of the United States. As a result of the
devaluation of the American dollar, the value of this gold coin was
raised to $1,588,935.95. This amount is held in the vaults of the
insular treasurer as part of the exchange-standard fund. (It forms
part of the $2,384,286.81 shown in the balance sheet under the heading
“In United States Currency.”) There are no other gold reserves held
in the Philippine Islands, other reserves in the exchange-standard fund
being in the form of dollar deposits with the United States Treasurer
and with American banks.
No gold is being purchased by the Government or the banks.
Although there is no external evidence that gold is being hoarded
by the public, a considerable amount of hoarding has undoubtedly
taken place.
THE GOLD CLAUSE
All bonds issued by the Philippine Government, its provinces and
municipalities, prior to 1933, contained the gold clause, which re
quired payment of the principal and interest at the Treasury of the
United States in gold dollars. Upon the President’s approval of
Public Resolution No. 10, Seventy-third Congress, on June 5, 1933,
the right of a creditor to require payment in gold or in a particular
kind of coin or currency, or in an amount in money measured thereby,
was voided. As the bonds of the Philippine Government then out
standing were all payable at the Treasuiy of the United States, they
automatically became payable in United States currency just as did
United States obligations.
The net outstanding bonded indebtedness of the Philippine Gov
ernment as of December 31, 1934, was approximately $49,735,284.
No bonds containing the gold clause have been issued by the Philip
pine Government since the enactment of Public Resolution No. 10,
Seventy-third Congress.
170
HANDBOOK OF FOREIGN CURRENCIES
Private obligations payable in gold in the Philippine Islands have
been estimated at about $6,000,000. The normal procedure in the
Philippine Islands, however, is to make private obligations such as
mortgages, bonds, notes,' etc., payable in pesos, without any reference
to the gold content of the peso.
The Manila Railroad Co. has outstanding bonds in the amount
of $26,391,450, all of which contain the gold clause.42 Of these
bonds, a total of $11,655,000 are also payable abroad at the holders’
option, at the former gold equivalent in the various currencies spec
ified in the bonds. The interest coupons upon the Manila Railroad
bonds presented in the United States for payment are paid in United
States currency in compliance with Public Resolution No. 10, Seventythird Congress. The coupons presented for payment abroad are
being paid in foreign currency at the rate of exchange called for by
the provisions of the bonds.
Tho Tenth Philippine Legislature passed a joint resolution to
assure uniform value to the coins and currencies which are legal
tender in the Philippine Islands. This resolution, which was approved
by the Governor General on November 22, 1934, was modeled on
Public Resolution No. 10, Seventy-third Congress, and was designed
to accomplish in the Philippine Islands the voiding of the gold
clause in existing obligations. By its own provisions, it cannot
become effective until it shall have been ratified by act of Congress
of the United States. To date (Aug. 1, 1935), Congress has not
ratified the joint resolution and it is therefore noneffective.
SILVER
The amount of silver coins in circulation, available for circulation,
in the Treasury certificate fund, and in the exchange standard fund
is shown in a preceding table. The amount of silver in these coins
is as shown in the following table on silver coins:
Philippine Monetary Stock of Silver, May 31, 1935
Denomination
Value
1 peso'
Pesos
1st issue................................................................................. 1,478.087.00
2d issue............................ ......... .......................................... 20,334,454.00
50 centavo:
1st issue................................................................................
148,877.00
2d issue................................................................................... 6.123,617.50
20 centavo:
1st issue.................................................................................
252,601.60
2d issue................................................................................. 5.2S1,151.40
10 centavo:
1st issue..................................................................................
239.123.60
2d issue................................................................................. 3, 649. 547.40
Total...................................................................................
Number of
coins
1,478,087
20,334,454
297,754
12, 247, 235
1,263.008
26,405, 757
2,391,236
36,495,474
Total
weight of
silver (mil
lions of fine
ounces)
1.15
10.46
. 12
3.00
.20
.25
. 19
1.76
17. 29
It is impossible to give exactly the weight of silver in the hands
of the general public, the banks, and the Government, or even to*
*1 Since the deficits of the Manila R. R. Co. are met by the Philippine Government, the latter has as
sumed responsibility for its debts. The bonds of the railroad are owned by British interests which could
throw the company into bankruptcy and take over the property if interest or capital were defaulted.
HANDBOOK OF FOREIGN CURRENCIES
171
give the amount in the Treasury vaults, since it is unknown to what
extent the heavier first-issue coins are in active circulation. Applying
the weight of fine silver in the second-issue coins we get a figure of
5,327,800,000 grains of fine silver in coins in the Treasury vaults
available for circulation, and 3,691,045,921.908 grains of fine silver
in coins in active circulation. It is most likely that the first-issue
coins are entirely or almost entirely in active circulation or lost, as
they would be melted and recoined if they came to the Treasury.
It therefore seems reasonable to add the difference of 279,800,000
grains of fine silver on account of the greater amount of silver con
tained in the first-issue coins to that held by the general public and
the banks, giving the latter a total of 3,970,800,000 grains. The
amount in the hands of the Government would thus be 5,327,800,000
grains, including 4,169,200,000 grains held in the Treasury certificate
fund and the exchange standard fund.43
On May 31, 1935, banks in the Philippines held 377,806.50 pesos
ia silver coins.
For additional information on silver currency see Trade Promotion
Series No. 149, The Monetary Use of Silver in 1933.
POLAND
The monetary unit is the zloty (abbreviation zl.), divided into 100
grosze. The zloty has a par value of approximately $0.1899.
DESCRIPTION AND CIRCUI.ATION OF CURRENCY
The currency is described in the accompanying tables.
The only foreign paper currency in circulation consists of United
States bank notes which circulate freely and often in considerable
amounts.
Check circulation is very limited. Checks are rarely used except
by the larger business enterprises.
Paper Currency of Poland
Denomination
Total .......................................................
iS 480 grains=l ounce troy.
Dimensions
Amount
outstand
ing May
31, 1935
(millions
of zlote)
125.1
410.5
204.8
210. 3
1.2
951.9
172
HANDBOOK OF FOREIGN CURRENCIES
Coins of Poland
Gross weight
Denomination
Silver content
Amount
outstanding
Diam Thick Mar. 31
Metal of Fine
eter
ness
chief value ness
1935
Grams Grains Grams Grains (mm) (mm) (millions
of zlote)
0. 750 22. 0000 539. 5010
.750 18. 0000 278. 3620
.750 11.0000 159. 7520
. - d o .......... .7.50 4.4000 67. 9010
1.000 7. OiXM) 108. 0265
1.000 5. 0000
77. 1618
50 grosze..................
1.000 3.0000
46. 2971
1.000 2.0000
30. 8647
Copper__ s. 950 3. 0000 46. 2971
...do.......... 4.950 2. 0000 30. 8647
4. 950 1. 5000 23. 1486
Total.............
16.500
13. 500
8. 250
3. 300
254.628
208. 772
127. 304
50.926
34.0
28.0
0)
22.0
25.0
23.0
20.0
17. 6
20.0
17.5
14.7
2.81
1. 75
(<)
1.46
1.85
1. 50
1. 20
1. 10
1. 25
1. 16
1.12
» 126.8
.3
» 105.4
» 61.9
26.0
35.2
9.4
8.3
5.4
3.0
1.7
383.1
i On Aug. 10, 1935, the circulation of the 10-zloty coins amounted to 140,950,000 zlote; the 5-zloty (second
emission) to 114,825,000 zlote; and the 2-zloty coins to 70,000,000 zlote.
» First emission.
s Second emission which is being slowly withdrawn from circulation.
« Not obtainable.
* Alloy: Tin, 0.040; zinc, 0.010.
N ote.—The legal-tender limit for coins is as follows: 10-zloty coins, to 1,000 zlote; 5-zloty coins, to 500
zlote; 2-zloty coins, to 100 zlote; 1-zloty coins, to 50 zlote. All other subsidiary coins to 10 zlote.
The 100- and 500-zloty notes are printed on rag paper of foreign
manufacture; and the 10-, 20-, and 50-zloty notes, on rag paper of
domestic manufacture. The 10-zloty notes are being gradually
withdrawn from circulation.
New bank notes in preparation are engraved. The devices pro
tecting bank notes against counterfeiting are the following: (a) The
use of a special kind of paper with shaded watermarks, (6) the clean
liness and precision of the print made from separate cliches forming a
complete drawing, and (c) selection and use of colors.
NOTE-ISSUING AUTHORITY
The privilege of issuing notes is held by the Central Bank, the
official name of which is Bank Polski (Bank of Poland). The Govern
ment has a controlling voice in determining the policies of the Bank of
Poland. The president and vice president of the Bank of Poland are
appointed by the President of the Republic, and the appointment of
the managing director and of the members of the board of directors
must be approved by the Minister of Finance. The Government is
represented on the board by a Government commissioner, appointed
by the Minister of Finance; the present incumbent was formerly in
that Ministry. All resolutions and decisions of the board of directors
affecting the policies of the bank must be approved by the Minister
of Finance, to whom a monthly report of condition of "the bank must
be submitted by the president. The nominal detachment of the bank,
a joint stock institution, is thus more apparent than real.
RESERVE REQUIREMENTS
The proportion of reserves now required to be held by the Bank
of Poland was fixed at a stockholders’ meeting on February 9, 1933.
Legal reserves may consist of gold only, and must amount to at least
30 percent of the combined note circulation and demand liabilities,
after deducting 100 million zlote therefrom.
HANDBOOK OB FOREIGN CURRENCIES
173
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
In accordance with a decree of the President of the Republic, dated
February 15, 1928 (journal of laws no. 18, item 156), exportation of
gold bars and coins is prohibited, unless a special permit of the Minister
of Finance is obtained. There are no restrictions on the exportation
of silver.
Data on smuggling are not available.
GOLD
The gold reserves of the Bank of Poland totaled on October 10,
1935, 466,600,000 zlote, or roughly, 78,764,000 grams of fine gold
valued at approximately 5,924 zlote per kilogram.
Gold is being purchased by the Bank of Poland at 5,924.44 zlote
per kilogram.
There are no official or other estimates of the amount of hoarded
gold. According to the Ministry of Finance, gold and foreignexchange holdings (chiefly United States dollars) amount to approxi
mately $100,000,000.
THE GOLD CLAUSE
The gold clause is in force in all domestic contracts drawn in zlote,
provided that the notation “gold zloty” is inserted. The gold clause
in domestic contracts drawn in foreign currencies was abolished by a
decree of the President of the Republic, dated June 12, 1934. (See
journal of laws no. 59, item 509.)
SILVER
The hoarding of silver coins is negligible. No data are available
on the weight of fine silver, held by the banks and the public. On
August 10, 1935, the weight of all silver coins in Poland was 726,670,00(5 grams or 545,000,000 grams of pure silver.
PORTUGAL
The monetary unit is the escudo, divided into 100 centavos. The
escudo has a par value of approximately $0.0748. The symbol of the
escudo is $, which is placed where the decimal point is used in Amer
ican currency designations.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
Paper Currency1 of Portugal on June 12, 1935
Denomination
20 escudos..............................................................
Total............................................................
Dimensions
Amount
outstanding
(thousands
of escudos)*
730,866
456, 909
489, 200
238, 796
113,342
2,029,113
1 The banknotes are printed and engraved in England on watermarked paper made of a mixture of new
linen, hemp, and cotton rags. They are unlimited legal tender.
* Excepting Azores currency.
66111°— 36
-----------
12
174
HANDBOOK OF FOREIGN CURRENCIES
Coins 1 of Portugal
of chief Fine
Denomination Metalvalue
ness
2)4 escudos......... ....... do...........
50 centavos...........
Copper *___
Total...........
0.835
.650
.650
. 190
. 190
.960
.960
.960
Gross weight
Grams
Grains
12.5000 192.9045
7.0000 108.0265
3.5000 54.0133
8.0000 123. 4589
4.5000 69. 4456
5.0000 77.1618
4.0000 61.7294
3.0000 46. 2971
Silver content
Grams
Grains
10. 4375 161.0752
4. 5500 70. 2172
2. 2750 35.1016
Amount
Diam outstand
eter * ing (mil
(mm) lions of
escudos)
30.0
25.0
20.0
26.8
22.8
25.0
22.5
19.0
65.0
42.5
12.5
14.6
13.4
3.8
3.3
1.7
156.8
i Legal-tender limits are as follows: Silver, 200 escudos; nickel, 20 escudos; copper, 5 escudos.
* Data as to thickness are not available.
* Alloy: Copper, 0.010, and zinc, 0.200.
* Alloy: Zinc, 0.040.
NOTE-ISSUING AUTHORITY
The sole authority to issue bank notes in Portugal is vested in the
Bank of Portugal (Banco de Portugal). The following is a transla
tion of the pertinent parts of the bank’s statutes, as approved by
decree no. 19962 ** dated June 29, 1931:
A r t . 17. The bank shall have until June 30, 1961, the sole right to issue notes
representing gold coin, as provided in decree no. 19870 of June 9, 1931. The
notes shall be legal tender throughout the whole territory of the mainland of the
Portuguese Republic and the adjacent islands (viz, the Azores and Madeira),
without distinction, and shall be exempt from stamp tax and all imposts * * *.
P a r . 2. During the period of this exclusive license, no other bank or institution
shall be granted the right to issue notes in Continental Portugal and the
adjacent islands.
Whether the Portuguese Government can be said to have, by law,
a controlling voice in forming the policies of the Bank of Portugal, is
debatable. This can be understood from an examination of the
bank’s statutes, which reveal that:
(1) Of the 13 members of the conselho de administracao (board of directors)
only 3, viz, the governor and two vice governors, are Government appointees;
10 are elected by the shareholders.
(2) The seven members of the conselho fiscal (audit council) are elected by
the shareholders.
(3) The important commissao de estabilizacao (stabilization committee), how
ever, is clearly under the control of Government appointees, since three of its
six members are appointed by the Minister of Finance and one of the three (viz,
the governor of the bank) is entitled to an extra and deciding vote in the event
of a tie. The stabilization committee is charged with permanently directing
the policy of the bank as regards monetary stabilization, regulating especially
the price and total volume of credit in any of its forms * * * (art. 78 of
the bank’s statutes).
(4) According to article 67 of the statutes, the governor of the bank shall be
able to suspend the execution of the decisions of the board of directors and of the
stabilization committee in order to present such decisions for consideration by
the general council of the bank, urgently convened for the purpose. He shall
also suspend any decision of the said bodies which he considers contrary to law,
to these statutes, or to the interests of the State, and shall give notice thereof to
the Government.
In short, while the Government’s position as regards the manage
ment of the bank is strong, it is doubtful that it could properly be
termed “controlling.”
« Published in Diario do Governo, I series, no. 148, June 29, 1931.
HANDBOOK OF FOREIGN CURRENCIES
175
RESERVE REQUIREMENTS
With regard to reserves against the currency, article 13 of decree
no. 19870 dated June 9, 1931, provides:
The bank (of Portugal), however, is obliged to hold in gold coin or bullion,
national or foreign public gold securities capable of ready realization, and gold
exchange on markets of countries where the currency is in gold or convertible
notes, a sum not less than 30 percent of its fiduciary note circulation, deposits,
and other demand liabilities.
In order to meet the situation created by the departure of Great
Britain from the gold standard in September 1931, decree no. 20683,
promulgated on December 29, 1031, provided that the aforementioned
reserve could, until April 30,1932, include foreign exchange and foreign
public securities expressed in pounds sterling. Decree law no. 22496
of May 4, 1933, extended this provision indefinitely.
Silver is not included in the currency reserve.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
Both the importation and exportation of gold and silver in coins
or bars are exempt from payment of duties. These exemptions are
contained in the following articles of the import and export tariffs
established by decree no. 19185 dated November 31, 1930, and pub
lished in the biario do Governo, I series, no. 304 of that date.
Import tariff.—Article 175 (gold bars, powder, and scrap); article 896 (coins of
gold and its alloys, except platinum); article 180 (silver and its alloys, except gold
and platinum, in bars, powder, or scrap); article 899 (coins of silver and its alloys,
except gold and platinum).
Export tariff.—Article 46-A, as established by decree no. 20047 of July 9, 1934
(gold and silver in bars); and article 117 (gold and silver coins).
While there are no restrictions on bullion movements into Portugal,
gold and silver may not be exported without permission of the
inspeccao do comercio bancario (banking inspection service), as pro
vided in article 20 of decree no. 10071, dated September 6, 1924,
and published in the Diario do Governo, I series, of that date.
According to article 21 of decree no. 10071, as amended by decreelaw no. 23945, dated and effective June 1, 1934, travelers destined
to foreign countries may leave Portugal in possession of 10,000 escudos
in notes of the Bank of Portugal and £100 (100 pounds sterling) or
the equivalent of £100 in foreign currency.
It is believed that there is no smuggling of gold or silver into
Portugal and that the clandestine exportation of gold and silver is
small.
GOLD
The weekly statement of the Bank of Portugal for July 24, 1935,
shows that its gold reserves on that date were valued at 844,994,728.61
paper escudos. Since the conversion into paper escudos is made at
par (viz, 1 gold pound equals 110 paper escudos) rather than at the
actual value of the gold pound (about 180 escudos), the true escudo
value of the bank’s gold reserves is approximately 64 percent greater
than that stated. According to the Federal Reserve Bulletin, the
Bank of Portugal, on November 30, 1935, held gold totaling
910,000,000 escudos.
The Bank of Portugal buys all gold offered at a price based on the
Lisbon-Paris exchange rate. For example, with the franc equivalent
176
HANDBOOK OF FOREIGN CURRENCIES
to 1.46 escudos (Aug. 20, 1935), the sovereign in Lisbon was quoted at
181.35, viz, the product of 1.46 and the par value in francs (124.21)
of the British sovereign. The amount paid by the bank is, of course,
less than this rate; on August 20, 1935, the bank paid 179.90 paper
escudos per sovereign.
It is the consensus of bankers and businessmen that the Portuguese
public does not hoard gold.
THE GOLD CLAUSE
Since Portugal is actually on a paper currency basis, the gold
clause in domestic contracts is for practical purposes nonexistent.
Contracts generally provide for payment in escudos or current
currency (moneda corrente).
The following are the legal stipulations governing payments in
metallic currency, as provided in the Civil Code, as amended by
decree no. 19126 45 of December 16, 1930:
A r t . 724. When it has been agreed that payment is to be made in metallic
currency of a certain denomination, the payment shall be made in the currency
stipulated, provided that it exists legally, regardless of any variation of value
which might have taken place between the date of the contract and the time of
payment and even if this variation has resulted from legal dispositions.
A r t . 727— P a r . 1. If it is stipulated that payment is to be made in escudos
in metallic form but without mention of the denomination, the debtor shall
satisfy the obligation in currency current at the time of payment, provided that
the currency used is of the metal stipulated.49
SILVER
Since the publication of Trade Promotion Series No. 149, The
Monetary Use of Silver in 1933, two decrees have altered the author
ized circulation of Portuguese silver currency. By decree-law no.
22683 of June 14, 1933, the maximum number of 10-escudo coins
was decreased from 6,500,000 to 5,000,000. Compensating increases
were made by authorizing the emission of 7,500,000 5-escudo pieces
and 5,000,000 2}(-escudo pieces—a total of 100,000,000 escudos.
(The former maximums, as provided by decree no. 19871 of June
9, 1931, were: 6,500,000 10-escudo coins, 5,000,000 5-escudo coins,
and 4,000,000 2%-escudo coins.)
After the old 10-, 5-, and 2((-escudo notes had been called in as
provided in decree no. 19871, the Government found that the silver
coins in circulation, especially those of 10 escudos, were insufficient
for the country’s needs. A decree-law (no. 23,593, of Feb. 23, 1934)
was therefore promulgated which increased the authorized total of
silver currency from 100,000,000 to 120,000,000 escudos, divided
as follows: 6,500,000 10-escudo coins, 8,500,000 5-escudo coins, and
5,000,000 2}(-escudo coins.
As indicated in the foregoing table showing metallic currency in
circulation, the full amount of silver currency authorized has been
minted and placed in circulation. Since the silver coins in use appear
to be adequate, no increase in the use of monetary silver is foreseen.
Based upon the legal fine-silver content and weight of the coins in
circulation (see table above), the total weight of fine silver in monetary
use has been computed at 117,893.75 kilograms. In view of the*
** Diario do Governo, I series, no. 292, Dec. 16, 1930.
«• For example—gold, silver.
HANDBOOK OF FOREIGN CURRENCIES
177
tolerances, both as regards fine-silver content (for 10-escudo coins,
3 percent; 5- and 2%-escudo coins, 5 percent) and weight (10-escudo
coins, 5 percent; 5- and 2}(-escudo coins, 7 percent), this figure is
only approximate.
No statistics are available regarding the distribution of holdings
of fine silver in monetary use.
RUMANIA
The monetary unit is the leu (plural lei, abbreviation 1.), divided
into 100 bani. The leu has a par value of approximately $0.0101.47
DESCRIPTION AND CIRCULATION OP CURRENCY
The currency is described in the accompanying tables.
The notes of the National Bank of Rumania (Banca Nationale a
Romaniei, S. A.) are printed in Rumania on foreign watermarked
paper made of ramie. The ink is purchased from the Bank of France
and the paper from private firms in France and England. The
quality of the paper and the dimensions of the letters and figures are
considered as protective devices.
In addition to the notes shown in the table, Rumania formerly had
notes in denominations of 100 and 5,000 lei, both of which were
withdrawn in December 1932.
No foreign currency is in circulation.
In addition to the silver coins described in the accompanying tables,
note should be made of the fact that a law of February 22, 1935, em
powered the Ministry of Finance to mint and issue new silver coins of
50 and 200 lei in the amounts of 600,000,000 and 5,000,000 lei, re
spectively. It was expected that the new coins would be put into
circulation in the latter part of 1935. The 50-leu coins are to consist
of 75 percent silver and 25 percent copper; and the 200-leu coins, 83
percent silver and 17 percent copper. The former were to weigh 4.5
grams and be 22 mm in diameter, while the latter should have a weight
of 13.5 grams and a diameter of 29 mm.
Paper Currency of Rumania
Denomination
l.ooolei..................................................................
Total...........................................................
Dimensions
220 bv 126 mm 1............................................
Amount
outstand
ing June
20, 1935
(millions
of lei)
w
c)
21. 187
1 These notes have been largely replaced by notes measuring 130 by 222 mm and are brown in color.
3 Not available by denominations.
3 The old 500-leu notes are being gradually withdrawn and replaced by new 500-leu (green) notes 84 by
156 mm in size.
4TThe leu has not been devalued, but, according to an unofficial report, the National Bank has announced
that it will pay exporters a premium of 30 percent on their foreign currencies.
178
HANDBOOK OF FOREIGN CURRENCIES
Coins of Rumania
Gross weight Silver content
Amount
out
Diam
Thick
stand Per
Metal of Fine
Denomination 1 chief
eter ness ing June cent
value ness
of
30, 1935 total
Grams Grains Grams Grains (mm) (mm) (millions
of lei)
2 0.500
100 lei..................
20 lei................... Copper___ 3.790
10 lei....................
*. 790
3.790
5 lei......................
« .250
2 lei.....................
<.250
Total.........
14.0000 216. 0530 7.0000 108.0265
7.5000 115. 7427
5.0000 77.1618
3. 5000 54. 0132
7.0000 108. 0265
3.5000 .54. 0132
1. 2030
.8900
31
27
23
21
25
21
21
19
2.00
1. 50
2.00
1. 50
1.25
1.25
1,840
660
600
300
200
200
15
5
3,820
48.2
17.3
15.7
78
5.2
5.2
.4
.1
100.0
1 Regarding the new 50- and 200-leu pieces, see text
* Alloy: Copper, 0.400: zinc, 0.050; and nickel, 0.050.
* Alloy: Zinc 0.200 and nickel 0.010.
* Copper 0.750.
* Practically out of circulation and are soon to be replaced by copper coins.
NOTE-ISSUING AUTHORITY
The only note-issuing authority is the National Bank of Rumania,
its privilege expiring on December 31, 1960.
The government appoints 3 members of the board of directors out of
a total of 10; 3 auditors out of 7, and a commissioner who has the
right to demand the suspension of any decision contrary to the law and
statutes or to the interests of the State. The government appoints
the governor and vice governor.
RESERVE REQUIREMENTS
The National Bank is required to maintain a reserve in gold or in
foreign exchange convertible, both legally and practically, into
exportable gold, equivalent to at least 35 percent of its total demand
liabilities. The actual holdings of free gold, both at home and abroad,
must be equivalent to at least 25 percent of the total demand liabil
ities. (Art. 4 of monetary law of Feb. 7, 1929, and art. 28 of the
revised statutes of the National Bank, approved and promulgated by
royal decree 1521 on June 4, 1935, published in the Official Gazette,
No. 127, of June 5, 1935.)
RESTRICTION'S ON BULLION AND COIN MOVEMENTS
The first order prohibiting the sale and purchase of gold coins and
gold bullion was issued in the form of a decree of the Council of
Ministers on May 17, 1932. This was followed by a law on trade in
foreign exchange, promulgated on September 30, 1932 (Monitorul
Official, No. 230, Oct. 1, 1932) and regulations thereunder on
October 15, 1932. The above-mentioned law was supplemented by
another law promulgated on April 13, 1935, further restricting the
trade in foreign exchange. The exportation of gold bullion and coins
is still prohibited.
The importation and exportation of silver coin or bullion are not
restricted by law.
HANDBOOK OF FOREIGN CURRENCIES
179
Smuggling is reported to exist, mostly near the Baia Mare gold
mining region near the Hungarian and Czechoslovak borders, but not
to a very great extent.
GOLD
In July 1935 the gold reserves of the National Bank totaled 10,543,152,881 lei, of which 1,641,652,025 were held abroad. The total
weight was 94,888 kilograms (computed on the basis of 1 leu=9
milligrams of gold, as established by the stabilization law' of Feb.
7, 1929).
According to a decree of the Council of Ministers, no. 1060/935,
beginning June 11, 1935, the National Bank will pay for each kilo
gram of gold delivered to the refining plant of the state a premium of
30,000 lei over the official price, which is 111,111 lei per kilogram.
According to article 95 of its revised statutes, the National Bank
may grant loans to gold-exploiting concerns. Such advances may
not, however, exceed 2 percent of the bank’s total resources and shall
be made for a period not exceeding 7 years from the date of the pro
mulgation of the revised statutes.
No data on gold hoarding are available.
THE GOLD CLAUSE
In accordance with article 969 of the Civil Code, any agreement
between the parties to a contract is valid. Therefore, an agreement
whereby one of the parties undertakes to pay in gold is perfectly
valid. Enforcement of such a clause has, howrever, been impossible
since October 25, 1932, when a law for dealing in foreign exchange
became effective. The regulations issued under this law restrict the
right to deal in foreign exchange (devize) without the approval of the
National Bank of Rumania. Foreign exchange (devize), as defined
in article 2 of these regulations, includes gold coin and bullion; and
article 3 provides that it shall be granted only for real needs examined
and approved by the National Bank. Consequently no gold clause
in domestic contracts is effective without the authorization of the
National Bank, which is strongly opposed to granting such authoriza
tions.
SILVER
In January 1935 it was reported that 20 metric tons of silver had
been sold by the National Bank of Rumania to a private concern in
Budapest, payment being made in pounds sterling. The price was
not stated, but it was pointed out that although the controlled price
of silver in Rumania varied between 1,500 and 1,700 lei per kilogram,
the price in Hungary, where silver transactions were free, was about
2,700 lei per kilogram. The total stock of silver of the National
Bank is said to have amounted to 38 metric tons, so that by this
transaction it was reduced by more than half. However, the mone
tary coverage was not affected, as silver is not a legal backing for
currency in Rumania.
In conformity with Cabinet Journal, No. 1060/935, published in
Monitorul Official, No. 139, part 1, of June 21, 1935, the National
Bank will pay, beginning June 11, 1935, a premium of 27 percent on
the value of silver as established on international markets, converted
into stabilized lei.
180
HANDBOOK OF FOREIGN CURRENCIES
SALVADOR, EL
The monetary unit is the colon (symbol $"), divided into 100 cen
tavos. The colon has a nominal parity of $0.8466.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
United States coins are practically the only foreign coins in cir
culation and were made legal tender by the monetary law of 1919.
Gold dollars have unlimited legal-tender status, while silver dollars
and subsidiaiy silver coins are legal tender up to 10 percent of all
payments.
A law of June 7, 1933, authorized the Government to issue 5,000,000
colones in silver coins. The new silver coins will be legal tender at
par for all customs duties, taxes, and payments to “institutions and
foundations of public utility”, while for private obligations they must
be accepted at par up to 30 percent. Copper-nickel coins are legal
tender for amounts not exceeding 2 percent of the payment to be
effected.
Paper Currency of El Salvador
•
Denomination
Amount
outstanding
Oct. 31,
1935 (mil
lions of
colones)
Dimensions
0) 3.3
(«) 1.3
2.4
2.7
1.0
1.9
12.6
Total............................................................
»These are old notes which now have a very limited circulation.
The notes are printed in the United States on paper made by an
American manufacturer. United States bank notes circulate freely
at the approximate exchange rate of the United States dollar pre
vailing on that day. Checks are used mainly by merchants and
businessmen in the capital and in two or three other important cities
of El Salvador. Notes constitute the main item in the total currency
circulation.
Coins of El Salvador
Denomination
1 colon........................
50 centavos................
25 centavos................
20 centavos................
10 centavos................
5 centavos..................
Gross weight
Metal of chief Fineness
value
Grams Grains
Silver...........
....... do..........
___ do...........
....... do...........
___ do_____
Nickel ».......
Silver...........
....... do.»........
.......do.».........
0.900
.900
.835
.835
.835
.250
.835
.250
.250
.250
25.00
12.50
6.25
5.00
2.50
7.00
1.25
5.00
3.50
2.50
>Data as to thickness not available.
Silver content
Grams
Grains
385.800
192.900
96. 450
77. 160
38.580
108.024
19.290
77. 160
54. 012
38.580
22.5000
11.2500
5.2000
4. 1750
2.0875
1.0437
347.3200
178. 6600
80. 5358
65. 4286
32. 2143
16.1160
* Alloy: Copper, 0.750.
Diame
ter 1
Milli
meter
37
31
25
22
18
26
14
23
20
16
HANDBOOK OF FOREIGN CURRENCIES
181
NOTE-ISSUING AUTHORITY
Notes are issued only by the Central Reserve Bank of El Salvador
(Banco Central de Reserva de El Salvador). The bank, upon its
organization in July 1934, assumed responsibility for all the notes
in circulation that had been issued by the three commercial banks
in the country (Banco Occidental, Banco Salvadoreño, and Banco
Agricola Comercial), and took over the assets guaranteeing these
notes. The old notes are now being replaced by the notes of the
Central Reserve Bank. The exchange must be completed within
a period of 2 years. Thus, notes are issued only by the Central
Reserve Bank, which is responsible for the full amount now in cir
culation (13,697,825 colones on Oct. 31, 1935).
RESERVE REQUIREMENTS
The Central Reserve Bank Act requires the bank to keep a “mini
mum cover” in gold and such foreign currencies as may comply with
the new monetary law (not yet issued) equivalent to at least 25 percent
of its notes in circulation and sight liabilities. Foreign currencies
held in the reserve must be deposited in the central bank of the coun
try of their origin. The gold shall be unpledged and in the unre
stricted ownership of the bank and only net foreign exchange (i. e.,
the free balance after all liabilities in gold and foreign exchange have
been deducted) shall be held in the reserve.
The bank states that no silver is held in its reserve against notes
and that silver cannot be included therein.
Article 39 of the act creating the Central Reserve Bank requires it
to exchange its notes on demand, in amounts of not less than 5,000
colones, for either gold or foreign currency, at the bank’s option, in
compliance with the provisions of the monetary law.
It may be added that according to the latest statement of the Cen
tral Reserve Bank as of October 31, 1935, the ratio of gold to notes
and sight liabilities is 64.94 percent, or well above the required ratio.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
A law of October 7, 1931, declared the notes of the three commercial
hanks, which were then the banks of issue, to be inconvertible until
June 30, 1936. The gold stocks of the banks were placed under
Government seal and so remain, although they have been largely
transferred to the Central Reserve Bank.
On October 8, 1931, a decree was issued prohibiting the exportation
of coined gold. By a decree of September 22, 1933, the exportation
of gold or silver in any form was forbidden so long as the emergency
decrees covering the inconvertibility of the notes continued in force.
An exception, however, was made for newly mined gold.
The Government adopted on May 25, 1935, effective the same date,
a law authorizing the Central Reserve Bank to purchase and export
gold and .silver. Article 1 provides that “the bank shall not be able
to export the gold holdings which it actually has in its vaults under
the seal of the State.” Shipments of old jewelry, articles of gold and
silver for repair, and newly mined gold are covered by the decree.
Newly mined gold is being shipped regularly, under the permissive
ͻrevisions of the respective mining concessions. The Central
Reserve Bank may take steps to acquire this gold, but has not yet
done so.
182
HANDBOOK OF FOREIGN CURRENCIES
The inconvertibility decrees and the law of September 22, 1933,
prohibiting gold and silver exports, was to expire on June 30, 1935, but
officials of the Central Reserve Bank considered it certain that the
provison woud be extended to protect the gold reserves of the bnak.
GOLD
The amount of gold held by the Central Reserve Bank amounts to
$3,682,170 in old gold dollars of. 25.8 grains. For accounting pur
poses this is revalued in accordance with the devaluation law of the
United States, dated January 31, 1934, and is carried on the books
of the bank, pending the issuance of the new monetary law at
2 colones to 1 dollar (the prevailing exchange rate in August 1935
was 2.50). It may not be revalued except upon the issuance of the
new monetary law and in accordance with its provisions.
Gold is being purchased by the Central Reserve Bank, which has
maintained an offer to buy all gold offered it at 4 colones per dollar of
fine gold, since the enactment of the law of May 25, 1935, referred to
above. An old gold dollar is equal to $1,693 of the new, and the
latter amount, at the present commercial exchange rate of 2.50, is
equal to 4.233 colones. Owing, however, to the costs of shipment,
the danger of detection, the facility of negotiating sales of gold at the
Central Reserve Bank, and to other factors, it is believed that the
lower price paid by the bank offers little incentive to smuggling of
gold at the present time.
There are no figures indicating the extent of gold hoarding. The
Central Reserve Bank, emphasizing that the figure is purely an esti
mate, which is not based on gold import or other statistics, places the
amount of gold privately held at about $2,000,000, old value American
gold dollars.
THE GOLD CLAUSE
Decrees affecting the gold clause are as follows: March 12, 1932,
June 3, 1932, November 17, 1932, and May 31, 1933 (as amended on
June 12, 1933). The latter is still in effect.
Salvadoran law provides that the currency shall be on a gold basis,
and, pending the issuance of Salvadoran gold coins, those of the
United States shall be considered the standard. (Decree of Septem
ber 12, 1919.) Salvadoran gold coins were never issued, so that
contracts were written in American dollars. Article (5) of the decree
appearing in the “Diario Official” of June 12, 1933, provides that “all
mutual obligations (that is, loans as distinct from overdrafts) con
tracted in gold or drafts (that is, foreign currency) before October 9,
1931, shall be paid in colones, in the established ratio of 2 colones for
each gold peso.” (Presumably, by gold peso is meant U. S. dollar.)
Regarding obligations contracted after October 9, 1931, the decree
provides that payment shall be effected in colones at the rate prevail
ing at the time the undertaking was entered into.
SILVER
Since the publication of Trade Promotion Series No. 149, The
Monetary Use of Silver in 1933, a law was passed providing for the
issuance of 5,000,000 1-colon silver pieces. These pieces have not
HANDBOOK OF FOREIGN CURRENCIES
183
been minted, and the Central Reserve Bank states that they will
probably never be issued.
The total amount of fine silver in monetary use is estimated at
10,000 kilograms. This is believed to be mainly in the hands of the
general public. The Government holds none. The banks may hold
some, but as these coins have recently been worth more as bullion
than as money, they are disappearing from circulation.
The exact amount of silver currency in circulation is unknown.
The Central Reserve Bank estimates that the amount of silver 1-colon
pieces in circulation a few months ago was about 1,000,000. Since
that time, the bank itself has exported 600,000 such pieces, leaving
an estimated 400,000 in monetary use. The bank emphasizes that
these figures are purely estimates and may he far from correct.
Similarly, nothing is known of the amount of silver coins of smaller
denominations in circulation. The Central Reserve Bank hazards
no guess. Since, however, the amount of silver in circulation in El
Salvador in 1932 (presumably on Dec. 31) was 1,078,142 colones,
and the bank estimates that about 1,000,000 silver colon pieces were
in circulation recently, it is possible that the smaller coins total only
about 78,000 colones.
SIAM
The monetary unit is the baht (formerly called tical), divided into
100 satang or 4 salung. The baht does not have a par value, but
at the present time there is a fixed ratio between the baht and
sterling in that the Siamese Government promises to buy sterling at
the rate of 10.80 bahts to the pound sterling and to sell it at the
rate of 11.20 bahts to the pound. By taking the mean of these
offers, say bahts 11 and New York-London cross rate of $4.86, the
equivalent value in United States money is $0.4418. Under present
conditions the value of the baht in United States currency fluctuates
with changes in the New York-London cross rate.
DESCRIPTION AND CIRCULATION OF CURRENCY
The total circulation of notes on September 30, 1935, amounted
to 133,532,500 bahts. Details as to the amount of each denomina
tion then outstanding were not available. On March 31, 1933,
when the total circulation amounted to 114,200,000 bahts, over 50
percent of the notes in circulation were of 20- and 10-baht denomina
tion and about 20 percent were notes of 1 baht. The other denomi
nations then in circulation were of 5, 50 (in very restricted volume),
500, and 1,000 bahts.
The notes are partly engraved and partly printed from dies and
plates made in London. The paper employed is of best machinemade quality unwatermarked. The work is done entirely abroad.
To prevent counterfeiting, two antiphotographic lithographic tint
printings are used on the front, and one on the back.
The coinage is described in the accompanying table:
184
HANDBOOK OF FOREIGN CURRENCIES
Coins of Siam
Denomination
Metal of
chief value
Fine
ness
0.900
.650
.650
1.000
1.000
.950
Gross weight
Silver content
Amount
iugon Mar.
31,1935
Grains (millions
of bahts)
Grams
Grains
Grams
15.0000
7. 5000
3. 7500
3. 5000
2. 0000
5.0000
231.4853
115. 7427
57.8713
54.0132
30. 8647
77.1618
13.5000 203.3368
4.8750 75. 2327
2.4375 37. 6164
69.0
1.6
1.9
4.2
2.8
3.2
72.6
NOTE-ISSUING AUTHORITY
The only authority which issues notes is the Central Government.
The total note issue at the end of May 1935 was 133,532,498
bahts, as compared with 112,632,498 bahts on May 31, 1934.
RESERVE REQUIREMENTS
There are no legal requirements as to reserves against the currency.
Siamese silver coins to the face value of 43,372,000 bahts are included
in the reserve.
On September 30, 1935, the total currency reserves against out
standing notes of 133,532,500 bahts consisted of the following:
Sterling securities:
Of more than 1 year’s maturity______________
Others..................................................................
Cash:
At call or at not more than 7 days’ notice (in
sterling)................................................
Total....................................................................
Baht coins____________ ______ ________________
Grand total........................................................
Baht»
13, 952, 000
27, 500, 000
110,039,000
43,372,000
153,411,000
68,587,000
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
There are no official orders imposing embargoes or restrictions on
bullion movements. Consequently, there is no occasion for smug
gling.
GOLD
There are no gold reserves in Siam. Some gold is said to be held
in London, but the amount is not generally known.
A considerable amount of gold hoarding has occurred but is probably
decreasing due to scaituty of available gold.
No statement of gold purchases by the Government has appeared
for several years.
THE GOLD CLAUSE
The legal status of any gold clause which may exist in domestic
contracts has not been determined.
Handbook
ok foreign currencies
185
SILVER
No figures are as yet available.
SPAIN
The monetary unit is the peseta (abbr. p. or pta.), divided into
100 centimos. The par value of the peseta is approximately $0.3267.
DESCRIPTION AND CIRCULATION OF CURRENCY
The accompanying table describes the coins issued from 1868 to
June 11, 1935, that were outstanding as of the latter date. It will
be noted that certain coins are not in active circulation. No exact
statistics are available regarding the volume of coins lost or exported.
Practically no gold currency is in circulation. On December 31,
1932 (the latest date for which detailed figures are available), the
Bank of Spain, in its 2,259,000,000 peseta gold reserves, had only
393,183,080 pesetas in Spanish gold coins issued since 1868. The
balance, aside from small amounts in older Spanish gold coins and
gold bars, consisted of foreign gold coins. The difference between the
Spanish gold coin held in the Bank of Spain and the 1,103,705,030
gold pesetas coined has largely disappeared and may properly be
considered as not constituting part of Spain’s monetary stock.
On June 1, 1935, the silver stocks of the Bank of Spain, all in coin,
totaled 701,981,109 pesetas. The difference between this amount
and the total silver coined to date (1,332,589,907 pesetas)—less an
estimated 200,000,000 pesetas, representing net exports, coins lost,
destroyed, etc.—may be considered as in the hands of private banks
and the public.
According to existing legislation (Ley “Villaverde” of Dec. 26,
1899), the amount of silver in circulation may not be increased. In
1933 and 1934 a total of 2,000,000 pesetas of worn silver coins were
melted and reminted, but this did not affect the nominal total
outstanding.
Paper currency in circulation on June 1, 1935, according to the
official statement of the Bank of Spain, totaled 4,583,318,950 pesetas.
The components of this amount, by denominations, are not available.
The various denominations outstanding on December 31, 1934, are
shown in the accompanying table.
Spanish paper currency is engraved in London on linen paper of
foreign manufacture. The notes bear a protective watermark and
the engraving is of superior quality.
The coins and notes are legal tender for payment of public and
private debts. Silver pieces of 2 pesetas and less are legal tender in
amounts not exceeding 50 pesetas; minor coins, in amounts not over
5 pesetas.
Foreign currency may be imported freely, but no currency not
described in the accompanying tables circulates in Spain.
The use of checks is limited, as they are heavily taxed.
Duties and, as a rule, customhouse charges are stated in gold
pesetas . . . and are payable one-fourth in gold or gold currency
checks and three-fourths in Spanish silver coins or notes of the Bank
of Spain, increased by a surtax sufficient to raise the sums thus paid
to approximately their gold equivalent. On certain products, how
ever, duties must be paid entirely in gold or gold currency checks.
186
Handbook OK eoreígn
currencies
The collection of one-fourth of the duties in gold or gold currency
checks was established by royal order no. 962 of December 21, 1929
(Gaceta de Madrid, Dec. 22, 1929), for the purpose of servicing the
1930 6-percent treasury gold bonds. The one-fourth payable in gold
or gold currency checks must be in French or Swiss francs or in
Dutch florins; even gold coins of other countries are not accepted.
Paper Currency of Spain Outstanding Dec. 31, 1934
Denomination
Dimensions
Amount
outstanding
(millions of
pesetas)
1,201.1
314.4
(*)
.1
2,159.6
627.0
408.4
4,710. 7
Total............................-.............................
1 The 2.50- and 125-peseta notes are remnants of old issues virtually retired from circulation. Those still
outstanding may be considered as destroyed or lost. They must be kept on the books of the Bank of Spain,
as their validity was not prescribed.
2 79,750 pesetas.
Coins of Spain, 1868-1935
or silver
Gross weight Goldcontent
Denomination
Amount
issued
from
1868 to
Metal of chief Fine
Diam Thick June
11,
ness
value
eter ness
1935
Grams Grains Grams Grains
(millions
of
pesetas)
Arun- Mitlimeters meters
Gold .............. 0. 90t 32. 2581 497. 8179 29. 0323 448. 0361
35 2. 00
15 0
25 pesetas 1 ............. ___ do................ .900 8. 0645 121. 4545 7. 2580 112. 0090
932.7
.900 6. 4516 99. 5636 5. 8065 S9. 6072
21 L ¿5 154. 8
10 pesetas '— .......... .. .do............... .900 3.2258 49. 7818 2. 9032 44. 8036
it;
.75
1.2
Total, gold___ ............................
1, 103. 7
...........
.900 25.0000 385. 8089 22. 5000 317. 2280
37 2.30
2 pesetas.................. .......do ............ .835 10. 0000 154.3236 8. 3.500 128,8602
1.7S 156. 3
1 i>eseta_______ ..
. do...........
.835 5.0000 77. 1618 4.1750 64.4301
23 1.30 109.5
50 céntimos___ _ .. -do.............
. 835 2. .5000 38. 5809 2.0875 32. 2150
18 1.00
14.5
20 céntimos 2....... ..
.d o ............ .835 1.0000 15. 4324 .8350 12.8860 .......... ............. o
Total, silver—
1,332. 6
(......... 10.0000 154. 3236
30 1. 66
32 2
.. 5. 0000 77. 1618
25 1.35
22 1
......... 2.0000 30.8647
26
1 .... 1. 0000 15. 4324
1.8
ICopper 75 per- 1
25 céntimos *_____ < cent, nickel >......... 7. <)00<J 108. 0265
25
}J 8.0
1 25 percent.
66.7
> Not in circulation.
2 Rarely encountered in circulation.
* 1.018 pesetas.
*There are two types of these coins, one having a hole in the center.
* This coin has a hole in the center.
HANDBOOK OF FOREIGN CURRENCIES
187
NOTE-ISSUING AUTHORITY
The right to issue notes is limited exclusively to the Bank of Spain
(Banco de España). The latest legislation on this subject is the
Banking Ordination Law (Ley de Ordenacion Bancaria) of November
26, 1931, in which all prior legislation was consolidated.
The Government has a controlling voice in the policies of the Bank
of Spain, in accordance with the provisions of the law of November
26, 1931.
RESERVE REQUIREMENTS
Article 2 of the law of November 26, 1931, provides that the note
circulation of the Bank of Spain must have the following metallic
reserve: For a note issue not exceeding 4,000,000,000 pesetas the
minimum gold and silver reserve must be 45 percent, of which at
least eight-ninths must be in gold. For note issues in excess of
4,000,000,000 pesetas but not over 5,000,000,000 pesetas, the mini
mum gold and silver reserve must be 60 percent, of which at loast
five-sixths must be in gold.
At the request of the Bank of Spain, accompanied by a report from
the Superior Banking Council (Consejo Superior Bancario) to the
effect that such action is indispensable to the national economy, the
Government will authorize an increase in the note issue to a maxi
mum of 6,000,000,000 pesetas. In this case the minimum reserves
will be the same as those prescribed for note issues in excess of 4,000,000,000 pesetas and not over 5,000,000,000 pesetas.
In accordance with the same article 2 of the Bank Ordination Law,
all silver held by the Bank of Spain against its note issues must be in
legal-tender com. Accordingly, the silver stocks of the Bank of
Spain include no bullion.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
There are no legal restrictions on the importation or exportation of
gold or silver bullion. Unmanufactured gold and silver, as well as
gold and silver coins, are admitted into Spain free of duty. The
exportation of gold and silver coins was prohibited by a royal order
of August 3, 1914, which is still in effect. This prohibition was
confirmed by subsequent dispositions such as the royal orders of
July 12, 1921, March 14, 1924, and October 11, 1930. The order of
March 14, 1924, extended the prohibition to bank notes, but author
ized travelers to take with them abroad a sum not exceeding 5,000
pesetas. The order of October 11, 1930, provided that travelers
might take the equivalent of this amount in foreign bills. This was
confirmed by a ministerial order of May 16, 1931, but it is not clear
whether the amount taken out of Spain must be in notes or whether
it may be in silver coins. In practice, persons leaving Spain are
permitted to take out any part of the amount mentioned in silver
coins. Hence, there appears to be some conflict between the royal
order of August 3, 1914, prohibiting the exportation of gold and
silver coins, and the actual practice with regard to silver coins.
Clandestine exportation of gold coins may be considered to be
nonexistent, since no gold coins circulate. No smuggling of silver
coins is believed to exist, as the currency value of the 5-peseta piece
considerably exceeds its bullion value.
188
HANDBOOK OF FOREIGN CURRENCIES
The accompanying table shows Spanish imports and exports of
gold and silver during recent years.
Spanish Foreign Trade in Silver and Gold, 1929-35
Silver
Period
1929 ......................
1931...........................
1932................-........
1933..........................
1934 1935 (Jan.-Apr.)___
Imports
Gold
Exports
Imports
Exports
Value
Value
Value
Value
Weight (thou- Weight (thou- Weight (thou- Weight (thou(metric sands of (metric sands of (metric sands of (metric sands of
tons)1 gold
tons)1 gold
tons)1 gold
tons)1 gold
pesetas)
pesetas)
pesetas)
pesetas)
2.0
1.0
5.6
3.8
16.0
4. 1
9.8
264
203
317
199
1,225
224
539
37.8
43.0
57.6
74. 4
62.4
18. 4
12. 1
4,912
5. 767
3.933
3. 702
3, 8S6
201
657
62
30
108
71
22
48.0 * 151,320
8.0 *25, 333
.1
228
.4
1,275
.2
655
.3
930
i One metric ton equals 1,000 kilograms, or 32,150.742 fine ounces troy.
1 Mostly gold coin shipped to England, probably used as collateral for loans made through the Bank of
Spain and subsequently transferred to the Bank of France.
GOLD
On June 1, 1935, the gold reserves held by the Bank of Spain totaled
2,245,979,575.68 gold pesetas. This includes only a small amount in
gold bars,48 the balance being gold coins of Spain, France, England,
Germany, the United States, and other countries. For the purpose
of this report, the gold coins held by the Bank of Spain have been
considered as 0.900 fine. On this basis, and figuring 1 kilogram of
fine gold as the equivalent of 3,444.44 pesetas (the rate established
in the banking ordination law), the weight of gold in the Bank of
Spain is approximately 652,058 kilograms. The Federal Reserve
Bulletin (April 1935) shows Spain’s gold stock as $741,000,000.
Although the Bank of Spain is authorized to purchase gold, no
purchases are being made in view of the fact that its present gold
holdings, if converted into paper pesetas at the present official rate
(1 gold peseta equals 2.3989 paper pesetas) are more than sufficient to
cover the entire note circulation.
No figures or estimates are available on the hoarding of gold,
which is believed to be negligible.
THE GOLD CLAUSE
Article No. 1170 of the Spanish civil code (codigo civil) provides
that “payment of monetary obligations must be made in the specie
stipulated and, shovdd it not be possible to deliver such specie, in
silver or gold currency of legal tender in Spain.” According to the
law of October 19, 1868, the 5-peseta pieces therein authorized are
full legal tender on the same basis as gold. Furthermore there is, as
already mentioned, no gold in circulation in Spain. Therefore, legal
opinion holds, a gold clause in domestic contracts would be inoperative.
So far as can he ascertained, the only public or private obligations
that have been issued in recent years which stipulate payment in*
*i At the end of 1932, the bars totaled 2,577,871 gold pesetas.
189
HANDBOOK OF FOREIGN CURRENCIES
gold or its equivalent are the 6-percent gold treasury bonds issued in
1930. In accordance with the loan contract, interest and amortiza
tion payments on this issue are made in paper pesetas with a premium
equal to the official surcharge established by the Government for the
payment in paper pesetas of the gold peseta customs duties. This
gold clause has not been annulled, and the above issue is at present
quoted on the local stock exchange at a premium.
SILVER
There appears to be no possibility of extending the monetary use
of silver in Spain under existing legislation.
While there is no prospect of legislation in the near future affecting
the monetary use of silver, it is reported that the Government has
under consideration action that might be taken, if the silver coinage
of Spain (owing to a continued rise in the price of silver) should reach
or pass its melting point. In that event, it is apparently the inten
tion to call in the silver coins in circulation and to issue either paper
money of small denominations or coins of baser metal. What dispo
sition would be made of the silver thus called in is conjectural. Under
the London Silver Agreement of July 22, 1933, Spain’s exports of
demonetized silver are limited to 5,000,000 ounces per annum for a
4-year period beginning January 1, 1934.
At present silver coins are not being hoarded to any large extent.
During periods of political unrest, however, the hoarding of such
coins becomes important. Thus, the silver reserves of the Bank of
Spain totaled 699,015,144 pesetas on December 31, 1930, but by
December 31, 1931 (the year during which the Republic was installed),
had declined to 515,010,628 pesetas. Since then, the trend has been
constantly upward and on June 1, 1935, the silver reserves of the bank
amounted to 701,981,109 pesetas.
The total silver issued from 1868 to date—minus an estimated
200,000,000 pesetas to cover silver exported over a period of years,
coins lost, destroyed, etc.—contained 5,019,695 kilograms of fine
silver, or about 161,000,000 fine ounces. This may be taken as
representing the amount of silver at present in monetary use in Spain.
This amount is distributed as follows:
Kilograms
Bank of Spain_________________________________
Private banks_________________________________
Public...................................................... ........................
T otal....................................................................
i Estimated.
3, 110, 900
1 636, 265
1 1, 272, 530
5,019,695
Spain’s production of silver is not very large. The following table
show's production of both gold and silver in Spain during recent years.
Production of Gold and Silver in Spain, 1929-33
Year
1929
1931 ..
............................
Year
Gold
Gold
Silver
Kilo
grams
Kilo
Kilo
grams
grams
82, 713 1932..........................................
240
87,688 1933..........................................
96,383
Source: Estadística Minera y. Metalúrgica de España, 1933.
66111o— 30------13
Silver
Kilo
grams
104,956
91, 120
190
HANDBOOK OF FOREIGN CURRENCIES
SWEDEN
The monetary unit is the krona (plural kronor, abbreviation hr.),
divided into 100 ore. The krona has a par value of approximately
$0.4537.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
No old issues of coins are in general circulation. A few old “Riksmyntsedlar” and “Bancosedlar” coins are in circulation and redeem
able. There are Swedish coins in circulation minted before 1905,
when Norway and Sweden were united. These are still legal tender
in Sweden. The only foreign coins in circulation are those of Den
mark and Norway, but they have no legal status.
The importation of gold is permitted under law no. 51, dated
March 28, 1930, but according to laws nos. 68, 69, 70, and 71, dated
April 11, 1924, Norwegian and Danish gold, silver, and bronze coins
are no longer legal tender.
No foreign notes are in circulation. Checks are coming into more
general use, but are not yet very popular. Checks once paid are
retained by the banks as part of their records, but are made available
to customers for reference.
Paper Currency of Sweden,' May 31, 1935
Denomination
Dimensions
Amount
outstanding
(millions of
crowns)
87.0
246.6
105.4
206.3
36.3
.7
.6
682.9
1 Engraved on 100-percent linen paper of domestic manufacture.
* Besides the 1-krona notes a small amount of riksmynt notes of 1859-73 and specie and banco notes issued
1776-1858 is still in circulation. These are redeemed by the Riksbank on demand. The only nonredeemable notes are those for kopparmynt, issued 1743-75, and worthless since 1841.
Coins of Sweden
Metal of Fine
Denomination chief
value ness
Gold or silver Diam Thick
content
eter ness
(mm) (mm)
Grams Grains Grams Grains
Gross weight
Gold......... 0.900 8.9606 138. 2828 8.0645 124. 4545
.900
.900 2.2401 34.5707 2.0161 31.1136
.900 25.000 385.8089 22. 5000 347. 2280
.800 15.0000 231.4853 12.0000 185.18S3
.800 7.5000 115. 7427 6.0000 92. 5941
.600
.600 2.4200 37.3454 1.4520 22.4073
.400 1.4500 22.3769
Copper__ «. 950 8.0000 123.4589 .5800 8.9508
«.950 4.0000 61. 7294
1 ore...................... ....... do___ «.950 2.0000 30.8647
1 December 1930.
* Minted to June 19, 1935, when an additional 160,000 kronor was authorized.
1 On May 31, 1935 silver coins outstanding totaled 4,421,248 kronor.
« Tin 0.040 and zinc 0.010.
* Copper coins totaled 126,543 kronor.
23 1.55
16 .83
31 2 456
25 1.906
17 1.374
27 1.92
21 1. 58
16 1.40
Amount
outstand
ing (mil
lions of
crowns)
i 79 2
(*)
(»)
(>)
(»)
(>)
(*)
•
HANDBOOK OF FOREIGN CURRENCIES
191
NOTE-ISSUING AUTHORITY
The Bank of Sweden (Sveriges Riksbank) has the sole right to issue
bank notes. The law provides that these notes shall be redeemed on
demand at the bank, in gold. If deemed absolutely necessary on
account of war, menace of war, or some financial crisis, redemption
may be suspended for a fixed period, by the bank and the Parliament
(Riksdag) together, or, if the Riksdag is not in session, by the King
alone, upon the proposal of the board of directors and after consul
tation with the national-debt board (Riksgaldskontoret). (The
latter is in charge of state finances.) If granted by the King between
sessions of the Riksdag, suspension of note redemption must be
approved by the latter within 20 days after the first meeting of its
next session.
According to the law governing the Riksbank (Lag for Sveriges
Riksbank, dated May 12, 1897, as amended May 24, 1928 and
May 21, 1931), the bank is placed under the guaranty of the Riksdag
and is governed by a board of directors. The board is composed of
seven members, of whom one, with one substitute, is named by the
King for a term of 3 years. The other six, with three substitutes, are
chosen by the Riksdag, for the term (3 years) and in the manner in
dicated in the regulations governing the bank. The director named
by the King is the president of the bank.
The directors of the bank may receive instructions from the
Riksdag or from the parliamentary committee on banking, in respect
to those matters in which the committee has the right to act on behalf
of the Riksdag. They are responsible only to the Riksdag, its
parliamentary committee on banking, and its auditors, their responsi
bility and that of the directors of branch offices being defined in
special statutes.
The capital stock of the bank, which is owned entirely by the
State, amounts to 50,000,000 kronor, and its reserve fund amounts
to 20,000,000 kronor. The disposition of its net profits is determined
by the Riksdag in accordance with article 26 of the bank act.
On May 31, 1935, the assets of the bank totaled 1,285,897,768
kronor compared with 1,223,506,523 kronor at the end of 1934.
RESERVE REQUIREMENTS
The Riksbank may issue notes to double the amount of its gold
stock plus 350,000,000 kronor. On June 15, 1935, the maximum
permissible was 1,058,125,818 kronor, but the actual circulation was
657,646,775 kronor.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
The exportation and importation of silver and the importation of
gold are unrestricted. Under a law of September 27, 1931 (Svensk
Forfattningssamling No. 326, September 27, 1931), gold may be
exported only by the Riksbank under special license of the Treasury
Department. This law has been renewed several times, the last time
on May 31, 1935, to expire February 29, 1936.
Some smuggling of gold may have occurred since the enactment of
the law of September 27, 1931, but it is believed to be quite negligible.
192
HANDBOOK OF FOREIGN CURRENCIES
GOLD
On June 15, 1935, the Riksbank’s gold reserve in Sweden amounted
to 354,062,909 kronor (142,767.3 kilograms at 2,480 kronor per kilo
gram).
The Riksbank purchases gold abroad and from the Boliden Mining
Co., Sweden, at a premium.
The general public is not actively hoarding gold.
THE GOLD CLAUSE
Gold payments were temporarily suspended by the Riksbank on
September 28, 1931, under royal decree. A law of June 17, 1932,
reaffirmed the suspension of gold payments,49 and it has been further
extended from time to time by action of the Riksdag. The present
extension from June 1, 1935, through February 29, 1936, is embodied
in a decree of May 31, 1935.50
A case on the gold-clause ruling is now under appeal to the Swedish
Supreme Court. This is the case of Forsakringsaktiebolaget Skandia
v. Riksgaldskontoret (Skandia Insurance Co. v. Swedish National Debt
Office). On April 16, 1935, the Svea Court of Appeal handed down a
decision in favor of the plaintiff.
The following note was submitted by Acting Commercial Attache
Osborn S. Watson on April 25, 1935:
A ruling in a gold-clause case was handed down on April 16 by the Svea Court
of Appeal in the case of the Skandia Insurance Co. against the Swedish National
Debt Office. The insurance company, holders of bonds of the Swedish Govern
ment 1924 dollar loan, claimed in their suit that the Swedish Government should
pay the service on these bonds in gold, in accordance with the terms of the gold
clause in the bond contract. The ruling of the court upheld the contention of
the plaintiff stating in effect that holders of such bonds, not under the jurisdiction
of the United States, are entitled to payment in gold, and that the question of
the interpretation of the gold clause must be adjudged according to Swedish law
and not according to the American ruling which the National Debt Office had
petitioned.
It is understood that the case will be appealed to the Swedish Supreme Court,
and, pending a final decision, interest payments on the dollar bonds will continue
to be made in dollars of current value. Of the original $30,000,000 loan of 1924,
$3,200,000 are still outstanding.
SILVER
No new developments in the monetary use of silver in Sweden have
occurred since Trade Promotion Series No. 149, Monetary Use of
Silver in 1933, was published, except the issuance of special coins on
May 25, 1935, to commemorate the five-hundredth anniversary of the
Riksdag. (See Description and Circulation of Currency.)
The amounts of silver currency held separately by the general
public, the banks, and the Government are not known. At the end
of 1934 the Riksbank had in its vaults silver coins to the amount of
3,099,990.47 kronor. At the end of 1933 the mint had on hand
467,800 kronor of silver coins.
Silver coinage issued by the royal mint up to December 31, 1933,
totaled 71,133,789 kronor, of which 8,592,852 kronor had been
called in.
During the 8 years ended August 1935 approximately 16,000,000
kronor of silver had been struck by the royal mint. The director of
«»Svensk Forfattniagssamling No. 212, “Lag ora Batalaiug pi Gruad av Vissa Obligationer.”
*>Svensk Fd.-faUnragssaraling No. 217.
193
HANDBOOK OF FOREIGN CURRENCIES
the mint estimated that approximately 60,000,000 kronor of silver
coins were then in circulation in Sweden. In August there was a
shortage of silver coins at the Riksbank, and the amount to be minted
during that month was above the average. By the middle of August
some 700,000 Riksdag five-hundredth-anniversary 5-krona silver
coins had been minted during 1935, and approximately 2,000,000
kronor of the ordinary silver pieces. Every month the mint receives
instruction from the Riksbank concerning the amount of silver coins
to be minted.
SWITZERLAND
The monetary unit is the Swiss franc (abbreviation f. or fr.),
divided into 100 centimes. The franc has a par value of approximately
$0.3267.
DESCRIPTION AND CIRCULATION OP CURRENCY
The currency is described in the accompanying tables.
Gold coins are unlimited legal tender. Silver coins are legal tender
in amounts not exceeding 100 francs; nickel coins, in amounts not
over 10 francs; and bronze coins, in amounts up to 2 francs. As to
paper money, the Swiss National Bank and all Federal public offices
are required by law to accept at any time and in any amount the
notes of the Swiss National Bank at their face values.
Notes in denominations of 50, 100, 500, and 1,000 francs are
engraved, but those of lesser denominations are printed.
Paper Currency of Switzerland, Dec. 31, 1934
Amount
outstanding
(millions of
francs)
368.3
113.8
598. 4
202.0
}
156.1
1.7
70 by 125 millimeters.....................................
Total..........................................................
1,440.3
i Known as the Pestalozzi note, because of the printed likeness.
Denomination
Dimensions
Characteristics of
edge
Amount outstand
ing Dec. 31,1934
1 (millions of francs)
Gold ... 0.900 32. 2580 497.8169 29. 0323 448. 0563 35
20 francs.......... ..d o ----- .900 6. 4520 99. 5696 5.8065 89. 6126 21
.900 3. 2260 49. 7818 2.9032 44.8032 19
.835 15.0000 231.4854 12. 5250 193. 2903 31
.835 10.0000 154. 3236 8. 3.500 128. 8602 27
1 franc............. ...d o ___ .835 5.0000 77.1618 4.1750 64.4301 23
50 centimes__ .do___ .835 2.5000 38.5809 2. 0875 32. 2150 18
21
1.000 4. 0000 61. 7294
19
1.000 3.0000 46. 2971
1. 000 2.0000 30. 8647
17
». 950 3.0000 46. 2971
20
...do’___
».
950
23.
1485
16
1 centime........
1.5000
Total__
1 Fineness of this coin was reduced from 0.900 by law of June 3, 1931.
* Alloy: Tin, 0.040; and zinc, 0.010.
Thickness (mm)
1 Grains
Prams
i Grains
j Grams
Fineness
Metal
chief
Denomination ofvalue
Gold cr
Gross weight silver
content
Diameter (mm)
Coins of Switzerland
2.360
1.400 Grooved, inscribed
or starred.
1.000
2. 400
2. 100
1.600 ....... do-.....................
Î.400 ....... do........................
1.600
1.500
1.300
1.200
1.200 ....... do........................
0.5
420.0
26.5
104.2
27.7
31.2
16.8
10. 7
7.9
6.0
.9
1.1
653. 4
194
HANDBOOK OP FOREIGN CURRENCIES
NOTE-ISSUING AUTHORITY
According to the Federal laws of June 19, 1925, and December 20,
1929, the Swiss National Bank has the exclusive right to issue bank
notes. This privilege, which was to expire on June 20, 1937, was
renewed for a further period of 10 years by a Federal law approved on
September 25, 1935.
The statement of the National Bank, issued on June 3, 1935,
shows that note circulation as of May 31, 1935, amounted to 1,302,073,690 francs.
The Government is able to influence the policies of the National
Bank only through the appointive power. On February 28, 1897,
the question of the relation of the bank to the Federal Government
was submitted to a referendum voto of the Swiss people. According
to the law which originated in this referendum, the conduct of the
National Bank must remain independent of the Government and its
credit policies.
The Board of Directors (Bankrat), which is charged with the super
vision and general oversight of the bank’s business, is composed of
40 members, holding office for periods of 4 years. Twenty-five are
appointed by the Federal Council (Bundesrat), and the balance by
the stockholders. The group appointed by the Federal Council
includes the president and the vice president. A maximum of five
members of this group may belong to the Federal Assembly (Bundes
versammlung) and five may be members of the cantonal governments.
Thus the law provides that only five of the Board of Directors may
be members of the Federal Government. Although the Government
is in a position to exercise its influence indirectly through the appoin
tive power, the independence of the Central Bank from the Govern
ment in regard to its policies is in reality effectively assured.
RESERVE REQUIREMENTS
Article 19 of section 111 of the Federal law of April 7, 1921, con
cerning the Swiss National Bank reads in part as follows:
The metal (gold) coverage (of the currency) must amount to at least 40 percent
of the notes in circulation. The minimum metal coverage is to be kept within
the country.
Silver may not be included in the currency reserves and is used
only for subsidiary coinage. The National Bank does not hold
silver bullion beyond the subsidiaiy coinage needs.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
There are no embargoes or restrictions on gold and silver move
ments into or out of Switzerland.
The importation of gold in bullion form is subject to only a nominal
dutv, and imports of gold coins are duty free. The smuggling of
gold does not, therefore, constitute a problem. According to reliable
information, considerable quantities of gold coins of different countries
have found their way into Switzerland in recent years without being
declared, but failure to make formal declaration was owing more to
a desire for secrecy than to fear of any restrictions.
The movement of silver outside of recognized channels is very
small, and smuggling of the metal may be regarded as nonexistent.
HANDBOOK OF FOREIGN CURRENCIES
195
GOLD
The Swiss gold reserve as of May 31, 1935, was 385,728.65 kilo
grams, or 1,192,672,990.70 francs, one kilogram 0.900 fine being
valued at 3,092 francs.
Article 1 of the “Provisions for the Purchase of Gold In Bars and
Foreign Coins” of the Business Regulations of the Swiss National
Bank provides as follows:
The Swiss National Bank buys, insofar as the need exists, gold bars on the
basis of 3,086.50 francs for a kilogram of gold of a fineness of 900/1000, equal to
3,429.44 francs for a kilogram of fine gold.
Gold is not purchased at a premium in Switzerland. The country
mines practically no gold.
There has been considerable gold hoarding in Switzerland in recent
years, and especially at times when it was thought that the country
might devalue its currency. Since 1931, gold to a total value of
700.000. 000 francs has been imported in private account, and only
200.000. 000 francs has been exported. Thus, on the last 4 years,
500.000. 000 francs of gold has apparently found its way into private
hoards. The foregoing amounts, however, embrace only those of
which there is a record; the importation of gold coins without the
formality of declaration has been common. The chief statistician
of the Swiss National Bank estimates the amount of gold hoarded
in Switzerland at 1,000,000,000 francs, while the Credit Suisse, the
largest private bank, places the amount at 1,500,000,000 francs.
Local opinion seems to regard the latter as a conservative estimate
THE GOLD CLAUSE
The gold clause has not been deemed important in Switzerland
and, following the lead of the National Bank, commercial bankers
have avoided the gold clause in loan contracts. During the specu
lative attack on the Swiss franc in April 1935, gold was at a con
siderable premium. Swiss bankers, however, looked upon this
merely as a passing phenomenon, apparently feeling that any dis
cussion concerning the possible need for a gold clause would be an
indication of weakness and would be reflected in loss of confidence
in the currency. In law, all contracts calling for payments of Swiss
money are presumed to be payable in gold.
SILVER
Of a total outstanding silver coinage amounting to 188,081,563.50
francs (1,250,000 kilograms of 835/1000 fineness), on December 31,
1934, 33,500,000 francs was held in the vaults of the National Bank,
and the balance by the private banks and by the general public.
More detailed statistics are not available.
SYRIA
The monetary unit is the Syrian pound, divided into 100 piasters.
The Syrian pound is pegged to the French franc at a rate of 20
French francs to 1 Syrian pound.
196
HANDBOOK OF FOREIGN CURRENCIES
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
No old issues of notes or foreign notes are in circulation, although
there is no restriction on the importation of foreign notes. Checks
arc used to a very small extent, because of the extreme conservatism
of the people. Paper currency is in common use throughout the
country. Turkish silver coins were formerly used to a large extent
in the interior, but have recently been withdrawn from circulation.
The notes are engraved by the Bank of France. Protection against
counterfeiting is assured by the fact that the Bank of France prints
the notes, and by the use of thin watermarked paper. The notes
are full legal tender.
Paper Currency of Syria
Denomination
Amount
outstand
ing Oct.
31, 1935
(millions
of Syrian
pounds)
Dimensions
}
Total............................................................
0.55
3.20
1.93
2.84
3.57
3.10
15.19
Coins of Syria1
Denomination
50 piasters................
25 piasters...............
10 piasters...............
5 piasters.................
1 piaster...................
Turkish coins: *
1 pound.............
H pound...........
20 piasters........
10 piasters.........
5 piasters..........
2 piasters..........
Total..............
Gold or silver
content
Amount
out
standing
Diam Thick Oct. 31,
Metal of Fine
eter
ness
chief value ness
1935
(mm) (mm) (millions
Grams Grains Grams Grains
of Syrian
pounds)
Gross weight
Silver.......
..-do..........
...do .-.......
Copper—
Nickel___
Gold.........
...d
o ..........
Silver........
...d o ..........
...do..........
»0.680 10.0000
» .680 5.0000
» .680 2.0000
* .910 4.0000
».910 2.0000
» .250 5.0000
» .250 4.0000
>.9167 7.2160
».9167 3.6080
i .830 24.0550
» .830 12.0280
1 .830 6.0140
» .830 2.4050
» .830 1.2030
154.3236
77.1618
30.8647
61. 7294
30.8647
77.1618
61.7294
113.5991
55.6800
371.2168
185.6161
92.8080
37.1140
18.5652
6.8000 104.9100
3. 4000 52. 4700
1.3600 20.9880
6.6149
3. 3075
19. 9657
9.9832
4.9916
1.9962
.9985
28
24
17
23
18
24
21
102.0679 22
51.0340 18
308.0708 37
154.0408 27.25
77.0204 24
30.8014 18. 75
15.4069
2.0
1.5
1.4
1.0
1.4
.3
1.0
1.5
.211
1.5
1.08 } «5.0
.86
2.52
2.09
1.37
.92
6.911
1 Alloy is copper.
* Alloy is aluminum.
1 The Turkish coins are not a part of the legal currency, but have enjoyed a large circulation despite
the etYorts of the Syrian Government to have only Syrian currency used.
4 Estimated.
HANDBOOK OF FOREIGN CURRENCIES
197
NOTE-ISSUING AUTHORITY
On April 8 and 22, 1919, the French Minister of Finance signed an
agreement with the Banque de Syrie (now the Banque de Syrie et du
Grand Liban), according to which the Banque de Syrie was author
ized to establish a note-issuing department as an entirely independent
office charged with all operations pertaining to note issue and with
drawal. Notes are issued for the account of the Treasury or the
Banque de Syrie at Paris. Payments by the bank to the French
Government result in the opening of a credit by the French Treasury
to exactly the countervalue of the sum paid. On the other hand,
the note-issue department cannot give the notes to the Banque de
Syrie for its commercial transactions except in exchange for foreign
money or drafts drawn on foreign countries which must constitute,
together with the credits opened at the Treasury in Paris, cover for
money in circulation.
While notes are issued by the note-issue department at the Banque
de Syrie et du Grand Liban, the French High Commissioner in his
decree no. 2507, dated April 16, 1929, authorized the States of the
Levant under French mandate to issue silver coins, and instructed
the Banque de Syrie et du Grand Liban to do this in their behalf.
Previously, according to decrees dated January 1, 1922, and Feb
ruary 16, 1923, the French High Commissioner had authorized the
States to issue nickel and copper coins. (See above table on Coins
of Syria.)
The several local governments have no voice in the policies of the
Banque de Syrie et du Grand Liban. However, the French High
Commission has the right to audit the accounts of the note-issue
department.
RESERVE REQUIREMENTS
According to the convention between the governments of the Syrian
States (represented by the High Commission) and the Banque de
Syrie et du Grand Liban, the bank notes in circulation must at all
times be wholly covered by a reserve consisting of the following assets
(the silver and other coins require no reserve):
1. Gold coin or bullion, or foreign government securities payable in gold;
2. A portfolio consisting of either foreign bills of exchange bearing at least two
signatures acceptable to the bank, with a maximum duration of 90 days, stipu
lated in foreign currency and drawn in foreign or Syrian markets on foreign
markets; or local bills of exchange bearing three signatures acceptable to the bank,
with a maximum duration of 90 days and designated in Syrian money. The
total value of the foreign and domestic bills put together must not exceed 7 per
cent of the amount of bank notes in circulation, nor 1,000,000 Syrian pounds;
3. An obligatory deposit, designated by the name “A” account, located at the
Central Public Treasury at Paris, the amount of which must be equivalent to,
but not exceeding one-third of the total circulation, and to bear interest at the
rate of 1.5 percent per annum.
The bank may also have, if it so desires, another demand deposit at the Central
Public Treasury at Paris, designated by the name “B” account, which shall bear
interest at a rate not less than that allowed by the said Treasury on demand de
posits of individuals. The total value of the portfolio of commercial bills and
the balance in account “B” must never exceed 22 percent of the circulation reserve;
4. Securities of the French Government, or securities guaranteed by it, pay
able within a period not exceeding 2 years; said securities to be deposited at the
Banque de France.
The cover of the note circulation must be calculated at the rate of the day, the
piaster being equal to 20 French centimes, and a margin of at least 10 percent
must be deducted from that part which consists of gold and commercial bills
payable in other money than the franc.
198
HANDBOOK OF FOREIGN CURRENCIES
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
LEGAL STATUS OF GOLD AND SILVER MOVEMENTS
1. Decree no. 443, dated October 26, 1920, provided for free movement of gold
within the States under mandate;
2. Decree no. 844, dated May 10, 1921, forbade the exportation of gold, silver,
platinum, either as money or bullion;
3. Decree no. 2040 of July 23, 1928, stated that the export of gold, silver, or
platinum might be authorized on special application to the Financial Adviser of
the French High Commission.
4. Decree no. 27/LR of April 10, 1931, provided for free importation of gold in
money or bullion as well as for its reexportation in transit; for free exportation of
silver in money or bullion and its importation in bullion. It prohibits the ex
portation of gold in money or bullion as well as importation and transit of silver
money and old money. It states that such prohibitions can be repealed only by
special authorization of the Adviser of the High Commission for Financial Affairs.
GOLD
The total amount of gold reserves as of June 1, 1935, was 500,000
Syrian pounds, all held by the Banque de Syrie et du Grand Liban in
Turkish coins and btdlion. The weight is unknown.
Neither the Government nor the bank has any definite gold-buying
policy. However, the bank (but not its note-issue department) buys
Turkish gold pound coins whenever the local rate is lower than the
price of gold in Paris. All gold bought is shipped to France.
The habit of hoarding and the disinclination to invest are deeply
rooted in Syria, particularly in the interior of the country. It is
impossible to determine how much gold is hoarded, but it may be
estimated at between one-fourth and one-third of the total monetary
stock.
THE GOLD CLAUSE
Domestic contracts, and more especially rental leases, are stated
in Turkish gold pounds. If the rate is not stated, it must be paid
according to the rate of exchange prevailing on the day payment is
made.
SILVER
No figures as to the weight of the silver held by the public or by
the banks are available. Neither the Government nor the Banque
de Syrie et du Grand Liban has on hand any silver except in the form
of coins.
The general public, which used to possess about 2,000,000 Syrian
pounds of Turkish silver currency, is believed to be disposing of it,
owing to the provisions of the High Commissioner’s decree no. 116/LR
issued on May 23, 1935. According to customs statistics, exports of
silver money amounted to 52 metric tons, valued at Syrian pounds
556,022, in the first half of 1935; since the exportation of Syrian money
is forbidden, this amount must have been in Turkish silver coins.
TURKEY
Byr the decree-law of April 8, 1916, on monetary unification, the
monetary unit is the gold piaster. In practice, however, the Turkish
ound (symbol £T) is employed as the monetary unit, the piaster
eing regarded as a divisional part thereof. There are 100 piasters
to the pound and 40 paras to the piaster. The fine gold content of a
piaster is 0.0661518 gram and its value is $0.074439. As a matter
E
HANDBOOK OF FOREIGN CURRENCIES
199
of fact, the currency has long been on a fiduciary basis. In recent
years, however, its value in foreign exchange has been stabilized by
linking the Turkish pound (100 piasters) to the French franc at the
rate of 12.06 French francs to 1 Turkish pound. On that basis the
Turkish pound has a value equivalent to about $0.80.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
Regarding the coins in circulation, it should be stated that, in
addition to the coins listed in the table below, there are still in exist
ence, although they have been largely retired from circulation, the
following coins: The altilik (5 piasters) and its subdivisions (2)( and
l'/4 piasters); the beslik (2fi piasters) and the % beslik (1% piasters);
the old metafile (20, 10, and 5 paras) and the avarli (10 and 5 paras).
Details as to the metallic composition, weights, and dimensions of
these old coins are not at hand.
Paper Currency of Turkey
Dimensions
Denomination
6.89 by 3.93 inches................................................
6.69 by 3.62 inches.................................................
t These notes have been called.
Metal of
chief value
Denomination
‘ Do...................... Copper *___
Silver *.........
Do
do.»........
Silver *.........
1 piaster................... ....... do.».........
Nickel.........
Do .
Silver *.........
Silver *.........
....... do.».........
do.» ..
» Pure.
Amount
outstanding
Sept. 15,
1935
(millions
of Turkish
pounds)
148.1
Coins of Turkey
Gross weight
Silver content
Diam Thick
eter ness
Grams Grains Grains Grains (mm) (min)
Coins now in circulation
29. .50
1.70
10.0000 154.3200
(00.830 24.
2. 52
05.50 371.2253 19. 9657 308. 1170 37.00
2.09
.830 12. 0275 185.6127 9. 9829 154.0585 27.25
.900-. 915 7. 5000 115. 7400
27. 20
1.70
1.37
. 830 6.0140 92. 8063 5.0196 77.0292 24.00
22. 50
1.35
.900-. 915 4.0000 61.7280
18. 75
.95
.900-915 2. 0000 30. 8640
.92
.830 2. 4050 37.1225 1.9962 30.8117 18. 75
.70
.830 1. 2025 18. .5613 .9981 1.5. 4059 15.00
23.50
1.52
92. 5920
0) .830 6.0000
.47
.6010 9. 2806 .4988 7. 7029 13.75
21.00
1.27
4.0000
61.7280
0)
1.05
2.6500 40.8950
18.50
1
16.00
.95
1.7500 27.0060
w
Coins being placed in circulation
1.76
0.830 12.0000 185.1840 9. 9600 153. 7027 29.00
1.28
. 830 6.0000 92. 5920 4.9800 76. 8514 24 00
1.00
. 830 3.0000 46. 2960 2. 49 H) 38. 4257 19.(K)
25. 50
. 250 6.0000 92. 5920
21.50
.250 4.0000 61.7280
18. 50
.250 2.5000 37.5800
18.00
2.0000 30. 864
* Alloy is aluminum.
* Alloy is copper.
Fineness
200
HANDBOOK OF FOEEIGN CURRENCIES
NOTE-ISSUING AUTHORITY
The Central Bank of the Republic of Turkey is the principal
note-issuing agency. The Ottoman Bank, which since 1863 has
enjoyed the right of note issue, is permitted, under its latest con
vention with the Government (June 1935), to issue notes in an
amount not exceeding £T 279,069.
The notes issued by the Central Bank include those put out by the
Government during the World War, for which the bank assumed
responsibility on October 3, 1931.
The Government has a controlling voice in the policies of the
Central Bank, owning over 50 percent of the shares.
RESERVE REQUIREMENTS
There are no legal requirements as to reserves against the currency.
Until 1931 the Turkish paper currency had no metallic cover whatever.
During the past 4 years important gold reserves have been accumu
lated. At present the coverage is about 19.7 percent. Silver is not
considered legal metallic reserve for the currency, and no appreciable
stocks of silver are held by the Central Bank.
During the past year 42,473 kilos of silver were acquired abroad
for the purpose of striking Turkish 1-pound silver coins and the
contemplated 50- and 25-piaster silver pieces.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
By virtue of the decree-law of March 2, 1919, the export of silver
is prohibited. The export of gold has been forbidden, by law, since
November 6, 1922. For several years following the World War
gold coins of the old Ottoman Empire were smuggled out of the
country in considerable quantités, but the amount of smuggling is
relatively small at present.
GOLD
On September 14, 1935, the Central Bank held 13,360.1 kilograms
of gold valued at 23,011,845 Turkish pounds, besides 4,401.3 kilograms
of gold valued at 6,190,763 Turkish pounds deposited abroad.
THE GOLD CLAUSE
The gold clause is not used in domestic contracts. The Turkish
currency bears no promise to pay in gold and is strictly a fiat currency.
SILVER
Turkey has practically no stocks of silver. When, in May 1933,
the Government passed a law calling for the minting of 1-lira (pound)
silver coins, it decided to accept the old Ottoman Empire 20-piaster
silver coin for the payment of taxes at the rate of 37 piasters paper
currency for each coin, and the Central Bank was instructed to buy
silverware presented at its windows at the rate of 19 piasters for each
10 grams of pure silver. Despite these measures, it was found that
practically all of the silver required for the minting of the 1-lira coins
had to be purchased abroad.
UNION OF SOUTH AFRICA
The monetary unit is the South African pound (symbol £), divided
into 20 shillings (s.) of 12 pence (d.) each. The South African pound
has a par value of approximately $8.2397.
201
HANDBOOK OF FOREIGN CURRENCIES
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
There are still outstanding gold sovereigns and half sovereigns,
although the issuance of these coins ceased when gold payments were
suspended at the end of 1932. Subsequently the South African
Reserve Bank has purchased sovereigns and half sovereigns offered
to it at a price approximately that of the bullion content of the coins
in accordance with the current London market price of gold.
The establishment of a branch of the Royal Mint at Pretoria was
provided for by Act No. 45 of 1919. The Coinage Act, no. 31, of
1922, defines the powers of the Minister of Finance with respect to
the coinage, and the powers of the Governor-General regarding the
dimensions, designs, etc. The act prescribes the denominations,
weight, fineness, etc., of the coins made at the Pretoria Mint.
Because of the extensive smuggling of British silver coins into the
Union, to avoid loss of exchange, Government notice no. 1507, dated
November 18, 1932, was issued, providing for the withdrawal of such
coins from circulation in the Union and for their demonetization as
of January 15, 1933.
The use of checks is fairly common, although there is a 1-pence
tax on each check.
Details as to the amount of silver coins outstanding in 1935 are
not available. In 1934 the amount in circulation was £2,080,000 and
that held by the banks, £620,000, as compared with £2,615,222 and
£660,278, respectively, in 1929.
Silver coins are legal tender in amounts not exceeding £2 and
copper coins in amounts of not more than £1.
Paper Currency of the Union of South Africa, June 14, 1935 1
Dimensions
Denomination
Amount
outstanding
June 14,
1935
(hundreds
of pounds)
75.7
195.2
4, 656.9
6,196. 4
1, 118.5
* 12,242.8
i Engraved on paper of British manufacture with plates and dyes made in England. The paper is sim
ilar to “safety paper” used in the United States for checks.
* The small discrepancy in the summation is due to abbreviation of the items.
Coins of the Union of South Africa, 1935
Denomination
2Ms. (half crown)...
chief value
....... do...........
3d. (threepence)___ ....... do...........
W . (halfpenny) —
\\d. (farthing)......... ....... do_____
» Alloy is copper.
ness
Gross weight
Grams Grains
Silver content
Grams Grains
0.800
.800
.800
.800
.800
(’)
©
(>)
14.1380 218.1818
11.3104 174.5455
5. 6552 87. 2727
2.8276 43. 6364
1.4138 21.8182
9. 4198 145.8833
5. 6699 87. 5000
2. 8350 43. 7500
* Not reported.
11.3101
9.0483
4.5241
2.2620
1.1310
Diam Thicketer
(ram) (mm)
174.5455 32.2072 2.1336
139.6304 28. 6004 2.1590
69. 8182 23. 6474 1.6002
34.9091 19. 3294 1.2700
.9144
17.4545 ■
30.9118 1.8288
25. 5270 1.6510
20. 1930 1.3208
Alloy is tin and zinc.
202
HANDBOOK OF FOREIGN CURRENCIES
NOTE-ISSUING AUTHORITY
The Currency and Banking Act of 1920 gave the South African
Rosorve Bank the sole right to issue bank notes in the Union for a
period of 25 years from the effective date of the act, namely, Decem
ber 17, 1920. (The bank began to operate June 30, 1921.) These
notes are legal tender even when tendered by the bank itself, but
they are no longer redeemable in gold. The denominations of the
notes are fixed by the Treasury. The commercial banks which had
enjoyed the note-issue privilege were to cease to issue or reissue
notes at a date to be determined after the Reserve Bank began opera
tions (tills date was later fixed as of June 30, 1932) and within 2
years after that date the several banks were required to pay over the
amount of their notes still outstanding to the Reserve Bank which
would then assume all liability for them.
As of Marcli 31, 1935, the balance sheet of the Reserve Bank
shows that there were outstanding £137,867 10s. of notes of the com
mercial banks, for which the Reserve Bank had assumed liability.
Of the 11 directors of the Reserve Bank, 5 are appointed by the
Governor General and 6 are chosen by the shareholders. Of the latter,
three must be, or have been, actively engaged in commerce or finance,
one in agriculture, and two in other industrial activities. The provision
of the original act, that three directors experienced in banking and
finance were to be selected by the shareholding banks as their repre
sentatives, was abolished on June 30, 1923.
RESERVE REQUIREMENTS
The Currency and Banking Act of 1920 provided that the notes of
the Reserve Bank must be secured by a reserve of not less than 40
percent in gold. Tins ratio was reduced to 30 percent by section 4
of the Currency and Exchanges Act of 1933, which also provided that
one-half (instead of one-quarter) of the reserve might, with the con
sent of the Treasury, be held abroad. Silver may not be included in
the reserve.
The minimum ratio of gold reserve to deposits and bills payable
of the bank was likewise reduced from 40 to 30 percent by the
Currency and Exchanges Act of 1933 (sec. 7). With the consent of
the Treasury, one-half of this reserve may he kept abroad. Silver
specie may comprise part of the reserve, but the proportion of silver
therein may not exceed 20 percent.
On June 14, 1935, the bank held £109,269 8s. 6d. in silver coin, but
no silver bullion. Silver coin, therefore, constituted a negligible pro
portion of the bank’s metallic reserves.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
There are no embargoes on the exportation of gold or silver from
the Union and no restrictions on their movement into or within the
country.
GOLD
On June 14,1935, the gold reserve held by the South African Reserve
Bank against its notes and deposits amounted to over £28,400,000
(calculated at the standard price of 84s. 11.45d. per fine ounce). Of
this amount about £6,977,000 was held in London and the remainder
HANDBOOK OF FOREIGN CURRENCIES
203
was held in South Africa. The weight of this gold was 6,689,902.728
ounces fine.
The output of the mines of the Witwatersrand is purchased twice
a week by the South African Reserve Bank, in conformance with a
contract between the gold producers and the bank. This gold is
either retained by the bank or sold on the London bullion market.
The bank may buy and sell gold with a view to preventing any
undue fluctuations in the relative exchange value of the currency of
the Union in relation to that of the United Kingdom. Any profit or
loss on these transactions is for the account of the Union Government.
It is thought that the public is not hoarding gold. It is estimated
that approximately 235,420 fine ounces, or about £1,000,000, of gold
coin is held by the public, excluding the banks.
THE GOLD CLAUSE
Prior to 1931, contracts seldom contained the gold clause. Within
the next 2 years its inclusion became frequent. Because of a statute
passed by the South African Government in 1933, however, the
matter has come to have only academic significance. The statute
decreed that payment of an obligation stated in gold coin could be
made by notes or other instruments that are legal tender at the time
of payment.
SILVER
Silver coin in the hands of the banks and the public on December
31, 1934, was estimated at £2,700,000, of which sum the banks held
approximately £620,000.
In addition the Union Government held at the South African Mint,
for issuance to the banks as required, a sum of £31,400 in Union
legal-tender coin. The above £2,731,400 in silver coin contains
approximately 8,000,000 fine ounces of troy silver.
UNION OF SOVIET SOCIALIST REPUBLICS
Although the notes issued by the issue department of the state bank
are expressed in chervontsy (singular, chervonets), and treasury notes
in rubles, the ruble is generally regarded as the currency unit of the
Soviet Union. The chervonets is equivalent to 10 rubles. By a
decree issued October 25, 1922, authorizing the minting of gold
chervontsy, the weight of this gold coin was fixed at an amount
equivalent to approximately 7.7423 grams or 119.4825 grains, which
would give it a value of about $8.7125. The notes issued by the
state bank and the treasury are not, however, redeemable in gold
or silver.
DESCRIPTION AND CIRCULATION OF CURRENCY
The notes of the state bank are issued in denominations of 1, 3, 5,
10, 25, and 50 chervontsy and those of the treasury, in denominations
of 1, 3, and 5 rubles. The circulation on April 1, 1935, of the former
was officially reported as 3,978,041,500 rubles, and of the latter, as
3,500,925,525 rubles.
On April 1, 1935, the total circulation of silver and nickel coins
amounted to 344,569,310 rubles; copper coins, to 7,234,541 rubles;
and bronze coins to 48,057,236 rubles. The following is a description
of the silver coins:
204
HANDBOOK OF FOREIGN CURRENCIES
Coins of II. S. S. R.
Denomination
Silver content
Grams
18.0
Grains
Denomination
277. 776
Silver content
Grains
1. 35
Grains
20.8332
.90 13.8888
1.8 138.888
27. 777
20kopecks................................ 9.0
Nickel coins are issued in denominations of 20, 15, and 10 kopecks.
The 20-kopeck piece has a gross weight of 3.6 grams, or 55.554 grains,
the weights of the 15-kopeck and 10-kopeck pieces being, respectively,
three-quarters and one-half of those amounts. The copper and bronze
coins are of 1, 2, 3, and 5 kopecks.
NOTE-ISSUING AUTHORITY
From October 11, 1922, until the currency reform of February 5,
1924, the state bank possessed the sole right to issue notes. Since
1922 a special council, known as the emission board, has been entrusted
with this function. The board consists of five members: One
appointed from each of five dominant Government agencies, including
the president of the board of the state bank, and a member of the
board of the state bank.
The state controls the activities of the state bank.
The treasury, under the Peoples’ Commissariat for Finance, has
the power to mint silver, nickel, copper, and bronze coins and, since
the currency reform of 1924, to issue treasury notes in denominations
of 1, 3, and 5 rubles. The currency issued by the treasury is trans
ferred to the state bank as an exchange and special reserve fund of the
treasury. The technical work of issuing treasury currency is carried
out by the state bank.
RESERVE REQUIREMENTS
Notes of the state bank and the treasury are fully guaranteed by
these institutions and are secured by reserves which were stipulated
by the Council of Peoples’ Commissars on October 11, 1922, as
follows: Not less than 25 percent of the sum of the notes shall be
held in the form of precious metals and stable foreign currencies
according to the gold rate, while the remaining 75 percent shall be
secured by goods which can easily be sold, domestic51 short-term bills
and other short-term obligations.
The volume of coins issued is fixed in the state budget. Apart
from the exchange fund of the treasury, the Peoples’ Commissariat
for Finance submits to the state bank a special reserve fund which is
safeguarded in special vaults at the exclusive disposal of the Com
missariat of Finance. The exchange fund can be used as follows:
(a) To exchange treasury currency against bank notes and vice versa;
(b) to exchange various denominations of treasury currency; and
(c) to withdraw old and worn-out treasury currency from circulation.
According to the statement of the issue department of the state
bank the total reserves as of October 1,1935, were as follows:
Domestic short-term bills represent settlements of intergovernmental agencies.
HANDBOOK OF FOREIGN CURRENCIES
205
Statement of the Issue Department of State Bank of U. S. S. R.
Item
Oct. 1, 1935 Apr. 1, 1935
(Chervontsi) (Chervontsi)
96,336,986
85,835, 583
739,991
739,992
3,472, 732
3,129,949
434,456
338, 976
Bills discounted. ..................................................................................................... 399, 454,098 308,017, 237
500,000,000 398,500,000
The value of gold is calculated at 1.29 rubles per gram of pure gold,
and of platinum, at 1.24 rubles per gram. The pound sterling is
valued at 5.67 rubles, the dollar at 1.15 rubles, and the German mark,
at 0.46 rubles.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
The various decrees regulating foreign trade in precious metals have
been so voluminous and subject to so many changes that no attempt
can be made here to reproduce even the major provisions. In general,
precious metals in the form of bullion or art objects cannot be ex
ported except by special authorization of the currency administration
of the Peoples’ Commissariat for Finance. Item 65 of the customs
tariff permits the importation, free of duty, of gold in any form except
coin which is not mentioned in that article. In general, monetary
values of all kinds can be freely imported into the Soviet Union.
Gold has not been in circulation for almost 20 years in the territory
occupied by the Soviet Union, and silver was in circulation for only
a short period following the establishment of the new monetary system
in 1924. The policy of the Soviet Government of selling merchandise
for gold or silver coins, articles, or bullion at prices much lower than
those charged for goods sold for paper rubles or goods unavailable
elsewhere has, it is believed, resulted in much of the hoarded gold
and silver passing into the hands of the Government. Soviet officials
reported that in the years 1932-35, inclusive, approximately 370,000,00.0
rubles of gold were surrendered by the public. This practice has
removed the incentive for smuggling precious metals out of the
country, and it appears that there is very little smuggling at present.
GOLD
The state bank of the Soviet Union held a total gold reserve of
858,355,830 rubles on April 1, 1935, and 963,369,860 rubles on October
1, 1935. At the official rate of approximately 87 cents United States
currency per gold ruble these sums would be roughly equivalent to
$724,769,672 and $838,131,798, respectively. It has not been the
practice of the treasury or state bank to purchase gold at a premium.
It is believed that there is practically no hoarding of gold.
THE GOLD CLAUSE
Gold clauses are not inserted in Soviet contracts intended for
execution within the Soviet Union.
60111°— 36------ 14
206
HANDBOOK OF FOREIGN CURRENCIES
SILVER
No information is available regarding the stocks of silver bullion
or silver coins held by either the public or the Government.
UNITED KINGDOM
The monetary unit is the pound sterling (symbol £), divided into
20 shillings (s.) of 12 pence (d.) each.' The par value of the pound
sterling is approximately $8.2397.
DESCRIPTION AND CIRCULATION OP CURRENCY
The accompanying tables deocribe the currency of the United
Kingdom.
There is no restriction on the importation and exportation of gold,
silver bullion or coin, or paper currency, but no foreign money is
in circulation. The importation of foreign coins other than gold or
silver is subject to license.
The notes are engraved and lithographed on linen-rag paper of
domestic manufacture.
Of the £411,000,000 of notes outstanding on April 30, 1935,
£387,000,000 were those of the Bank of England; £21,400,000, notes
of the Scottish joint-stock banks; and £2,000,000, notes of banks in
Northern Ireland. The notes of the Scottish and Northern Ireland
banks are in denominations of £5 or over.
The use of checks is widespread and increasing.
Paper Currency of United Kingdom
Denomination
Dimensions
by 5‘M® inches.
by 5-M» inches.
8% by 5:>ie inches.
8% by bzA e inches.
8% by 5Me inches.
Denomination
8%
8%
Dimensions
8?8
5:Me inches.
85£i;iéobybyby5->i6
inches.
3Me inches.
5%a by 3Me inches.
Coins of United Kingdom
Denomination
5 pounds.......................
110pound
(sovereign)...
s. (halfsovereign)...
2%s. (half crown).......
Metal of
chief Fineness
value
Gross weight
Grams
Grains
Gold or silver Diam Thick
content
eter ness
(mm)» (mm)»
Grams Grains
Gold......... *0.916% 39.9403 616.3724 36.6119 565,0080
...do.......... » .916% 15. 9761 246. 5490 14. 6448 22610032
. ..do.......... » .916% 7.9881 123. 2745 7.3224 113.0016
.-.d o ...__ *. 916% 3. 9940 61.6372 3. <>612 56. 5008
» . 500 28. 2759 436.3636 14. 1380 218.1818
...do.......... ».500 14. 1380 218.1818 7. 0690 109.0909
». 500 11.3104 174.5455 5. 6552
* . 500
5. 6.552 87. 2727 2. 8276
». 500
2. 8276 43. 6364 1.4138
4 d. ( f o u r p e n c e ...do.......... ».500
1.8851 29.0909
.9425 14. 5455
or groat).»
3d. (threepence).......... ...d o .......... ».500
1.4138 21.8182
.7069 10.9091
2d. (twopence)»........... ...do.......... »«.500
.9425 14.5455
.4713 7. 2727
. 500
.4713 7. 2727
.2356 3. 6364
• .955
9. 4498 145.8333
« .955
5. 6699 87. 500C
Md. (fartbing)*-........... ...d o .......... «.955
2.8350 43. 7500
1* Maximum
Not laid down in th8 regulations. The measurements here shown are of actual coins.
thickness oi finished coins.
* Alloy is copper.
» Alloy: Copper, 0.400; nickel, 0.050; and zinc, 0.050.
* Coined only as mauudy money.
* Alloy: Tin, 0.030; zinc, 0.015.
36.12
28.50
22.05
19.25
38. 81
32. 50
2.41
17.63
16.25
13.43
11.12
30.86
25. 53
20.27
1.14
1.14
.96
. 74
2 03
1.65
1.70
1.22
HANDBOOK OF FOREIGN CURRENCIES
207
NOTE-ISSUING AUTHORITIES
With two minor exceptions, the only note-issuing authorities are
the Bank of England, the eight joint-stock Scottish banks, and the
Irish banks. The Scottish banks are the following:
The Bank of Scotland.
The Royal Bank.
British Linen Bank.
Commercial Bank.
National Bank.
Union Bank.
North of Scotland Bank.
Clydesdale Bank.
The Irish banks include the following, all in Northern Ireland:
Belfast Banking Co., Ltd., Northern Bank, Ltd., and Ulster Bank,
Ltd.
The Westminster Bank and Lloyds Bank have small note issues
outstanding in the Isle of Man. The respective amounts of such
notes at the end of 1934 were £14,632 and £6,200.
The Bank of England, the Central Bank, is a private corporation
and, technically, is not controlled by the Government, although
there is increasingly close cooperation between the bank and the
Treasury.
RESERVE REQUIREMENTS
The Bank of England may issue £260,000,000 of notes beyond the
issue that is secured by gold coin and bullion. The limit of fiduciary
issue was fixed at £260,000,000 in 1928, was temporarily increased
to £275,000,000 in August 1931, and lowered to £260,000,000 in
March 1933. Silver coin up to £5,600,000 may be included in the
cover for the fiduciary issue.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
There are no restrictions on bullion and coin movements in the
United Kingdom.
GOLD
The gold reserve of the Bank of England on August 21, 1935, was
carried on the books at a value of £193,251,510. The market value
of the gold reserve, converted into dollars, was about $1,587,000,000.
THE GOLD CLAUSE
The status of the gold clause in the United Kingdom was deter
mined in the case of F eist v. Société Intercom m un ale Belge d ’E lectricité.
In 1933 Mr. Feist appealed to the House of Lords from the decision
of the Court of Appeal upholding a lower-court decision that payment
of the sum of £100 on a bearer bond which stipulated payment in
gold coin equal to the standard of weight and fineness existing on
September 1, 1928, could be satisfied by offering £100 in legal tender
rather than by payment of the present paper equivalent of the quan
tity of gold mentioned in the bond.
On December 15, 1933, the House of Lords allowed the appeal
and declared that the bond interest and principal must be paid in an
amount of sterling computed in gold and not in mere legal-tender
pounds, as permitted by the decision of the lower courts. Creditors
were held entitled to receive “such a sum in sterling as represents the
gold value of the nominal amount of each respective payment, such
gold value to be ascertained in accordance with the standard of weight
and fineness existing on September 1, 1928, and that accordingly
208
HANDBOOK OF FOREIGN CURRENCIES
every pound comprised in the nominal amount of each such payment
must he treated as representing the price in London in sterling (cal
culated at the due date of payment) of 123.27447 grains of gold of
the standard of fineness specified in the First Schedule of the Coinage
Act, 1870 * *
The full decision was published in the London
Times of December 16, 1933.
SILVER
The situation with respect to silver is as described in Trade Promo
tion Series No. 149, The Monetary Use of Silver in 1933.
The distribution of silver in monetary use is reported as follows:
Amount
General public________________ £50, 000, 000
Bank of England_____________ 2, 000, 000
Other banks____________
18, 000, 000
Total................................... 70, 000, 000
Fine ounces, estimate
90, 909,390
32, 727,388
3, 636,375
' 127, 273, 146
1Based on an estimate of Messrs. Samuel Montagu & Co., London.
On August 21, 1935, the issue department of the Bank of England
held £1,538,361 in silver coin, compared with £3,500,000 a year
earlier.
URUGUAY
The monetary unit is the peso (symbol $), divided into 100 centesi
mos. The peso has a par value of approximately $1.7511.
Although by act of August 14, 1935, the main portion of the gold
holdings of the Bank of the Republic that were transferred to the
newly created issue department, was revalued for specified pur
poses, the peso has not been actually devalued by law.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency in circulation on June 24, 1935, is described in the
accompanying tables. Since that date important changes have taken
place as a result of the passage of the gold revaluation law of August
14, 1935. Some of these changes are briefly referred to under the
headings “Reserve requirements” and “Restrictions on bullion and coin
movements”, below. Whether changes will be made in the dimen
sions and other physical characteristics of the bank notes which the
issue department of the Bank of the Republic will substitute for the
old notes of the bank, is not known at this time (February 1936).
Article 16 of the gold revaluation law of August 14, 1935, pro
vided that as of the effective date of this law, all silver coins of
previous and current issues should cease to be legal tender. They
may, however, be exchanged in the currency issue department at
their face value for a period of 1 year. The same article provides
that the Bank of the Republic shall have authority to order the
minting, for the account of the State, of fractional metal coins up
to a total of 500,000 pesos. It must, however, obtain the approval
of tho executive power in determining the characteristics of the coins.
209
HANDBOOK OF FOREIGN CURRENCIES
Paper Currency of Uruguay
Circulation (mil
lions of pesos)
Emission
Denomination
Dimensions
Amount
Author outstand
ized ing June
24, 1935
>15. 7........
(
140. 4 __
1.4..........
2........
u11 ........
14.4
I0. 2.........
1 ,3
20centesimos..............................
Argentine......... ........ 138 by 70 millimeters............
103.9 ...
75.8
Coins of Uruguay
1peso 3.............................
50 centesimos *___ ____
2010centesimos
3.__...........
centesimos 3................
Total.....................
Metal of
chief value
Gold.........
Silver.......
...do..........
-.do.........
Copper__
Nickel___
...do..........
©
1o3
Silver
content
i
i
a
3
1
o
Circulation, June
24, 1935 (thou
sands of pesos)
1 Diameter (mm)
Thickness (mm)
In Bank
of the
Republic
Denomination
Fineness
Gross
weight
0.917 8. 485 120. 8405 7. 7807 119.9617
.900 25.0000 385. 8089 22.500 347. 2280
.900 12.5000 192. 9045 11.250 173.6140
.800 5.0000 77. 1618 4.000 61. 7294
« .910 8.000 123. 4589
8.250 5.0000 77.1618
8.250 3.5000 54.0132
».250 2.000 30.8647
èf II
f-8
22
36 2.5
/1,5.50
23 2.0 }.3, 946 604 \3,000
23 1.0 72 928 1,000
26 2.0 71 429 .500
23 1.5 20 780 800
2017 1.5
570
1.0 (•) 1 570
129 130
4. 109 3, 441 7,550
• Rare.
* The edge of the coin is stamped with the date of minting and the words "República Oriental del
Uruguay.”
s This coin has a serrated edge.
* Alloy: Aluminum 0.090.
8 Alloy: Copper 0.750.
• 400 pesos.
NOTE-ISSUING AUTHORITY
The Bank of the Republic of Uruguay was the only note-issuing
authority in Uruguay until September 26, 1935, when the currencyissue department, created by the gold revaluation act of August 14,
1935, was formally placed in charge of the Uruguayan currency and
of the currency reserves which the Bank of the Republic had held.
The issue department is an autonomous organization within the Bank
of the Republic and is directed by an honorary council consisting of
the president and directors of the Bank of the Republic, one repre
sentative each, of the Uruguayan private banks, the foreign banks
in Uruguay, and the stockraisers’ association, and two persons repre
senting commerce and industry.
210
HANDBOOK OF FOBEIGN CURRENCIES
Article 7 of the law of August 14,1935, provides that there shall be,
as formerly, a major issue and a minor issue of bank notes; the mini
mum value of the former being 10 pesos, and the maximum value of
the latter being 5 pesos. Notes of both issues arc declared to be
legal tender and to have the guaranty of the State. Article 12 pro
vides that the issue of minor notes shall not exceed the maximum
(20,000,000 pesos) authorized by the law of December 17, 1929.
A period of 6 months was fixed (art. 15) for the exchange of notes
issued by the Bank of the Republic, this period to begin with the date
on which the issue department places the new notes in circulation.
Upon the expiration of this period, the notes issued by the Bank of
the Republic cease to be legal tender, and they must be exchanged
for new notes during a period of 1 year.
RESERVE REQUIREMENTS
The first statement published by the issue department following
its establishment under the act of August 14, 1935, shows that on
September 30, 1935, its metallic reserves consisted of 37,000,000
pesos in gold, and 4,091,324 pesos in silver, a total of 41,091,324 pesos.
The statement also shows that the issue department at that date
had authority, under the act of August 14, 1935, to issue a maximum
of 121,297,170.19 pesos in notes; of which 100,000,000 pesos had
been delivered to the Bank of the Republic, while 21,297,170.19 pesos
were to be delivered to the bank. The maximum was calculated as
follows:
The equivalent of the reserve in gold and silver
Pes°>
revalued at the rate of 2.1932 pesos for 1_____ 90, 121, 491. 79
The equivalent of the paid-up capital of the Bank
of the Republic on September 30, 1935________ 31, 175, 678. 40
Total.......................................................... 121, 297, 170. 19
In a report dated October 28, 1935, H. Bartlett Wells, American
vice consul at Montevideo, made the following statement on the note
issue:
According to Article 10(a) of the law of August 14, 1935, the issue department
shall deliver to the bank notes equivalent to the paid-in capital of the bank,
under the guaranty of the liquid assets of the latter. For this reason the bank
is liable to the issue department for an amount equivalent to the value of its
paid-in capital, and of the notes transferred to it under this section of article 10.
The remainder of the 100,000,000 pesos denoted on the last page of the September
statement as “notes delivered to bank” is backed by the gold (37,000,000 pesos)
and silver (4,091,324 pesos), a total of 41,091,324 pesos, revalued at the rate of
2.1932 pesos to 1 under article 19 of the law (providing that metallic reserves shall
be revalued at the average of the official exchange rate during the 12 months
previous to the passage of the law), and transferred to the issue department by
the bank. This comes to 90,121,491.79 pesos, which, when added to the 31,175,678.40 pesos mentioned above as being issue backed by the bank’s assets,
comes to 121,297,170.19 pesos, or 21,297,170.19 pesos more than the 100,000,000
pesos of issue actually supplied to the bank. Since the bank may call on the
department of issue for these 21,297,170.19 pesos, they figure among the assets
of the bank.
It must not be supposed that the department actually supplied to the bank
100,000,000 pesos in new bills, leaving those already in circulation—71,517,423.80
pesos’ worth at the end of August—-suspended in the air without accounting.
These pesos in circulation are no longer liabilities of the bank, but of the issue
department, so they have dropped out of the bank’s liability column. They now
form part of the 100,000,000 pesos mentioned above.
Just as notes in circulation are not now, and were formerly, liabilities of the
bank, so notes in the hands of the bank were not formerly, and are nov, assets
HANDBOOK OF FOBEIGN CURRENCIES
211
of the bank. These appear under the item—Cash on hand—bills * * * 18,683,787.43 pesos and—Equalization fund—bills in custody * * * 8,093,813.07 pesos—among the bank’s assets for September. Adding these to the
71,517,423.80 pesos in circulation on August 30, the total is 98,295,024.30 pesos.
The remainder to make up 100,000,000 pesos—1,704,975.70 pesos—-represents
an actual increase in circulation over August. It appears, consequently, that
on September 30 there were notes to the value of 73,222,399.50 in the hands of
the public.
In addition to the forms of issue described above, the issue department may
issue up to 10,000,000 pesos of emision mayor (major issue) notes of 10 pesos
and up against rediscount paper for periods of 180 days or less, canceling the
notes upon redemption of the paper (article 14, law of Aug. 14, 1935). The
State assumes no responsibility for this issue, which has not yet been put into
practice.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
The importation of gold and silver into Uruguay is free, but expor
tation of both gold and silver is prohibited. The law of August 8,
1914, provides in article 10 “There is prohibited the exportation,
reembarkation, or transshipment of gold in coins or bullion, except
when expressly authorized by the executive power.” This provision
was extended continuously, until on December 17, 1923, a law made
the prohibition permanent until the passage of legislation to the
contrary. The power of the Government to make exceptions was
also continued.
The exportation of silver has been under the control of tho Bank
of the Republic by virtue of the law of May 29, 1931, and regulatory
decrees, which assigned to the bank tho control of foreign exchange
operations and of the exportation of capital. Recently, however,
on June 3, 1935, in consequence of tho arrest of a silver smuggler,
the Bank of the Republic issued an express regulation prohibiting
the exportation of silver in bullion or coin.
The clandestine exportation of silver coins is believed to have been
going on for some months. Its extent is not known, but tho 1-peso
coins have completely disappeared from circulation, the 50-ccntesimo
coins nearly so, and tho 20-centesimo coins have decreased con
siderably in number.
GOLD
On June 24, 1935, the gold reserve amounted to 46,568,704.29
pesos. With the gross weight of the Uruguayan monetary unit
1.697 grams and its fine weight 1.556149 grams (both fixed by the
law of June 23, 1862), the gold reserve amounted to 79,027 kilograms,
or about 2,540,000 fine ounces troy.
Upon the establishment of the Issue Department of the Bank of the
Republic on September 26, 1935, 37,000,000 pesos of gold were
transferred to that department, the balance of the gold being held
in the Banking Department. Details regarding the latter are not
obtainable, but it is known that a part of these holdings is included
in “cash on hand” and is earmarked for definite uses; at the end of
November 1935, 1,755,798 pesos were held for the Equalization Fund
and about 3,500,000 pesos for the Autonomous Amortization Board.
In addition, the Banking Department is reported to have held
gold abroad.
So far as could be learned, gold was not being purchased at a
premium by the Government or the Bank of the Republic of Uruguay,
nor is gold being hoarded to any appreciable extent.
212
HANDBOOK OF FOREIGN CURRENCIES
THE GOLD CLAUSE
The legal status of the gold clause in domestic contracts in Uruguay
has never been placed in question, so far as can be ascertained.
Although the currency has not been convertible since 1914, it is still
a common practice in domestic contracts to specify payment in
“pesos oro sellado” (minted gold pesos), and payment in goldbacked currency is considered as complying therewith.
SILVER
The weight of the fine silver in monetary use is estimated by the
Bank of the Republic as follows: In the hands of the public and in
banks, 32,157,117.5 grams; in the Bank of the Republic, 90,217,882.5
grams.
VENEZUELA
The monetary unit is the bolivar (abbr. b.), divided into 100
centimos. The bolivar has a par value of approximately $0.3268.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
Bank notes are not specifically declared to be legal tender, and
those of Maracaibo banks are not generally accepted in the eastern
sections of the country. The notes of the Banco de Venezuela, how
ever, are said to be accepted freely in all parts of the Republic. The
banks of emission are obligated to receive their own notes in pay
ments due them and also to exchange them for legal money on demand.
The national gold coins are legal tender in any amount. Silver
coins 0.900 fine are legal tender for payments up to 500 bolivares;
those 0.835 fine, for payments up to 50 bolivares; and nickel coins,
up to 10 bolivares.
The importation of foreign notes is prohibited, and they do not
circulate.
Checks on banks are used very little. In fact, several of the
Venezuelan banks do not carry checking accounts.
A Venezuelan bank furnished the following figures relative to
monetary stocks of gold, silver, and nickel coins, and bank notes as
of December 31, 1934:
Monetary Stocks of Gold, Silver, and Nickel Coins, and Bank Notes, Dec. 31, 1934
[In bolivares]
Item
In other In foreign In circula
In Banco de domestic
branch
Venezuela 1 banks
tion
banks
Total
94.317,668 26. 437.638 10.473,686 11.535,632 142. 764, 624
17.037, 784 12,358, 759 5.357,832 50,300,000 85.054,375
7.632, 220 10,070,990 14, 164,470 70, 205, 730 102,073,410
1The Banco de Venezuela is a semigovernmental institution, In that it is the depositary of Government
reserves of gold and other money.
213
HANDBOOK OF FOREIGN CURRENCIES
The coinage of an additional 20,000,000 bolivares of silver was
authorized by Executive decree of November 12, 1934, divided as
follows:
Number of
coins
Denomination
Value
(bolivares)
1,600,000
8,000,000
3.000.
000 6,000.000
5.000.
000 5,000.000
300.000
600,000
2,800,000
700.000
13.000,000
20.000,000
Total..............................................................................................................
Paper Currency of Venezuela1
Amount
outstand
ing on Juno
30, 1935,
by banks
(bolivares)
Dimensions *
Bank of issue and denomination
Banco de Venezuela:
53,695,000
Banco Venezolano do Credito:
)
Banco Caracas:
17,540,000
} 9,633,410
Banco Mercantil y Agricola:
]
> 12,000,000
Banco Comercial de Maracaibo:
Ì
> 4,000,000
Banco de Maracaibo:
]
[■ 5,000,000
102, 128,410
Total ...........-.............-...............................
>The notes are engraved and printed in the United States on American-made paper.
* The sizes mentioned here were reported in 1929. It was then stated that all new issues would have
the uniform size of 75 by 175 millimeters.
Coins of Venezuelai
Denomination
Metal of chief Fineness
value
Gold................
Gross weight
Gold or silver
content
Grams
Grains
Grains
Grains
*0.900 32. 2581
* .900 6.4516
*.900 3.2258
* .900 25.0000
* .835 10. 0000
*. 835 5. 0000
*.835 2.5000
*. 835 1.2500
*.250 5.0000
*.250 2.5000
497.806
99. 566
49.8805
385.800
154. 320
77. 160
38.580
19. 790
77. 160
38.580
29.0323
5. 8064
2. 9032
22. .5000
84.1750
. 3500
2.0875
1.0438
448. 0256
89. 598
44. 8022
347.22
128. 857
64. 4286
32.2143
16. 1071
i Data as to thickness of coins not available.
* Alloy is copper.
Diameter
(mm) »
35
2119
37
27
23
18
16
23
19
214
HANDBOOK OF FOREIGN CURRENCIES
NOTE-ISSUING AUTHORITY
The Government does not issue notes. Those in circulation are
issued by six banks, four in Caracas, and two in Miracaibo (see
above table). There are no other banks of issue.
The Banco do Venezuela may bo regarded in certain respects as a
Central Bank, though under the law (Ley de Bancos of July 19,
1926) it is subject to the same regulations as other domestic banks
of issue. Recent changes in the presidency of the Bank are said to
have been dictated by political expediency.
RESERVE REQUIREMENTS
According to article 15 of the monetary law of June 15, 1918, “the
coinage of silver cannot be ordered unless the same law orders double
the quantity of gold coin; however, if it happens at the time of coining
the silver that double the quantity of gold exists in the Treasury
reserve funds, the Federal Executive may order the coinage of such
amounts of silver as the National Congress may authorize.”
By article 26 of the banking law of July 19, 1926, limits of note
issuance and required reserves are as follows:
Banks of issue may be authorized to issue notes up to double their paid-in
capital. The total value of the notes issued must be represented by the stock of
legal currency in their vaults and by the sum of the values of their quick assets
within the country, at sight or within the term of 30 days; but in all events the
stock of coined gold in their vaults must represent at least the third part of the
value of the notes issued. This stock may be reduced proportionately to the
amount represented by notes that are not in circulation provided that the notes
are kept together with the stock of gold mentioned above. When the interests
of the Nation so require, the Federal Executive is empowered to fix a quota in
cash larger than that determined in this article as a guarantee of the issue; and
in this case a prudential lapse of time will be fixed so the banks may adapt them
selves to the new disposition.
All silver in the banks and in the Government Treasury is in the
form of coin.
RESTRICTIONS ON BULLION AND COIN MOVEMENTS
The monetary law provides as follows:
20. Foreign coins designated by the Federal Executive, whose respective
value is indicated in accordance with their pure gold content, shall circulate
legally in the country.
A r t . 23. The importation and circulation of foreign coins, other than gold is
prohibited. * * * (Coins for collections or exhibitions may be imported
under certain conditions.)
A r t . 24. Only the National Government may import Venezuelan silver and
nickel coins.
Art.
Under the existing form of government in Venezuela, a ministerial
resolution or even an oral order would be sufficient to prohibit expor
tation of gold from the country, and at the time when the bolivar
was depreciated in terms of gold-standard currencies (1931-34)
such an edict was in force, departing passengers being examined at
the ports to prevent gold from being smuggled out of the country.
By regulation entitled “circulación del Oro no Acunado” (Circula
tion of Uncoined Gold) provision was made for the reporting of all
gold mined in the country, subject to the administration of the
Ministry of Fomento. In article VI of this regulation it is stated
that “the holding, circulation, or traffic in gold mineral remains sub-
215
HANDBOOK OF FOREIGN CURRENCIES
ject to the vigilance, inspections, and verifications prescribed by
article 52 of the Organic Law of the National Treasury.”
Gold is mined to some extent in Venezuela (3,392 kilograms were
produced in 1934) and it is currently exported by producing compa
nies, chiefly to the United States and Great Britain.
GOLD
As of June 30, 1935, gold holdings of the various domestic and
foreign banks were as follows:
Millions of
bolívares
Banco de Venezuela________________________ ________ 124. 6
Banco Caracas__________ _____ ____________________
6. 8
Banco Venezolano de Credito________________________ 12. 2
Banco Mercantil y Agricola_______ ____ ___ ____ ____
7. 5
Banco de Maracaibo_________________________ _____ 1 1. 7
Banco Comercial de Maracaibo_________________ __ * 1. 5
National City Bank of New York______________ —
5. 0
Royal Bank of Canada_____________________________
4. 7
Netherlands Bank of the West Indies____________ _ _
.9
Anglo-South American Bank_________________________
.5
Total.............................................................................3 165. 4
■ As of June 30, 1933.
* As of Mar. 30, 1935.
1 Of this total, 60,500,000 bolívares represented reserves against notes.
As reported by the local branch of an American bank, gold reserves
of the various banks at the close of the fiscal year 1932-33 were as
follows:
Notes Issued and Gold Holdings of Commercial Banks in Venezuela
Name of bank
Date
June 30,1933
Mar. 31,1933
Banco Comercial de Maracaibo................. July
31,1933
June 24,1933
June 30,1933
Total....................................................
Note issues
outstanding
Bolivares
63.875.000
9,2.58,410
17.900.000
12.000,000
5,000.000
4,044,000
102,077,410
Gold reserve
against notes
Other gold
holdings
Bolivares
Bolivares
30,000,000.00 36.019,033. 63
4, 500,000.00 3, 334, 471. 25
9, 900,000.00 4,055,747. 60
4,000,000. 00 1, 409, 729.00
1,660, 704. 90
17.888. 00
210,341.00
1, 377, 335. 00
4. 100, 647.00
4. 021,804.00
499, 483. 12
1,238,547.00
51, 444,039.90 54, 907,691.60
Weights of the gold holdings listed in the table are not available,
but it may be assumed that practically all are gold coins 0.900 fine.
Gold is not being purchased at a premium by the Government or the
Banco de Venezuela, the Government having ample stocks of gold as
reserves for monetary purposes. Bank notes outstanding are about
15 percent less in value than the gold holdings of all the banks.
By arrangement made with the foreign petroleum companies and
the banks, in August 1934, the Government had purchased drafts
from the petroleum companies 1 1 an average rate of 3.07 bolivares
per dollar to a total of $16,845,003 up to February 28, 1935, tins
sum being applied to the acquisition of gold. This arrangement is
to be discontinued after July 1, 1935, when the banks will be required
until further notice to negotiate drafts of the petroleum companies.
216
HANDBOOK OF FOREIGN CURRENCIES
There is virtually no gold in circulation, and, as of December 31,
1934, the quantity of gold in the hands of private individuals and
firms was estimated at 11,535,632 bolivares. This sum may be
regarded as hoarded. The weight thereof is not available.
.
THE GOLD CLAUSE
As far as can be ascertained, the. gold clause is not customarily
embodied in domestic contracts.
Article 18 of the monetary law of June 15,1918 provides:
National gold coins constitute legal tender without any limit. Those of silver
and nickel may be tendered in the following proportions:
Silver coins of 0.900 fineness, up to the sum of bolivares 500.
Silver coins of 0.835 fineness, up to the sum of bolivares 50; nickel coins up to
the sum of bolivares 10.
The foregoing proportions shall apply to all payments, unless stipulation has
been made for payment in a specific currency.
SILVER
The weight of fine silver in monetary use can be estimated only
on the basis of the figures given in the table on coins of Venezuela.
YUGOSLAVIA
The monetary unit is the dinar (abbreviation d. or din.), divided
into 100 paras. The dinar has a par value of approximately $0.0298.
DESCRIPTION AND CIRCULATION OF CURRENCY
The currency is described in the accompanying tables.
The 10-dinar notes of the National Bank of Yugoslavia issued under
date of November 1, 1920, ceased to be legal tender on July 18, 1935,
as did also the outstanding 5-dinar notes. The November 20, 1920,
and December 1, 1929, issue of 10-dinar notes will cease to be legal
tender after May 4, 1936. There are no foreign notes in circulation,
but the importation of foreign notes is not prohibited.
Silver coins are legal tender witliin the following limits: 50-dinar
coins, up to 1,000 dinari; and 10-dinar and 20-dinar coins, up to 500
dinari.
The use of checks and paper bills is not widespread, but is develop
ing gradually.
Paper Currency of Yugoslavia
Denomination
Date of issue
1,000 dinari............................... ...............
Dec. 1, 1931..
Nov. 30, 1920
and Dec. 1,
1929.
Jan. 5, 1905
D o ..................................................
Total..................................................
Dimensions
Nov. 30, 1920.
Nov. 1, 1920.
Do....................................................... May 26, 1926
and Dec. 1,
1929.
Various datesTotal...............................................
Grand total.......................................I.........................
*The slight discrepancy in the summation is due to abbreviation of the items.
Amount
outstand
ing Dec.
31, 1934
(millions
of dinari)
2,487
1,446
33
3,966
389
10
14
4
1418
4.3S4
217
HANDBOOK OF FOREIGN CURRENCIES
Coins of Yugoslavia
Gross weight
Metal of
Denomination chief
value
50 dinari...........
20 dinari...........
10 dinari...........
2 dinari.............
50 paras............
25 paras.............
Silver...........
....... do...........
.......do........
Nickel.........
___ do...........
Aluminum..
Silver content
Amount
Diam minted
Fine
eter 1 (millions
ness
of
Grams Grains Grams Grains (mm) dinari)
*0.750
*.500
* .500
*.250
* .250
*.250
(*)
22.0
14.0
7.0
10.0
5.0
2.5
5.7
339.5139 16.5000 254. 6339
216.0530 7.0000 108.0265
108.0265 3.5000 54.0133
154. 3236
77. 1618
38. 5809
87.9644
36
31
25
27
23 |
18
24
550
250 |
200
200
1,200
Amount
out
standing
Dec. 31,
1934
(millions
of
dinari)
843
151
994
1Data on thickness not available.
* Alloy is copper.
* Coin made of aluminum-bronze.
NOTE-ISSUING AUTHORITY
The National Bank of the Kingdom of Yugoslavia has the sole
privilege of issuing notes, under conditions set forth in the controlling
law.
The issuance of notes by the National Bank is considered a public
service rendered by the bank in the name of the State. The bank is
made responsible for the regularity of this service by appropriate pro
visions of the law. Subject to provisions of the currency law, the
Government, through the Ministry of Finance, appears to have a
controlling voice in the affairs of the National Bank.
Money issued by the National Bank is legal tender, according to
article 2 of the currency law of the Kingdom of Yugoslavia, dated
May 11, 1931.
RESERVE REQUIREMENTS
The Currency Act of May 12, 1921, requires the National Bank to
maintain a reserve in gold and such foreign exchange as is legally
and freely convertible into gold for export. The amount of this
reserve shall be at least 35 percent of the aggregate amount of the
demand liabilities of the bank ; and at least 25 percent of the demand
liabilities must be covered by gold in vaults or earmarked abroad and
freely available for export. Silver is not included in the metallic
cover. The reserve on July 8, 1935, was as follows: Dinari
Gold at the National Bank___________________ 1, 259, 745, 579
Gold abroad__________ __________ _________ _ 90, 083, 699
Foreign notes_______________________________
211, 427
Ddvisen (drafts)____________________________
34, 904, 222
Total........................................ : _____ ____ 1,384,944,927
Premium of 28.5 percent_____________________ 394, 709, 304
1, 779, 654, 231
EMBARGOES AND RESTRICTIONS ON BULLION MOVEMENTS
Precious metals such as gold and silver may be used in Yugoslavia
exclusively for the general welfare. The use of such metals for indus
trial or other purposes may be permitted, but only as an exception
218
HANDBOOK OF FOREIGN CURRENCIES
and in conformity with provisions of the regulations governing the
traffic in drafts and currencies, as amended.
Gold and silver may be freely imported. The exportation of these
metals, however, is subject to provisions of the regulations governing
the traffic in drafts and currencies.
The right to purchase the entire production of precious metals
within the country is reserved, in the name of the State, to the
National Bank of the Kingdom of Yugoslavia. The National Bank
buys at the worl 1 market prices. Gold coins are purchased at the
gold parity plus 28.5 percent.
No information is available as regards the smuggling of precious
metals from the country.
GOLD
The gold reserve on July 8, 1935, is given above. No information
as regards the weight of this gold is available.
Gold coins, as stated above, are purchased by the National Bank
at 28.5 percent premium.
No information is available concerning the hoarding of gold within
the country.
THE GOLD CLAUSE
The gold clause is apparently not used in Yugoslav domestic
contracts.
SILVER
The weight of silver in monetary use in Yugoslavia is estimated at
339,000 kilograms.
APPENDIXES
A.
FOREIGN EXCHANGE RATES, 1930-35*
A U S T R A L IA ( p o u n d )
(Par prior to Jan. 31, 1934: $4.8666; pince then, $8.2397]
Month
1930
1931
$4.5860 $3.5150
1932
$2. 7993
July................................................................
1933
1934
1935
$3.3707 $4. 0095
2.6719 4. 0244
2. 7217 4.0078
2.7273 4.0586
2.K479 4. 1054
3.1307 4.0710
3. 2922 4.0224
3.6044 4.0170
3.5813 4.0362
3.7127 3.9650
3. 7147 3.9152
4.0975 3.9573
4.0750 3.9227
$3.8886
3. 8792
3.8637
3. 7856
3. 8352
3.8755
3.9128
3. 9331
3. 9452
3.9152
3.8961
3.9090
3.9128
A U S T R IA (s c h illin g )
(Par prior to Jan. 31, 1934: $0.1407; since then, $0.2382]
$0. 1409 $0.1402 $0. 1396 $0.1545 * $0. 1879 >$0.1883
. 1406
. 1407
. 1395
.1397 *.1791
1.1877
. 1406
.1405
. 1395
. 1399 *.1857
>. 1879
. 1407
. 1406
. 1396
. 1401 i . 1891
*. 1888
. 1408
. 1406
. 1395
. 1407 * . 1887 * .1879
. 1409
. 1405
. 1396
. 1456 * . 1894
*. 1877
. 1409
. 1396
.1405
. 1420 *.1890
*.1888
. 1404
.1398
. 1567 * . 1888 *. 1891
J u ly ............................................................... . 1411
.1412
. 1404
.1397
. 1548 *. 1900 *. 1^94
.1411
. 1404
.1396
. 1665 * .1902 *. 1885
. 1396
. 1410
. 1392
. 1677 *.1892
*. 1881
. 1395
. 1409
.1395
. 1804 * . 1880 *.1878
.1408
.1395
.1396
.1768 1.1877 ».1878
B E L G IU M (b e lg a )
[Par prior to Jan. 31, 1934: $0.1390; from Feb. 1, 1934, to Mar. 31, 1935, $0.2354; since then, $0.1695]
$0.1395 $0.1393 $0.1391 $0.1790 $0. 2329
. 1394
. 1394
. 1391
. 1386
. 2204
. 1393
. 1394
. 1394
. 1396
.2289
. 1394
.1393
.1394
. 1398
.2330
. 1396
.1390
. 1400
.2344
. 1453
.1395
.1391
.1402
.2341
. 1627
.1395
.1392
.1394
.1705
.2336
. 1395
. 1398
. 1387
. 1945
.2336
.1398
.1394
.2371
. 1387
. 1915
.1395
.1391
.1386
.2070
.2373
.1394
.1399
. 1389
.2072
.2346
.1394
.1391
.1387
.2232
.2332
.1396
.1390
.1385
.2173
.2339
Footnotes at end of table.
219
$0. 1842
.2332
.2333
.2276
. 1694
. 1695
. 1694
. 1691
. 1689
. 1686
. 1685
. 1689
.1686
220
HANDBOOK OF FOREIGN CURRENCIES
A. FOREIGN EXCHANGE RATES, 1930-35—Continued
B R I T I S H IN D IA ( r u p e e )
(Par prior to Jan. 31. 1934: $0.3650; since then, $0.6180]
Month
1930
1931
1932
1933
1934
Annual average................................. $0.3607 $0.3369 $0.2635 $0. 3182 $0.3788
January.........................................................
.3631
. 3593
.2.582
.2541
.3797
. 3594
February............................................ ......... . 3621
. 2603
. 2583
.3786
March........... ............................................ .3611
.2731
. 2579
.3608
.3833
.3612
. 3610
April------- -------------------------------------.2801
.2687
. 3876
May..............................................................
. 3606
.3614
. 2732
.2967
.3833
June.......................... ............................
.3600
. 3600
.2716
.3107
.3791
. 3599
July............................ .................. ............. .3606
. 2668
.3493
.3788
August..... ...................................... ..........
. 3604
. 3594
. 2616
. 3385
. 3806
September............................ .....................
.3599
.3391
. 2622
. 3501
. 3765
October............... .
... ___ ______
. 3602
. 2868
.3504
. 2568
.3714
November............... ............ ......... .....
.3597
.2799
.2478
.3834
.3749
December.................................................... . .3593
.2479
.3839
.2536
.3718
1935
$0.3696
. 3686
. 3680
. 3602
. 3<>44
. 3686
.3719
.3735
.3748
.3721
.3702
.3714
.3720
B U L G A R IA (lev)
(Par prior to Jan. 31, 1934: $0.0072; since then, $0.0122]
Annual average.................................. $0.0072 $0. 0072 $0.0072 $0.0100 >10.0129 >$0.0130
January.................... ....................................
.0072
.0072
.0072
.0072 *.0135 *.0120
February . ........... ... .......................... .0072
.0072
.0071
.0072 *. 0135 *.0127
March............. ... .................................
.0072
.0072
.0072
. 0072 *.0133
*.0129
.0072
.0072
. 0072
May..............................................................
.0072
.0072
.0078 * .0132 *.0128
.0072
June............. ... . . ..............................
.0072
.0072
. 0072
.0081 *. 0125 *.0131
July.. .......
.............. ................
.0072
.0072
.0072
.0100 *. 0126 *.0131
.0072
.0072
.0072
September.......................... .......................... .0072
.0072
.0072
. 0124 * .0128 *.0129
October............................................ ....... . .0072
.0071
.0072 *.0126 * .0124
*.0132
November................ ................................
.0072
.0071
.0072 * .0164 *.0121
*.0134
December.................................................
.0072
.0071
.0072 * .0134 * .0 1 2 1
*. 0133
C A N A D A ( d o lla r )
[Par prior to Jan. 31, 1934: $1.00; since then, $1.6931]
Annual average................................. $0.9984 $0.9633 $0.8809 $0.9196 $1.0101
January.....................................................
.9889
.9979
.8513
.8746
.9952
February______ __________________ _
. 9924
. 9998
. 8729
. 8351
.9917
March................
............................
.9976
. 9998
.8945
.
8352
.9979
April..............................................................
.8988
.9995
. 9995
.8472 1. 0021
M ay............................................................ .9984
. 9994
.8844
.
8759
1.0019
June......... ...............
.. ___
.9999
.9972
.8674
.8989 1. 0079
July................... ............ .................
. 9966
1.0007
.8707
.9447 1.0120
August.........................................................
1.0009
. 9969
.87.55
.9428
1. 0238
September.............
....... ........
1.0012
.9625
. 9026
.9647 1.0294
October......................................................
1.
0010
.8910
.9123
.
9760
1.
0212
November______________ _________ _
. 8899
.8730 1.0118 1.0247
December..................................................... 1.0010
.9990
.8271
.8660 1.0055 1.0131
$0.9949
1.0018
. 9989
.9906
. 9953
.9990
. 9991
. 9983
.9978
.9926
.98'>8
.9892
.9905
C H IN A ( y u a n )
[No fixed par]
Annual average................................. $0. 2992 $0.2244 $0. 2174 $0.2860 $0. 3409
January........................................................ .3555
.2291
.2370
. 1979
.3400
February..................................................... .3427
.2436
.20*4
.2011
.3431
March.............. ............. ..........................
. 3360
.2279
.
2192
.2073
.3462
April...................... .......................... ............ .3338
. 2249
.2232
. 2220
.3415
M ay_______________ _______________
.3182
.2190
.2171
.
2452
. 3246
June............................... .....................
.2638
.
2144
.2131
.2613
. 3305
July............................................................... .2648
.2242
.
2064
.2927
. 3391
August.........................................................
.2776
.
2135
.
2100
.2807
.3486
September......................... ................. ..
.2855
.
2192
.2104
.
2968
.3558
October-............................. ...................
. 2800
.2270
.2089
.
2985
.3459
November...........
.2780
.2472
. 2059
.3290
.3339
December
. 2564
.2373
. 1947
.3345
.3422
Footnotes at end of table.
$0.3657
.3499
.3654
.3830
.3879
.4110
.4040
.3868
. 3686
.3762
.3561
*.2965
.2945
HANDBOOK OF FOREIGN CURRENCIES
221
A. FOREIGN EXCHANGE RATES, 1930 35—Continued
C U B A (p e s o )
[Par: $1.0000]
Month
1930
1931
1932
1933
1934
Annual average............................ . $0.9995 $0. 9993 $0. 9994 $0. 9995 $0.9994
January_______ ____________________
.9992
. 9994
.9993
.9994
.9996
February..................................................
1.0002
.9996
. 9998
.9996
M arch..._____ ________ ___ _______ 1.0003
. 9990 1. 0002 1.0006 1. 0002
. 9995
. 9992
. 9992
.9998
.9993
.
9993
Apnl.....................—
-............
-.........
........
May................. .. . . .................
1.0000
. 9992
.9993
. 9992
. 9993
June____ ___
_______
. 9994
.9992
. 9992
. 9992
.9997
July....................
.. _________
. 9991
.<<991
. 9992
. 9992
.9994
August........................................................... . 9994
.9997
.9991
. 9995
.9992
September................... ............. ............
. 9997
. 9997
.9991
. 9996
.9992
October................ .
.............. ......
. 9994
. 9999
.9991
.9992
.9992
November__________________________ . 9996
. 9999
. 9992
. 9996
.9992
December....................................................
. 9993
.9995
.9993
.9996
.9992
1935
$0. 9992
.9992
.9992
.9992
.9992
.9992
.9992
.1992
.9992
. 9992
. 9992
.9992
.9992
C Z E C H O S L O V A K IA ( k o r u n a )
[Par prior to Jan. 31, 1934: $0.0296; from Feb. 1 to Feb. 17, 1934: $0.0502; since then, $0.0418)
Annual average............................... $0. 0296 $0. 0296 $0. 0296 $0. 0382 $0. 0424
January-........ . ........................................ . . 0296
.0296
. 0296
. 0296
.0470
February___________
. 0296
. 0296
. 0296
. 0296
. 0444
March____ ________ _
____ - ___ . 0296
. 0296
. 0296
. 0297
. 0415
April________ ________ ____________
. 0296
. 0296
. 0296
.0312
.0417
May............................................................... . 0296
. 0296)
. 0297
.0351
.0418
June___ _____________ _____________
. 0297
. 0296
. 0296
. 0365
.0416
July...............................................................
. 0297
. 0296
. 0296
. 0415
.0415
August........................................ ................. .0297
. 0296
. 0408
. 0296
. 0419
September_____ ____________________
. 0297
. 0296
. 0296
.0441
.0121
October- ___________ ___________ .0297
. 0296
. 0296
. 0442
. 0-120
November....... ........................................... .0297
. 0296
. 0296
. 0476
. 0418
December .............. ..............-................. . 0297
. 0296
.0296
.0465
.0418
$0.0416
.0-417
.0418
. 0120
.0418
.0-117
.0118
.0417
.0416
.0114
.0414
.0114
.0414
D E N M A R K (k ro n e )
[Par prior to Jan. 31, 1934: $0.2680; since then, $0.4537]
Annual average.................................. $0. 2677 $0. 2506 $0. 1883 $0. 1907 $0. 2250
January............... -.......................................
. 2675
. 2672
. 1888
. 1691
2285
February.-........ ....................... .................
. 2675
. 2675
. 1902
. 1526
. 2247
March________________ ____________
. 2677
. 2675
. 2001
.
1532
.
2274
Aoril.................................................. .........
. 2677
. 2675
. 2053
. 1595
. 2301
May......... ........
................ ........... . 2676
. 2677
. 2007
.
1752
.
2279
. 2676
June.........
----.............. ......
.2678
. 1992
. 2254
. 1844
July......................... -___ ____________
. 2679
. 2673
. 1920
.2077
. 2251
August..........................................................
. 2682
. 18.50
. 2673
.2012
.
2262
. -.
____
September___
. 2677
. 2526
. 1798
. 2083
. 2230
October
___
. 2676
. 2202
. 1764
. 2084
. 2206
November.___ _______ __ _________
.2674
.2067
. 1706
. 2300
.2227
December. _....... ........................................ . 2674
. 1859
. 1701
.2285
.2208
$0. 2188
.2184
. 2176
.2132
. 2159
. 2182
.2205
.2213
.2218
.2201
. 2191
.2198
.2200
F IN L A N D ( m a r k k a )
[Par prior to Jan. 31, 1934: $0.0252; since then, $0.0426]
Annual average................................. $0.0252 $0. 0239
January......................................................... .0252
.0252
.0252
.0252
March......................................................... - . 0252
. 0252
April---------------------------------------------- . 0252
. 0252
May______ _________________ ______
.0252
. 0252
June...............................
. 0252
.0252
July................................................................ . 0252
.0252
August----------- ------------------------- ------ . 0252
.0251
September_______________ ____ ____ .0252
. 0251
October -.............. .....................................
. 0252
. 0231
November........-........................................... . 0252
.0198
December.......... .......................................... .0252
.0169
60111”— 36— — 13
$0.0155
.0150
.0160
.0172
.0172
.0170
.0154
.0151
.0150
.0148
.0144
.0142
$0.0187 $0. 0223
.0146
.0224
.0152
.0225
.0158
.0227
.0175
. 0225
.0182
.0223
. 0205
.0223
.0200
.0224
.0207
.0221
.0207
. 0218
.0227
.0220
.0227
.0219
$0.0216
.0216
.0211
. 0213
. 0215
.0218
.0219
. 0219
.0217
. 0216
.0217
.0217
HANDBOOK OF FOREIGN CURRENCIES
222
A.
FOREIGN EXCHANGE RATES, 1930-35—Continued
F R A N C E (fra n c )
[Par prior to Jan. 31, 1934: $0.0392; since then, $0.0303]
Month
1930
1932
1931
$0.0392 $0. 0392 $0.0393
.0393
.0392
.0393
.0392
. 0392
.0394
.0391
.0391
.0393
.0392
.0391
.0394
.0392
.0391
.0395
.0392
.0392
.0394
. 0393
.0392
.0392
.0392
.0392
.0393
.0393
.0393
.0392
. 0392
. 0394
. 0393
.0392
.0392
. 0393
.0392
.0393
.0390
1933
1934
$0.0503 $0. 0657
. 0390
.0321
.0392
. 0040
.0394
.0658
.0410
.0002
.0061
.0459
.0480
. 0060
. 0540
. 0659
.0537
.0666
.0577
.0667
.0582
.0662
. 0:27
.0659
.0612
.0660
1935
$0.0660
.0058
.0659
.0662
.0660
.0659
.0661
.0662
.0663
.0659
.0659
.0659
.0660
G E R M A N Y (re ic h s m a rk )
[Par prior to Jan. 31, 1934: $0.2382; since then, $0.4033]
$0.23*5
.2388
.2187
.2386
.2387
.2386
.2385
July................................................................ .2387
.2389
.2382
.2381
.2383
.2384
$0. 2363
.2377
.2377
.2381
.2381
.2380
.2373
.2328
.2366
.2342
.2324
.2368
.2362
$0. 2375 $0. 3052 $0.3938
.2365
.2377
.3759
.2374
.2383
.3888
.2378
.2385
.3906
.2374
. 2439
. 3959
.2379
.2736
.3947
.3830
.2369
.2881
.2372
.3326
.3849
.2378
.3271
.3948
.2378
. 3543
.4028
.2377
.3543
.4045
.3824
.4021
.2375
.2379
.3732
.4019
$0. 4026
.4006
.4012
.4037
.4026
.4025
.4041
.4035
.4035
.4023
.4023
.4023
.4022
G R E E C E (d ra ch m a)
[Par prior to Jan. 31, 1934: $0.0130; since then, $0 0220]
$0. 0130 $0.0129
.0129
.0130
. 0130
.0129
. 0130
.0129
.0130
.0129
.0130
.0129
. 0130
.0130
. 0130
. 0129
.0130
.0129
.0130
.0129
.0129
.0129
.0130
.0129
.0129
.0129
$0. 0083
.0129
.0129
.0129
.0213
.0066
. 0064
.0064
.0063
.0001
.0060
.0057
.0054
$0. 0072 $0.0094
.0054
.0089
.0056
.0093
.0067
.005)4
.0059
.0095
.0066
.0095
. 0009
. 0094
.0079
.0095
.0096
.0077
.0084
.0096
.0084
.0095
.0091
.0094
.0089
.0094
$0.0094
.0093
. 0093
.0094
.0094
.0093
.0094
.0094
.0094
.0094
.0094
.0094
.0094
H O N G K O N G ( d o lla r )
[No fixed par]
Annual average.................................. $0.3385 $0. 2433 $0. 2346 $0. 2945
.2427
. 24S4
.2175
January.......................................................... .3995
. 3824
.2534
. 2207
February.......................................................
. 2267
.2274
.2453
.2469
March........................................................... .3722
.2372
.3719
.2433
.2377
April..............................................................
.2401
.2343
.2716
May.......................-...................................... .3577
.2382
.2334
.3114
.2914
June....................................-.........................
.2473
.2289
.3296
July............................................................... .3118
.3221
.2378
.2325
.3159
August................... .....................................
.2343
.3311
.2419
September..................................................... . 3220
. 2295
.2468
.3328
October.......................................................... .3192
.2241
.2601
.3669
November..................................................... .3145
.2487
.2135
.3715
December...................................................... .2800
$0.3872
.3768
.3810
.3868
.3816
.3623
.3649
.3762
.3861
. 3933
.4047
.4124
.4229
$0. 4822
.4317
. 4434
.4791
.5267
.5931
.5752
.5303
.5033
.5005
.4897
.3648
.3270
223
HANDBOOK OF FOREIGN CURRENCIES
A.
FOREIGN EXCHANGE RATES, 1930-35—Continued
H U N G A R Y (p e n g ô )
iPar prior to Jan. 31, 1934: $0.1749; since then, $0.2961]
Month
1930
1931
1932
1933
1934
1935
$0.1749 $0.1745 $0.1745 $0. 2236 » $0. 2957 » $0. 2960
* .2958
. 1749
.1748
.1745
. 1743 » .2804
.1744
.1744 ». 2912 *.2970
.1748
.1746
.1744 ».2961
*.2964
. 1744
.1744
. 1747
* .2949
. 1747
. 1744
.1743
. 1748 ».2977
* . 2944
. 1744
. 1744
. 1888 ».2976
. 1748
. 1748
.2124 » .2975
. 1747
*. 2951
. 1745
. 1746
.2451 » .2971
* .2968
. 1751
. 1744
July.................................................... .........
*.2970
.2424 » .2988
. 1753
.1745
.1745
. 2609 ». 3002 * .2962
. 1752
.1747
. 1745
*.2904
.1746
. 1745
.2635 » .2990
. 1751
*.2962
. 1747
. 1744
.2823 * .2971
. 1749
*.2962
.1749
.1746
.1743
.2769 *.2960
IT A B Y (lir a )
[Par prior to Jan. 31, 1934: $0.0526; since then, $0.0891]
Annual average.................................. $0.0524 $0.0521 $0.0513
. 0504
. 0524
January.......................................................... .0523
. 0523
. 0524
. 0518
February......................... .............................
.
0524
.
0524
.0518
March............................................................
. 0524
.0515
April.............................................................. .0524
. 0524
.0515
. 0524
May.............................................. ..............
.0512
. 0524
. 0523
.
0523
.0510
.
0524
July................................................................
.0511
. 0524
. 0523
. 0517
.0513
. 0524
September.....................................................
.0512
.0516
October.......................................................... . 0524
.0511
.0523
.0515
November................................................. .
.0524
.0511
.0511
December......................................................
$0. 0671 $0.0856 *$0.0825
. 0512
.0831
.0852
. 0858
.0847
.0512
. 0834
.0514
.08.58
. 0537
.0828
. 0866
. 0852
. 0823
. 0609
.0860
. 0826
0638
. 0858
.0823
.0737
. 0722
.0821
. 0866
.0814
.0781
.0868
.0812
. 0782
. 0861
.0843
. 0854
* .0810
».0808
.0822
.0854
J A P A N (y e n )
[Par prior to Jan. 31, 1934: $0.4985; since then, $0.8440]
$0.4939 $0.4885 $0. 2811 $0. 2565 $0. 2972
.2074
.4909
. 4944
.3599
.3011
.4941
. 3432
.2975
.4913
. 2079
.2126
.3001
.4933
.4937
.3216
.4936
.2209
. 3031
. 4937
.3281
. 4938
.2400
. 3023
. 4938
.3197
. 2576
. 4941
.4937
.3029
.2910
.2877
. 2984
4936
. 4936
.2745
July................................................................. .. 4939
. 4935
.2449
. 2690
. 2999
. 4934
. 2725
.4941
.2363
.2977
.2306
.2868
. 4959
. 4925
.2777
.2062
.3036
.2906
. 4960
.4930
.4346
.3074
.2882
.4962
.2073
$0.2871
.2847
. 2839
. 2798
. 2837
. 2873
.2899
.2915
. 2932
.2894
.2867
.2868
.2874
M E X IC O (p e s o )
[Par prior to Jan. 31, 1934: $0.4985; since then, $0.8440]
Annual average.................................. $0.4713 $0.3549 $0.3185 $0.2810
.4744
.4636
. 3933
.3016
.2842
. 4620
.3787
February...................................................... .4748
.4749
.2832
. 4735
.3368
.4754
.4748
.3337
.2702
.2887
. 4754
.4802
.3025
.4741
.2767
. 4903
.2690
.4713
. 4901
.2800
.2773
July................................................................
.2811
. 4734 «. 3003
.2857
.3341
.2992
.4737
.2815
.2817
.4717
. 3659
.3111
.3222
.2780
.4610
.3915
.2774
.4555
.3199
.3901
December.....................................................
Footnotes at end of table.
$0.2774
.2774
.2773
.2772
.2772
.2774
.2775
. 2775
.2773
.2775
.2775
.2776
.2776
$0. 2778
. 2775
. 2775
. 2775
.2794
.2779
.2778
.2777
.2775
.2776
.2776
.2777
.2777
224
HANDBOOK OF FOREIGN CURRENCIES
A. FOREIGN EXCHANGE RATES, 1930-35—Continued
N E T H E R L A N D S (flo rin )
[Par prior to Jan. 31, 1934: $0.4020; since then, $0.6806]
1930
Month
1931
1932
1933
1934
$0.4023 $0.4023 $0. 4029 $0.5172 $0.6738
. 4023
. 4023
.4018
.4018
.6362
.4014
.4010
. 4035
.4027
. 6604
.4011
.4009
. 4028
. 4036
. 6730
.4014
.4020
.4049
.4195
.6785
.4023
. 4018
. 4055
. 4695
.6791
.4020
.4024
. 4044
.4901
.6781
. 4024
.4028
.4027
July...............................................................
.5618
.6771
. 4029
.4032
. 4024
.5538
.6838
.4029
. 4027
.4016
.5988
. 6857
.4043
. 4030
. 4022
.5995
.6809
. 4024
.4019
. 4018
.6456
.6760
.4027
.4023
.4017
.6285
.6764
1935
$0.6771
. 6746
.6756
.6795
.6746
.6762
.6787
.6799
.6778
.6756
.6774
.6780
.6777
N E W Z E A L A N D (p o u n d )
[Par prior to Jan. 31, 1934: $4.8666; since then, $8.2397]
$4.6822
July................................................................
$4.1529 $3. 2019 $3.4000
2.9213
2. 7287
2. 7345
2.8548
3.1386
3.3009
3. 7019
3. 5902
3.7217
3.7240
4.1104
4.0872
* $4.0246 *$3.9126
* 4.0347 » 3.9025
»4.0181 *3.8869
*4.0684 *3.8091
*4.1163 *3.8585
*4.0828 *3. 8990
» 4.0339 * 3.9354
*4.0281 *3.9565
>4.0509 *3.9686
* 3.9877 * 3.9369
* 3.9367 *3.9186
*3.9807 *3.9374
*3.9463 *3.9432
N O R W A Y (k ro n e )
[Par prior to Jan. 31, 1934: $0.2680; since then, $0.4537]
Annual average.................................. $0.2676 $0. 2505
January................................. ....................... .2673
.2673
February........................................................ . 2072
. 2675
March...........................................................- .2676
. 2675
.2677
April................................................... .........
. 2675
.2676
M ay..............................................................
.2678
June................................................. .............. .2676
. 2678
.2679
. 2673
July................................................................
August............................................ ............. . 2681
.2673
September.......................................-............ . 2676
.2540
October......................................................... .2675
. 2207
.2674
November.....................................................
. 2052
December......................................................
.2674
.1848
$0. 1800 $0.2143 $0. 2532
.1870
.1727
.2537
.1877
.1753
.2528
. I960
. 1759
. 2558
. 1908
. 1832
.2588
. 1848
.2002
.2565
.1806
.2088
. 2536
.1764
.2336
.2532
. 1741
. 2265
.
2545
.1745
. 2344
.2509
. 1718
.2345
.2483
. 1673
.2587
.2507
. 1689
.2571
.2485
$0.2463
. 24.58
. 2449
.2403
.2430
.2456
.2479
.2491
. 2495
.2477
. 2466
.2474
.2476
P O L A N D (z lo ty )
[Par prior to Jan. 31, 1934: $0.1122; since then, $0.1899]
Annual average................................_ $0.1121 $0.1120 $0.1118 $0. 1441 $0.1885
January....... ......... .....................................
. 1120
. 1121
.1119
.1119
. 1793
February.................-......................... ........ - . 1119
. 1120
. 1119
. 1119
. 1860
March..........................................................
.1120
1119
. 1118
. 1118
.1890
April............................................................. . 1120
.1119
.1118
. 1138
.1896
IVfay....................-.........................................
. 1120
.1120
. 1118
. 1309
. 1895
June................................
. 1120
.1120
.1118
. 1382
.
1889
July............................... ............. ..................
. 1121
.1120
. 1119
. 1562
.1889
August.......................................................
.1121
.1120
. 1118
. 1543
. 1908
September....................... - ----- -----. 1121
. 1120
. 1118
. 1670
. 1914
October........................ ............................. 1121
. 1120
.1117
. 1671
. 1901
November............._............... ...................
. 1122
.1119
.1118
. 1806
.
1890
December........................ .................. .......... .1121
.1119
.1118
.1770
.1889
Footnotes at end of table.
$0.1888
.1885
. 1887
. 1896
. 1886
. 1884
. 1891
. 1896
.1896
.1885
. 1884
.1882
.1885
225
HANDBOOK OF FOREIGN CURRENCIES
A. FOREIGN EXCHANGE RATES, 1930-35—Continued
P O R T U G A L (e s c u d o )
[Par prior to Jan. 31, 1934: $0.0442; since then, $0.074S]
Month
1930
1931
1932
1933
Annual average.................................. $0 0449 $0. 0124 $0.0320 $0.0392
January......................................................... .0150
.0449
.0316
.0304
February___ ______________________ _ .0450
.0119
.0318
.0310
March..................... ...................................... .0149
. 044S
.0328
.0314
April....................... ................. .............
. 0450
. 0448
. 0338
. 0321
May.................................................. ............ . 0450
. 0419
. 0333
. 0358
June..................... .
________
.0450
. 0442
. 0333
. 0377
July......................... .................................... .0449
. 0142
. 0322
. 0125
August....................................................... . .0150
. 0442
.0316
.0115
September...................................................
.0149
. 0442
.0315
.0417
October........................................................
. 0449
.0393
. 0309
.0153
November______ _____ _____________
. 0304
. 0448
. 0303
. 0486
December...................................................... .0148
. 0323
.0302
.0469
1934
1935
$0.0461
.0465
. 0463
.0167
.0171
. 0467
. 0463
.0461
. 0163
. 0456
.0450
.0154
.0450
$0. 9146
.0445
.0443
.0434
. 0439
.0444
. 0419
.0451
. 0452
.0449
.0447
. 0448
. 0449
$0.0100
. 0096
. 0099
.0100
.0101
.0100
. 0100
. 0100
.0101
. 0101
.0101
.0100
.0100
$0.0093
.0100
.0096
.0101
.0101
.0101
.0101
.0100
.0094
.0081
. 0080
.0079
.0079
$0. 1072 $0. 1362
.0818
. 1300
. 0824
. 1330
. 0844
. 1362
.0888
. 1370
. 0999
. 1371
. 1036
. 1368
. 1165
. 1367
.1146
. 13.80
. 1241
. 1383
. 1243
. 1373
. 1311
. 1365
. 1279
. 1367
$0. 1368
. 1364
. 1366
. 1372
. 1367
. 1365
. 1370
. 1373
. 1373
. 1366
. 1365
. 1365
. 1367
R U M A N IA (le u )
[Par prior to Jan. 31, 1934: $0.0000; since then, $0.0101)
Annual average ..................... .......... $0.0060
January.................... ...............................
.0060
February.................................................... .0060
March............................................................ .0060
April.............................................................
. 0060
May.........................-.................... ..............
. 0060
. 0059
June_______ __________________ ____
July...............................................................
.0060
August_______ _________ __________
.0000
September..................................................
.0060
October________ __________ _____
. 0059
November............................ ......................
. 0059
December............... .....................................
. 0059
$0.0059
. 0059
. 0059
. 0059
. 0059
. 0059
. 0059
. 0059
. 0059
. 0059
. 0060
. 0060
.0000
$0.0060
.0060
. 0060
. 0060
. 0060
.0000
. 0060
. 0060
. 0060
.0060
. 0060
. 0060
.0060
$0. 0078
. 0060
. 0000
. 0060
.0061
. 0070
. 0071
. 0088
. 0084
.0089
.0091
. 0098
.0095
S P A IN ( p e s e ta )
[Par prior to Jan. 31, 1934: $0.1930; since then, $0.3267]
Annual average................................. $0.1167 $0. 0955 $0. 0804
January................................................... .
. 1310
. 1040
.0839
February______ ______ _______ ______ . 1270
. 1019
.0777
March............................................................ . 1231
. 1073
.0760
April.............................................................
. 1248
. 1017
.0769
May..............................................................
. 1223
. 1000
.0812
June___________ ___ . .. __ ____
. 1175
.0967
. 0825
July............................................................... . 1152
.0931
. 0805
. 1088
August________ _________ __________
.0S80
. 0806
September----- --------------------- -.............
. 1073
.0898
.0810
October............... ...... .................... .............
. 1034
. 0896
.0819
November_________________________- . 1130
.0861
. 0817
December..................... ..............................
. 1075
.0840
.0815
S T R A IT S S E T T L E M E N T S ( d o lla r )
[Par prior to Jan. 31, 1934: $0.5678; since then, $0.9613)
Annual average................................. $0.5596 $0. 5245
January................-....................................... .5603
. 5593
February......................................... ...........
.5600
. 5600
March.........................................................
.5590
. 5009
.5587
.5605
April.......... ------------ ----------------------. 5589
. 5603
June..............................................................
.5591
.5604
July........................... ...................................
.5594
. 5602
. 5595
August..........................................................
. 5600
September__________________________ . 5603
. 5356
October....... ................................................. .5617
.4513
November..................................................... .5595
.4314
December...................... ............................... .5593
.3903
$0. 4040 $0. 4923
. 3969
.3899
.3977
. 3958
. 3961
.4133
.4274
.4124
.4106
.4796
. 5405
.4097
.4010
. 5236
. 4025
.5429
. 3944
. 5457
3800
. 6006
.8801
.5970
$0. 5901
.5892
.5879
. 5960
. 6035
.5917
. 5906
. .5935
. 5852
. 5792
. 5845
.5797
$0.5717
. 5724
. 5701
. 5563
. 6633
.5738
. 5755
.5783
.5762
. 5714
. 5761
. 5761
226
HANDBOOK OF FOREIGN CURRENCIES
A. FOREIGN EXCHANGE RATES, 1930-35—Continued
S W E D E N (k ro n a )
[Par prior to Jan. 31, 1934: $0.2680; since then, $0.4537]
Month
1930
1931
1932
1933
1934
$0.2685 $0. 2525 $0.1847 $0. 2203 $0.2598
.2685
.2670
. 1919
.1830
. 2604
.2683
.2677
. 1929
. 1827
.2596
. 2686
.2626
.2678
. 1985
. 1819
. 1909
. 2650
.2688
.2678
.1881
.2681
.2683
. 1872
.2024
.2632
. 2685
. 2680
.1870
.2128
.2602
. 2688
. 2676
. 1822
.2398
.2599
July...................... .........................................
.2689
. 1785
.2675
.2323
.2612
.2609
.2405
. 2687
. 1781
.2575
.2685
.2311
. 1753
.2548
.2407
.2683
.2074
. 1743
.2655
.2572
.2683
.1871
.1791
.2639
.2550
1935
$0. 2527
.2523
.2513
.2463
.2493
.2520
. 2544
.2556
.2562
.2512
. 2530
.2539
.2541
S W IT Z E R L A N D ( f r a n c )
[Par prior to Jan. 31, 1934: $0.1930; since then, $0.3267]
Annual average................................. $0.1938 $0. 1940 $0.1940 $0.2484 $0. 3237
. 1936
January.........................................................
. 1951
.1928
. 1935
.3064
February-..................................................... . 1929
.1929
. 1950
.1937
.3174
March............................................................ . 1935
. 1924
. 1934
. 1937
. 3229
. 1944
. 1926
April.............................................................. . 1938
.2013
. 3246
. 1936
. 1928
. 1956
.2254
May......... .....................................................
. 3253
. 1937
.1951
.2357
June............................................................. .
. 1940
.3250
. 1943
.1943
.1947
.2696
.3258
J u ly _____________ ______ __________
August........................................................... . 1944
. 1949
. 1945
.2653
.3295
Septem ber....... .........................................
. 1941
. 1951
. 1930
.2873
. 3302
Octolier......................................................... . 1942
. I960
.1930
. 3277
.2879
November..................................................... . 1939
. 1916
. 1925
.3102
.3217
December...................................................... .1938
.1948
.1924
.3025
.3241
$0.3250
.3231
. 3235
.3253
. 3236
. 3232
. 3268
.3275
.3272
. 3250
. 3253
.3244
. 3243
U N IO N O F S O U T H A F R IC A ( p o u n d )
[Par prior to Jan. 31, 1934: $4.8666; since then, $8.2397]
$4.8379
July................................................................
$4. 8076 $4. 7656 $4.1498
3. 4063
3.3890
3.3988
3. 5374
3.8874
4. 0876
4.5933
4.4439
4.4857
4.6123
5. 0929
5.0576
*$4.9829 »$4.8*64
* 4.9909 »4.8399
*4. 9742 »4. 8230
*5.0342 >4. 723,1
*5.0943 *4. 7827
» 5. 0480 *4.8334
*4.9910 *4.8806
34. 9844 *4. 9061
* 5. 0127 *4.8874
*4. 9423 *4.8842
»4.8843 *4.8563
»4. 9342 *4. 8708
»4. 8924 *4.8744
U N IT E D K IN G D O M ( p o u n d )
[Par prior to Jan 31, 1934: $4.8666; since then, $8.2397]
Annual average................................. $4.8621 $4.5350 $3.5061 $4.2368 $5.0393
January......................................................... 4.8688 4.8547 3.4312 3.3614 5. 0493
February...................................................... 4. 8618 4. 8584
4563 3. 4221 5.0326
March........................................................... 4.8631 4.8.583 3.3. 6393
3.4328
0939
April............................................................. 4.8631 4. 8599 3. 7500 3. 5793 5.5.1534
May............................. .................. ............. 4. 8597 4.8640 3.6751 3.9324 5.1063
June___________________ _________
4.8587 4.8649 3. 6466
5. 0484
July........................................... .................... 4. 8657 4. 8561 3.5496 4.1356
5. 0407
August.......................................................... 4. 8707 4.8577 3. 4757 4.6499
4.5027 5.0651
September.................................................. 4.8611 4.5313 3. 4711 4.6647 4.9941
October ....................... ...............................
3.8893 3.3962 4.6683 4. 9408
November................................................... 4.8590
4.8564 3.7199 3. 2753 5.1497 4.9890
December...................................................... 4.8566 3.3737
3. 2797 5.1159 4. 9458
Footnotes at end of table.
$4.9018
4.8925
4.8735
4. 7762
4.8368
4. 8878
4.9349
4.9577
4.9699
4.9307
4.9078
4. 9250
4.9288
227
HANDBOOK OF FOREIGN CURRENCIES
A.
FOREIGN EXCHANGE RATES, 1930-35—Continued
Y U G O S L A V IA ( d in a r )
[Par prior to Jan. 31, 1934: $0.0176; since then, $0.0298]
Month
1930
1931
1932
$0.0177 $0.0177 $0.0164
.0177
.0177
.0178
.0176
.0176
.0178
.0176
.0176
.0178
.0177
.0176
.0177
.0177
.0176
.0177
.0177
.0174
.0177
.0177
.0177
.0167
July................................................................
.0177
.0169
.0177
.0177
.0177
.0159
.0141
.0177
.0177
.0135
.0177
.0179
.0134
.0177
.0178
1933
1934
$0.0176 $0.0227
.0136
.0218
.0136
. 0225
.0137
. 0226
.0142
.0227
.0161
.0227
.0167
.0227
.0190
. 0228
.0189
.0231
.0203
.0232
.0204
.0230
.0220
.0228
.0216
.0228
1935
$0.0228
.0227
.0227
.0229
.0228
.0227
.0229
.0230
.0230
.0228
.0228
.0229
.0229
S IL V E R ( lin e o u n c e tr o y )
[Official price for spot silver in New York, as issued by Handy & Harman]
$0. 3815 $0. 2870 $0.2789 $0.3473 $0.4797
.4500
.2942
.2978
. 2540
.4419
.4319
.2677
.3014
.2607
.4523
.4163
.2981
.4588
.2919
.2793
.4243
.2828
.2830
.3073
.4518
.4074
.2765
.2776
.3407
.4423
.3460
.2725
.2747
. 3566
.4517
. 2826
. 2670
.3435
. 3763
.4631
.3519
.2752
.2799
. 3607
.4899
.3632
.4948
.2818
.2787
. 3844
.3585
.3819
.2954
.2720
.6238
.3222
.2670
. 3591
.4297
.5426
.3012
.3264
.2501
.4355
.5439
$0. 6427
. 5442
.5460
. 5905
.6779
. 7436
.7194
.6822
.6637
.6538
.6538
.6538
.5842
G O L D (lin o o u n c e tr o y ) »
July
..........................................................
$20. 67
20. 67
20. 67
20.67
20. 67
20 67
20. 67
20. 67
20 67
20.67
20.67
20.67
20.67
$20. 67
20. 67
20. 67
20.67
20. 67
20.67
20.67
20.67
20.67
20.67
20.67
20. 67
20.67
$20.67
20.67
20.6
20. 67
20.67
20.67
20. 67
20.67
20. 67
20. 67
20.67
20. 67
20.67
$28. 57
20. 67
20.67
20. 67
21.65
24.23
25.34
28. 80
28.36
30.58
30.82
33. 34
34.03
$34.94
34. 29
35.00
35.00
35.00
35.00
35 00
35.00
35.00
35. 00
35. CO
35. 00
35.00
$35. 00
35.00
35.00
35. 00
35.00
35.00
35.00
35.00
35.00
35.00
35.00
35.00
35.00
t Rased on Federal Reserve Board monthly averages of daily (noon) buying rates in New York City
for cable transfers payable in foreign currencies,
i Nominal.
3 On Nov. 3, 1935, the yuan was definitely placed on a managed currency basis and tied to sterling at a
given rate.
* Beginning with August 1931, quotations are for silver peso.
* Previous to April 1933, gold was quoted at $20.67 per fine ounce troy, as established by law of Mar. 14,
1900; from Apr. 1 to Sept. 7, 1933. inclusive, the price was calculated on the basis of the value of the French
franc n New York City. Sept. 8 to Oct. 24,1933, inclusive The price as announced by the U. S. Treasury.
Oct. 25, 1933, to Jan. 31, 1934, inclusive: The price as fixed by the Reconstruction Finance Corporation.
Since Jan. 31, 1934, the price of $35 per ounce has been based upon the President's proclamation of Jan. 31,
1934.
228
HANDBOOK OF FOREIGN CURRENCIES
B. AVERAGE QUOTATIONS IN BERLIN FOR BLOCKED REICHSMARKS
[Percent discount from free reichsmarks] i
Credit
Security
Registered blocked
blocked
reichsmarks reichsmarks
reichsmarks
Year and month
1934
July................. ........................... .......................... ..............-.............
1935
July...... ................ .................................................................... ...........
1936
February.................................................................................. .............
18.00
23.50
27. 50
36. 00
34.00
35. 25
34. 75
37. 50
39. 75
48. 25
46. 25
39. 50
35.02
17. 75
28. 50
32.00
45. 50
48. 50
52. 00
50. 50
59. 75
58. 75
58. 25
58. 25
52.75
46.88
38. 43
35. 33
39. 35
42. 78
46. 79
45. 32
42. 98
42. 10
49. 01
51. 69
49. 00
47.03
44.15
49. 64
52. 49
56. 70
61. 74
67. 36
67. 46
66. 47
68. 42
71. 78
69. 97
67. 69
64. 69
63 70
47. 21
44. 92
63. 43
62. 45
38.50
42.00
44.50
54. 75
57.00
65.50
63.50
64.00
65. 75
68.00
67. 75
62. 00
57. 77
67 2“
72.07
76. 56
74. 10
80.09
78. 69
76. 79
72.65
75.84
74.90
1 One free reichsmark at par equals $0.4033 United States currency. At a discount of 35.02 percent
(average rate for 1934) 1 registered reichsmark had a value of $0.2621.
* Average of 12 monthly averages.
C. LATIN AMERICA—AVERAGE OFFICIAL AND FREE-MARKET RATES
OF EXCHANGE, BY MONTHS, 1934 AND 1935
[In Latin-American countries where there is exchange control it is important to have not only the official
rate but the free-market rates of exchange for the given currencies, since, in most instances, the hulk of
import transactions are settled at the free-market rate (export draft rate, controlled free rate, curb rate,
etc.)]
Argentina
[Paper pesos to dollar]
Month
January...
February .
March.......
April____
May..........
June..........
July..........
August__
September
October...
November.
December.
Average
1934
Official
3.25
3.31
3. 36
3. 32
3. 42
3. 44
3. 46
3.41
3. 43
3. 45
3. 42
3. 45
3.39
1935
Free
3.99
3. 89
3.95
4.00
4. 29
4. 10
4.06
3. 70
3. 74
3.83
3. 94
4.00
3.96
Official
3. 47
3. 47
3.54
3.50
3. 47
3.44
3. 43
3. 42
3. 45
3.47
3. 45
3.45
3. 46
Free
3.98
3.90
3.96
3.91
3.88
3. 79
3. 76
3. 73
3. 70
3.68
3.68
3. 67
3.80
229
HANDBOOK OF FOREIGN CURRENCIES
C. LATIN AMERICA—AVERAGE OFFICIAL AND FREE MARKET RATES
OF EXCHANGE, BY MONTHS, 1934 AND 1935—Conlinued
Bolivia
•*
[B o liv ia n o s to d o llar]
O fficial
C u rb 1
4. 20
4.25
4. 17
4. 12
4. 11
4. 15
4. 14
4. 16
4. 19
4. 25
4. 20
4. 23
4. 18
8.44
9. 73
9. 96
10.28
10. 63
10. 81
10. 84
11.00
11.43
14. 18
15.60
F re e
m a rk e t
(J a n .
2-24)
Im p o r
te rs ’ ex
change
(J a n .
2-24)
Export
ra te
24.35
21.00
Y e a r a n d m o n th
1934
J a n u a r y ............
F e b r u a r y ......... .
M a rc h .................
A p ril...................
M a y .....................
J u n e ....................
J u l y .....................
A u g u s t............
S e p te m b e r-----O c to b e r............
N o v e m b e r-----D e c e m b e r____
A v erag e
Y e a r a n d m o n th
Jan u ary —
F e b r u a ry .
M a r c h ____
A p ril............
M a y ............
J u n e ............
J u ly ..............
A u g u s t—
S e p te m b e r
O c to b e r.
N ovem ber
D e c e m b e r.
A v e ra g e
1985
O fficial
4.31
4.31
4. 38
4.34
4. 30
4. 25
4.23
4.21
4. 22
4. 22
4. 10
4. 15
4.26
24. 35
F re e
Im p o rte rs ’
m a rk e t2 exchange 2
16. 70
20. 63
18. 67
11.17
15.84
18.00
16 92
O p e n m a rk e t
rr e n c y C h e c k s
( F e b .- C u(legal)
(illegal)
D ee.)*
(A p r .(A p r.D e e .)
D ee.)
17.02
17.30
17. 20
17.02
16. 75
16. 65
16.56
16.54
16.56
16.42
16. 40
16. 77
21.00
22.66
20.39
17. 73
17. 13
17. 12
17.29
17. 87
17.80
16.70
18.29
20.95
20. 35
17. 73
17. 13
17. 12
17.29
17. 87
17.80
16. 70
18. 10
» J a n . 2 to N o v . 15.
* N o v . 16 to D ec. 31.
* E x p o rt r a te e sta b lis h e d o n J a n . 25. O n ly 2 q u o ta tio n s o f 17 b o liv ia n o s d u rin g re m a in d e r of m o n th .
Brazil
[M ilre is to d o llar]
1934
1935
M o n th
O fficial
J u ly
................................................................................
1Jan. 2 to M a y 23.
11.859
11.849
11.774
11.651
11.756
11.890
11.900
11.850
11.936
11.711
11.420
11.825
11.785
C u rb 1
15.217
14.910
15. 142
14. 983
15.663
15.183
F re e 2
O fficial
18.383
16.260
15. 770
14. 958
14. 255
13. 701
14. 163
15.000
15. 311
* M a y 24 to Dec. 31.
11.846
11.824
11.784
11.834
11.844
11.794
11.780
11. 769
11.835
11.852
11.846
11.821
11.819
F re e
15. 286
15. 079
16. 137
16. 681
18. 166
18. 374
18. 452
18.661
18.230
17. 516
18.027
18. 146
17. 396
230
HANDBOOK OF FOREIGN CURRENCIES
C. LATIN AMERICA—AVERAGE OFFICIAL AND FREE MARKET RATES
OF EXCHANGE, BY MONTHS, 1934 AND 1935—Continued
Chile
(P eso s to d o llar]
1934
M o n th
J u lv ....................- .............................................................
O fficial
E x p o rt
d ra ft *
10. 17
9. 78
9. 59
9. 53
9. «0
9. 60
9.60
9. 51
9.49
9. 55
9. 61
9.60
9.64
25.91
25.34
24. 78
24. 42
25.31
26.19
25. 37
25.17
25.04
24. 56
24.78
23.91
25.07
1935
O fficial
E x p o rt
d ra f t
25.93
25.71
25. 47
24.28
25.47
25.86
25.97
25. 29
24.47
23. 99
24.56
23. 82
19.37
19.35
19.24
19. 32
19.35
19. 29
19.25
19. 24
19. 34
19.35
19. 39
19. 42
25.07
19.33
23.88
24.09
24.08
24.08
24.03
24.10
24. 17
24. 10
24. 14
24. 77
25.33
25. 70
24.37
C u rb
C u rb
23. 49
24.09
24.77
25. 06
26.09
26. 40
26. 44
25. 72
25.34
25.00
25. 43
26.26
25.34
Colombia
[P eso s to d o llar]
1934
1935
M o n th
O fficial
J u l y ....................................................................................................................................
S e p te m b e r................. ........... ................ ................................................ ..................
N o v e m b e r__________ ______________ ______________ _____________ _____
D e c e m b e r.......................................................................................................................
A v e ra g e ................................................................................................ .............
C u rb
1.49
1.43
1.48
1.68
1.63
1.73
1.78
1.81
1. 73
1.65
1.54
1.55
1.63
O fficial
1.65
1.57
1. 56
1.78
1.69
1. 73
1.77
1.78
1. 76
1. 70
1.62
1.67
1.69
1.57
1. 70
1.84
1.81
1.82
1. 84
1.89
1.88
1. 79
1. 75
1.77
1. 76
1.79
C u rb
1.70
1. 75
1.86
1.83
1.85
1.88
1.92
1.92
1.84
1 83
1.85
1.87
1.84
Costa Rica
[C o lo n es to d o llar]
1934
M o n th
F e b r u a r y .........................................................................
J u l y .....................................................................................
■ F e b . 1-28.
• F e b . 27-28.
O fficial
4.30
4.26
4. 25
4. 25
4. 25
4.25
4. 25
4. 25
4.25
4. 25
4.25
4. 25
4. 25
1935
C u rb
4.56
4.54
4. 55
4.44
4.40
4.51
4.75
4. 78
4. 77
4. 78
4. 79
4.93
4.65
O fficial
4. 25
» 4.25
C o n tro lle d
b a n k ra te
>4.64
5 01
5.30
6.30
6.31
6. 59
6. 69
6 81
6.83
6.11
C u rb
5 10
5.08
6 31
6.87
6.20
231
HANDBOOK OF FOREIGN CURRENCIES
C. LATIN AMERICA—AVERAGE OFFICIAL AND FREE-MARKET RATES
OF EXCHANGE, BY MONTHS, 1934 AND 1935—Continued
Ecuador
[S u cres to d o llar]
1934
M o n th
O ffi
c ial 1
6.00
1934
1935
M o n th
O p en
O p en
m a rk e t m a rk e t
10.20
10.15
10.16
10.49
10. 74
10. 47
1L 14
* N o official r a te a fte r J a n . 10.
1935
O ffi O pen O pen
c ial 1 m a rk e t m a rk e t
11.06
11.03
11.75
11.86
12.04
11.22
10.54
10.50
10.50
10.50
10.50
10.50
6.00
10.92
10.50
10.50
10.50
10.50
10.50
10.56
Nicaragua
[C o rd o b a s to d o llar]
1935
1934
O fficial
J u ly
C u rb »
1.02
1.02
1.02
1.02
1.02
1.02
1.02
1.02
1.02
1.02
1.04
1.10
1.03
.....................................................................
t J a n . 2 to 16 a n d N o v . 26 to D e c . 31.
• J a n . 17 to N o v . 24.
F re e *
1.15
1.24
1.26
1.22
1.15
1.23
1. 19
1.24
1.25
1.25
1. 17
1. 16
1.22
1.23
1.21
1.21
O fficial
1. 10
1. 10
1.10
1.10
1. 10
1. 10
1. 10
1.10
1. 10
1. 10
1. 10
1. 10
1. 10
C u rb
1.27
1.32
1. 35
1.38
1.44
1.45
1.50
1.52
1.53
1.54
1.57
1.62
1.46
Peru
[Soles to d o llar]
M o n th
J u ly
..................................................
1934
4.3 9
4.16
4.19
4.45
4. 49
4 34
4.35
1935
4. 23
4.3 0
4.38
4.33
4.23
4 21
4.19
M o n th
1934
4.35
4.37
4.40
4.3 0
4.27
4.34
1935
4.19
4. n
4.0 2
3.96
4.04
4. 19
232
HANDBOOK OF FOREIGN CURRENCIES
C. LATIN AMERICA—AVERAGE OFFICIAL ' ND FREE-MARKET RATES
OF EXCHANGE, BY MONTHS, 1934 AND 1935—Continued
El Salvador
[U . S . c e n ts to colon]
M o n th
1934
J u ly .........................................................
0. 32
.3 9
, 39
.3 9
.41
.4 0
. 40
1935
1934
0.4 0
.4 0
.4 0
.4 0
.4 0
.4 0
.4 0
0.40
.4 0
. 40
. 40
.4 0
.3 9
1935
0. 40
.4 0
.4 0
. 40
.4 0
.40
Uruguay
fU . S . c e n ts to peso]
1934
1935
M o n th
O fficial
J a n u a r y ..........
F e b r u a r y .........
M a r c h ................
A p ril...................
May...............
J u n e ....................
J u ly .....................
A u g u s t..............
S e p te m b e r___
O c to b e r______
N o v e m b e r___
D e c e m b e r___
A v e ra g e
C u rb
F re e
0. 7390
.7815
.7802
.7802
.7900
.7900
.7900
.7974
.8047
.7994
.7946
.7956
.5050
« A u g . 17 to D e c . 31.
0. 4842
.4499
.4232
.4107
.4110
.4054
.4074
.4028
.4097
. 4252
.4134
.4221
C on
tro lle d
free 1
O fficial
0. 4323
.4322
. 4307
.4493
.4553
.4400
0. 7943
.7950
.7987
.7955
.7948
.7970
.7990
.7994
.7952
.7947
.7946
.7953
.7961
F ree
0.4141
.4015
.3866
.3889
.3915
.4028
.4074
.4090
. 4076
.4315
.4470
.4510
.4116
C on
tro lle d
free
0. 4547
. 4421
. 4335
.4375
. 4456
.4546
.4456
. 4362
.4251
.4670
. 4834
.4858
.4510
Venezuela
{ B o lív ares to d o llar]
M o n th
1934
M a y .......................................................
J u l y ........................................................
3.81
3.25
3.27
3.23
3. 30
3. 12
1935
M o n th
3.93
3.93
3.93
3.93
3.93
3.91
1934
1935
3. 42
3. 93
3. 91
3.93
3.53
3.91
3.92
OTHER LATIN AMERICAN COUNTRIES
The currencies of the following countries, not previously mentioned,
have been quoted, with relation to the dollar, as indicated below:
Dominican Republic—1 peso to dollar.
Guatemala—-1 quetzal to dollar.
Haiti—5 gourdes to dollar.
Panama—-1 balboa to dollar.
Exchange control has been in effect in Honduras since June 1, 1934,
but the official rate has remained the same as the free rate; that is,
2.04 lempiras to dollar.
o
Hi
Fl
Gir
@FedFRASER