Increased Bank-Note Issue in Spain
Title
Increased Bank-Note Issue in Spain
Creator
CB Hurst
Identifier
WWP18623
Date
1919 January 7
Description
A report by C.B. Hurst on inflation in Spain.
Source
Benjamin Strong Jr. Papers, New York Federal Reserve Bank
Language
English
Text
INCREASED BANK-NOTE ISSUE IN SPAIN.
[Consul General C. B. Hurst, Barcelona, Jan. 7, 1919.]
The development of the banking operations of the Bank of Spain and its natural connection with the requirements of Spanish industry and commerce, both domestic and foreign, has resulted in a circulation of bank notes amounting to 3,316,215,325 pesetas (about $597,000,000), which is almost the limit of notes authorized by the royal decree of August 6, 1918. In order to avoid any inconvenience to the bank in its operations, an authorization to increase its issue of bank notes was necessary, pending the presentation to Cortes of a law regulating the issues of the bank.
Accordingly, a royal decree, published on January 3, authorized the Bank of Spain to increase its bank note issue by 500,000,000 pesetas (about $90,000,000), or up to 4,000,000,000 pesetas, instead of the 3,500,000,000 pesetas authorized in August, 1918, on condition that the gold reserves of the bank are in proportion to the increase and that the increase does not disturb the guaranty established by previous legislation. The Bank of Spain may not reduce the gold reserve actually held without the consent of the cabinet or acquire, through the decreed issue, gold that is not in legal circulation without the previous authorization of the Minister of the Treasury.
[Consul General C. B. Hurst, Barcelona, Jan. 7, 1919.]
The development of the banking operations of the Bank of Spain and its natural connection with the requirements of Spanish industry and commerce, both domestic and foreign, has resulted in a circulation of bank notes amounting to 3,316,215,325 pesetas (about $597,000,000), which is almost the limit of notes authorized by the royal decree of August 6, 1918. In order to avoid any inconvenience to the bank in its operations, an authorization to increase its issue of bank notes was necessary, pending the presentation to Cortes of a law regulating the issues of the bank.
Accordingly, a royal decree, published on January 3, authorized the Bank of Spain to increase its bank note issue by 500,000,000 pesetas (about $90,000,000), or up to 4,000,000,000 pesetas, instead of the 3,500,000,000 pesetas authorized in August, 1918, on condition that the gold reserves of the bank are in proportion to the increase and that the increase does not disturb the guaranty established by previous legislation. The Bank of Spain may not reduce the gold reserve actually held without the consent of the cabinet or acquire, through the decreed issue, gold that is not in legal circulation without the previous authorization of the Minister of the Treasury.
Original Format
Letter
Files
Collection
Citation
CB Hurst, “Increased Bank-Note Issue in Spain,” 1919 January 7, WWP18623, Benjamin Strong Jr. Papers, Woodrow Wilson Presidential Library & Museum, Staunton, Virginia.