April 1939

APRIL 1939 FEDERAL RESERVE BULLETIN 271

BRITISH AND NOTES ACT, 1939 The Currency and Bank Notes Act, 1939, Provided that adjustments may, if the Treasury so direct, be made in respect of interest affecting the which received Royal assent on February 28 current of any securities and, in the case of and became effective March 1, makes impor- securities standing at a premium, in respect of that tant amendments to the governing the premium. (3) If, as the result of any such valuation, the operations of the Bank of . It pro- value of the assets then held in the Department differs vides for valuing gold in the Issue Depart- from the total amount of the notes then outstanding, there shall be paid to the Depart- ment each week at current instead of ment from the Exchange Equalisation Account (in at the legal gold parity of the sterling, this Act referred to as "the Account") or to the Ac- count from the Department such sum as will counter- as formerly. Securities held in the Issue De- act that difference, and separate payments may be partment as cover for the fiduciary issue are made in respect of differences arising from changes in the value of gold and differences arising from also to be valued at current prices. The stand- changes in the value of other assets. ard fiduciary issue, by amendment to the Cur- Any payment required by this subsection may be rency and Bank Notes Act, 1928,1 is raised effected in or, by agreement between the Treas- ury and the Bank of England, by a transfer of gold from £260,000,000 to £300,000,000. The or securities (whichever is appropriate), or partly Treasury's powers to authorize changes in in cash and partly by such a transfer. 3.— (1) Gold held in the Department may be sold the amount of the fiduciary issue for various to the Account and gold may be bought for the De- periods remain unaltered. Section four of partment from the Account, in each case at the price the Bank Charter Act, 1844, requiring the at which gold was valued for the purposes of the last Bank to buy gold at a fixed price, is repealed. valuation under the last preceding section. (2) The Treasury shall pay into the Account all The full text of the new Act is given below. sums received by them after the commencement of this Act in respect of the profits of the Department An Act to amend the with respect to the Issue under section six of the Currency and Bank Notes Department of the Bank of England, the Exchange Act, 1928. Equalisation Account and the issue and place of pay- ment of Bank of England notes. [28th February, 4.— (1) Notwithstanding anything in any enact- 1939] ment, bank notes for five pounds and upwards may Be it enacted by the King's most Excellent Majesty, be issued by the Bank of England otherwise than at by and with the advice and consent of the Lords their head office without being made payable at the Spiritual and Temporal, and Commons, in this pres- place of issue, and all bank notes for five pounds and ent Parliament assembled, and by the authority of upwards issued by the Bank shall, wherever issued, the same, as follows:— be payable only at the head office of the Bank unless 1. The fiduciary note issue shall, unless and until, expressly made payable also at some other place. after the commencement of this Act, it is reduced (2) Section four of the Bank Charter Act, 1844 under subsection (2) of section two of the Currency (which requires the Department to issue notes in and Bank Notes Act, 1928, or increased under sub- return for gold), shall cease to have effect. section (1) of section eight of that Act, be three 5.— (1) This Act may be cited as the Currency and hundred million pounds and accordingly— Bank Notes Act, 1939. (a) in subsection (1) of the said section two and subsection (1) of the said section eight, for the (2) This Act shall come into operation on the first words "two hundred and sixty million pounds" Wednesday after the day on which the Royal Assent there shall be substituted the words "three hun- is given thereto. dred million pounds"; and (3) The enactments set out in the Schedule to this (6) any Treasury Minute in force at the com- Act are hereby repealed to the extent mentioned in mencement of this Act under the said section the third column of that Schedule. eight shall cease to have effect. 2.— (1) The assets held in the Issue Department of SCHEDULE—ENACTMENTS REPEALED the Bank of England (in this Act referred to as "the Department") shall be valued on the day on which this Act comes into operation and thereafter once in Session and each week. Chapter Title Extent of Repeal (2) For the purposes of every such valuation, the 7 Geo. 4. c.46. The Country Bankers The final proviso to sec- assets shall be valued at such prices as may be cer- Act, 1826. tion fifteen. tified by the Bank of England to be the current prices 3 & 4 Will. 4. c.98. The Bank of England Section four. Act, 1833. of those assets respectively on the day of the valua- 7 & 8 Viet. c.32. The Bank Charter Act, Section four. tion, ascertained in such manner as may be agreed 1844. between the Treasury and the Bank: 22&23Geo.5.c.25. The Finance Act, 1932. Subsections (2) to (6) of section twenty-five. 1 BULLETIN for August 1928, pp. 567-569.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis