Legal Reserve Requirements of the Bank of Spain

November 1919

NOVEMBER 1,1919. FEDERAL RESEEVE BULUSTIN. 1037

Legal reserve requirements of the Bank of Spain,

Reserves. Amount of note issue. Amount required. Gold required. Silver required. Kind of gold or silver.

Aug. 1,1914: Pesetas, Pesetas. Pesetas. Up to 1,200,000,000 400,000,000 200,000,000 or more 200,000,000 or less ] Spanish silver or gold, foreign gold at From 1,200,000,000 to 1,500,000,000... 180,000,000 120,000,000 or more.. 1. 60,000,000 or less [• par, or gold bars at rate of 3,444.44 From 1,500,000,000 350,000,000 250,000,000 or more 100,000,000 or less...... 1 pesetas per kilo of fine gold. Since Aug. 1,1914: From 2,000,000,000 to 2,500,000,000... 500,000,000 Not specified 500,000,000 or less Specie; no kind specified. From 2,500,000,000 to 3,000,000,000... 500,000,000 500,000,000 None... Gold; no kind specified. From 3,000,000,000 to 3,500,000,000... 500,000,000 500,000,000 None. Gold only, of which not more than 15 per cent may be without legal currency unless the minister of finance authorizes it on account of the inter- national situation. From 3,500,009,000 to 4,000,000,000... 500,000,000 500,000,000 None Gold only, none without legal currency to be held without authorization of minister of finance. Total 2,930,000,000 2,070,000,000 or more,.. 860,000,000 or less

It will be noted that the required percentage dividends were 21 per cent and in addition of metallic reserve increases with the volume 30 million pesetas, amounting to 20 per cent of circulation and that an increasing proportion of the stock, were distributed in 4 per cent of the reserve is required to be in gold. All bonds. The charter of the Bank of Spain notes over 2 billion pesetas require a 100 per expires at the end of 1921, and in connection cent gold reserve. The actual reserve position with its pending renewal an effort is being of the bank at the outbreak of the war and at made to increase the part of the government subsequent dates is shown in the table below. in the management and its share in the profits of the bank. Notes in circulation and reserves of the Bank of Spain* [Amounts in thousands of pesetas.] TRADE WITH THE ALLIES AND FOREIGN EXCHANGE. Percentage of Metallic reserves. reserve to notes. Notes in Of special interest in connection with Spain's Date. circula- economic developments during the war period tion. Total Gold Total. Gold. Silver. re- re- is her trade with Great Britain, France, and the serves. serves. United States, and the exchange rates prevailing in Spain in respect to these countries. A July 25,1914.. 1,919,000 1,273,300 543,500 729,800 66 28 Dec. 31,1914.. 1,973,600 1,282,600 573,100 708,900 65 29 table showing the monthly high and low rates Dec. 31,1915.. 2,100,200 1,620,100 867,200 752,900 77 41 prevailing during 1914-1918 and the first eight Dec. 30,1916.. 2,360,100 1,991,900 1,250,900 741,000 84 53 Dec. 31,1917.. 2,798,600 2,676,100 1,966,900 709,200 96 70 months of 1919 is attached. Dec. 31,1918.. 3,334,300 2,869,700 2,228,300 641,400 86 67 Great Britain's exports to and imports from Sept. 20,1919. 3,708,400 3,050,700 2,410,300 640,400 82 65 Spain during the period, as shown in the British foreign trade accounts, were as follows: The reserve ratio rose steadily during the period under discussion, except in 1919, and [In thousands of pounds sterling.] stood at 82 per cent on September 20 last, as compared with 66 per cent at the outbreak of Exports Imports from Great from Spain Excess of the war. At the same time the percentage of Calendar year. Britain to to Great imports. gold reserve rose from 28 to 65 per cent, so Spain. Britain. that gold, which constituted less than half of 1913.. 8,631 14,394 5,763 the total metallic reserve in July, 1914, formed 1914 7,142 14,114 6,972 nearly four-fifths of the total reserve in Sep- 1915 7,453 18,864 11,411 1916 . . 10,187 25,034 14,847 tember of the present year. 1917 5,575 22,166 16,591 Dividends paid by the Bank of Spain were 1918.. 3,869 30,697 26,828 20 per cent for each year, 1914-1917. In 1918 1919 (Jan.-June) 4,955 17,298 12,343

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