28 THE CUBA REVIEW 



furnish a surety bond fixed by the Board of Directors and which may not be under 

 $100,000 in cash or in bonds of the Republic of Cuba. The notes, securities, docu- 

 ments and cash which are delivered to the Chief of the Issue Department shall be 

 under his custody and under that of another official of the bank, also under bond, 

 expressly appointed for this purpose, so that the presence of both officials or of their 

 representatives, shall be necessary in order that access may be had to said notes, 

 securities, documents and cash. 



58. The bank shall have the right to receive from the Chief of the Issue Depart- 

 ment the quantity of bank notes that it requests, provided that it deliver to the Chief 

 of said Department, with the formalities that shall be established, collateral security 

 for an equal amount, at least, as the par value of the notes requested. The collateral 

 security which the bank shall deliver shall be made up of bills of exchange, drafts, notes, 

 bonds of the Republic of Cuba, or coined gold legal tender, in accordance with what 

 is provided in the present law with regard to the operations of rediscount or loan. 



59. The notes of the Reserve Bank of Cuba shall be issued in denominations of 

 one, two, five, ten, twenty, fifty, one hundred, five hundred and one thousand dollars, 

 with different designs, and will state on the same that they are obligations of the Reserve 

 Bank of Cuba which will pay them at par upon presentation at its central office in 

 Havana, in gold coin or other legal tender in the Republic. 



60. The bank notes shall be engraved and printed through the National Banking 

 Commission, the expenses, of every kind incurred by this service to be charged to the 

 account of the bank. 



61. The Board of Directors shall issue the regulations for the withdrawing from 

 circulation of deteriorated bank notes of the Reserve Bank of Cuba as well as of 

 deteriorated bank notes of the United States of America, it being the obligation of the 

 bank to exchange them for others in good condition, and all the expenses incurred in 

 the exchange of said bills shall be on account of the bank. 



Reserve for Its Own Notes 



62. The bank shall be obliged to keep a reserve in gold or other legal tender of 

 not less than 35% of the deposits that other banking institutions have placed with it in 

 fulfillment of what is provided in section 39 of this Law, and a reserve in gold or other 

 legal tender of not less than 40% of the total value of its notes in circulation. A part 

 of said reserves may be placed with any Federal Reserve Bank of the United States, 

 if the Reserve Bank of Cuba is authorized to make said deposit of funds in said banks. 



Conditions for Rediscounts and Loans 



63. The Reserve Bank of Cuba may rediscount promissory notes, drafts or bills 

 of exchange which bear the endorsement of any banking institution which has deposited 

 with the bank the percentage of reserves fixed by the present Law, provided the follow- 

 ing conditions exist: 



First: That said promissory notes, drafts or bills of exchange have been drawn or 

 issued with the object of applying their proceeds to the production, purchase, sale or 

 holding for future sale of goods in any steps of the process of production, manufacture 

 or distribution, the term goods comprising articles in any state of manufacture, raw 

 materials and agricultural products, as well as cattle. 



Second: That the proceeds of said promissory notes, drafts or bills of exchange 

 have not been used or will not be used for the purpose of acquiring or paying for real 

 estate or permanent fixtures, such as buildings or machinery, or for buying or negotiating 

 in stocks, bonds or other securities. 



Third: That said promissory notes, drafts or bills of exchange shall have a period 

 of maturity on the date of rediscount not exceeding ninety days. But the bank may 

 rediscount said instruments if they have a period of maturity, at the time of rediscount, 

 not greater than 120 days, when they have been drawn or issued in agricultural trans- 



