LEAGUE OF NATIONS. held in Geneva from February 2jth to March yth, 1928, AND A. R E P O R T OF TH E FINANCIAL COMMITTEE. IN TRO D U CTIO N.

Transcription

1 [D istributed to the Council and the M em bers of th e League.] C M [F. 507 (1)]. Geneva, M arch 10th, LEAGUE OF NATIONS FINANCIAL COMMITTEE REPORT TO THE COUNCIL ON THE WORK OF THE THIRTIETH SESSION OF THE COMMITTEE, held in Geneva from February 2jth to March yth, 1928, AND RESOLUTIONS ADOPTED BY THE COUNCIL AT ITS FORTY-NINTH SESSION. A. R E P O R T OF TH E FINANCIAL COMMITTEE. IN TRO D U CTIO N. The Financial Com m ittee has th e honour to subm it to the Council the following report on the work of its th irtieth session, held in Geneva from F ebruary 27th to March 7th, The following m em bers were present: Sir O tto N ie m e y e r (Chairm an). M. A rm anni (in place of M. B ia n c h in i). M. d e Ch a l e n d a r. M. D u b o is. M. J a n s s e n. M. M e l c h io r. M. t e r M e u l e n. M. P o s p is il. Mr. Jerem iah Sm it h. Sir H enry Strakosch. M. T s u sh im a. M. M arcus W a l l e n b e r g. The following also atten d ed p art of the meetings : 1. M. A d o r, Chairm an of the Economic and Financial Committee. 2. For Bulgarian questions: M. M o l l o ff, M inister of Finance. M. B o u r o f f, Minister for Foreign Affairs. M. Assen I v a n o f f, Governor of the Bulgarian N ational Bank. M. Ch a r r o n, Commissioner of the League of N ations in Sofia. 3- For the question of the financial reconstruction of Portugal : General Ivens F erraz (Minister for the Colonies), Acting M inister of Finance. M. I. Camacho R o d r ig u es, Governor of the B ank of Portugal. M. A. J. Ma l h e ir o, Director-General of Public Accounting. Dr. A. F. Carneiro P a checo, Professor of Law. M. R. da Carm o, of th e General B ank of Deposits. M. H. da F on sec a, Director-General of Taxation. M. J. B a r to lo m eu, Secretary to the Finance Minister. ^ 1 (fr) (A). 3/28. Imp, K un dig Publications of the League of Nations II. ECONOMIC AND FINANCIAL II. 10.

2 2 4 - For Greek questions: M. D e n d r a m i s, G reek M inister a t Berne. Sir Jo h n H ope S im p s o n, Vice-Chairm an of the Greek Refugee Settlem ent Commission. 5. For the Estonian Loan : Sir W alter J. F. W i l l ia m s o n, C.M.G., Adviser to th e B ank of E stonia. 6. For the M ixed Greco-Bulgarian Emigration Commission : Colonel Co r f e, Chairm an. Colonel d e R e y n i e r, neutral Member. M. L a g r a n g e, General Secretary. 7. For questions relating to the balance of the H ungarian Reconstruction Loan : Mr. Royall T y l e r, representative in B udapest of the Trustees of the Loan. SUM M ARY. I. G e n e r a l... 3 Page II. B u l g a r ia : (a) Settlem ent of R e f u g e e s..., (b) Stabilisation L o a n... 3 III. F i n a n c i a l R e c o n s t r u c t i o n o f P o r t u g a l... 6 IV. G r e e c e : (a) Settlem ent of R e f u g e e s... 7 (b) Stabilisation L o a n... 7 V. E s t o n i a n L o a n... 8 V I. Mix e d G rec o-b ulgarian E m igration Co m m i s s i o n... V II. B a la n c e o f A u s tr ia n R e c o n s t r u c tio n L o a n... 8 V III. B alance of H ung arian R econstruction L o a n... * * * A p p e n d ix A : PR O TO C O L signed at Geneva on M arch 10th, 1928, by the Bulgarian Minister of F in a n c e... 9 Annex I. A m endm ents to the present S tatu tes of the B ulgarian N ational B ank. *3 Annex I I. Transform ation of the B ulgarian N ational B a n k Annex I I I. Statem ent showing Budget Liabilities to be repaid out of the Proceeds of the L o a n Annex IV. - Funds which m ay be exem pted from Incorporation in the Budget under Article VI, 6 ( a ) A p p e n d ix B : N ote from the President of th e Mixed Greco-Bulgarian E m igration Commission to the Financial Committee, dated M arch 2nd,

3 3 I. G EN ER A L. The Com m ittee learnt w ith great regret th at, for reasons of health, M. B ia n c h in i, who h as been a m em ber of the Com m ittee since June 1921, has felt obliged to resign 1. At the request of the Com m ittee on A rbitration and Security, th e F inancial C om m ittee chose three of its m em bers M. d e C h a le n d a r, M. M e lc h io r, and Sir H enry S tr a k o s c h to represent it 011 a M ixed C om m ittee (composed of m em bers of the C om m ittee on A rbitration and S ecurity an d members of the F inancial Com mittee) appointed to discuss in detail th e plan for financial assistance to States victim s of aggression. The Financial Com m ittee appointed M. Léopold D u b o is to represent it on the C onsultative Committee of the Econom ic Organisation. II. BULG A RIA. (a) S e t t l e m e n t o f R e f u g e e s 2. The Com m ittee considered the sixth quarterly report by M. René Charron, League of N ations High Commissioner for the Settlem ent of Bulgarian Refugees, covering the period N ovem ber 15th, 1927, to F ebruary 15th, 1928 (document C.45.M II). The questions dealt w ith in this report were exam ined w ith M. Charron. The Com m ittee noted th a t progress in the w'ork of settlem ent h ad necessarily been som ew hat slower during the w inter, b u t th a t arrangem ents had been m ade b y M. Sarafoff, D irector of the Settlement O rganisation, and the League Commissioner, to push forward the work w ith all necessary speed during These arrangem ents, particularly those relating to the transfer of land and the methodical exploitation of th e forests, can, however, only be carried through w ith the support of certain B ulgarian G overnm ent D epartm ents, more especially the M inistry of A griculture. A number of difficulties have been experienced in this quarter which, if not removed, m ight affect the success of th e w ork of settlem ent. The Committee points out th a t in a letter d ated M ay 3rd, 1926, from the B ulgarian Chargé d Affaires at Berne to the Secretary-General of th e League of Nations, the B ulgarian G overnm ent itself stated th a t it is desirable to use for the purposes of the loan the organisations already existing in Bulgaria... and the organisations of th e M inistry of Agriculture T he Com m ittee hopes th at the assistance of these bodies will be forthcom ing in future. The Committee was gratified to hear th a t the International H ealth Division of th e Rockefeller foundation had decided to assist in the m alaria cam paign which has been undertaken in Bulgaria, and that it proposes to set up for this purpose a health centre in the Petrich district. The sixth report of the League Commissioner does not call for any decision b y th e Council. (6) B u l g a r ia n St a b il is a t io n L o a n. As stated in the last report of the Financial Com m ittee (docum ent C.643.M II), the request of th e B ulgarian Governm ent of Septem ber last for an exam ination of the financial position of B ulgaria was followed by a visit of a League delegation to Sofia. On the basis of th e inform ation so obtained, a scheme of reconstruction has been discussed with the Bulgarian representatives, b o th a t the last session of the Com m ittee and a t the present one. The scheme is described below, and the obligations it involves are specified in a Protocol (see Appendix A, page 9). The Bulgarian representatives are in agreem ent w ith th e scheme and with the term s of th e Protocol, which it is understood th a t they are ready to sign on approval by the Council3. By way of preface to the scheme, it is enough to recall th at, the leva having been stable and the budget in approxim ate equilibrium for some years, the League in 1926 authorised th e issue f a loan under its auspices solely for the purpose of refugee settlem ent w ithout a t th a t tim e undertaking a responsibility for general financial reconstruction. Subsequent experience showed that, if the financial position was to rem ain on a safe basis and if the stability of th e currency was to be maintained, it was necessary for the refugee scheme to be supplem ented b y one of financial reconstruction. 1 After the close of the Financial Committee's session, the Council appointed M. Fulvio S u v ic h, Under-Secretary 01 Statc m the Italian Ministry of Finance, as a Member of the Financial Committee (see Paragraph IV, page 23). : The Council took note of this part of the Financial Committee s report at its meeting of March loth, This Protocol (see page 9) was signed at Geneva by the Bulgarian Minister of Finance on March 10th, 1928.

4 4 The present scheme is th e resu lt. I t will be seen th a t it contem plates a loan of 44 purposes : N ational B a n k... 1,500,000 A gricultural B a n k ,000 C entral Co-operative B ank ,000 B udget A r r e a r s... 1,100,000 R oads and R a ilw a y s... 1,250,000 m illions sterling, to be used for the following 4,500,000 The loan is to be secured by a first charge on the Custom s revenues if this security can be released for the purpose. The independence of the B ank is to be assured ; it is to be transformed, under the conditions described below, into a private share b an k ; and a foreign bank adviser, with extensive powers, is to be appointed and to rem ain for a t least two years after this transformation has been^effected. The sum s devoted to roads and railw ays will be expended in accordance w ith a plan draw n up w ith th e aid of a foreign expert, who will m ake a survey in th e country, and both this expenditure and th a t upon budget arrears will be supervised b y the present League Commissioner in charge of th e Refugee Settlem ent, M. R ené Charron. The Reconstruction Scheme. W ith this preface, the problem an d the solution recom m ended m ay be described in more detail. The exchange rate of th e leva has been approxim ately stable for over four years. There would appear to be a prima facie sufficient basis for proceeding now to a definite legal stabilisation of B ulgarian currency, provided th a t the m easures described later in this report are adopted. Budget. W hen the Financial C om m ittee considered the question of the issue of the refugee loan in 1926, the latest available results were those for the financial year , which gave a surplus of 548 million levas. In the following financial year, characterised by a severe economic crisis, revenue collections were reduced, while the expenditure figure was increased, the accounts closing w ith a deficit of 741 million levas 1. As the result of a compression of expenditure effected by the newly in stitu ted B udget Commission, the deficit w as reduced to 393 million levas in the year , m aking a to tal for two years of 1,134 million levas. This deficit was p artly m et by surpluses from previous years ; b u t on A pril 1st, 1927, the budget arrears am ounted to 767 million îevas (about 1,100,000). The budget estim ates were : revenue, 6,993 million levas; expenditure, 7,085 million levas. B ut, on the basis of the results of the period A pril-d ecem ber 1927, th e actual results for the year m ay be estim ated a t: revenue, 6,600 million levas; expenditure, 6,540 million evas; or a surplus of 60 million levas. This result has been obtained b y a stringent control over expenses ; and it is very necessary th a t this should continue. In th e next tw o years there will be certain increases in expenditure, p artly for liquidation of outstanding pre-w'ar and w ar charges and for th e considerable sum s due in respect of compensation payable under th e aw ards of the Mixed Greco-Bulgarian E m igration Commission, but the Bulgarian Finance M inister has inform ed th e Com m ittee th a t in his opinion th e ordinary and extraordinary budget expenditure (including an y new loan service) can be k ept approximately w ithin 6,750 million levas in and 7,000 millions in , excluding in b o th cases receipts and expenditure accounted for in special funds and such capital outlay as is m et from the loan. The Com m ittee believes th a t these results should be realised b ut th a t th ey will need certain financial reforms, including a reduction in th e num ber of officials by 10,000 to be effected over th e next two financial years. B ut it will be necessary to clear off from special resources derived from the proposed external loan the existing dead wteight of past arrears and some of th e tem porary borrowings from which such arrears have been for the m om ent m et. The Com m ittee proposes th a t a sum of 1,1 0 0,0 0 0 should be devoted to these purposes. I t considers th a t w ith this assistance any other arrears can be m et from th e budget w ithin the lim its indicated above. Supervision over the expenditure of any loan monies for the paym ent of arrears as well as for other purposes should, in the opinion of th e Com m ittee, be exercised by the League Commissioner for th e Settlem ent of Refugees. Certain other technical m easures are also essential: inter alia, com plete unity of the budget (including the incorporation therein of a large num ber of the existing funds) ; m ainten ance of the system of m onthly budgets and of the present B udget Commission, and establishm ent of a compte e 1 L = 675 levas; $ = 138 levas ; I Sw.fr. = levas.

5 5 and perm anent system of Treasury control; regular publication every m onth, under appropriate heads, of returns of actual receipts and expenditure ; centralisation of cash balances in th e T reasury account ; control by th e M inister of Finance, after consultation w ith th e G overnor of th e N ational Bank, over borrowings b y public authorities. National Bank. A considerable sum will be required from th e loan to reduce the liabilities of th e S tate to the Bank and to relieve it of various other illiquid assets, as wrell as to increase its unencum bered foreign exchange reserve to a more satisfactory percentage of its to tal sight liabilities. The Com m ittee proposes th a t a sum of 1,500,000 shall be devoted to'paying off in p a rt th e advances of th e N ational B ank to or on behalf of the State an d to relieving th e N ational B ank of the advances to th e tw o other State Banks, nam ely, the A gricultural B ank and th e C entral Co-operative Bank. Various changes will also be required im m ediately in the B an k s statutes to define m ore accurately its proper sphere of action and to establish its complete independence on surer foundations. These changes are show n in A nnex I to the Protocol (page 13). Independence is above all essential. On this depends th e prospect of m onetary stabilisation which is necessary for any sound scheme of financial reform. In the opinion of th e Com m ittee, independence can be best secured by constituting the B ank as an independent corporation w ith shares carrying a lim ited dividend as widely distributed as possible throughout all classes of th e population. This is th e solution which has been adopted in th e case of all recently founded C entral Banks and will enable th e N ational B ank of Bulgaria to take its proper position am ong the Central Banks of th e world to-day. The Com m ittee annexes an outline of a scheme em bodying this principle, b y which it thinks, taking into consideration th e special conditions of Bulgaria, such a reorganisation could be secured. It will be observed th a t th e scheme does not contem plate th a t the shares or voting power should be in the hands of persons other th an Bulgarian nationals. Nor would th e N ational B ank be dominated by any particular group or class or by a few persons only, the share units being intentionally fixed a t a low figure and th e m axim um voting power of th e holder of any num ber of shares being strictly limited. The N ational B ank of B ulgaria w ould rem ain in th e tru est sense the property of all classes of th e Bulgarian people. F urther, th e Com m ittee realises th a t, as in other cases, a certain lapse of tim e will be necessary before the proposed reorganisation can be fully completed. The Bulgarian G overnm ent fully recognises the desirability of the proposed reform and has undertaken to safeguard th e com plete independence of the N ational B ank. In all the circum stances, the Committee agrees th a t, subject to th e appointm ent forthw ith of an expert adviser a t the National B ank w ith th e powers indicated in A nnex II of the Protocol (page 20), the final decision as to the date of transform ation m ay be deferred. The Com m ittee is glad to record th a t agreem ent on this question has been reached. I t is embodied in th e following passage of the Protocol (Article IV, parag rap h 1) : " The B ulgarian G overnm ent undertakes to safeguard the independence of th e B ulgarian National B ank from any political influence w hatsoever. " The B ulgarian G overnm ent agrees, w ith this intention and for this purpose, to the appointm ent b y the Council of th e League of N ations of a technical adviser to th e B ulgarian National Bank, whose powers shall be those defined in the am endm ents to th e S tatu tes of the N ational B ank (Annex I). " The B ulgarian G overnm ent fully recognises th a t for th e definite consolidation of th e financial situation of Bulgaria it is im portant to transform the B ulgarian N ational B ank in accordance w ith the plan laid down in A nnex II, in order to bring it into conform ity with the other C entral B anks, and undertakes to effect this transform ation at a d ate to be fixed by agreem ent betw een the Council of th e League of N ations an d th e B ulgarian Government. The details of this transform ation shall be fixed by agreem ent betw een the Council and th e B ulgarian G overnm ent on the advice of th e Financial Com m ittee. Agricultural and Central Co-operative Banks. It will, moreover, be desirable to provide new1 working capital for these tw o B anks : to the extent of 500,000 for th e A gricultural B ank and 150,000 for th e Central Co-operative Bank. Communications. The position of th e S tate railways requires very careful consideration, and th e Com m ittee hinks that the B ulgarian G overnm ent has been wise in securing, on th e advice of th e T ransit rganisation of th e League, a foreign expert to advise them on this problem. This expert will ubtless advise on th e relative economic advantages to B ulgaria of railw ay or road construction; 0n e degree to which repairs are essential on th e existing railw ay system ; on the railw ay

6 6 accounting system ; and on th e desirability or otherwise of reorganising the railw ays on an autonom ous basis. The Com m ittee proposes th a t a sum of 1,250,000 should be provided in th e loan for expenditure on com m unications, in accordance w ith a program m e to be approved after the advice of the expert has been received. Am ount of Loan. The Financial Com m ittee is of opinion th a t Bulgaria should not a t present borrow any sum th a t is not absolutely indispensable. The present resources of the country are limited, and its foreign liabilities are relatively considerable, though the present foreign paym ents do not, including reparation charges, exceed in gold value the pre-w ar budget charge for foreign debts. The Comm ittee thinks it w ould be unwise to expect th a t a larger sum th a n 4,500,000 could now be raised; and it believes th a t th e necessary requirem ents outlined above could be m et w ithin th at sum. Provided th a t adequate m easures are taken to establish budget equilibrium and monetary stabilisation is carried out and m aintained by the w orking of a satisfactory C entral Bank, a loan of this size does not exceed the financial capacities of the country. Securities. The Com m ittee has discussed a t length w h at revenues could be pledged for th e service of such a loan. A fter exam ining in detail th e various possibilities, th e Com m ittee has been forced to the conclusion th a t the charge which, from a m ark et point of view, w ould justify confidence in a successful issue of th e loan w ould be a first lien on the Custom s revenues. These are at present subject to a first Hen for reparation an d other tre a ty charges. There m ay also be certain private claim s on these revenues. B u t it m ight be possible to arrange th a t the Inter-A llied Commission a t Sofia (whose assent in an y case w ould be necessary for a release from th e general charge for reparations on all B ulgarian revenues and assets) should allow the Custom s revenues now specifically pledged for reparations to be pledged in the first place for the service of th e contemplated new loan, and, while retaining a second charge on th e Customs, accept an alternative charge for w hat they release on some other satisfactory revenue. These are the general aspects of the scheme which is em bodied in the attach ed Protocol and which the C om m ittee subm its for the approval of th e Council. The C om m ittee wishes to drawtatten tio n to th e im portance for th e success of this scheme of an early settlem ent of certain outstanding questions, such as the possibility of securing a first charge on th e Custom s revenues and sufficient progress in th e settlem ent of various pre-w ar private debts of the B ulgarian State. III. F IN A N C IA L R E C O N ST R U C T IO N O F PO R T U G A L 1. On N ovem ber 24th last, the Finance M inister of the Portuguese Republic inform ed the Council th a t the Portuguese G overnm ent desired to carry out a scheme of financial reconstruction, currency stabilisation and economic developm ent, and asked th a t the Financial Com m ittee should examine th e question, in conform ity w ith th e decision of th e Council. A delegation has since visited Lisbon, and th e wrhole situation has been carefully exam ined w ith the help of representatives of the G overnm ent, of the G overnm ent D epartm ents, the N ational B ank, and others, both there and at Geneva. The Com m ittee, under th e au th o rity of th e C om m ittee of th e Council appointed by the Council a t this session, has endeavoured to elaborate a reconstruction scheme in agreement with the Governm ent. The technical problem presented is in principle sim ilar to th a t presented by some of the other schemes which have been recently before th e Council. The currency of P ortugal has been seriously depreciated since the wtar. An effort to arrest depreciation wras m ade, which m aintained a de facto stability for some years; b u t th e general financial position has m ade this stability precarious and prevented a legal stabilisation. In these circum stances, th e Portuguese G overnm ent, anxious to achieve perm anent reform by m eans of a com prehensive scheme, including an external loan, has applied for th e assistance of the League. T he first results of th e C om m ittee s stu d y involve th e establishm ent of budget equilibrium, th e legal stabilisation of th e currency, the consolidation of th e floating debt and the reduction 01 th e S tate debt to th e B ank of Portugal, and, finally, the issue of an external loan, a portion 0 w hich could be devoted to public works which are econom ically essential. W ith the aid of these m easures, and under the other conditions discussed w ith th e G overnm ent, the Committee consider th a t th e finances of P ortugal and its currency could be placed on a sound basis. It has not yet been possible to com plete th e scheme, and the C om m ittee is still in discussion w ith the G overnm ent on some features in it. 1 The Council took note of this part of the Financial Committee s report at its meeting of March 10th, 1928'

7 7 IV. GREECE. (a) S e t t l e m e n t o f R e f u g e e s. The Financial Com m ittee has considered the Seventeenth Q uarterly R eport of the Settlem ent Commission 1, supplem ented by oral explanations from Sir Jo h n Hope Simpson, th e Vice-President of the Commission. It recom m ends the Council to adopt the report and only has the following observations to offer on it. The Com m ittee is im pressed by the rem arks m ade in the Settlem ent Commission s re p o rt, paragraph IV, page 9, regarding the prevalence of tuberculosis am ong the refugees. It suggests that contact m ight be established between the Refugee Settlem ent Commission and th e H ealth Organisation of the League of N ations w ith a view to the latter rendering assistance to th e public health authorities of Greece and to the Settlem ent Commission in dealing w ith this situation. The Com m ittee has also considered tw o notes 2 which contain a request from the Settlem ent Commission, m ade in agreem ent w ith the Greek Governm ent, th at au thority m ay be given b y the Council, in accordance w ith Article V I of the Protocol signed on Septem ber 15th, 1927, for th e sums of 150,000, 100,000 and 29,000 to be earm arked respectively for the construction of certain roads and bridges in Macedonia, and the prom otion of th e carpet industry and arts and crafts, out of the 3,000,000 sterling assigned under the Protocol for settlem ent work. The Com m ittee recom m ends th a t the Council should give au th o rity for these allocations to be made and for th e Settlem ent Commission to expend th e sums m entioned on the objects specified, when the to ta l of 3,000,000 sterling contem plated in the Protocol has been m ade available for the settlem ent of refugees. (b) S t a b i l i s a t i o n L o a n. Since the last session of the Committee, a net sum equivalent to 6,500,000 sterling out of the 9,000,000 sterling contem plated in th e Protocol signed on Septem ber 15th, 1927, has been raised by the issue of loans for public subscription in London and New York, a portion of th e sterling bonds being taken in Ita ly and Sweden, and of the dollar bonds in Switzerland. The loan was issued a t 91, carrying 6 per cent interest. The m em ber of the Financial Com m ittee (Sir H enry S t r a k o s c h ) appointed in accordance w ith paragraph 4 of Article I of the Protocol signed on Septem ber 15th, 1927, approved the loan contracts as conforming to the provisions of this paragraph, and also approved the reference to the League of Nations in the prospectuses of the sterling and dollar blocks issued in London and New York. In the prospectuses it was stated th a t power had been form ally reserved by th e Greek Government to raise a further effective am ount of 2,500,000 sterling under th e Protocol signed on September 15th, 1927, ranking equally w ith the public issues w'hich have been m ade. The Hellenic Government, however, has concluded an agreem ent w ith th e S tate and T reasury D ep artm en ts of the United S tates of America, which has been ratified by the Greek Parliam ent and which has also been subm itted to Congress for ratification, for an advance of 12,167,000 U.S.A. gold dollars (i2.5oo,ooo) at 4 per cent per annum, redeem able in 20 years, and to be secured b y th e sam e securities as the public issues which have been m ade. This advance is to be tu rn ed over in its entirety to the Refugee Settlem ent Commission to be expended by the Commission for its settlem ent work. In these circum stances the President of the Financial Com m ittee, in pursuance of the powers conferred upon him under paragraph 1 of Article V II of th e Protocol signed a t Geneva on Septem ber 15th, 1927, approved an arrangem ent whereby the proceeds of the public issues w hich have been made should be allocated as to one-third for the purposes described in A rticle IV (Bank of Issue), one-third for the purposes described in Article V (Liquidation of T reasury Liabilities), 500,000 sterling to the Refugee Settlem ent Commission to be expended in accordance w ith A rticle V I, the remainder being retained by th e issuing houses until such tim e as th e balance of the to tal loan of 9.000,000 sterling contem plated under the Protocol should have become available. The Financial Com m ittee congratulates the Greek G overnm ent on th e successful issues which have taken place. The Committee has considered the F irst Q uarterly R eport on the B udget Situation3 tran sm itted y the Greek G overnm ent to the Council in accordance w ith paragraph 7 of Article V of the Protocol signed on Septem ber 15th, It has no observations to offer upon this report, and recom m ends th e Council to take note of it. *Document C.51.M VI. Documents C II (F.494), and C II (F.500). Document G II (F.495).

8 8 V. ESTO N IA N LOAN K The Financial C om m ittee has interview ed M. A lbert Janssen, Trustee for the E stonian Loan, and Sir W alter W illiamson, A dviser to the B ank of Estonia. As a result, it finds th a t the currency and banking reform in E stonia has been satisfactorily carried out, in accordance w ith the Protocol signed a t G eneva on D ecem ber io th, Of th e loan of 1,350,000, a sum of 1,000,000 w as paid to th e E esti P an k a t the end of D ecem ber 1927, so th a t th e legal stabilisation of the E stonian currency becam e effective as from Ja n u a ry 1st, The E stonian Official Journal of D ecem ber 30th, 1927, published the Statutes, adopted by P arliam ent, of the N ational M ortgage B ank of Estonia, an d on F eb ru ary 27th, 1928, th e balance of th e loan was paid over to th a t institution, which has th u s begun its activities. V I. M IX E D G RECO -BU LG A RIA N EM IG R A T IO N COMMISSION. I. B y a resolution of Decem ber 12th, 1927, the Council of th e League took note of the Agreem ent 2 signed a t Geneva on D ecem ber 9th by th e representatives of th e Bulgarian and Greek G overnm ents and th e President of th e M ixed Greco-Bulgarian Em igration Commission, an d accepted this A greem ent as far as the League of N ations was concerned. This Agreem ent has so far not been ratified either b y Bulgaria or by Greece. The attention of the Financial Com m ittee has been draw n b y th e President of the Mixed Commission, in a note which is attached (see A ppendix B, page 21), to th e serious obstacles to th e progress of the work of the Mixed Commission created b y this non-ratification. As th e President of the Mixed Commission states, it will be impossible for the Commission to accomplish its task if the Agreement is not executed. The Financial Com m ittee has heard th e representatives of the B ulgarian and Greek G overnm ents on this m atter. T he B ulgarian representatives inform ed th e Com m ittee that the necessary law wras to be deposited on M arch 7th w ith th e B ulgarian Parliam ent and that they anticipated th a t ratification w ould be obtained before Easter. The Greek representative informed th e Com m ittee th a t th e law will be deposited w ith the Greek Cham ber at once and th a t the Government w ould ask for its ratification, b u t he wras unable to indicate a date. The Financial Com m ittee is of opinion th a t ratification of this A greem ent is in th e interests of b o th countries. Moreover, ratification should be im m ediate if very regrettable delay in the w ork of th e Mixed Commission is to be avoided, from the effects of which th e exchanged populations would be the first to suffer. The Com m ittee therefore ventures to recom m end th a t the Council should strongly urge upon the two G overnm ents the desirability of ratifying the A greem ent a t the earliest possible moment. II. U nder Article 5 of the Agreem ent, the Council h as to appoint a n eu tral bank to receive certain bonds to be deposited by the debtor G overnm ent. In order th a t th e Agreement, when it is ratified, m ay be carried out a t once in this respect also, the Financial Com m ittee recommends th a t the Council should m ake arrangem ents th a t au th o rity be given on its behalf for the designation of such a bank. III. In the note of th e President of th e Mixed Commission, a tten tio n is also drawn to the fact th a t the A greem ent of Septem ber 12th, , betw een th e B ulgarian and the Greek G overnm ents w ith regard to cash paym ents to be m ade in connection w ith the work of the Mixed Commission, is not being strictly carried out in particular, n o t by th e Greek Government. In the opinion of th e Financial Com m ittee, this A greem ent should be strictly adhered to in the future. IV. The Financial C om m ittee expresses th e hope th a t a t its next session the President of the Mixed Commission will be able to report to it th a t satisfactory progress has been made in all respects. V II. BALANCE O F T H E A U ST R IA N R EC O N STR U C TIO N L O A N 1. M. D ubois gave inform ation to th e Com m ittee in regard to the situation of the balance of the A ustrian reconstruction loan. He com m unicated to th e C om m ittee a letter from the A ustrian G o v ern m en t4, asking that th e rem ainder of the balance which is not eai m arked for any specific purpose, an d which amounts to approxim ately 3.7 million schillings, should be liberated for productive investm ents during th e year The Com m ittee agreed in principle to this request, subject to th e exact purposes for w hich the m oney was to be em ployed being approved by M. Dubois. V III. BALANCE O F T H E H U N G A R IA N R EC O N STR U C TIO N LOAN \ The Financial Com m ittee was inform ed b y M. ter M eulen an d Mr. R oyall T yler of the present position as regards this balance. 1 The Council took note of this part of the Financial Committee s report at its meeting of March ioth, I92 2 Document C II. 5 Document F.437. * Document F.491.

9 9 APPENDIX A. PROTOCOL sig n ed at G enev a by th e B ulgarian Min ist e r of F in a n c e on March io t h, 1928 W hereas the B ulgarian G overnm ent desires to issue, under the auspices of the League of Nations, a loan the yield of which shall be applied for the purposes of stabilising th e B ulgarian currency and im proving the situation of the Bulgarian N ational Bank, the A gricultural B ank an d the Central Co-operative B ank, of liquidating budget arrears of the Bulgarian S tate and for certain urgent expenditure on m eans of transit ; And whereas the Council has approved for this purpose th e provisions of the present Protocol, The undersigned, duly authorised for the purpose, accepts on behalf of Bulgaria th e following provisions : Article I. Issue of a Loan. 1. The B ulgarian G overnm ent m ay issue a loan yielding an effective sum equivalent to not more than four and a half millions sterling for the purpose of providing the m eans to carry out the plan of financial an d m onetary reconstruction set out in the report of th e Financial Com m ittee to the Council annexed hereto 1. The whole of this am ount shall be integrally m ade available as hereinafter provided. The expenses of issue negotiation and delivery shall be added to the capital of the loan as fixed above. 2. The capital and interest of the loan m entioned in paragraph 1 above shall be paid b y the Bulgarian G overnm ent free of all deductions in respect of taxes, dues or charges present and future for the benefit of th e B ulgarian State or of any m unicipal or local authority. 3. The conditions of the loan, the m ethod of issue, the issue price, the rate of interest, the amortisation, and the expenses of issue, of negotiation and of delivery shall be subm itted for approval on behalf of th e Financial Committee of the League of N ations to a person or persons appointed by the C om m ittee for this purpose ; the am ount of the annuity necessary for the service of interest and am ortisation of the loan shall likewise be so approved. H e shall also approve the terms of reference to th e League of N ations in any prospectus of the loan. Article II. Securities. 1. The B ulgarian G overnm ent will furnish as securities for the loan the following revenues : (а) Receipts obtained from all im port and export duties, including ad valorem taxes, bonding, statistical and sealing charges and other Customs charges ; (б) Such other revenue or revenues (if any) as m ay from tim e to tim e be assigned in accordance w ith paragraph 6 below. 2. The am ounts required for the service of the loan shall be, and shall rem ain, a first charge upon the revenues m entioned in paragraph 1 above, and the Bulgarian G overnm ent acknowledges that such revenues shall stand charged accordingly. 3- The revenues m entioned in th e preceding paragraph shall not be used as security for any new loan w ithout th e consent of th e Trustees of th e loan. 4- The Bulgarian G overnm ent will not take any measures which, in th e opinion of th e Trustees, would be such as to dim inish the aggregate value of th e revenues m entioned in paragraph i to such an extent as to th reaten the security of th e bondholders. 5- All decisions tak en by th e Trustees in virtue of paragraphs 3 and 4 shall require confirm ation by the Council if w ithin fourteen days of the notification of any such decision by th e Trustees to the Bulgarian Governm ent th e latter shall have lodged an appeal against it w ith th e Council. 6- If at any tim e th e to ta l yield of the revenues referred to in paragraph 1 should fall below 150 per cent of th e annual sum required to m eet the service of th e loan, th e Trustees m ay request the Council to call upon the Inter-Allied Commission established under Article 130 of the Treaty of Neuilly to release from the charge laid down in Article 132 of the said T reaty such additional revenues as m ay be sufficient to assure the im m ediate restoration of the yield to th e above percentage, and such additional revenues so released, shall be forthw ith assigned to th e service of the loan. Article I I I. Employment of the Loan. The Bulgarian G overnm ent undertakes th a t the yield of the loan shall be applied only for tne. purposes and in strict accordance w ith the procedure set out in Articles IV, V, V I, V II and ' III below. The Financial Committee s Report on the Bulgarian Stabilisation Loan (see page 3) is an annex to the original Slgned text of the Protocol.

10 10 Article I V. Bulgarian National Bank. 1. The B ulgarian G overnm ent undertakes to safeguard th e independence of the Bulgarian N ational B ank from any political influence w hatsoever. The B ulgarian G overnm ent, w ith this intention and for this purpose, agrees to the appointment by th e Council of th e League of N ations of a technical adviser to th e B ulgarian N ational Bank, whose powers shall be those defined in th e am endm ents to th e S tatutes of the N ational B ank (Annex I). The B ulgarian G overnm ent fully recognises th a t, for the definite consolidation of the financial situation of Bulgaria, it is desirable to transform th e B ulgarian N ational B ank in accordance with th e plan laid down in A nnex II in order to bring it into conform ity w ith other Central Banks, and undertakes to effect this transform ation at a date to be fixed by agreem ent betw een th e Council of th e League of N ations and th e B ulgarian G overnm ent. The details of this transform ation shall be fixed by agreem ent betw een th e Council an d th e B ulgarian G overnm ent on the advice of th e Financial Committee. 2. The existing S tatu tes of the B ulgarian N ational B ank shall be am ended forthwith in conform ity w ith the provisions contained in A nnex I, subject to th e final te x t for this purpose being approved by the Financial Com m ittee or by such m em bers as th e Com m ittee m ay nominate for th e purpose. The am endm ents to th e S tatu tes shall enter into force on th e date on which the pay m en t m entioned in paragraph 5 below has been com pleted. The B ulgarian N ational B ank shall perform th e functions assigned to it in th e Statutes, as am ended, and, in particular, it shall effect and m aintain the stabilisation of the B ulgarian currency in relation to gold and th e centralisation at the B ank of all th e receipts and paym ents of the State and the S tate enterprises. 3. The B ulgarian G overnm ent shall appoint as Adviser, under paragraph 1 above, to the B ulgarian N ational B ank such person as m ay be nom inated by th e Council of the League of Nations. The functions of the Adviser shall continue until such tim e as the Council shall have ascertained th a t th e financial and m onetary7 stability of B ulgaria is assured, and in any case, for not less than tw o years after th e transform ation of the B ulgarian N ational B ank shall have been completed in the m anner described in parag rap h 1 above. 4. F or the purpose of stabilising th e B ulgarian currency, a sum of 1,500,000 from the yield of th e loan shall be em ployed by the B ulgarian G overnm ent for strengthening th e position of the B ulgarian N ational B ank in th e m anner stated in p aragraph 6 below. 5. The B ulgarian G overnm ent shall, in accordance w ith Article V III below, request the issuing houses to pay the said sum directly to the B ulgarian N ational Bank. 6. The said sum shall be allocated : (а) To th e repaym ent of such p art of the advances m ade by th e B ulgarian National B ank to th e A gricultural B ank and the C entral Co-operative B ank respectively as the Bulgarian N ational B ank m ay decide, in agreem ent w ith the Adviser to th e B ulgarian National Bank; (б) To th e repayaient of all advances, other th a n those m ade to the Agricultural Bank and the C entral Co-operative Bank, m ade by7th e B ulgarian N ational B ank under the guarantee of th e S tate, such advances to be thereupon transferred to the A gricultural B ank; and (c) To th e repayaient of p art of the S tate debts to the B ulgarian N ational Bank, to be applied in the first place to th e im m ediate rep ay m en t of three T reasury bills of 50 million levas each. 7. The S tate will further apply the underm entioned funds annually tow ards the extinction of the rem ainder of its debt to the N ational B ank of B ulgaria: (a) The sum of 100 million levas from its current budget resources ; (b) All seignorage profits of the S tate derived from th e issue of subsidiary7coinage, (c) The whole of the S ta te s participation in th e profits of the N ational Bank. 8. The B ulgarian G overnm ent will tak e all necessary steps to effect the legal stabilisation of the B ulgarian currency in relation to gold as from th e day on which th e paym ent mentioned m paragraph 5 above has been completed. 9. The decisions fixing the m axim um am ount of subsidiary coinage which m ay at any time be in circulation, th e m ethod of its issue, and the am ount for which such coins shall be legal tender, shall be tak en by the G overnm ent in agreem ent w ith the N ational B ank of Bulgaria, p r o v i d e d th a no such decisions shall be in contravention of th e provisions of the S tatu tes of the Nationa B ank as am ended by this Protocol, and provided th a t such coinage shall be p u t into c irc u la tio n only through and a t the request of th e N ational Bank. 10. All restrictions upon the purchase or sale of foreign exchange shall be abolished within six m onths of the day m entioned in paragraph 8 of this article or w ithin such further perio 35 m ay be approved b y the A dviser to th e B ulgarian N ational Bank.

11 II Article V. Agricultural and Central Co-operative Banks. 1. The Central Co-operative B ank shall rem ain under the direct a u th o rity of the M inister of Finance, and th e general financial policy of the A gricultural B ank shall be determ ined by agreement betw een the M inister of Finance and the M inister of Agriculture. 2. For the purpose of providing new working capital for the said banks, the B ulgarian Government shall pay out of th e yield of the loan 500,000 to the A gricultural B ank an d 150,000 to the Central Co-operative Bank. 3. The Bulgarian G overnm ent shall, in accordance w ith Article V III below, request the issuing houses to pay the sum s m entioned in paragraph 2 above directly to the B ulgarian N ational Bank. The Bulgarian N ational B ank shall transfer the counter-value of the said sum s in B ulgarian currency to th e A gricultural Bank and the Central Co-operative Bank, respectively. 4. W ith the exception of a sum of 100 million levas which shall constitute perm anently a share of th e S tate in the capital of the Central Co-operative Bank, th e sum s received b y the Agricultural and C entral Co-operative Banks, in accordance w ith Article IV, paragraphs 6 (a) and (b), and Article V, paragraphs 2 and 3, shall be reim bursed to the S tate by the said B anks in accordance w ith an agreem ent to be made between them and the State. Article V I. Budget. 1. The B ulgarian G overnm ent undertakes to m ake, and to persist in making, every effort to keep the ordinary an d extraordinary budget for within the lim it of 6,750 million levas, and that for w ithin the lim it of 7,000 million levas, excluding in both cases such capital outlay as is m et out of the loan and receipts and expenditure accounted for in special funds, and to m aintain thereafter a complete equilibrium between the current revenue and current expenses of the State, current expenses being taken to m ean all expenditure except such capital outlay for productive purposes as m ay be provided for from sources other th an current revenue. 2. The B ulgarian G overnm ent undertakes to reimburse forthw ith out of the loan the budget liabilities set out in A nnex III. 3. The B ulgarian G overnm ent shall, in accordance w ith Article V III below, request the issuing houses to p ay th e p art of the loan m entioned in paragraph 2 above directly to the B ulgarian National B ank for the account of the Bulgarian G overnm ent. 4. The B ulgarian N ational Bank shall hold the sums to be used in accordance w ith paragraph 2 above in a special account for the Bulgarian Governm ent. All drawings from this account shall require the counter-signature of the Commissioner appointed in accordance w ith Article I of the Protocol signed at Geneva on Septem ber 8th, The Commissioner shall satisfy himself th a t such drawings are in respect of and are used for paying the liabilities described in paragraph 2 above. 5. The B ulgarian G overnm ent undertakes to transm it, every three m onths during a period of five years after th e date of the signature of this Protocol, to the Council of the League of N ations, a report on its budget situation and T reasury liabilities, and in particular, as to the em ploym ent of the proceeds of the loan. 6. The B ulgarian G overnm ent undertakes: (а) To proceed to the creation of a new system of public accounting in conform ity w ith the principle of the u n ity of the State budget, and to include in the budget all special funds except those described in A nnex IV ; (б) To m aintain the existing system of m onthly budgets; (c) To establish a com plete and perm anent system of T reasury control, and until such system is established to m aintain the existing system of control by the Budget Commission ; [d) To publish regularly every m onth under appropriate heads returns of receipts and expenditure provided for in the budget, the cash position and the liabilities of th e T reasury and the position of the public debt. The form of these returns shall be determ ined b y agreem ent between the Bulgarian G overnm ent and the Commissioner of the League of Nations. 7- The B ulgarian G overnm ent will m ake every effort to reduce the employees of the State and of State undertakings w ithin a period of two years from Ju ly 1st, 1928, by at least 10, The Minister of Finance shall co-ordinate and approve all borrowings, w hether external mternal, on the p a rt of all public authorities. He shall ask the advice of th e Governor, and, during the term of his office, of the Adviser of th e Bulgarian N ational B ank on these questions and on all legislative and other m easures of a general character in m atters of m oney and credit. Article V II. Means of Transit. L A sum not exceeding 1,250,000 out of the proceeds of th e loan m ay be em ployed for jneans of transit. The purposes for which it is to be em ployed and a general scheme of expenditure aft k6 PurPoses shall be subm itted for the approval of the Council of the League of Nations, a ^ e report of th e railw ay expert to be appointed by the Bulgarian G overnm ent has become

12 12 2. T he B ulgarian G overnm ent shall, in accordance w ith A rticle V III below, request the issuing houses to p ay the p a rt of th e loan m entioned in paragraph i above into a special account or accounts as directed by the Commissioner appointed in accordance w ith Article I of th e Protocol signed a t G eneva on Septem ber 8th, All draw ings from such special account or accounts shall require the counter-signature of th e said Commissioner an d shall be m ade only for th e purposes m entioned in paragraph 1 above and in conform ity w ith detailed plans approved by him, w ithin the general scheme contemplated in paragraph 1. T he Commissioner shall satisfy him self th a t such paym ents are used only for the purposes for which he has authorised th em to be m ade. Article V I I I. Miscellaneous. 1. T he several instalm ents of the loan issues shall be allocated for the purposes contemplated by the present Protocol in agreem ent w ith the President of the Financial Committee, and instructions to th e issuing houses shall be given accordingly b y the B ulgarian Governm ent. 2. If any balance rem ains under either A rticle VI or A rticle V II, th e Financial Committee m ay authorise a transfer from one head to th e other. 3. A ny sum s which have becom e available from th e yield of the loan and have not been allocated shall be tem porarily retained on a blocked account or accounts, as th e Commissioner, appointed in accordance w ith A rticle I of the Protocol signed a t G eneva on September 8th, 1926, m ay decide in agreem ent w ith the N ational B ank of Bulgaria, and under the control of the said Commissioner. Article I X. Issue of Treasury Bills. The B ulgarian G overnm ent undertakes not to seek short-term advances or to issue Treasury bills or other sim ilar short-term obligations in excess of 600 m ilhon levas. N othing in this article shall prejudice th e existing rights of th e Inter-allied Commission established under A rticle 130 of th e T reaty of Neuilly. Article X. Trustees. 1. The Council of th e League of N ations will appoint T rustees to represent the interests of th e bondholders of th e loan, and the B ulgarian G overnm ent accepts th a t th e Trustees shall fulfil th e functions an d perform the acts assigned to th em in this Protocol until th e loan, and every part thereof, and every claim in respect thereof, shall have been com pletely discharged. 2. The revenues m entioned in Article II, parag rap h 1, will be p aid into a special account, as an d w hen collected for the purpose of assuring the service of the loan. The Commissioner appointed in accordance w ith A rticle I of th e Protocol signed at G eneva on Septem ber 8th, 1926, and, after th e term ination of his functions, the Trustees, m ay alone control this account. Any balance of th e account not retainable in accordance w ith th e following provisions or with th e term s of issue of the loan shall be reim bursed to th e B ulgarian G overnm ent, subject, however, to the powers conferred on the T rustees in th e event of a default under paragraph 3 (b) below. 3. The term s on which the loan is issued shall include, am ong other provisions: (a) Provisions as to am ounts which, a t th e intervals fixed by such term s, shall be paid out of the special account provided for in th e preceding p arag rap h b y the Commissioner to the Trustees, and during such tim es as th e Trustees m ay be in control of the account, set aside by the T rustees them selves and retained for the service of the loan, including interest, am ortisation an d all charges, commissions or o th er paym ents to be m et b y the Bulgarian G overnm ent in connection therew ith. (b) Pow er for th e Commissioner a t th e request of the Trustees, or for the Trustees them selves if th ey shall be in direct control of the account m entioned in paragraph 2 of this article, to retain, collect or otherwise provide out of the said revenues (including such other revenues as m ay be brought into charge under the provisions of A rticle II) sufficient sums to rem edy an d m ake good an y default of the B ulgarian G overnm ent in whole or in part m carrying out an y of its obligations contained in the conditions of the loan. Article X I. Commissioner. 1. The Commissioner appointed in accordance w ith A rticle I of the Protocol signed at Geneva on Septem ber 8th, 1926, shall, in th e reports subm itted by him to the Council of the League of N ations in accordance w ith paragraph 3 of A rticle I of th e said Protocol, report also as to tne progress m ade in the execution of the present Protocol, and the B ulgarian Governm ent sha furnish him w ith all inform ation necessary for this purpose.

13 13 2. N otw ithstanding th e provisions of Article I, paragraph 6, of the Protocol signed a t Geneva on Septem ber 8th, 1926, the functions of the Commissioner under th e present Protocol shall continue until th e Council is satisfied th a t his services are no longer required for the purposes specified in Articles V I and V II of the present Protocol. Article X I I. First Charge. The obligations assum ed by th e Bulgarian G overnm ent under the provisions of this Protocol shall not become effective unless and until the Bulgarian G overnm ent is able to give th e first charge contemplated under A rticle II. Article X I I I. Protocol Article. 1. A ny differences as to the interpretation of this Protocol shall be settled b y the Council of the League of Nations. 2. All decisions to be taken b y the Council under the term s of this Protocol shall be taken by a m ajority vote. 3. This Protocol, of which the French and English texts are both authentic, shall be ratified by Bulgaria, and the ratification shall be deposited at the Secretariat of the League of N ations as soon as possible, and in any case not later than three m onths from the date of its approval by the Council of the League of Nations. In faith whereof th e undersigned, duly authorised for the purpose, has signed the present Protocol. Done a t Geneva on the 10th day of March, 1928, in a single copy, which shall be deposited with the Secretariat of the League of N ations and be registered by it w ithout delay. (Signed) Wl. M o llo ff, Bulgarian Minister of Finance. Annex 1 1. A m en d m en ts to th e P r e se n t Statutes of the B ulgarian N ational B a nk 2. I. Article 2: th e words The convertibility into gold of paper m oney (banknotes) will be governed by a special law to be deleted. II. The following article to be inserted after Article 2: To ensure th e convertibility of its notes : Article A. 1. The B ank, on th e requisition of any person who m akes a dem and or offer to th a t effect at the head office of th e B ank in Sofia, shall be bound to sell to, or to purchase from, such person in exchange for legal-tender currency of Bulgaria, a t the rates defined in Sections 2 and 3 of this article, respectively, th e legal-tender currency of such foreign gold standard country or countries as is by law and in practice convertible into exportable gold, and such as m ay be notified in th e Official Gazette, for im m ediate delivery in such foreign country or countries. Provided th a t no person shall be"entitled to dem and or offer an am ount of foreign currency of less value th a n 50,000 levas of legal-tender m oney of Bulgaria. 2. For the purpose of determ ining the rate applicable to the sale of foreign currency under this article, the am ount in levas which represents 1,000 gram m es of fine gold in accordance w ith the stabilisation rate shall be deem ed to be equivalent to such sum in th a t foreign currency as is required to purchase 1,000 gram m es of fine gold in th a t foreign country, at th e rate at w hich th e principal currency au th o rity of th a t country is bound by law to sell gold in exchange for currency, after deduction from such of an am ount to be fixed by the B ank representing the norm al cost per I'000 grammes of transferring gold bullion in bulk from Sofia to th a t foreign country, including interest and insurance of its value during transit. 3 - F or the purpose of determ ining the rate applicable to the purchase of foreign currency under this article, the am ount in levas which represents 1,000 gram m es of fine gold in accordance with the stabilisation rate shall be deem ed to be equivalent to such sum in th a t foreign currency as 1 The final text of this Annex is to be approved by the Financial Committee or such members as the Committee ma> nominate for the purpose, in accordance with Article IV, paragraph 2, of the Protocol. It is understood that the articles of the Statutes will have to be renumbered in connection with these amendments.

14 14 is realised by the sale of 1,000 gram m es of fine gold in th a t foreign country a t the rate a t which the principal currency au th o rity is bound b y law to purchase gold in exchange for currency, after addition to such sum of an am ount to be fixed by the B ank representing the norm al cost per 1,000 gram m es of transferring gold bullion in bulk from th a t foreign co u n try to Sofia, including interest and insurance on its value during transit. 4. On the date on which th e provisions of this law become operative, th e B ank shall notify in th e Official Gazette a t least one foreign gold stan d ard country for the purposes set fo rth in Section 1 of this article. The B ank shall sim ilarly notify an y additions or changes of the foreign gold standard countries to w hich Section 1 of this article is to apply. T he B ank shall also from tim e to time determ ine the equivalent rates in accordance w ith th e provisions of Sections 2 and 3, and shall notify in th e Official Gazette th e rates so determ ined. III. Articles 8, 9 and 10 to be replaced by th e following articles: Article B. The B ank shall m aintain a reserve of not less th a n 3 3 l/3 per cent of th e am ount of its notes in circulation an d other dem and liabilities. B y banknotes in circulation are to be understood all banknotes issued to th e public an d not retu rn ed to th e offices of the Bank. Article G. The term reserve in th e preceding article shall include only : (а) Gold coin and bullion 1 in th e unrestricted ownership of th e B ank, and either in the custody of th e B ank or deposited in another C entral Bank, or in an y M int, or in transit ; (б) N et foreign gold exchange in th e unrestricted ow nership of the B ank, provided th a t it be either : (1) On a country th e currency of w hich b y law and in practice is convertible on d em and at a fixed price into exportable gold ; or (ii) On a country th e currency of w hich by law and in practice is convertible on dem and a t a fixed price into foreign exchange as defined in (i). F or th e purpose of this article th e term net foreign gold exchange shall be tak en to consist of the following kinds of claim s on th e currency of a co u n try as defined in the preceding paragraph (6) : (1) Balances standing to th e credit of th e B ank a t th e C entral B ank of such a foreign country. (2) Bills of exchange draw n on an d payable in th e currency of such a foreign country, m aturing w ithin three m onths and bearing a t least tw o good signatures. (3) T reasury Bills, T reasury Certificates of indebtedness or sim ilar obligations of th e G overnm ent of such a foreign country m atu rin g w ithin three m onths : Less all liabilities in foreign exchange. of th e weekly statem ent. All such liabilities shall be included in the figures In calculating th e am ount of th e reserve, should it be found th a t the liabilities in foreign exchange exceed th e to ta l of th e assets enum erated in th e paragraphs num bered (1), (2) and (3) of this article, the excess shall be deducted from th e to ta l of th e other assets of the reserve. Article D. A t th e request of the Bank, th e G overnm ent m ay suspend th e operation of Article B subject to th e paym ent by th e B ank to th e G overnm ent of a tax. Suspension m ay be granted for a period of not m ore th a n th irty days in the first instance and m ay be renewed for further periods not exceeding fifteen days a t a tim e. The ta x shall be levied on th e am ount by which the note circulation and other dem and liabilities of the B ank exceed the m axim um sum which would be admissible under Article B. The ta x shall be calculated on th e daily am ount of th e excess at th e following rates : 1 y2 per cent per annum above the published m inim um current discount rate of th e Bank foi three-m onths bills if th e reserve, while less th a n 33^3 per cent, is not less th a n 30 per cent. 2 per cent per annum above such m inim um current discount rate if th e reserve, while less than 30 per cent, is not less th a n 25 per cent. 3 per cent above such m inim um current discount rate if th e reserve is less th a n 25 per cen Article E. Before applying to th e G overnm ent for th e suspension of A rticle B, th e B oard of D irectors shall raise the B an k s rate for discounts by not less th a n one per cent per annum. 1 See also transitory Article P for silver.

15 15 IV. A rticle 13, paragraph 2, to be replaced by the following paragraphs: The G overnor and th e Deputy-Governors shall be appointed b y R oyal Decree on the recommendation of th e M inister of Finance, the Governor for seven years, the D eputy-g overnors for five years. These term s of office m ay be renewed. If the Governor, any D eputy Governor or any D irector be guilty of a breach of these S tatutes, or abuse his position for private or business purposes, he can be rem oved from office by a decision of the Sobranie, to whom the Minister of Finance shall subm it a reasoned report, to which should be annexed a statem ent b y th e Governor, th e D eputy Governor or the D irector in question of their point of view. V. Articles 34 to 37 inclusive, Article 38, paragraph 1, Article 39, Articles 40, 43 to 45 inclusive, Article 46, paragraphs 2 and 3, Articles 47, 53, 54 and 55, paragraph 1, to be deleted. The following articles to be inserted after Article 33 : Article F. The business of the B ank shall be restricted to the following operations. The B ank m ay : (1) Make and issue banknotes. (2) Issue dem and drafts and bank post bills m ade payable a t the B ank s head office or branches. No such drafts or bills draw n by the Bank on itself shall be m ade payable to bearer. (3) B uy and sell gold coin or bullion. (4) Deliver cheques, drafts and letters of credit to order or to bearer, payable in levas at sight and effect transfers by telegram, by letter or otherwise. (5) A ccept m oney on current or deposit account. (6) Discount, purchase or sell inland bills of exchange and prom issory notes arising out of bona-fide com m ercial transactions bearing not less than tw o good signatures and m aturing w ithin three m onths. (7) D iscount bonds and coupons of loans of the State or of loans guaranteed by the State, provided th a t these bonds and coupons m ature within three months. (8) D iscount, purchase or sell bona-fide inland agricultural bills and notes bearing not less th a n tw o good signatures and m aturing w ithin nine m onths, provided th a t this category of bills and notes does not exceed 25 per cent of the B ank s portfolio of inland bills and notes acquired by discount or purchase. (9) D iscount for the tem porary requirem ents of the S tate for expenditure au th o rised in th e A nnual S tate Budget, T reasury Bills of the Bulgarian State w ith a m atu rity of not more th an three m onths, up to an am ount of 400 million levas, provided th a t the whole am ount be repaid not later th an a t the end of the quarter following the close of th e fiscal year in respect of which such accom m odation is afforded. The rate of discount for such Treasury Bills to be 2 per cent below the current bank rate for the discount of three m onths' bills w ith a m axim um of 7 per cent. (10) D iscount, purchase or sell T reasury Bills of the Bulgarian S tate w ith a m atu rity of not more th a n three m onths which are endorsed by a bank, person or firm whose nam e has been approved by the B oard of Directors. Provided th a t the total am ount of T reasury Bills acquired in accordance w ith this paragraph or accepted as collateral in accordance w ith paragraph (14) (c) below m ay not together at any tim e exceed 200 million levas. (11) U ndertake the issue and m anagem ent of the State D ebt and loans of other public bodies and such other services as are laid down in Articles 68, 69 and J. (12) B uy and sell at hom e and abroad, for im m ediate or forw ard delivery, foreign currencies stabilised on gold, telegraphic transfers, cheques, bills of exchange (including Treasury Bills) an d drafts draw n in or on any place in a country whose currency is stabilised on gold, and m aturing w ithin three m onths, and keep balances w ith banks in such currencies. (13) A ct as agent for or correspondent of any other bank in Bulgaria or abroad. (14) G rant advances for fixed periods not exceeding three m onths against the following security: (а) Gold coin an d bullion. (б) B ulgarian S tate Bonds or bonds guaranteed by the B ulgarian G overnm ent quoted on the Sofia Stock Exchange, provided th a t no advance shall exceed 80 per cent of the m ark et value of an y such bonds. (c) T reasury Bills of the Bulgarian S tate w ithin the lim itations specified m p aragraph (10) of this article. (d) W arehouse certificates (warrants) expressed in Bulgarian currency, on condition th at these certificates bear the signatures of two persons well know n to be solvent, and

16 i6 th a t th e y be payable in B ulgaria w ithin a m axim um period of three m onths. The warehouses whose w arran ts m ay be accepted as security for an advance at th e Bank shall be selected b y the B oard of Directors, who will also determ ine th e nature of the com m odities to w hich th e w arrants m ay relate. The B oard of D irectors will also fix th e am ounts which m ay be pledged. No advance, however, shall exceed 50 per cent of th e current value of th e com m odities in question. All stipulations set out above regarding com m ercial bills shall apply equally, mutatis mutandis, to w arrants. (e) Bills of exchange payable in B ulgaria or abroad in th e national currency or foreign gold exchange w ith not m ore th a n three m onths to run, and conforming to the stipulations of paragraphs (6) an d (12) above, b u t only up to 80 per cent of their face value. (/) Certificates of deposits at th e N ational B ank for fixed periods not exceeding six m onths and repayable in th e national currency or foreign gold exchange. (g) O ther form s of foreign gold exchange as defined in Article C. The rate of interest on all advances shall be n ot less th a n 1 per cent above the B an k s current official discount rate for three-m onths bills. (15) Accept the custody and m anagem ent of monies, securities and other articles of value. (16) U ndertake on behalf of th ird parties th e purchase and sale, collection and payment of securities, currencies and credit instrum ents at hom e an d abroad and the purchase or sale of gold and silver. (17) Invest an am ount not exceeding 20 per cent of the paid-up capital and reserves in B ulgarian S tate Bonds or bonds guaranteed by th e B ulgarian G overnm ent quoted on the Sofia Stock Exchange. (18) D eliver guarantee certificates for use w ith departm ents of th e public service. These certificates to be delivered against paym ent or against prom issory notes payable to order or on dem and signed b y the debtor and b y tw o solvent persons as guarantors. The m axim um am ounts of these certificates and th e conditions of issue shall be determ ined by the B oard of Directors. The B ank m ay, w hen it thinks necessary, dem and a replacement of th e prom issory note b y a m arketable security authorised b y these S tatutes or may enforce the paym ent of the note b y the process of forced execution. Certificates of guarantee m ay also be delivered against securities or com m ercial bills surrendered in pledge. (19) D o all such things as m ay be incidental to the transaction of th e Bank's legitim ate business, as defined in these Statutes. Article G. In th e case of advances against bills of exchange, th e B ank shall have th e right to examine the books and also th e portfolio of th e depositor w hen it thinks necessary. The B ank shall not: Article H. (1) Issue notes of a denom ination less th a n 200 levas ; (2) D irectly or indirectly m ake advances to th e S tate except as provided in Article F or undertake an y transactions for th e S tate n ot specified in A rticle F ; (3) D irectly or indirectly m ake advances, in an y circum stances whatever, to departm ents, m unicipalities or other bodies of th e sam e n atu re ; (4) Engage in tra d e or otherw ise have a direct interest in an y com m ercial or industrial undertaking ; (5) Make unsecured loans or advances; (6) A dvance m oney on m ortgage or engage in any sim ilar transactions, or in general m ake advances for periods longer th a n those specified in A rticle F ; (7) Become the possessor of im m ovable p roperty except so far as is necessary for its own business an d w ith the exception provided for in A rticle 42; (8) Purchase its own shares or th e shares of an y other b an k or of an y company : (9) P ay interest on m oney placed on deposit or current account w ith the Bank except as provided in A rticle J, and th a t interest at th e rate of n o t m ore th a n 1 per cent per annum m ay be paid on the deposit or current accounts of other banks ; (10) D raw or accept bills payable otherwise th a n on dem and ; (11) D iscount or accept from a n y one p a rty (unless from th e G overnm ent under Article F) as security, w ithout a special resolution adopted b y a three-quarters majority vote of a m eeting of th e B oard of D irectors, bills exceeding one-tenth of the paid-up capita of th e B ank, taking into consideration th e liabilities of th e p a rty to th e B ank as a bill acceptor, drawter or endorser ; (12) Allow the renew al of m atu rin g bills of exchange purchased or discounted by t e Bank.

17 VI. A fter A rticle 60, sub 1, add: 17 These statem ents shall be in the form set out in the Annex to these S tatutes and shall include all foreign exchange engagem ents. Delete A rticle 61. VII. A fter Article 69 insert the following articles: Article I. No interest shall be paid by the Bank on such accounts, except th a t th e B an k m ay p ay on funds held abroad interest a t a rate lower b y not less th a n one per cent per annum th a n th e average rate earned b y the B ank on such funds. Article J. The G overnm ent shall entrust the B ank w ith all their money, rem ittance, exchange and banking transactions in Bulgaria and elsewhere. V III. A fter A rticle 71, insert the following article : Article K. The B ank shall not g ran t accom m odation to the State, S tate undertakings or public authorities, directly or indirectly, by w ay of discounts, loans, advances or overdrafts, otherw ise than is provided in A rticle F. The Bank shall not guarantee T reasury Bills or other obligations of the State undertakings or any public authorities, neither shall the B ank effect paym ents for the State, S tate undertakings, or any public authorities for which funds are not im m ediately available at the B ank, nor enter into contracts in the nam e of th e B ank for their account. IX. A dd to A rticle 74 the following sentence : The G overnm ent Commissioner shall observe strict secrecy in regard to the affairs of the Bank. " X. The second sentence of Article 76 to be replaced b y the following : A ny such objection shall have the force of a suspensive veto until th e question in dispute has been decided by a Commission of three persons to be nam ed w ithin seven days on a request to th a t effect being m ade either by the B ank or the G overnm ent Commissioner, and to report w ithin seven days of nom ination. The Commission shall be composed of one nominee of th e G overnm ent, one nominee of the B oard of Directors and a chairm an who shall be chosen b y the G overnm ent and the B oard of Directors, or who, failing agreem ent betw een the parties, shall be th e President of the High Court of A dm inistration. XI. A fter A rticle 76 ad d the following article: Article L. Any question in dispute between the G overnm ent and the B ank other th an those leading to a suspensive vote of the G overnm ent Commissioner shall also be settled b y arb itratio n in th e same m anner as is laid down in Article 76. XII. After A rticle 77, insert the following article: Article M. The Bulgarian G overnm ent binds itself not to issue or re-issue m oney of an y ty p e w hatever other than subsidiary coins of denom inations not higher th an 100 levas, an d these only to th e B ank and at its request an d in accordance w ith the law.

18 i8 X III. A fter Article 79 insert the following article: Article N. The B ank shall be exem pt from all taxes or duties levied by the S tate ; in particular, from the paym ent of any tax or d u ty on its note issue other th a n th e tax to be im posed in certain contingencies as provided in Article D. X IV. A fter Article 80 insert th e following articles: T r a n sito r y A r t ic l e s. Article 0. The B ank shall use every endeavour to free itself as quickly as possible from its mortgage business, and, w ithin three years from the coming into force of these Statutes, shall free itself from all other business of a n atu re co n trary to the provisions of th e S tatutes. Article P. W ithin a period not exceeding three years from th e date of signature of the Protocol to which these am endm ents to the S tatu tes are annexed, the B ank shall sell the silver in its possession ; b u t in the m eantim e such silver m ay be included in the B ank's reserve (Article C) a t its market value. Before disposing of its silver elsewhere, the B ank shall offer the B ulgarian Governm ent the o pportunity of purchasing such am ran t as it m ay require in respect of silver coinage. The Bank shall be p erm itted b y the B ulgarian G overnm ent to export an y balance which it m ay desire to dispose of on the open m arket. Article Q. D uring the first three years from th e date on w hich these S tatu tes come into force, the Bank m ay issue notes of a denom ination less th a n 200 levas, notw ithstanding the provisions of Article H. XV. A t th e end of th e S tatu tes add th e following chapter : A p p o in t m e n t o f a n A d v i s e r. Article R. An adviser to th e N ational B ank of Bulgaria shall be appointed by th e G overnm ent on the nom ination of th e Council of th e League. On entering on his office, th e A dviser will give an undertaking in w riting to perform his duties faithfully in th e interests of th e B ank and in conform ity w ith its S tatutes, and to preserve secrecy w ith regard to the business of th e Bank. Article S. In exercising his functions, th e A dviser shall as far as possible w ork through, and in consultation w ith, the B oard of M anagem ent. T he governors, m anagers and all employees of the Bank, w hether at the head office or a t th e branches, shall render th e A dviser all th e assistance in their power, as well as furnish him w ith an y inform ation or docum ents w hich he m ay require. Article T. The A dviser shall have the right to a tte n d all m eetings of the B oard of Directors, Executive Com m ittee and B oard of M anagem ent in a consultative capacity. In th e event of his being ot e opinion th a t a decision taken by the B oard of M anagem ent is co n trary to these Statutes, he ma} require th a t th e question be subm itted forthw ith to a m eeting of th e B oard of Directors. Should he be of the opinion th a t a decision tak en by th e G overnor, by the B oard of Directors, or b y th e E xecutive Com m ittee is contrary to th e provisions of these S tatutes, he shall exercise suspensive veto, and no action shall be taken on th e decision until either an agreem ent has bee reached betw een th e B oard of D irectors and th e A dviser on th e question or it has been decided y a third p a rty to be m utually agreed upon, or, failing such agreem ent, b y th e Chief Justice. Article U. A ny alteration of this law shall require th e specific approval of the Adviser.

19 IQ X V I. At th e end of the S tatutes add the following annex: Annex. N a t i o n a l B a n k o f B u l g a r ia : W e e k l y R e t u r n. i4sse/s. 1. Gold coin and bullion, i (a). S ilv e r1. 2. Foreign gold exchange (Article C of Statutes). 3. O ther foreign exchange. 4. Subsidiary B ulgarian coins. 5. Inland bills and notes: (a) Commercial bills and notes : (5) T reasury bills. 6. A dvances: 1. R epayable in levas : (a) G overnm ent ; (b) Others. 2. R epayable in foreign exchange. 7. S tate debt. 8. Investm ents. 9. B ank buildings and equipm ent. 10. O ther assets. 11. Capital paid up. 12. Reserve funds: (a) General Reserve F u n d ; [b) O ther Reserve Funds. 13. B anknotes in circulation. 14. O ther sight liabilities in levas: 1. C urrent and deposit accounts : (a) G overnm ent accounts ; (b) B ankers accounts ; (c) O ther accounts. Liabilities. 2. B ank post bills and dem and drafts. 15' Deposits in levas a t notice: (a) G overnm ent accounts; (b) B ankers accounts ; (c) O ther accounts. 16. Foreign exchange liabilities: (a) Foreign gold exchange (Article C of Statutes) ; (b) O ther foreign exchange. 17. O ther liabilities. Proportion of gold, silver and net foreign gold exchange to sight liabilities. Gold. Silver. Net foreign gold exchange (No. 2 less No. 16) Reserve (as laid down in Article C of Statutes) Total (a) Notes Other sight liabilities in levas Total (6) Proportion of T otal (a) to Total (b) = % 1 See Article P.

20 20 Annex II. T ransfo rm ation of t h e B ulga rian N ational B a n k. 1. The B ank to have a paid-up capital of 500 million levas, divided into 500,000 shares of 1,000 levas each, carrying a lim ited dividend. 2. T he whole of the shares to be offered for public subscription through the N ational Bank. The allotm ent to be m ade b y the N ational B ank and, in th e case of over-subscription, preference to be given to sm all subscribers. Shares w hich have not been subscribed to be sold by th e National B ank w henever application is m ade for their purchase. 3. All monies obtained b y th e issue an d sale of the shares to be used for th e reduction of the S tate debt to th e N ational B ank. 4. The shares to be registered in the nam e of the holder. Only B ulgarian nationals to be allowed to register as shareholders. T en shares to entitle their owner to one vote, b u t a grouping of shareholders holding less th a n ten shares to m ake up this num ber for th e purpose of exercising their vote at the General M eeting to be permissible. No shareholder to be entitled to m ore th a n tw enty-five votes in respect of shares registered in his own nam e. As proxy, his right to be lim ited to another tw enty-five votes. 5. The General M eeting of shareholders to be th e suprem e au th o rity of th e B ank and represent th e whole body of shareholders. 6. The B oard of the B ank to consist of eleven m em bers, nam ely, the Governor, two Vice-Governors and eight other Directors. The G overnor of the B ank to be appointed by th e King, on th e recom m endation of th e Minister of Finance, for a period of seven years. The Vice-Governors to be sim ilarly appointed, but for five years each. These term s of office to be renewable for like periods. The Governors to be of recognised com petence in financial and m onetary affairs. F our of th e rem aining eight directors to be elected freely by the General Meeting of shareholders. The other four to be elected by th e General Meeting, one from each of four panels containing three nam es each. The four panels to be established respectively by bodies representative of commerce, of industry, of agriculture and of u rban co-operative societies. 7. A fter m aking provision for b ad and doubtful debts, depreciation in assets and such o th er contingencies as are usually provided for by bankers, and appropriations to th e Staff Pension Fund, a dividend not exceeding a fixed percentage to be paid to the shareholders. Of the surplus, one-half to be allocated to th e G eneral Reserve F u n d and the other half to th e Government. A fter th e Reserve F u n d has becom e equal to the capital, one-quarter of th e surplus to be paid to the shareholders and the balance to th e G overnm ent. 8. In th e event of liquidation of the B ank, its assets an d liabilities to be valued by three experts to be appointed one by the G overnm ent, one b y the B ank and one in agreem ent by the G overnm ent and th e Bank. The nom inal value of th e shares to be paid to th e shareholders and any surplus to be divided in th e proportion of one-third to the shareholders and tw o-thirds to the G overnm ent. Annex III. S t a t e m e n t s h o w i n g B u d g e t L i a b i l i t i e s t o b e r e p a i d o u t o f t h e P r o c e e d s o f t h e L oan. Levas (000,000's omitted) 1. D ebt to th e N ational B ank arising from the fact th a t th e am ount due to the B ank under th e S tatu tes was n ot paid in th e financial year i5 " 2. R epaym ent of loans from special funds : Social insurance f u n d F und to provide loans to M unicipalities for irrigation works, electricity w o r k s M unicipal roads f u n d F u n d for housing, hospitals an d pensions of railw ay employees F und for w ar victim s, e tc IS8-3. Paym ent in respect of th e debt due to th e Pension F und on account of non-paym ent of subsidy in past y e a r s... I00 _ 4. A rbitral tribunals, internal liability to railw ay c o n tracto rs A rrears of interest due to A gricultural B a n k... 9 ~ 6. Paym ent in respect of supplem entary guarantee for the refugee l o a n... ^4-2 T o t a l = (say) 11,100,000

21 21 Annex IV. F unds w h ic h m a y b e e x e m p t e d f r o m I n c o r p o r a t i o n in t h e B u d g e t u n d e r A r t i c l e V I, 6 (a ) : 1. D onation funds ; 2. S tate Officials Pension Fund; 3. Social Insurance Fund; 4. F u n d to cover losses b y the State on loans for refugees; 5. F u n d to supply loans to Municipalities for irrigation and electricity works; 6. M unicipal roads fund ; 7. F unds for housing, hospitals and pensions of railw ay employees ; 8. Construction and upkeep of sanatoria and health resorts for postal employees ; 9. C onstruction of offices and purchase of postal vehicles ; 10. Epizootic Fund. Funds which are m erely suspense accounts i.e., accounts through which revenue only passes to the general budget are not contem plated by Article VI. APPENDIX B. NOTE FROM T H E P R E S ID E N T OF T H E M IX E D GRECO-BULGARIAN E M IG R A TIO N COMMISSION TO T H E FIN A N C IA L COM M ITTEE. Geneva, March 2nd, In Septem ber 1927, the Council of the League of N ations, on the proposal of th e R ap p o rteu r, Sir Austen Cham berlain, requested the Financial Committee to be good enough to advise th e President of the Mixed Commission on any technical questions connected w ith th e com pensation of Greek and B ulgarian em igrants, concerning which the President of the Commission m ight wish to consult the Committee. As the result of this Council resolution, the President of the Commission was able in Septem ber to explain to the Financial Com m ittee all the questions raised by th e com pensation of the em igrants. I he Chairm an of th e Financial Com m ittee kindly undertook to study the problem in detail, and. on Septem ber 17th, the Bulgarian M inister of Finance and representatives of th e Greek Minister of Finance signed at Geneva a first Agreem ent on the subject of the cash payments to be made to the em igrants. In December, the Financial Com m ittee resumed its consideration of the problem and, in consultation w ith the Finance Ministers of the two States, drew up a second Agreement under which all questions still outstanding, in particular deferred payments and guarantees, were settled. This Agreement w as signed by the Greek and Bulgarian Ministers of Finance and by th e President of the Mixed Commission on behalf of Greece, Bulgaria and the Em igration Commission respectively. hen, on Decem ber 12th last, the Council of the League of N ations noted the Agreem ent "hicli had been signed on the ninth day of the same m onth, the President of the Mixed Commission asked the Council to convey m ost hearty thanks to the Financial Com m ittee for its valuable help, "hich would very m aterially assist the Mixed Commission to term inate its work. 1he President of th e Commission and his neutral colleague now venture to draw the Committee s attention to the m anner in which the agreem ents signed through its good offices are emg carried out in the tw o countries, and the consequences which will follow if this situation is prolonged. 1. Cash Payments. The sum s paid in by the Bulgarian G overnm ent to the N ational B ank, _ u&'n n t up to the am ount due under the Septem ber Agreement, have nevertheless been sufficient to pay claims on the drafts issued by the Commission up to F ebruary 20th last. On the j reek side, the paym ents have not been sufficient to m eet the drafts issued up to the same date, the total liability on unpaid drafts reaches a high figure. 2. Deferred Payments. (a) The Agreement of December 9th has not yet been subm itted 1 the Greek Parliam ent for the ratification specified in Article 10. On the B ulgarian side, the commission has been inform ed th at, although the Agreement has not yet been ratified, it will be app led without w aiting for ratification.. IJ) Article 3 of the A greem ent laid down th a t any titres provisoires which it m ight be necessary t flsue alter Jan u ary is t, 1928, would be worded in accordance w ith the new form ulas appended 0 the Agreement. On th e Greek side, persons who have em igrated are still given titres provisoires j 1the old form ; on the B ulgarian side, no titres provisoires have been distributed since Ja n u a ry is t n to lack of funds.

22 22 (c) U nder paragraph 3 of Article 4, the Greek G overnm ent was requested to pay to th Bulgarian G overnm ent, before Ja n u a ry 31st, a sum of about 18 million levas as interest on account of its debt. As far as the Commission is aware, this sum has not been paid. The Mixed Commission has now reached a point in its w ork where it can: (1) contemplate the liquidation of the em igrants property before the end of the present year; (2) plan (as it has already inform ed the Governm ents) to reduce its working expenses for the financial year by about 60 per cent. It is absolutely essential, if th e Mixed Commission is to achieve its purpose, th at the Agreem ents concluded through the good offices of the Financial Com m ittee should be strictly carried out b y the tw o contracting parties. If these signed A greem ents are allowed to rem ain inoperative, it will be impossible for the Mixed Commission to do its work. Consequently, the Members of the Commission appointed by the Council feel bound to report these facts to the Financial Com m ittee, w ith a request that the Com m ittee will give its opinion as to the steps w hich m ight be taken to rem edy th e situation. They w ould be glad if the Financial Com m ittee w ould also consider w hether the Council should n ot forthw ith appoint the neutral bank referred to in Article 5 of the Decem ber Agreement. Finally, th e President desires to assure the Financial Com m ittee once more th a t he and his neutral colleague have only one end in view to bring their w ork to a speedy and successful term ination. B ut as the Financial Com m ittee can see the task is an arduous one, bristling w ith fresh difficulties at every turn. The President therefore ventures to appeal m ost earnestly to the Committee, asking th at now, as in the past, it will afford its valuable assistance to the Mixed Commission w ith a view to ensuring th e strict application of the Agreem ents signed.

23 23 B. RESOLUTIONS ADOPTED BY T H E COUNCIL. I. G r e e c e : S e t t l e m e n t o f R e f u g e e s a n d S ta b i lis a tio n L oan. The Council: Resolution adopted March $th, Takes note of the Seventeenth Q uarterly R eport of the Refugee Settlem ent Commission 1 ; 2. A pproves an d adopts th e report of the Financial Committee, and in particular approves, in accordance w ith A rticle V I of the Protocol signed at Geneva on Septem ber 15th, 1927, the allocation of approxim ately 150,000, 100,000 and 29,000 respectively : (a) To the construction of certain roads and bridges in M acedonia connected w ith the settlem ent of refugees, (b) To prom oting the productive developm ent of the domestic carpet industry, and (c) Village arts and crafts am ong refugees, these sum s to be expended w hen the to tal of 3,000,000 sterling contem plated in the Protocol has been m ade available for the settlem ent of refugees ; 3. Takes note of th e F irst Q uarterly R eport on the B udget Situation tran sm itted by the Hellenic G overnm ent to th e Council in accordance w ith paragraph 7 of Article V of th e Protocol signed on Septem ber 15th, The Council: II. B u l g a r ia n S t a b il is a t io n L o a n. Resolution adopted March 10th, (1) A pproves th e Financial C om m ittee s report and the d raft Protocol attach ed thereto concerning th e B ulgarian Stabilisation Loan; (2) C ongratulates the B ulgarian G overnm ent and the Financial Com m ittee on the preparation of this plan and hopes th a t it can be put into operation very shortly; (3) Appoints th e C hairm an of the Financial Committee to discharge tem porarily the duties of the Trustees as specified in Article X of the Protocol, until the Council session following the issue of the loan. The Council: III. M i x e d G r e c o - B u l g a r ia n E m ig r a t io n Co m m is s io n. Resolution adopted March 10th, Approves th e Financial C om m ittee s report on the Mixed Greco-Bulgarian E m igration Commission ; 2. Urges strongly the two G overnm ents to ratify as soon as possible the A greem ent3 signed at Geneva on D ecem ber 9th, 1927; 3. Em powers its President, in consultation w ith the R apporteur to the Council an d on the advice of the Financial Com m ittee, to designate, as soon as the Agreem ent is ratified, the neutral bank which is to act as provided in Article 5 of the Agreement. IV. N e w M e m b e r o f t h e F i n a n c ia l Co m m it t e e. The Council, on M arch 10th, 1928, appointed M. Fulvio S u v ic h, U nder-secretary of S ta te at the Italian M inistry of Finance, a Member of the Financial Committee. 1 Document C.51.M VI (F.474). - Document C II (F.495). Document C II.

24 [D istributed to the Council and the Members of the League.] C M II. (Annex I revised). [F (1).] Geneva, April 10th, LEAGUE OF NATIONS FINANCIAL COMMITTEE FINAL TEXT OF AMENDMENTS TO THE STATUTES OF THE BULGARIAN NATIONAL BANK Note by the Secretariat. Article IV, 2, of the Bulgarian Protocol, signed at Geneva on March 10th last, stipulates that " the existing Statutes of the Bulgarian National Bank shall be amended forthw ith in conformity w ith the provisions contained in Annex I, subject to the final text for this purpose being approved by the Financial Committee or by such members as the Committee m ay nom inate for the purpose. The following revised text of the proposed amendments to these Statutes has now been approved, in agreement with the Governor of the National Bank of Bulgaria, by members of the Financial Committee nominated for the purpose \ and should be substituted for the present Annex I to the Protocol (document C.116.M II (F.507 (1).),* page 13). AMENDMENTS TO T H E PRESEN T STATUTES OF T H E BULGARIAN NATIONAL BANK AS D E FIN IT E L Y APPROVED ON B EH A LF OF T H E FINANCIAL COMMITTEE IN ACCORDANCE W ITH ARTICLE IV, 2, OF T H E PROTOCOL SIGNED AT GENEVA ON MARCH 10TH, I. Article 2: The words The convertibility into gold of paper money (banknotes) will b e governed by a special law to be deleted. II. The following article to be inserted after Article 2: Article A. To ensure the convertibility of its notes: 1. The Bank, on the requisition of any person who makes a dem and or offer to th at effect at the head office of the Bank in Sofia, shall be bound to sell to, or to purchase from, such person in exchange for legal-tender currency of Bulgaria, at the rates defined in Sections 2 and 3 of this article respectively, the legal-tender currency of such foreign gold-standard country or countries as is by law and in practice convertible into exportable gold, and such as m ay be notified in the Official Gazette, for immediate delivery in such foreign country or countries. Provided th a t no person shall be entitled to dem and or offer an am ount of foreign currency of less value than 50,000 levas of legal-tender money of Bulgaria. 2. For the purpose of determining the rate applicable to the sale of foreign currency under this article, the am ount in levas which represents 1,000 grammes of fine gold in accordance w ith the stabilisation rate shall be deemed to be equivalent to such sum in th a t foreign currency as is required to purchase 1,000 grammes of fine gold in th at foreign country, at the rate at which the principal currency authority of th at country is bound by law to sell gold in exchange for currency, after deduction from such of an am ount to be fixed by the B ank representing the norm al cost per 1,000 grammes of transferring gold bullion in bulk from Sofia to th a t foreign country, including interest and insurance of its value during transit. 3. For the purpose of determining the rate applicable to the purchase of foreign currency under this article, the am ount in levas which represents 1,000 grammes of fine gold in accordance with the stabilisation rate shall be deemed to be equivalent to such sum in th at foreign currency as is realised by the sale of 1,000 grammes of fine gold in th a t foreign country at the rate at which the principal currency authority is bound by law to purchase gold in exchange for currency, after 1 M. Janssen and Sir Henry Strakosch. 2 It is understood that the articles of the Statutes will have to be renumbered in connection with these amendments. * Financial Committee's report on the work of its thirtieth session. S.d. N (F) (A ). 4 /2 8. I m p. K a n d ig Publications of the League of Nations II. ECONOMIC AND FINANCIAL II. 12.

25 addition to such sum of an am ount to be fixed by the B ank representing the norm al cost per 1,000 grammes of transferring gold bullion in bulk from th at foreign country to Sofia, including interest and insurance on its value during transit. 4. On the date on which the provisions of this law become operative, the Bank shall notify in the Official Gazette at least one foreign gold-standard country for the purposes set forth in Section 1 of this article. The Bank shall similarly notify any additions or changes of the foreign gold-standard countries to which Section 1 of this article is to apply. The Bank shall also from time to time determ ine the equivalent rates in accordance w ith the provisions of Sections 2 and 3, and shall notify in the Official Gazette the rates so determined. III. Article 3, 2nd sentence : The original capital of the Bank am ounts to 1,000 million levas to be replaced by: " The capital of the Bank am ounts to 500 million levas. The amount by which the capital exceeds this sum, at the tim e when this am endm ent comes into force, shall be carried to the reserve. IV. Article 7: 2nd and 3rd paragraphs to be replaced by: So long as the debt due by the State to the Bank has not been repaid in its entirety, that portion of the net profits of the Bank which is due to the State Treasury shall be retained and used for the am ortisation of the debt. Furtherm ore, the Minister of Finance shall provide annually in the Budget of the State E xpenditure a sum am ounting to 100 million levas to be applied to the repaym ent of the debt and shall devote all seignorage profits of the State to this purpose. V. Articles 8, 9 and 10 to be replaced by the following articles : Article B. The Bank shall m aintain a reserve of not less th an 33 '7, per cent of the am ount of its notes in circulation and other dem and liabilities. B y banknotes in circulation are to be understood all banknotes issued to the public and not returned to the offices of the Bank or w ritten off under Article 59. Article C. The term " reserve in the preceding article shall include only : [a) Gold coin and bullion 1 in the unrestricted ownership of th e Bank, and either in the custody of the Bank or deposited in another Central Bank, or in any Mint, or in transit; (b) N et foreign gold exchange in the unrestricted ownership of the Bank, provided th at it be either : (i) On a country the currency of which by law and in practice is convertible on dem and at a fixed price into exportable gold ; or («) On a country the currency of which by law and in practice is convertible on dem and at a fixed price into foreign exchange as defined in [i). For the purpose of this article the term " n et foreign gold exchange shall be taken to consist of the following kinds of claims on the currency of a country as defined in the preceding paragraph (b): (1) Balances standing to the credit of the Bank at the Central Bank of such a foreign country. (2) Bills of exchange draw n on and payable in th e currency of such a foreign country, m aturing within three m onths and bearing at least two good signatures. (3) Treasury Bills, Treasury Certificates of indebtedness or similar obligations of th e Government of such a foreign country m aturing within three m onths: Less all liabilities in foreign exchange. All such liabilities shall be included in the figures of the weekly statem ent. In calculating the am ount of the reserve, should it be found th a t the liabilities in foreign exchange exceed the to tal of the assets enum erated in the paragraphs num bered (1), (2) and (3) of this article, the excess shall be deducted from the to tal of the other assets of the reserve. Article D. A t the request of the Bank, th e Government m ay suspend the operation of Article B subject to the paym ent by the Bank to th e Governm ent of a tax. 1 See also transitory Article Q for silver.

26 Suspension m ay be granted for a period of not more than th irty days in the first instance and m ay be renewed for further periods not exceeding fifteen days a t'a time. The tax shall be levied on the amount by which the note circulation and other dem and liabilities of the B ank exceed th e maximum sum which would be admissible under Article B. The tax shall be calculated on the daily am ount of the excess at the following rates : 1 y2 per cent per annum above the published minimum current discount rate of th e B ank for three-months bills if the reserve, while less th an 331/3 per cent, is not less th an 30 per cent. 2 per cent per annum above such minimum current discount rate if the reserve, while less than 30 per cent, is not less than 25 per cent. 3 per cent above such minimum current discount rate if the reserve is less th an 25 per cent. Article E. Whenever the reserve falls below the 331/3 per cent referred to in Article B, th e Bank shall immediately add to its minimum current discount rate a percentage at least equal to the percentage of tax leviable in accordance w ith Article D above. VI. Article 11: Delete all words after media of exchange and add: " otherwise than a provided for in Article M VII. Article 12 to be deleted. V III. Article 13, paragraph 2, to be replaced by the following paragraphs : The Governor and the Deputy-Governors shall be appointed by Royal Decree on th e recommendation of the Minister of Finance, the Governor for seven years, th e Deputy-Governors for five years. These term s of office m ay be renewed. " If the Governor, any D eputy Governor or any Director be guilty of a breach of these Statutes, or abuse his position for private or business purposes, he can be removed from office by a decision of the Sobranie, to whom the Minister of Finance shall submit a reasoned report, to which should be annexed a statem ent by the Governor, the D eputy Governor or the Director in question of th eir point of view. The following paragraph to be inserted at the end of Article 13: Persons who come within the categories mentioned in Article 25 shall not be eligible for election as Directors. IX. Article 15, 1st paragraph: Delete to a plenary session. X. Article 17: 1st sentence to read: The Board of Directors shall adm inister the affai of the Bank and lay down the general principles of its policy. From clauses 1, 2, 3 and 4 delete: in plenary session X I. Article 18: The first words to read: " The Governor manages the affairs of the Bank. X II. Article 28: Delete 2nd sentence and substitute : " Members of the Discount Committees m ay receive in return for their services a rem uneration to be fixed at the discretion of the Board of Directors. X III. Article 29: 2nd sentence to be replaced by the following: The Discount Committees fix the total am ount of credit which m ay be accorded in any form to each customer of the Bank and from time to tim e revise these limits. XIV. Article 32: 1st sentence to be replaced by the following: The President of a Discount Committee has the right to veto any decision of the Discount Committee."

27 4 XV. Articles 34 to 37 inclusive, Article 38, paragraph 1, Article 39, Articles 40, 43 to 45 inclusive, Article 46, paragraphs 2, 3 and 4, Articles 47, 53, 54 and 55, paragraph 1, to be deleted. The following articles to be inserted after Article 33 : Article F. The business of the B ank shall be restricted to the following operations. (1) Make and issue banknotes. The Bank m ay: (2) Issue dem and drafts m ade payable at the B ank s head office or branches. No such drafts drawn by the B ank on itself shall be made payable to bearer. (3) Buy and sell gold coin or bullion. (4) Deliver cheques, drafts and letters of credit to order or to bearer, payable in levas at sight and effect transfers by telegram, by letter or otherwise. (5) Accept m oney on current or deposit account. (6) Discount, purchase or sell inland bills of exchange and promissory notes arising out of bona-fide commercial transactions bearing not less th an tw o good signatures and m aturing within three months. (7) Discount bonds and coupons of loans of the State or of loans guaranteed by the State, provided th at these bonds and coupons m ature within three months. (8) Discount, purchase or sell bona-fide inland agricultural bills and notes bearing not less than two good signatures and m aturing within nine m onths, provided th at at the tim e of discount or purchase this category of bills and notes does not exceed one-third of the B ank s portfolio of inland bills and notes acquired by discount or purchase. In the case of agricultural bills discounted for the Agricultural B ank and Central Co-operative Bank, the N ational Bank of Bulgaria shall have the same special rights of recourse against the parties to the bills as those possessed by the Agricultural Bank and Central Co-operative Bank. (9) Discount for the tem porary requirem ents of the S tate for expenditure authorised in the A nnual State Budget, Treasury Bills of the Bulgarian State w ith a m aturity of not more than three m onths, up to an am ount of 400 million levas, provided th a t the whole am ount be repaid not later th an at the end of the quarter following the close of the fiscal year in respect of which such accommodation is afforded. The rate of discount for such Treasury Bills to be 2 per cent below the current 1ank rate for the discount of three months' bills w ith a m axim um of 7 per cent. (10) Discount, purchase or sell Treasury Bills of the Bulgarian State w ith a maturity of not more th an three m onths which are endorsed by a bank, person or firm whose name has been approved by the Board of Directors. Provided th at the total am ount of Treasury Bills acquired in accordance w ith this paragraph or accepted as collateral in accordance with paragraph (14) (c) below m ay not together at any tim e exceed 200 million levas. (11) U ndertake the issue and m anagem ent of the State D ebt and loans of a public utility character and such other services as are laid down in Articles 68, 69 and J. (12) B uy and sell at home and abroad, for im m ediate or forward delivery, foreign currencies stabilised on gold, telegraphic transfers, cheques, bills of exchange (including Treasury Bills) and drafts drawn in or on anyplace in a country whose currency is stabilised on gold, and m aturing within three m onths, and keep balances w ith banks in such currencies. (13) Act as agent for or correspondent of any other bank in Bulgaria or abroad. (14) G rant advances for fixed periods not exceeding three m onths against the following security: (a) Gold coin and bullion. (b) Bulgarian State Bonds or bonds guaranteed by the Bulgarian G overnm ent quoted on the Sofia Stock Exchange, provided th at no advance shall exceed 80 per cent of the m arket value of any such bonds. (c) Treasury Bills of the Bulgarian State within the lim itations specified in paragraph (10) of this article. (d) Warehouse certificates (warrants) expressed in Bulgarian currency, on condition th a t these certificates bear the signatures of two persons well known to be solvent, and th a t they be payable in Bulgaria within a m axim um period of three months. The warehouses whose w arrants m ay be accepted as security for an advance at the Bank shall be selected by the Board of Directors, who will also determ ine the nature of the commodities to which the w arrants m ay relate. The Board of Directors will also fix the am ounts which m ay be pledged. No advance, however, shall exceed 60 per cent 01 the current value of the commodities in question. All stipulations set out above regarding commercial bills shall apply equally, nmtatis mutandis, to warrants.

28 (e) Bills of exchange payable in Bulgaria or abroad in the national currency or foreign gold exchange with not more th an three m onths to run, and conforming to the stipulations of paragraphs (6) and (12) above, b u t only up to 80 per cent of their face value. The rate of interest on all advances shall be not less than 1 per cent above the B ank s current official discount rate for three-m onths bills. (15) Accept the custody and m anagem ent of monies, securities and other articles of value. (16) U ndertake on behalf of third parties the purchase and sale, collection and paym ent of securities, currencies and credit instrum ents at home and abroad and the purchase or sale of gold and silver. (17) Invest an am ount not exceeding 20 per cent of the paid-up capital and reserves in Bulgarian State Bonds or bonds guaranteed by the Bulgarian Government quoted on the Sofia Stock Exchange. (18) Deliver guarantee certificates for use with departm ents of the public service. These certificates to be delivered against paym ent or against promissory notes payable to order or on dem and signed by the debtor and by two solvent persons as guarantors. The maximum am ounts of these certificates and the conditions of issue shall be determined by the Board of Directors. The Bank may, when it thinks necessary, demand a replacement of the promissory note by a m arketable security authorised by these Statutes or m ay enforce the paym ent of the note by the process of forced execution. Certificates of guarantee m ay also be delivered against securities or commercial bills surrendered in pledge. (19) Do all such things as m ay be incidental to the transaction of the B ank s legitimate business, as defined in these Statutes. Article G. In the case of advances against bills of exchange, the B ank shall have the right to examine the books and also the portfolio of the depositor when it thinks necessary. The B ank shall not: Article H. (1) Issue notes of a denomination less th an 200 levas ; (2) Directly or indirectly make advances to the State except as provided in Article F or undertake any transactions for the State not specified in Article F ; (3) Directly or indirectly make advances, in any circumstances whatever, to departm ents, municipalities or other bodies of the same nature; (4) Engage in trade or otherwise have a direct interest in any commercial or industrial undertaking; (5) Make unsecured loans or advances ; (6) Advance money on mortgage or engage in any similar transactions, or make advances for periods longer th an those specified in Article F ; (7) Become the possessor of immovable property except so far as is necessary for its own business and with the exception provided for in Article 42; (8) Purchase the shares of any bank or of any company; (9) Pay interest on money placed on deposit or current account with the Bank except as provided in Article I, and except th a t interest at the rate of not more than 1 per cent per annum m ay be paid on the deposit or current accounts of other banks; (10) Draw or accept bills payable otherwise than on demand ; (11) Discount for or accept as security further bills from any one party (unless from the Government under Article F) whose total liabilities to the Bank as a bill acceptor, drawer or endorser already equal or exceed one-tenth of the paid-up capital of the Bank unless on the authority of a special resolution adopted by a three-quarters m ajority vote of a meeting of the B oard of Directors. (12) Allow the renewal of m aturing bills of exchange purchased or discounted by the Bank. Article 38: Last paragraph to be replaced by the following: The B ank s minimum current discount rate, which m ust be publicly displayed a t the offices of the Bank and published in the Official Gazette, shall be the same at all the establishm ents of the Bank. XVI. Article 58 to be replaced by: At the end of the financial year the accounts of the Bank, supported by the necessary vouchers, shall be verified by a committee appointed b y the Minister of Finance and composed of a Counsellor of the High Court of Accounts, nom inated by the President of the said Court,

29 6 an Accountant nom inated by the Sofia Chamber of Commerce and a representative of the Ministry of Finance. This committee shall also make a special report to the High Court of Accounts on the general expenses of the Bank." X V II. Article 59: For two y e a rs substitute "five years". X V III. After Article 60, sub 1, add: These statem ents shall be in the form set out in the Annex to these Statutes and shall include all foreign exchange liabilities valued at the m arket rate upon the day to which the statem ent relates." Delete Article 61. X IX. Article 62: The words the other gold assets or liabilities " to be replaced by the words " the other assets X X. After Article 69, insert the following articles: Article I. No interest shall be paid by the B ank on such accounts, except th a t the Bank m ay pay on funds held abroad interest a t a rate lower by not less th an 1 per cent per annum than the average rate earned by the B ank on all funds held abroad. Article J. The Government shall entrust the Bank w ith all their money, rem ittance, exchange and banking transactions in Bulgaria and elsewhere. X X I. After Article 71, insert the following article: Article K. The B ank shall not grant accom m odation to the State, State undertakings or public authorities, directly or indirectly, by way of discounts, loans, advances or overdrafts, otherwise than is provided in Article F. The Bank shall not guarantee Treasury Bills or other obligations of the State, State undertakings or any public authorities, neither shall the Bank effect paym ents for the State, State undertakings, or any public authorities for which funds are not im mediately available at the Bank, nor enter into contracts in the nam e of the Bank for their account. X X II. Article 73: Replace 1st paragraph by the following: Together w ith the annual balance-sheet the N ational B ank shall submit to the Minister of Finance a report on the business transacted within the year. In order th a t he m ay have an opportunity of satisfying himself on any question arising out of the report, the Minister of Finance m ay take the advice of the Committee appointed in accordance w ith Article 58, but only as regards any questions as to w hether the balance-sheet and the profit-and-loss account are m conformity with the books of the Bank." 2nd paragraph: For any q u estions substitute " a n y such q uestions. X X III. Add to Article 74 the following sentence: " The Government Commissioner shall observe strict secrecy in regard to the affairs of the Bank. X X IV. Article 76 to be replaced by the following: The Government Commissioner has the right to protest against any decision of the Board of Directors or of the Executive Committee which he considers contrary to these Statutes. Any such objection shall have the force of a suspensive veto until the question in dispute has been decided by a Commission of three persons to be nam ed within seven days on a reques to th a t effect being made either b y the Bank or the Government Commissioner, and to report within seven days of nomination. The Commission shall be composed of one nominee of the Government, one nominee of the Board of Directors and a chairm an who shall be c h o s e n by the Government and the Board of Directors, or who, failing agreement between the parties, sha be the President of the High Court of Administration."

30 7 XXV. After Article 76, add the following article : Article L. Any question in dispute between the Government and the B ank other th an those leading to a suspensive veto of the Government Commissioner shall also be settled by arbitration in the same m anner as is laid down in Article 76. XXV I. Article 77 to be replaced by the following: The N ational Bank shall not be subject to any regulations made by the Governm ent or its subordinate authorities except as provided in these Statutes. The Internal Regulations of the National Bank, drawn up by the Board of Directors in accordance w ith these Statutes, shall have full legal force as though they formed an integral part of these Statutes. X X V II. After Article 77, insert the following article : Article M. The Bulgarian Government binds itself not to issue or re-issue money of any type whatever other than subsidiary coins of denominations not higher than 100 levas, and these only to the Bank and at its request and in accordance w ith the law. X X V III. After Article 78, insert the following article: Article N. The Governor, D eputy Governors and the Directors shall give guarantees of an am ount to be fixed by the Minister of Finance. These guarantees shall be retained and released by the Ministry of Finance. The officials and employees of the Bank shall furnish guarantees, the nature and am ount of which shall be fixed by the Board of Directors. These guarantees shall be retained and released by the Board of Directors. All existing guarantees of present and former officials and employees shall be transferred to the National Bank. A special regulation approved by the Board of Directors shall determine the adm inistration of the guarantees. X X IX. A fter Article 79, insert the following article: Article 0. The B ank shall be exempt from all taxes or duties levied by the S tate; in particular, from the paym ent of any tax or duty on its note issue other than the tax to be imposed in certain contingencies as provided in Article D. XX X. Add to Article 80 the following: Transitory Articles. Nevertheless, the Bank shall use every endeavour to free itself as quickly as possible from its mortgage business and, within three years from the coming into force of this amendment, shall divest itself of all other business of a nature contrary to the provisions of th e Statutes. X X X I. After Article 80, insert the following articles: Article P. For a period not exceeding two years from the tim e this article shall come into force, the Bank may grant advances and open current accounts against the pledging of commodities for a period not exceeding nine months. Article Q. W ithin a period not exceeding three years from the date of signature of the Protocol to which these am endments to the Statutes are annexed, the B ank shall sell the silver in its possession ; but in the m eantim e such silver m ay be included in the B ank s reserve (Article C) at its m arket value. Before disposing of its silver elsewhere, the Bank shall offer the Bulgarian Governm ent the opportunity of purchasing such am ount as it m ay require in respect of silver coinage. The B ank

31 s shall be perm itted by the Bulgarian Governm ent to export an y balance which it m ay desire to dispose of on the open m arket. Article R. During the first three years from the date on which this article comes into force, the Bank m ay issue notes of a denom ination less th an 200 levas, notw ithstanding the provisions of Article H. X X X II. A t the end of the Statutes, add the following chapter: A p p o in t m e n t o f a n A d v i s e r. Article S. A n Adviser to the N ational Bank of Bulgaria shall be appointed b y the Government on the nom ination of th e Council of the League. On entering on his office, the Adviser will give an undertaking in writing to perform his duties faithfully in the interests of the Bank and in conform ity w ith its Statutes, and to preserve secrecy w ith regard to the business of the Bank. Article T. In exercising his functions, the Adviser shall as far as possible work through, and in consultation with, the Governor. The Governors, managers and all employees of the Bank, whether at the head office or at the branches, shall render the Adviser all the assistance in their power, as well as furnish him w ith any inform ation or docum ents which he m ay require. Article U. The Adviser shall have the right to attend in a consultative capacity all meetings of the Board of Directors, the Executive Committee and the Bodies constituted under Article 21. In the event of his being of the opinion th at a decision taken by the Governor, the Executive Committee or the Bodies constituted under Article 21 is contrary to these Statutes, he m ay require that the question be subm itted forthw ith to a meeting of the Board of Directors. Should he be of the opinion th a t a decision taken by the Board of Directors is contrary to these Statutes, he shall exercise a suspensive veto, and no action shall be taken on the decision until either an agreement has been reached between the Board of Directors and the Adviser on the question or it has been decided by a third p arty to be m utually agreed upon, or, failing such agreement, by the President of the High Court of Adm inistration. Article V. Any alteration of this law shall require the specific approval of the Adviser during the period of his office. X X X I I I. A t th e en d of th e S ta tu te s, a d d th e follow ing a n n e x : Annex. N a t io n a l B a n k o f B u l g a r i a : W e e k l y R e t u r n. Assets. 1. G old coin a n d b ullion. i(fl). S ilv e r F o re ig n g o ld ex c h an g e (A rticle C- of S ta tu te s ). 3. O th e r fo reig n exchange. 4. S u b sid ia ry B u lg a ria n coins. 5. In la n d b ills a n d n o te s: (1a) C om m ercial bills a n d n o te s: (6) T re a s u ry bills. 6. A d v an c es : (1) R e p a y a b le in lev as : (а) G o v e rn m e n t; (б) O th ers. (2) R e p a y a b le in fo reig n exchange. 7. S ta te d eb t. 8. In v e stm e n ts. 9. B a n k b u ild in g s a n d eq u ip m e n t. 10. O th e r assets. 1 See Article Q.

32 9 11. Capital paid up. 12. Reserve funds: (a) (b) General Reserve Fund; O ther Reserve Funds. 13. Banknotes in circulation. 14. Other sight liabilities in levas: (1) Current and deposit accounts : (a) Government accounts ; (b) Bankers accounts ; (c) Other accounts. (2) D em and drafts. 15. Deposits in levas at notice : (a) Government accounts; (Z>) Bankers accounts ; (c) O ther accounts. 16. Foreign exchange liabilities : Liabilities. (a) Foreign gold exchange (Article C of Statutes) ; (b) O ther foreign exchange. 17. Other liabilities. Proportion of gold, silver and net foreign gold exchange to sight liabilities. Gold. Silver. N et foreign gold exchange (No. 2 less No. 16) Reserve (as laid down in Article C of Statutes) Total (a) Notes O ther sight liabilities in levas Proportion of Total (a) to Total (b) = % Total (6)