10 
(The Bank of Iceland) was established by law of 1903, and commenced 
ils activities two years later. For a term of 30 years it was granted 
the sole right of issue in Iceland in excess of the 3/4 million krénur 
which the National Bank of Iceland was entitled to issue on behalf of 
the treasury. This right was retained by f[slandsbanki for a period 
of 19 years (1904—1922). But in 1921 it was enacted by law that 
its note-issuing privilege should lapse in 1933, and its note circulation 
be reduced by fixed annual amounts. When [slandsbanki was taken 
over by Otvegsbanki Islands the circulation had come down to 4 
million krénur. This amount is (according to the act under which Ut- 
vegsbanki fslands is founded) to be withdrawn at once and the sole right 
of issue handed over to the National Bank. But while [slandsbanki 
was thus withdrawing its notes the National Bank was by law ob- 
liged to re-discount for it sound commercial bills on certain specified 
terms, to an amount not exceeding 5 million krénur. The amount for 
which the National Bank was legally bound to re-discount bills should, 
however, be annually reduced until it was entirely discontinued. The 
special terms thus enjoyed by [slandsbanki are now transferred to 
Utvegsbanki fslands. 
According to the Balance Sheet the assets and liabilities of [slands- 
banki on 31. December 1928 were as follows: 
Gold . . . . . . 
Bonds & Stocks . . 
Loans . . . . . . . . . .. 
Bills of Exchange kr. 24 632 680.88 
less Net Profit — 583 003.16 
Kr. 24 049 677.72 
less estimated 
loss according 
to Bank Inspec- 
tor’s estimate . — 1014 982.62 23 034 695.10 
To balance (see Bills of Exchange) 1014 982.62 
Banking Correspondents . , , 261 208.18 
Foreign Currency . . . . . , — 7 184.93 
Bank Premises and other real Estate — 2 034 809.09 
Cash in Hand . . . . — 451 882.55 
Kr. 38 774 962.51 
Assets, 
. . kr. 
1 878 049.65 
2 535 831.07 
7 556 319.32 
Capital Paid up . . . . . 
Notes in Circulation . . , 
Bank Bonds . . . . . . 
Liabilities, 
. . kr. 4500 000.00 
. - 4811 000.00 
«0 o—- 706 000.00 
Kr. 10 170 000.00