37 
duced -such changes into the organization of the bank as were 
thought best adapted to fit it for this special mission. 
Pursuant to this act the bank is an independent State-owned institu- 
tion, operating through three financially separate departments, viz. the 
Issue Department, the Savings Bank Department, and the Hypothec- 
Mortgage Department. The national treasury is liable for all engage- 
ments made by the bank. 
The capital of the Issue Department is 3 million krénur, advanced 
by the treasury and on which an interest of 6 per cent. per annum is 
payable out of the annual profit of the Department. The total amount 
of interest thus paid to the treasury must, however, never exceed 
one-half of the yearly profit, the rest being passed to the reserve 
fund of the Department. 
Of the above-mentioned act the following are the most important 
provisions respecting the note issue. 
The Issue Department has the exclusive privilege of issuing bank notes 
or other circulating medium capable of taking the place of metal money 
and being current and legal tender instead of bank notes (see p. 89). 
Moreover, the Issue Department is bound to pay its notes, when 
presented, in legal tender and gold coin, provided the amount of notes 
thus presented corresponds to whole denominations, while smaller 
amounts are redeemable in change. Any person may take pure un- 
coined gold to the Issue Department, which is compelled bv law to 
buy it at 2480 krénur per kilo, less 1/2 per cent. for coinage. 
The Issue Department issues notes to the extent required to satisfy 
the need for circulating medium. To this, however, the following con- 
ditions are attached, (1) that the gold reserve held by the Department 
shall be equivalent to three-eighths of the notes in circulation at any 
time, and never less than 2 million krénur; and (2) that the note cir- 
culation not backed by gold be covered by easily convertible assets to 
the extent of 125 kr. against every 100 kr. in notes. 
In the gold reserves shall be reckoned: (a) legal current gold coin; 
(b) uncoined gold and foreign gold currencies at the rate of 2480 
krénur per kilo of pure gold; (c) a credit balance, payable on de- 
mand, at such banks abroad as may be deemed thoroughly safe by the 
board of governors and sanctioned by the minister concerned, — less 
corresponding debts of the department. This kind of securities must, 
however, in no case exceed one-fourth of the gold cover. 
The supreme authority of The National Bank is vested in a Committee 
and in the minister in charge of banking matters. The management of the