[ Act No. 3051, March 11, 1922 ]

AN ACT AUTHORIZING THE ISSUE OF BONDS OF THE GOVERNMENT OF THE PHILIPPINE ISLANDS SECURED BY BONDS ISSUED BY PROVINCES, MUNICIPALITIES AND CHARTERED CITIES

Be it enacted by the Senate and House of Representatives of the Philippines in Legislature assembled and by the authority of the same:

SECTION 1. The Secretary of War is  hereby authorized to issue in the name and behalf of the Government of the Philippine Islands  bonds, secured by  an  equivalent amount of bonds issued by provinces, municipalities, and chartered cities  of  the Philippine Islands held and  owned by the said Government of the Philippine Islands, in amounts which in each case shall be determined by the Council of State but in no  case shall the total of said bonds  exceed ten million dollars.  The bonds so authorized  to be issued  shall bear such date and be in such form  as the Secretary of War may determine and shall run for such time, not exceeding thirty years  from the date of issue, and  shall bear such rate of interest as he may determine.   The bonds  may  be  coupon bonds  or  registered bonds,  convertible in the discretion of the  Secretary of War, into  either form,  and in the case of the issue or transfer of any registered bonds the  same shall be registered in the Treasury of the United States.   Both principal  and interest of  said  bonds shall be payable in gold coin  of the  United  States at  the Treasury  of the United States.

Said bonds shall be exempt from  taxation by the Government of the United States, or by  the Government of the Philippine Islands or  of any political or  municipal  subdivision thereof, or by any State,  or  by any  county,  municipality, or other  municipal subdivision  of any State or Territory of the United States, or by the District of Columbia, which fact  shall  be stated  upon their  face, by virtue of section  one of the Act  of Congress approved February sixth, nineteen hundred and five, according to which Act, as well as in accordance with the Act of Congress approved on August twenty-ninth, nineteen hundred and  sixteen, as amended, and in accordance with this Act the said bonds are issued.

SEC. 2. The Secretary of War is further authorized to sell said bonds upon such terms as in his judgment are most favorable to the Government of the Philippine Islands, and he shall  deposit the proceeds of the sales thereof with the authorized depository or  depositories of the Government of the Philippine Islands in the United States, to the credit of the Treasurer  of the Philippine Islands.

SEC. 3. The sinking funds for the payment of bonds issued by  said provinces, municipalities, and  cities shall constitute the sinking fund for the payment  of the bonds issued by  virtue of this  Act.   Such sinking fund shall be under the custody  of the Insular Treasurer who shall invest it, in such manner as the Secretary of  Finance  may approve, in accordance  with the provisions of  law governing the investment of sinking funds.

SEC. 4. An appropriation is hereby made of the proceeds a. of the sale of the bonds authorized to be issued by this Act for the  purpose of paying for bonds issued  by provinces, municipalities and  cities and  assigned  and transferred  to the Government of the Philippine Islands and used  as security  for the bonds  issued under the authority of this Act: Provided, however, That the  proceeds  of the sale  of bonds issued under the authority of this Act, which shall  be secured by bonds issued by provinces, municipalities  or cities  before this Act became  effective and paid for out  of general funds of the Insular Treasury, shall revert to the said general  funds and the said Treasurer  shall transfer the same thereto immediately  upon receiving notice of the deposit of  said proceeds to his credit  by the Secretary  of War.

SEC. 5. An appropriation is  hereby made out of the general funds of the Insular  Treasury not otherwise  appropriated of a sufficient sum to cover the expenses  of the issue  and  sale of bonds authorized by this Act, and the Insular Government shall be reimbursed by the corresponding province, municipality or city for such expenses within thirty  days after the payment of the same by the Insular Government.

SEC. 6. A standing annual appropriation is hereby made, out of the general funds in the Insular Treasury  not otherwise appropriated,  of such sums as  may  be necessary  to pay the  interest on the bonds  issued  under authority  of this Act.

SEC. 7. This Act shall take  effect on its approval.

Approved, March 11, 1922.