The Central Bank
Proposals for the setting up of a Central Bank -The Chiha-Trad Report
Conclusions of a study undertaken by Michel Chiha and Habib Trad on the fundamental precepts for a National Bank of Issue, January 1924:
• It is in the interest of a nascent State, wherever possible, to have an interim national currency of its own, in advance of when its own fully sovereign national currency is established.
• It is advisable that stockpiles of gold bullion should be held within the confines of the Central Bank in order to limit its supply in the country and thus increase its value.
• For political and economic expediency including market confidence, the national currency ought, albeit temporarily, to be underwritten by the currency of France. Thus Lebanese-Syrian banknotes would be payable for example in Paris or Marseilles by check-in French Francs. However, within the territories of Greater Lebanon, Lebanese-Syrian banknotes would constitute the only recognised legal tender.
• Current accounts in foreign currencies would be authorised unconditionally. However, all capital payments made from these accounts would only be possible in the local currency.
• No constraints or obstacles should interfere in the free domestic trade of precious metals, coins, or ingots throughout the territories of Greater Lebanon and the federated states of Syria.
• Three branches of the state-administered Central Bank should be set-up in regional cities such as Tyre, Hasbaya or Rashaya, Batroun, or Jbeil for example, even if these prove to be unprofitable, in order to centralise the economic entity of the State.