|In 1941, Arnulfo Arias, then president of Panama, created
the "Banco Central de Emision de la Republica de Panama". Decree
6 of September 30, 1941 is the law that made it possible to create paper
money by a non-governmental controlled bank. This
bank was publicly owned and had the power to issue paper money. Arnulfo
was able to bypassed the normal governmental and fiduciary procedures to have this accomplished.
This bank created and issued the following paper notes:
Each bill measured 158 mm ( 6.22 inches) in length by 67 mm ( 2.64 inches) in width.
With the removal of Arnulfo Arias from office, this law was repealed
by Decree 19, on December 30, 1941 the bill were withdrawn from
circulation and burned. The US Government were instrumental in his removal
from office, and the destruction of the paper currency.
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