1. This Ordinance may be cited as the National Loan Ordinance.

2. The Governor is hereby authorized to raise by way of loan a sum not exceeding one hundred and twenty-five million rupees for-

(a) expenditure on emergency purposes, that is to say, purposes connected with or incidental to the emergency arising out of any war in which His Majesty may be engaged ;

(b) expenditure on any work connected with or incidental to post-war development, whether such work is commenced before or after the termination of the war.

3. The loan or any part of the loan authorized by this Ordinance may, subject as hereinafter provided, be raised under the Registered Stock and Securities Ordinance, at such time or times as the Governor may determine:

Provided that the Governor may, by Order, direct that in respect of any such loan or part of a loan, the provisions of the Registered Stock and Securities Ordinance shall apply and have effect subject to such exceptions, modifications and amendments as may be specified in the Order ; and every such Order shall, upon publication in the Gazette, be as valid and effectual as if it were herein enacted.

4. In addition to the sum specified in section 2, the Governor is hereby authorized to raise in the manner prescribed in or under section 3, such further sums as may be necessary for the purpose of defraying the expenses incurred in raising the loan or any part thereof.

5.

(1) All moneys raised by way of loan under section 2 may be expended for the purposes mentioned in section 2, but such expenditure on any of the purposes mentioned in paragraph (a) or paragraph (b) of that section shall not be finally charged to any such loan or to any part of any such loan except upon a resolution in that behalf passed by the State Council and ratified by the Governor.

(2) Where moneys have been expended out of general revenue for any purpose mentioned in section 2 whether before or after the commencement of this Ordinance, such expenditure may, by a resolution , passed by the State Council and ratified by the Governor, be declared to be charged to any loan or to any part of any loan raised under section 2.

6.

(1) In anticipation of the raising of any loan or of any part of any loan by authority of this Ordinance, the Governor may, in his discretion, from time to time cause such sums as he may deem necessary to be raised by the issue of Treasury Bills under the Local Treasury Bills Ordinance ; and the provisions of that Ordinance shall apply accordingly except in so far as they are inconsistent with the provisions of this Ordinance.

(2) Every sum raised by the issue of Treasury Bills under the authority of subsection (1) shall be applied- (a) for paying off at maturity any Treasury Bills issued under the authority of that subsection and outstanding at the date on which such sum is raised; or (b) for the purposes mentioned in section 2.

(3) Upon the raising of the loan or part of the loan in anticipation of which any sum has been raised by the issue of Treasury Bills under the authority of subsection (1), the Governor may- (a) expend from such loan or part thereof such amounts as may from time to time be necessary to meet the liabilities of the Government in respect of such Treasury Bills ; or (b) where such liabilities have been met in the first instance out of the general revenue, refund to the general revenue such amounts as may have been expended therefrom for that purpose.

7. The interest payable on any registered stock, promissory notes or bearer bonds issued by authority of this Ordinance under the Registered Stock and Securities Ordinance and held by the Government of any part of Her Majesty's Realms and Territories (including therein any British protectorate or protected state and any territory in respect of which a mandate on behalf of the League of Nations has been accepted by Her Majesty), shall be exempt from all taxes and duties leviable or payable under any written law in force in Ceylon, notwithstanding anything in any such law to the contrary.