Every evening, Wilmington daily commercial. (Wilmington, Del.) 1878-1928, 1922-09-23
LIFE Of Ass NOTE
EAD0U1 TEN MONTHS
Receive Bank Keeps $500, ooo,-
900 on Hand to Replace
Worncut Money.

4 supply OF approximately $780, |
90. 900 In new paper currency Is con-
etAntly kept in the vaults OF the New
York Federal Reserve Rank to replace
worn out paper money as II ie sent In
b. banks scattered throughout the 1
district says the New York TimesD
The problem OF keeping NJ money In
circulation IL n massive undertaking
for the local bank. rs wen as banks
throughout the country. An illustra-
ton ~ the amount of work involved
In Keeping clean currency in opera
ucn In furnished by figures given by
the local Rceerve bank. These show
that In one year $50 900, 900 individual
nctes were counted. OF which 10000
coo notes sEgreKatink $75l. 100000 were
cancelled. This work has grown, as
the LEGAL bank does much OF the work
previously carried on through the Sub
treasury.
The New York Reserve Bank. In a
summary OF these operations. says:
There 10 a, present about $s.500,-
~. 900 Of currency In circulation In the
United statcs. While "A considerable
part OF II at any given moment is in
the aafes OF individuals, business con-
cerns. or banks. yet much OF IL Is In
the peoples pockets or In process Of
passing from hand To hand. and 80 Ia
subject To wear.
In THE country paper money, which
forms about r-iifths OF our whole
supply VI currency. Is generally pre-
ferred above coin because OF its light
ness and convenience. But paper
money wears out rapidly and has 10 be
replaced frequently. The life OF IS
note. for example. is on the average
about ten months. and IN New York
City about two months less than the
average. owing mainly 10 the more
rapid rate at which Il circulaies. This
same tendency In seen in the higher
rate at which bank deposits turn over
In New York City than in other parts
of the country.
The work OF keeping the paper cur
reney In good condition IL done very
largely by the Federal Reserve Banks.
which. IN the course Of their daily
business. handle all forms ~ currency
and coin. eliminating that which Is I'M
NJ fer further circulation. This SER
vice IL a large item In their annual
costs OF operation. Last year. for in
stance, the supply u currency and
coin caseed an expenditure az the
Federal Reserve Bank Of New York
amounting 20 about se.st5.0 200, OF
which somewhat more than one-thlrd
represented the cost ~ printing new
Federal Reserve currency TO replace
worn notes IN circulation and TO in
crease supplies unissued and on hand"
The process Of replacement ordi-
narily work as follows:
When a man has a WORKOUT bill
whether II be a Federal Reserve note.
q Federal Reserve Bank note. a legal
tender note, a silver or gold certificate.
or 4 national bank note--he takes Il 70
HE hank and receives in return for 1t
. note At for circulation; or IL he
wishes, obtains credit for Il in his de-
pos!t account. Banks which are men,
bers OF the Federal Reserve System
ordinarily 90 not keep more currency
on hand than they are likely 10 need
mers.
Accordingly. shipments Of currency
are constantly passing between mem
Der banks and their Federal Reserve
Banks. and notes unfit for further
circulation are usually sent along with
shipments Of currency. which fer the
time being may be In excess Of re-
Qurements. Such shipment the
Federal Reserve Bank places 10 the
credit Of the transmitting member
bank In It's deposit account for use as
the member bank desires. A non-
member bank may also ship notes d.
rectly 20 the Federal Reserve Bank
The volume OF currency handled by
the banks runs into billions Of dol
lars annually the amount being almost
double the total supplies OF the entire
country because Of the constant
changing roing on from day TO day
In connection with the volume, tn,
hank xays that in 1927 all twelve
Federal Reserve Banks received from
member and non-merber banks 81.
$50 900, 600 In paper money and coin
Payments 10 banks amounted TO Sc,
te0. 00o. 900. As a mex result, more thar
81 .o0o. 900 900 in paper money and coll
wAa retired from circulation. illustrat
ting the lessened demand on the par
a the public for hsnd-to-hand cur
ssncy. There were $4,000 dineren
shipments 81 currency and coin 10 ant
from out-of-town banks.