Evening star., 1934-10-07
CIRCULATING CASH
GAINS $1A,0l0,OOO.
Figure for z Months Since
Announcement of Silver
Policy Rouses Comment.

By the Associated Press.
An increase of $134 600, 900 in money
In circulation was revealed last night
by Treasury and Federal Reserve fig
ures for the two months since the ad-
ministration announced its new silver
policy.
The figure attracted interest be-
cause of continuing argument over
the amount of imitation involved in
the administrations naturalization
and purchases of silver.
Included in the total-a net figure
representing money actually in the
pockets of the public or the vaults of
commercial banks-was q Jump of
s77,S5l 900 in outstanding Federal Re-
serve notes and Federal Reserve Bank
notes.
$5s,64s,0e0 Certificates.
The difference, or $56 6,64s, 900, rep
resented the probable total of new
silver certificates to reach the public.
Altogether $50 1893 900 Of these Ger
tificates have left the Treasury. OF
the latter figure the unaccounted-for
s23, 3,744,000 presumably had gone no
farther that the Federal Reserve
Banks.
The Reserve system Is the Treas
ury's distributing agency for the new
currency. 1t receives the bills and
passes them along to commercial banks
and the public as business conditions
permit.
How the Reserve notes got ahead of
the silver certificates in the last two
months none would say definitely.
Two theories were advanced-one
that a quick demand for c, -rency had
arisen for which the flow Of silver
certificates was inadequate; the other
that the new bills were being held
back for a special treatment that all
new notes are supposed to receive.
This is a chemical and aging proc
ess by which the fibers of the new notes
are toughened to prevent them from
wearing out quickly. Ordinarily this
requires six months, although recently
it has been speeded up.
Medium Of Distribution.
The Treasury also has its own dis
tributing medium for small portion
Of the new money. 1t passes them
out at the wicket at which Govern
ment checks are cashed and large
bills changed. From the start 1t has
been paying out the silver certificates
in this way, and one result is that
they are more abundant in Washing
ton than elsewhere.
While the Treasury is issuing the
new silver currency, it is buying huge
stocks of the metal, both here and
abroad, IN an effort to carry out the
mandate of Congress that 1t increase
its silver holdings until its bullion
reserve consists of rs per cent gold
and IS per cent silver.
Treasury officials announced yester-
day that foreign purchases of silver
were being supervised in such a way
as to aid foreign buyers of American
goods in making necessary payments
to this country. 1t was emphasized,
however, that no definite purchasing
system has been set up. All poSsibili-
ties are being explored experimental
ly," it was said
Silver is being purchased abroad at
rate of about $4,000, 900 ounces q
month. Oficials have indicated
around 100000, 900 ounces have been
bought here and abroad to date Ap-
proximately 62,000,0 900 ounces, in ad-
dition, were on hand from various
other sources.
1900, zoe zoe Ounces Needed.
Roughly. 1900 ,ooo. 900 ounces would
be needed to establish silver at a one
to-three ratio, with gold as cur
rency backing. At the present rate
of acquisition, at least two years
would be needed to obtain this supply
The prices at which the silver is
purchased vary, but the law still says
that as far as money at the mint is
concerned. one ounce of silver is the
equivalent of Sl.29. However, two
ounces of silver bought at SO cents
an ounce are made the backing for
one paper dollar, and the remainder
Of S158 is credited to the general
receipts of the Treasury.
Unoffcially it is called "seignorage." :"
and is generally explained as a charge
imposed for minting the metal
Since the fiscal year began on July
/, the Governments receipts have
been increased s4s,s13,984 by this
item