Evening star., 1940-12-18
Money in Circulation
Boosted TO Highest
Mark in History
Additional Increase
Before Christmas
Is Anticipated
BY PAUL ID. GESNER,
Associated Press Business Writer


moment totals over $8,625 900 900, the
highest in history and between now
and Christmas it is likely that an
other $100,OO0,000 will be poured
out into the streams of trade.
Money in circulation always rises
about this time of year as people 60
Christmas shopping, and seasonal
peak usually is noted right around
Christmas Day itself
Immediately after the holiday a
return flow starts to the banks
Around S400000,000 is expected to
flow back to the banks this season,
probably in January.
Even after the return flow, how
ever, money in circulation will re-
main extremely high.
The S6,625 900, 900 in circulation at
the moment is over sl00O000,000
above the S7,564 100000 in circula-
ton at this time last year
1t is over 370.0OO,0O0 above the
$7251 100000 recorded in March
1888, the previous high record. The
big 1888 bulge was caused by the
wave of boarding preceding the
famous bank holiday in which
every bank in the United States
closed its doors.
Exceeds Boom" Years.
The current circulation figure IS
! around S4,000,00O0O0 higher than
those witnessed in 1928 and 1929
the boom years. In 1923 and 1929
money circulation hovered around
$4,000 100000
While Christmas shopping is re-
sponsible for sharp recent increases
in money in circulation, the shop
ping angle this year is only part of
the story. Many other factors con-
tribute to the huge amount of cash
| outstanding.
For instance, substantial sums of
United States money currently are
| boarded abroad in foreign countries
In the years just preceding the start
OF the German expansion in Eu-
rope-the -l930s-United States
currency was shipped abroad heav-
lily Some of it went into the hands
of Europeans who feared for the
safety of their assets in European
monies. Another big chunk of it
went in $40 and $40 bills mailed in
letters by people in this country to
relatives and refugees abroad.
Today quite substantial amount
! OF currency sent to refugees abroad
is believed to be back in this coun-
| try-brought here by refugees who
fed here. 1t is hidden around in
safe deposit boxes, 1t is being taken
out only as it is spent.
One of the biggest factors con-
tributing to the heavy rise in money
in circulation the past few years,
financial circles say is the adoption
of service fees on checking accounts
by many banks.
Many people who formerly paid
their bills by check now pay them
in cash, to avoid checking account
fees.
Wages Paid in Cash.
| In addition. it is believed that re-
Gently there has been a trend to-
ward the making up of pay rolls in
cash, rather than in checks This,
too, has required more circulation
money.
OF course. the more active pace
OF business is prime stimulant of
money use. The fast industrial ac-
tivity with record output in steel,
electric power, airplanes, machine
tools and many other lines has ex-
panded the circulation of currency
At the moment, however, the
faster public spending in connection
with Christmas shopping is the stim-
ulant pushing money use upward to
the anticipated seasonal crest, as
well as a new record high next week
There are two seasonal low points
usually expected in money in cir
culation-a winter low and sum-
mer low. The winter low comes in
January, when money poured out
for the, Christmas trade returns to
the banks. The summer low comes
customarily some time in July, when
money circulated for use around the
July 4th holiday flows back to the
banks
The current circulation figure rep
resents a gain of over 100000, 900
above the $7,s54.o0o,0o0 July, 1910,
low point.