The Waterbury Democrat., 1945-01-02

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 AS the year ended this trend was continuing and the ratio was approaching its legal limit of 70 per cent. A relief for this situa- tlon would be lowering of reserve requirements, move that is at1- ticipated early in l945 If the war spending continues at the current rate. Other expeditents that would forstall such legislation have been listed as monetization Of the S2,O00, 900, 900 gold in the Treasury'S stabilization fund, monetization of silver seigniorage profit through printing additional silver certifi- cates, or assurance of Federal Re- serve banknotes requiring no gold cover, or all three.
 The gigantic war financing pro gram with its astronomical figures in all the Reserve System items has not been without its favorable side. The outstanding blessing, as the experts view the situation, is a start toward distribution of our gold hoard among other nations so that after the war stable cur rencieS can be achieved which would be boon to foreign commrece.
 Foreigners Hold More Gold
 Foreign nations have steadily built up their gold holdings It is estimated that today they hold around $l5,OO0, ,000,00 in gold and more than $3,00O,0 100000 in U. s. dollars, reflecting in part United States purchases for the war ef- fort and for the civilian life.
 Gains in gold holdings are re- ported by France, Switzerland, Spain, South Africa, Sweden, and the Latin American nations. No figures are available on RusSia's s gold supply but 1t is believed very large.
 During the years since January 3l, 1894, when the United States devalued the dollar by raising the price of gold from $20,87 per fine ounce to $35 per fine ounce, the United States gold supply steadily increased until it reached record righ of $22, 796, ,000, GOO on October 29, 194l. This total had been de- pressed to $22,7700 100000 at hte time of Pearl Harbro. It now stands at around $20,600, 000, 900, a new low since August ', l940.
 The United States dollar deValu- ation process which raised the gold price stimulated gold mining and raised the world supply Gold flowed here for safe keeping as the world prepared for war, and now that the peace is approaching the flow is reversed.
 Notwithstanding devalution," the Federal Reserve points out, "the dollars purchasing power over most products was greater at the end of the 1930s than at the beginning and in terms of the general average it was substantially higher
 Dollar Sought After
 As a result the dollar today is the most sought after currency in the world. This situation is expected to prevail after the war when foreign nations buy goods here for rehabil- itation and reconstruction. That sit uation is expected to bring many new problems into the exchange sit- uation, but in this connection, the Federal Reserve says:
 While the 1940s and the 1050s may be decades in which world trade will be subjected to unpredict- able stresses arising out of the great distortions of the war, one of the factors-namely, disturbing capital movements-that played so promi- nent a part in overturning the in- ternational balance in the 1930S will almost certainly not be permitted to play that role on the same scale again.
 How great a degree of stability and freedom-and in particular how great a volume of American export trade-will depend on the success that the United States achieves in moving toward full production economy at home and in pursuing on the international front policies that encourage Amer ican investment in all parts of the world where it will prove produc- tive
 Circulation in Long Rise
 The rise in money in circula- ton has been steadily going on since the war started in Europe in September, l939, when the total was $7l4l 100000. Near the enc of 1914, the figure stood at $25 ,l63, GOO 900, a record high. The latter represented rise of about $5090,- 100000 since Pearl Harbor.
 Another interesting point about the war financing program is tha' it is being done through banl; credit as well as taxing and bor- rowing. The Federal Reserves hold ings of government securities has risen to a record high of more than $l8,500 100000 from $2,42G,- 100000 as of September 1. l939 This figure stood at S2,l84 100000 at Pearl Harbor,
 Individuals throughout the na' ton have been purchasing large amounts of government bonds ano these have sWelled total savings fol the nation 10 around $l30 000,- GOO GOO. To that can be added large amounts of currency which Is bid den away by those unused to bank facilities and by hoarders. Black markets also are said to be absorb ing vast sume of the circulating ] money figure, notably the larg' , denomination bills,
 Although q vast potential lh' tiation has been built up, accord ing to the experts who aren't per