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my $finished_1, $finished_2; 
   # should be: my ($finished_1, $finished_2);
...
   #
   # instead of: print "$line1 \t $line2";
   # print "$line1 \t $line2\n";

sub read_circular
{
...
   
   return $line;
}

++$finished_1, seek ONE,0,0 if eof ONE;
# this is the same as
...
# directly into actual "code savings". The more
# wordy "if" loop will code into very similar, if
# not the exactly the same executing code