New-York tribune., 1917-11-04

PHILADELPHIA. Nov. Speaking
before the American. Academy OF 20
litical and Social Science to-day. A. I.
Miller. member Of the Federal Reserve
Board, warned that imitation al
ready had begun and said that Amer
lean business must not undertake 10
carry the war as an extra" but mus'
exercise the vision and imagination nee
essary TO see the great changes IN eco
nomic organization essential 70 victory.
Mr.. Miller pointed TO the increase In
Federal Reserve bank investments as
evidence of the existence OF inhatloh'
partly responsible for the rise in COM
modify prices since the United States
went to war, and declared that II this
increase continued it was not unreason-
able to expect that before long the re
serve system would be made into
great engine of banking imitation. lie
EXPLAINED the process by which enor-
nous imitation has been caused in Ger
many and France through government
borrowing from the banks, and added:
Saving Is Solution of Problem
whether a similar result is to be ex-
pected here in connection with oar
greater government borrowings, and, II
so. how soon will largely depend upon
whether all the people who have in
come enough to save will save, or
whether they can or will be made 10
save enough out of their incomes 70
absorb such loans Of the government
as may be put out in excess OF the cur
rent savings fund of the nation.
"The obligations Of government
such as the United States, when con-
sidered purely from an investment
point of view, are unquestionably the
most eligible sort of investment"
Estimating the annual actual savings
of the American people at fifteen bill
ion dollars, Mr.. Miller suggested that
twelve billion would be left to absorb
loans after deducting three billion TO
meet war taxes. Since appropriations
for the coming year aggregate some
twenty billion, he said, five billions
must be added to the nations savings
if the wars expenses are TO be met.
Mr.. Miller stated his opiHnCn that II
would require all of the economic re-
sources Of the country to win the war.
81 have it on competent autnorlty'
he said. "that il takes the labor OF
four men. working in industries OF one
kind or another producing military and
other needed supplies, 70 maintain one
soldier at the front. This means that
an American army Of one million men
will require the output of four million
men working in factory, field and foun-
dry. .u,.
.T also have il on competent author.
itv that the munitions, provisions and
other maintenance that the armies and
civilian populations OF our allies IN
Europe must have from US Will require
the OUTPUT of more than ten million
laborers working in this country.
"If we accept as approximately ac-
curate the estimates of our present
available labor supply as amounting TO
thirty million workers, the magnitude
of the economic problems with which
we are confronted is suggested by the
requirement that one-half or more OF
our existing labor supply must during
the war be devoted TO the producing
OF materials and supplies to he con.
sumed by our own and the armies OF
our allies and the civilian po2uiatioh u
the nations in Europe which are de-
nendent on us for part Of their neces-
sary keep" ..,,
Il cannot believe" Mr.. Miller contin-
ned. "that those who are sponsoring
the doctrine Of business as usuaP can
appreciate the economic-signifcance OF
the doctrine. The man who knowingly
nreaches the doctrine OF business as
usual at this time is proposing tnat
nriyate advantage should be set against
or ahead of public necessity. At this
crisis in the nations life every busi-
ness. no matter what its nature, 10 al
fected with public interest ard the
nublic has the right, indeed owes II 10
itself. 70 determine within what limits
that BUSINESS shall be crcumscrbed IN
the interest Of the war, or to wnat
extent il shall be helped and fostered
in the same interest
"The American business system is on
trial in this war. II it fails in
rising 70 the occasion through coward
ice. weakness or selfshness, it will
have gone a long way toward sounding
its death knell and surrendering TO
other agencies the right of leadership
in the great processes OF economic
reconstruction which must take place
al the close OF the war;
Summary of the Situation
Summing up his survey of the stu
alton, Mr.. Miller reaches these con-
clusions:
"The ultimate terms Of our war
financing must be, not money, but what
money will buy.
"Vast as our proposed expenditures
ard advances are, there is reason TO
believe that they can be met without
the use Of any doubtful or wasteful
expedients Of finance.
"Any attempt TO carry the war as an
extra would pave the way for an abuse
Of loans and certain imitation OF
credit and prices, which in the end
would increase the probable cost OF
the war by az much as 25 per cent.
Government bond issues, TO be safe,
must be bottomed on real savings. In
tensivt and discriminated savings and
methods of promoting thrift are ncces-
sary ingredients in any effective pro-
grsmme Of war finance.
"A similar necessity exists for the
effective mobilization of the industrial
power OF the country. The right OF
way must be gwen TO industries that
are tributary 10 the war needs Of the
government.
Working 10 the same end is prior
ity Of credits, the different industries
~ L.