The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1919-05-25
INITIATION and
PRICES Are
IN DISCUSSION
CHICAGO BANKER MAKES INTER.
ESTING STATEMENT TO y. s.
DEPARTMENT OF LABOR, EDU-
CATION SERVICE.


John J. Arnold, vice president of the
First National Bank Of Chicago, on
the solicitation OF the division of pub
lie works and construction develop
ment, information and education SER
vice OF the u. s. Department of Labor,
has made statement on Imitation and
Prices" in which he says 1t is futile
the popular opinion that the United
modify prices. Arnold's statement is
being circulated by the Information
and education service.
The Chicago banker dissents from
the popular that the United States
states has become the worlds banker"
and points out that we are creator
nation only and as such our response
bilities are heavy ones. not without
dangerous possibilities.
1.-THE situation which confronts US Is
serious, says Mr.. Arnold. and 1t may
be necessary that our government ac-
cept from the European governments
further government bonds, or promises
to pay for the interest which will be
due from year to year.
TT is desirable from every view
point that government financing should
be discontinued at the earliest possi-
Bile moment. Private enterprise should
be stimulated by private financing,
which will most quickly bring about
def1ation.
THE high cost of commodities and
labor of course, is partly due to the
increased demand for raw materials
and the curtailment of production for
peace purposes.
"The world today is glutted with
government securities, which include
both bonds and the medium of circula-
ton known as currency, and the sooner
we begin the process of reducing both
the sooner can we figure on lower
cost of living.
Prom the standpoint of the student
of economies, it is absolutely futile
for peace industry to wait longer for
pre-war commodity prices. and every
thing should be done to encourage the
resumption of peace business, which
alone can accomplish what we all de-
sire.
I'm other words. the production of
new wealth is absolutely essential for
the reduction of costs. The normal
way to reduce the price of wheat is
through the farms producing large
quantity. That it to say, we must place
the emphasis on a greater production
rather than consumption of commodi-
ties, while in the field of governmental
securities the opposite is the end to
be accomplished"
Mr. Arnold calls attention to the fact
that increasing loans and deposits in
equal amounts, without limitations,
shows no added strength to an insti-
tuition and may prove even dangerous
Loans within the power to pay are
legitimate and reflect, probably,
healthy state of affairs, but Mr.. Ar
mold points out that in Europe gov
H. Il
beyond thei rability to py within q
beyond their ability to pay within a
to the fact that much of the gov
ernmental borrowing has been for de-
struction rather than construction, and,
therefore, much of the money in these
loans has been spent for things which
produce no wealth and have no earn
ing power.
Mr.. Arnold suggests that the United
States use the interest paid by foreign
countries on their loans for a ''re-
Mobilization fund" to be spent in Eu-
rope which would mean that for
the period of time required for the re-
building of Europe we would be loan
ing our funds without interest.
81 think it is generally admitted"
says Mr. Arnold, that the greatest
investment we, as country, have ever
made was when we RENTED China the
amount of the Boxer indemnity. This
has brought about an understanding
between China and America and q re-
lation of friendship which could not
have been accomplished in SO short a
time in any other way. A contribu-
ton such as / am suggesting would
forever eliminate the charge of dollar
diplomacy in our International life. but
even aside from the harvest which we
would be likely to reap in friendship,
| am confident that in the long run
It would prove profitable even in dol
lars and cents"