East Oregonian : E.O. (Pendleton, OR) 1888-current, 1919-05-28
j. S. CREDITOR NATION
IS BANKERS ASSERTION
Urges Government Financ-
ing be Speedily Dis
continued.

CHICAGO, May 27--John J. Ar
mold vice president OF the First Ma
tionaI Bank OF Chicago. on the solicit
tation Of the Division Of Public Works
and Construction Development. lnfor-
nation and Education Service of the
4. = Department OF Labor, has made
a statement on "Inflntion and Prices
in which he says II Is futile for Indus
try to walt for prewar commodity
prices. Mr.. Arnold's statement Is be-
ing circulated by the Information ana
Education Service.
The Chicago Banker dlssents from
the popular opinion that the United
States has become the worlds ban
ker," and points out that we are
creditor nation only and as such our
responsibilities are heavy ones not
without dangerous po2s. bllties
"The situation which confronts us
L. serious" says Mr. Aronld, and it
may he necessary that our government
accept from the European govern
ments further government bonds. or
promises to pay FOR the interest which
viii be due from year to year.
1T Is desirable from every view
point that government financing
should be d scontinued at the earliest
possible moment. Private enterprise
should be stimulated by private fin
ancing, which will most quickly bring
about deflation.
"The high cost of commodities and
labor. Of course, is partly due to the
increased demands for raw materials
and the curtailment Of production for
peace Durposes,
Reduce L. s. securities.
'The world today is glutted with
government securities, which include
both bonds and the medium of circu-
lation known as currency, and the
sooner we begin the process Of reduc-
ing both the sooner can we figure on
"A lower cost OF living.
From the standpoint of the student
OF economies, 1t is absolutely futile
for peace industry to wait longer for
pre-war commodity prices. and every
thing should he done to encourage the
resumption of peace business. which
alone can accomplish what we all de-
sire.
"In other words. the production OF
new wealth is absolutely essential for
tho reduction of costs. The normal
way to reduce the price Of wheat il
through the farms producing n largo
quantity. That is to say. We must
place the emphasis on n greater pro-
duction rather than upon consump-
tion OF commodities. while in the
field of governmental securities the
opposite is the end to be accomplish
ed"
Mr.. Arnold calls attention to the
Faf IN lnang md dpnOEita
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, a
healthy state of affairs. but Mr.. Ar
mold point out that in Europe govern
ment obligations have been made be-
| yond their ability to pay within a
stated period He calls attention. also
to the fact that much Of the govern
ment borrowing has been for destruc-
| ton 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.
loan Without Interest.
Mr. Arnold suggests that the United
States use the interest paid by foreign
countries on their loans for a "reha-
hilitatlon fund" to he spent in Europe
which would mean that for the period
OF time required for the rebuilding
of Europe We would he loaning our
funds without interest.
81 think IL IL generally admitted"
says MIR. Arnold. that the greatest
investment we. as a country, have ever
made was when yNp rpmittpd China