The Morgan City daily review. (Morgan City, La.) 1916-1920, 1919-05-28
Chicago Banker Discusses
Currency Initiation and
Result on Prices

The First National Bank Of Chicago
on tie solicitation Of the Division d
Public Works and Construction De
velopment. Information and Educa.
ton Service OF the |. 5. Department
Of Labor. has made a statement or
Limitation and Prices" II which he
says it is futile for industry to wait
for prewar commodity prices. Mr.
Arnold's statement is being circu-
lated by the Information and Educa-
tion Service.
The Chicago banker dissents from
the popular opinion that the United
States has become the Worlds
= tanker and points out that we are
a creditor nation only and as such Our
responsibilities are heavy ones, not
without dangerous possibilities.
The situation which confronts lis
IS serious" says Mr.. Arnold. and it
nay be necessary that our govern
ment accept from the European gov
errments further government bonds,
Or romises to pay for the interest
which will be due from year TO year.
1T is desirable from every view
point that government financing
should be discontinued at the earll-
est possible moment. Private enter
prises should be stimulated by pri-
vate financing. which will most quick
ly bring about deflation.
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 circu-
|ation known as currency, and the
sooner we begin the process Of re-
iucing both the sooner can we fig
are on a lower cost of living.
From the standpoint Of the stu
lent of economics, it is absolutely
futile for peace industry to wait
onger for pre-war prices, and every
hing should be done to encourage
he resumption Of peace business.
which alone can accomplish what we
III desire.
In other words, the production Of
lew wealth is absolutely essential
or the reduction of costs. The nor
nal way to reduce the price of wheat
S through the farm producing a
arge quantity. That is to say, we
must place the emphasis on great
r production rather than upon con-
umption of commodities, while in
hefield of governmental securities
he opposite is the end to be accom-
lished."
Mr.. Arnold calls attention to the
act that increasing. loans and depos-
S in equal amounts, without limita-
ons, shows no added strength to an
lstitution and may prove even dan
erous. Loans within the power to
ay are legitimte and reflect prob
bly,, a healthy state of affairs, but
[r. Arnold points out that in Eu-
ope government obligations have
cen made beyond their ability to
ay within stated period. He calls
ttention also, to the fact that much
{ the governmental borrowing has
cen for destruction rather than con-
and therefore, much of the
loney in these loans has been spent
Or things which produce no wealth
nd have no earning power.
Mr.. Arnold suggests that the
United States use the interest paid
y foreign countries on their loans {
Or rehabilitation fund" to be /;
oent in Europe which would mean
lat for the period Of time required ,
or the rebuilding Of Europe we
ould be loaning our funds without
lterest.
81 think it is generally admitted"
.ys Mr.. Arnold, that the greatest ,
lvestment we, as country, have {
yer made. was when we RENTED
hina the amount of the Boxer in 6
,mnity. This has brought about an |
1derstanding between China and |
merica and a relation of friendship 2
hich could not have been accom- /.
ished in so short time in any +
her way. A contribution such as
am suggesting would forever elm
ate the charge of dollar diplomacy t
our international life. but even r
ide from the long run it would |
owe profitable even in dollars and +
nts" I;