Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-04-30
PAUL NJ. WARbURG
URGES RELENTLESS
WAR ON INITIATION
Causes Of High Prices Dis
cussed Before Academy of
Political Science.
By the Associated Press.

OuklO0I SOtVlsVVs
/ By the Associated Press.
NEW YORK. April 30.-The entire
Is to be enough for all. and that belt
is strict control of bank credit.
without which the world will con-
| tinue to gorge itself and initiate. de-
clared Paul NJ. Warburg. banker, dis
| cussing imitation. it's causes and reme-
dies, before the Academy of Political
Science here today.
summing up what he termed the
practitioners advice in the case. he
said:
First. we must fight imitation with
all the means at our disposal; by ar
resting the further increase of gov
eminent Indebtedness. and il possible
reducing it, and by calling a halt in
further bank credit and note issue ex-
pansiOn. We would thereby destroy
the atmosphere OF easy money and
paper prosperity that makes for in
dividual and corporate extravaganza
masses. rendering them disinclined to
give their full measure of work
This includes the most difficult task
of curling the production of unes-
sentials and Of stimulating the pro-
duction of essentials.
Must Stimulate Production.
And finally, we must fight rising
prices by stimulating essential pro-
duction. both here and abroad. which
means that we must furnish Europe
with the materials required in order
to rehabi litate her industries so that
once mora she may become self-sup-
granting of further credits it should
be our determined purpose to provide
them from our savings. If we are in
capable or too irresponsible to &C.
complish this. We must submit to
paying for the unsaved balance by
imitation. That would prove. as we
have seen. a wasteful and highly re-
grettable alternative. but it is easier
for US to bear the sacrifice than for
Europe"
Mr.. Lemngwel Address.
The government of the United States
"fs deadlocked against itself. a gov
eminent by obstruction" Assistant
Secretary Leffingwell of the Treasury
declared In a speech today before the
academy. Failure OF the government
to deal in a constructive way with
any one of the vital national problems
he attributed largely to the fact that
the government is divided against
itself"
1T is at least questionable" Mr.. LET
fingwell continued. whether the prog
ress of reaction would have been so
complete or so disastrous if our in
stitutions had not given this country,
during the most critical period Of the
worlds history, a government divided
against itself. and therefore incapable
of effective leadership in national and
international affairs.
AT this most critical moment in the
history of Europe, when our financial
and economic stake in Europe's az
could mean only disaster here, many
81 our own people have turned gam
elers and MASTERS. For plain living
and -high thinking we have substi-
tuted wasting and pickering. We en-
joy high living while we grumble at the
high cost of living
:, There is, only one remedy, Mr.. LET
f1ngwell said. The nation must get
together. stop pickering and face the
critical situation which confronts the
world as we should q foreign war"
sheulA Cut ExpenditurGs.
Government expenditures must be
cut to the quick" he said, and I'VE
must abjure bonuses and realize
promptly on all salable war assets.
including ships. applying the proceeds
to the war debt" He argued for
national budget with teeth in it,"
and urged prompt revision of present
tax laws.
ments administrative policy AZ penny
wise and pound foolish" recttAng how
Congress had struggled to effect
economies at the expense OF efficient
administration. while it takes time to
add $65,00O,000 to civil war pensions.
ly and boldly" he said, that prices
are high because they are wasting,
we nix prices and prosecute profiteers
in order that the people may buy more
and pay less. Instead Of telling the
young men who were drafted to fight
the war and who came back better and
stronger and more ut to fight their
own battles than they ever were be-
fore, to go to work and save their
money and look out for themselves as
any self-respecting man should. We
listen complacently to their organized
called adjusted compensation
While saying the liberty loan cam
paigns stand out as the most remark
able economic achievement of any
people," Mr.. Lefi1ngwell feared that
the good which had come through
them-the training of nation to
work and save-was about to be lost.
He declared too many people had
come 20 regard a $50 bond as a
$50 bill"
Talks OF Shortage and Speculation.
DR.. B. NJ Anderson. jr.. Of the Ma
tional Bank OF Commerce in New York,
speaking at the forenoon session, de-
clared that the shortage of goods and
the attendant speculation are the prime
causes of present high prices in this
country.
when our enormous exports balance
disappears and when our domestic mar
kets are called upon to absorb three
or four hundred million dollars worth of
goods per month, which they have not
been absorbing. we shall see lower
prices" he declared.
The speaker said that increased pro-
duction had been expected when the five
million men withdrawn from industry
for the Army and Navy returned. but
that it had not come.
DIR. Anderson declared bank expan-
sion has been more passive result
than an active cause of the rising
prices"
Causes for InAati0n.
Edwin W. Kemmerer. professor of
economies and finance. Princeton Uni
versity. after reviewing the two
groups of causes for imitation the
country has experienced. which he
classified as "non-war causes and war
causes" said:
THE great difficulty has been-and,
fear, will continue to be-that
financing a war by imitation. with all
it's injustice and with its necessary
aftermath of economic and social
problems, Is none the less both po-
litically and economically. during the