New-York tribune., 1920-05-31

increased by the amount of se4s.s20, 900
m excess of the increase in loans and
olscounts--an increase which the Fed
erai Reserve Board itself recognized as
a pure credit expansion, not called for
by increased industrial activity, but
occasloned by the use of the banks
cfeQlt tor government financing.
IN addition to initiation as the pri-
mary causes of high prices, there have
oeeh important contributory causes
wartime taxation, stationary produc-
Non, dlsproportionate wages. lavish
public expenditure and private extrava-
gance.
over and over drag-like effect
upon general business, the excess
pro1lts tax has operated to aggravate
the tendency toward rising prices.
II IS impossible to overlook the fact
.hat modern economic processes are In
.ttroePehdent as to price fixture, and
that the forces making for initiation
once released there followed a yicion.
cIrcie OF high prices, higher wages and
sun higher prices. Indeed, as in the
case OF war taxation, business men have
oech encouraged to protect themselves
ny discounting the likelihood of still
higner wages in fixing their price lists
Cost Plus System Scored
similar in effect was the noIicv
pursued IN awarding most Of the var
contracts on the 10 per cent cost plus
system. inns necessarily tended to
hn,n htmcre%se prices for materials and labor,
because the higher the contractor
could make his costs the greater would
De ms profit. This opportunity for
swollen profits was availed of from
the beginning with absolute disrepard
OF the public interest, and established
a level of costs and prices never
before reached in this country.
E;NN,'raVagance IN government ex-
Pendl(ure has contributed to the ac
cumulatlon of floating debt. the peri
oalc renewal Of which has operated and
nlCsV continue 10 operate to check fall
ing prices. Individual extravapanco
and Wasteful spending have further
served as direct stimulus to price in
crease - 'Ne III
"The evils of price imitation are. in
large part, beyond remedy But there
are certain wholesome things that can
be done, and it is upon these that pres
ent effort should be centered.
he first step in correction of the
hlgh cost Of living Is to stop further
CCredit imitation on the part of the
,Ifeasury in the form of certificate
borrowing In lieu Of certificate bor-
rowing of this kind the existence Of
the tioating. debt should be frankly
recognized, its volume determined and
responsibility for its incurring clearly
assigned. If cIrcums tances permit a
funding operation or discharge by tax
alton, this should be done
Credits Must Be Reduced
Progressive imitation arising ont Of
/ TIE Treasury's borrowing once checked
/ there should be courageous but in
te!Hgent reduction in the volume of
/ existing bank credit and note circula-
| ton An increasing discount rate is
the instrument for arresting such
! tendencies. Preference in bank credits
should be given to industries engaged
IN the production of essentials
IF further credit expansion and
I price increase are to be avoided, not
/ only must the savings of the nation
supply the funds for the liquidation of
formidable floating debt, but they
must also provide for that rapid en-
Iargement of the country's industrial
capital upon which increased produc-
tlon very largely depends.
Plan and fashion as We, will, the
country is in for q prolonged period
Of heavy taxation. Facing this pros.
pect, every effort should be made to
use those particular taxes which will
social life of the nation and at thl
same time realize the largest measure
OF justice as to incidence and distri-
button. Such policies are certain to
contribute to the corrective forces
making for reduction of living costs
I'm summary: Rigorous avoidance OF
further imitation in our government
borrowing, courageous but Intelligent
defation of credit and contraction OF
gtt,- iot, J., !,
D.. goods and services, public economy
and private thrift, revision OF taxa
tion as to distribution and Incidence
these are the approaches to successful
attack upon the high cost Of living
immigration Offers Problem
Accompanying the abstract on the
high cost Of living is q briefer one on
the immigration situation. Discussing
restriction, the report says:
"a plan widely advocated is limita-
ton of the immigration of each ethniC
group on the basis Of certain per.
centage of the number Of that grouI
naturallzed and resident in the Unitec
States
"The immigration movement to the
United States in the last one hundred
years has been the largest population
movement in history Over $4,000, ,00(
individuals have been admitted to this
country In 1910 14.7 per cent of oul
entire population were foreign born
Within recent years the source of the
main bulk OF the immigration current
has shifted from northwestern tc
south and eastern Europe Nearly
three fourths Of our recent immi-
grants have come from the latter area
"Our present law is based on the
fundamental principle of. the exclusion
Of undesirable immigrants and the ad.
mission, without numerical limitation
Of all who can pass the prescribed
tests; the law also provides for the
deportation of certain types of unde-
sirable immigrants after admission
Conditions revealed by certain events
have convinced the country that mum
erous changes, some of them of radical
character, are needed in the law.
in the first place, some improve
ments are needed in our selective
tests, particularly a higher physical
standard, better facilities for detecting
mentally deficient immigrants and
more emphasis upon previous records
Much would also be gained by d system
Of inspection near the source of immi-
grafton.
"Within recent years the conviction
has become widespread in the country
that selectiVe measures alone are in
adequate TO safeguard the United
States against the evils of immigration
Tbarp - q e1rOpC de1uapd for son, n