Every evening, Wilmington daily commercial., 1920-04-30
HIGH PRICES LAID
TO GOODS SHORTAGE
Banker Tells Political Scientists
Fall in Exports Will Bring
Relief to u. S.

New York. April 30.-Bankers, edn-
Gators and economists of the United States
and Europe discussed the facts and causes
of imitation and high prices and their
remedies. at the semi-annual meeting
of the academy of political science which
opened here today.
DR. b. NJ. Anderson, Jr., OF the Ma
tional Bank of Commerce Ill New YORK,
speaking at the forenoon session, de-
ciared that the shortage of goods and the
attendant speculation is the prime cause
of present high prices IN this country.
''When our enormous export balance
d;sannaars and when our domestic mar
kefs are called upon to absorb three or
four hundred million dollars worth oil
goods per month which they have not
been absorbing, we shall see lower prices,
he declared.
The speaker said that increased pro-
Cuction had been expected when the ilVe
million men withdrawn from industry Tor
the army and navy returned, but that 1t
had not come.
'In 1919 we produced less by at least
10 per cent i'm physical units than IN l9l',
he said. Coupled with this decreased
production due TO the prolonged STRAIN
on our industrial system, came a great
increase In our export balance OF traue
and a great increase IN domestic consuinp-
tion, as our people relaxed from wartime
economy and swung to the other en-
irene The net result Is greater short
opes of goods than at the end of the war
DIR Anderson declared bank expan-
sion has been more passive result than
an active cause of the rising prices.
Two mistaken policies In American
war financing arc responsible for imitation
according to DR.. jacob IL. Hollander pro-
fcSsor of political economy of Johns Hop
klus University
"The first" Inc said, consisted in issu-
ING bonds mt artiiicially low interest rates
with the aid of cheap borrowing faculties
al the Federal Reserve Banks, SO that bond
h,lvcrs found il easier to obtain addition
N credit from the banks to pay their
bonds rather than use their savings or
such bank deposits as they already had.
The second and more important way
in which the treasury contributed to
imitation was by continued adherance,
even after the armlstlce, to its wartime
practice Of borrowing from the hanks by
means of certificates of indebtedness
.'Ovcr and above IFS Jmwholesome effect
upon The money market and upon The
nation finances, certihcate borrowing
aggravated the problem Of high prices by
Fn0pkl1E tI titidNt ttiE dH bAAHtANicD EADF
able fall in prices on even contributing
TO still higher price level. II did this by
reason Of the fact that certificates OF m
debteCncss omitted lly the treasury were
taken almost entirely by the banks for
themselves and their customers and m
either event were paid Tor by the banks
almost entirely hv credit
The entire world must tighten Its belt
If Shcre is to be enough for All, and that
belt is a strict control Of bank credit
without which the world will continue 10
gorge itself and initiate, declared Paul NJ.
Warburg, banker, discussing an imitation,
its causes and remedies, before the
Academy of Political Science here today.
In summing up what he. termed the
practictioner S advance in the case, Mr..
Nhrhurg said:
First we must fight initiation with all
the means at our disposal; by arrestlng
the further increase of government IN
dcbtedness, and il possible reducing It.
Second, by calling halt IN further
bank credit and note ISSUE expansion,
We would thereby destroy the atmosphere
Of easy money and paper prosperity that
makes for individual and corporate en-
travangance and fosters discomfort among
the masses, rendering them dlsInclined Z
give their full measure of work. This IN
rludcs the most difiicult task OF curhtne
the production of unessenilals and O
stimulating the production Of essentials