South Bend news-times. (South Bend, Ind.) 1913-1938, 1920-05-17
CONSOLIDATE DEBT,
DEFLATE CURRENCY
SAYS ENGLISH MAN
Noted Financier Says Too
Much Paper Money Causes
High Prices.
BY FLOYD NACCRuFF.

LONDON. May 16.-Lord D'Aber-
non, one of Englano's most respected
and conservative financierS declares.
Prices will not fall in natural
course 10 their pre-war levels just
as soon as production is increased
TO its old levels.
Prices VIII not fall to their old
levels as soon as the nations float
ing debt is consolidated.
The exchange rates will not re-
turn TO their old PARTIES as soon as
free commerce is resumed between
the different countries Of the world
and eacn country's production has
regained normal proportions.
The general level Of prices and
the cost of living will not fall 10
the old pre-war level as soon as
freights are again normal.
Accumulation of gold in the Bank
Of England or the Bank Of France
will not restore the former exchange
rate values.
Diagnoses Falsc.
All these diagnoses are false, he
maintained Not until the world
has debated its paper currency,
which has been increased siX-fold
will any Roadway be made toward
reducing the cost Of living and get
ting things back to their old levels.
Take all five proposals, which
have been advanced by many lead
ing business men and bankers, and
get them adopted in toto or in any
com bination and there still would be
no solution in that pressing problem.
the mounting cost of living, Lord
D'Abernon says. But carry out
those proposals in conjunction with
reducing printing press money. and
there will be an immediate drop in
prices he insists.
Paper Increases.
1.-The paper currency OF the
world" Lord D'Abernon explains.
having been increased six-fold
since 1914, and having increased in
fniLely more in some countries (Rus-
STA, Austria. Germany, France) than
in others. has violently disturbed
prices. exchange and cost Of living.
For some unexplained reason.
the governments Of the world ap-
pear unwilling TO meet in confer
ence on the subject or even 10 have
il examined within their own Dor
ders with the publicity impartiality
and authority required.
They are inclined to take refuge
in the false diagnosis and in the en-
pirical treatment Of symptoms, in
stead Of recognizing that one factor
is dominant-namely, currency-and
that in the reform and control Of
that factor lies the only remedy
Draws Comparisons
Compared with other European
belligerents, England has been fair
~ wise and moderate in this process
OF watering the currency. We taxed
more: we borrowed more; we
printed less. The result is that
compared with France and Italy, our
level Of prices is lower and our ex-
change is better. Compared with
Germany. Austria and Russia our
currency position is incomparably
superior.
I'm each country the prices have
risen in proposition TO the amount
o. water put into the individual
currency.
LAS to the high cost OF living. il
Is not so much that commodities
and services which have risen in
price as II is the value OF money
which has fallen. Diminuation OF
production is a relatively unimpOrt-
ant factor compared with the cur
rency cilution.
Taking prices as a whole il is
doubtful whether profteering has
added FIVE percent 10 the level of
prices ruling today. and ii is doubt
full whether government control OF
commodities makes as much as FIVE
percent difference in the cost OF liv-
ing.
Not until the various nations
take the water out OF their currency
will the cost Of living 60 down."