EXPECT NO GREAT DROP IN PRICES

No drop in prices to the pre-war level is to be expected during the next ten years, in the opinion of the University Committee on Economic Research, said Professor C. J. Bullock, chairman of the committee, speaking last night at the first session of a national conference of subscribers to the Harvard Economic Service, held at the Harvard Club of Boston.

Taking as his subject "Prices over the Next Ten Years", Professor Bullock said "Business is affected by price movements more than by any other single factor. The probable movement of commodity prices during the next ten years is therefore of especial importance at a time when the revival of business activity is clearly disclosed.

"The plausible inference that prices must return to a pre-war normal has frequently been drawn from the fact that prices have reverted to their former level after previous periods of currency inflation in the early and middle nineteenth century. The Harvard Committee, however, cannot accept this conclusion, for it cannot find that the governing conditions exist today which brought about lower price levels in the past.

Problem of International Debts

"The problem of international indebtedness is here pertinent only in so far as it may affect the price situation. Cancellaton of all such debts would obviously help the debtor countries to carry through policies of drastic deflation but would not necessarily mean that such policies would, or could, be adopted. On the other hand, if these debts are to be paid, it must inevitably happen that the price of international commodities will be higher in creditor than in debtor nations, since otherwise payment cannot be made. Deflation in the creditor nations must, therefore, mean severe presure upon debtor countries; while inflation leading to higher prices would obviously ease the strain of international payments.

Must Accept Present Price Level

"If we are prepared to accept, as apparently we must, the present price level, as substantially that around which the fluctuations of the business cycle must play during the coming decade, we can contribute powerfully to financial stability throughout the world. And, finally, if we adhere consistently to this view, we can make it clear that little indulgence can be expected by debtors who adopt policies calculated increase inordinately the burden of debt inherited from the Great War".

Professor H. B. Vanderblue of the University also spoke on another phase of the same subject. This morning there will be another session at the Union in Cambridge, addressed by Professor W. M. Persons of the University and Professor W. L. Crum of Yale, followed by luncheon at the Union. The subscribers will attend the Centre game and will dine at the Harvard Club of Boston, where they will be addressed on the subject of "Next Year's Business" by Mr. L. P. Ayres, who was in charge of the statistical work of the War Department during the war, and by Mr. G. W. Norris, Governor of the Federal Reserve Bank of Philadelphia.