The Press. WEDNESDAY, MAY 29, 1895. A RIFT IN THE CLOUD.

Press, Volume LII, Issue 9116, 29 May 1895, Page 4

The Press. WEDNESDAY, MAY 29, 1895. A RIFT IN THE CLOUD.

It is pleasing to notice signs which tend to show that the cloud of depression which has hung over the world for so long is likely to lift. Fortunately the signs are local as well as general, which strengthens the hope that a change for the better has set in. In Europe and America several of the principal commodities show that an increased demand for them has commenced and that confidence and trade are reviving. In the United States beef, pork, cotton, oil and wheat, amongst other things, are all dearer. Beef is selling better because the recent statistics show there are 1,200,000 fewer cattle in the States than five years ago. Figures received by the last mail also show that the receipts of cattle at the Chicago yards were only 120,000 in April this year against 250,000 for the corresponding month in 1894. A similar decrease was manifest in the supply of hogs. la April this year only 400,000 were yarded against 560,000 in April, 1894. The price of cattle has advanced 90 cents or 3s 9d per lOOlb in the twelve months, and for hogs 1 cent or fd per lb. The Standard Oil Company allege that the wells are not yielding sufficient oil to meet the demands, and it is stated that this powerful Company have

entered into a combination with the Russian refiners to advance prices. Cotton also shares in the improvement, although not to any marked extent, but all cotton fabrics and wash goods are showing more or less animation. In Europe, as in America, wheat is dearer, and even wool meets with a readier sale, whilst those interested in rye, iron, and salt all report an improved feeling in their respective circles. Advices from the East state that tea is dearer, although the new crop is expected to yield over IO,OOO,OOOibs surplus for export beyond any previous year. Bice and cotfee also more than maintain last year's prices, so that the general outlook is considered to be much brighter than for years past. It is true that at present these are merely rifts in the cloud which may possibly close up again and leave the commercial outlook apparently as dark and cheerless as it was before. It is something, however, to see a gleam of sunshine, if only for a moment, and there seems good reason for trusting that, on this occasion, it is more than a transient break in the clouds, and that it really does give substantial promise of brighter times. Fortunately we in New Zealand appear likely to share in tho general improvement in the trade of the world. The recent revival in the wheat market, which has been the great theme of interest during the last week or two, is, among the cheering features in the situation, the one which first attracts attention. Wheat prospects are decidedly better now than they have been for a considerable time past. If we are not able to chronicle any increase in the price of wool—a more important staple than wheat so far as New Zealand is concerned—we have at least the satisfaction of knowing that the tone of the market is certainly firmer than it was. Gold-mining has taken a decided spurt, not only in South Africa and Australia —so that the total yearly output of the precious metal is now greater than ever before in the world's history—but the "boom" has extended to New Zealand, the present activity in the Auckland district being particularly in evidence. This is partly due to the large yield of gold from the Waihi and other mines, but even more to the large amount of English capital which is being introduced to developo newly floated gold-mining Companies in that district. We regret that the market for dairy produce continues in a depressed condition. As regards frozen meat, however, yesterday's cable news was decidedly more cheering, and there is at least a possibility that the opening up of a live stock trade may afford considerable relief to the pastoral industry in these colonies. Thanks to the energy and perseverance of the Government in endeavouring to introduce New Zealand timber in the English market, there is reason to hope that we may soon see this hitherto neglected source of national wealth being turned to good account. Side by side with these signs of an ■ improved demand for our products we have the great advantage of cheaper money now offering which ought to be of material assistance to farmers and producers generally in facilitating an increased output of commodities.

What we hope is that ,we have at length reached the reaction, which sooner or later sets in when prices descend below what may be termed a natural level—that is to say below the point at which production ceases to return a fair profit to the producer. It has often been remarked that there are cycles of high and low prices in trade. For several years we have been on the downward curve of such a cycle. The production of most of the world's commodities had overtaken the consumption, and prices fell, and continued to fall until at length many people began to despair of ever seeing a recovery. Instead of its being a curve with an ascending arc at the end of it they came to look on the movement in prices as taking a straight line downward leading simply to perdition. Natural laws, however, are bound to assert themselves in the long run. The result of a continuous decline in values such as we have described is that when they reach a certain level, the low prices either stimulate increased consumption or check production, or both influences are brought into play at once, the effect being the same in each case, viz., an arrest of the decline, and subsequently, when it is fully realised that prices of comrnoditie's'are below their natural values, this is followed by a rise. There is reason to believe that the world now realises that the consumption of the leading commodities we have named has overtaken the production. There are still, however, and there will be in the future, influences at work which drive prices down as well as speculative causes which tend to raise them. Which will prove the stronger it is, of course, difficult for us to say, but, on the whole, the general trend of prices appears to be in favour of renewed confidence, and this in itself is one of the most potent factors in bringing about an improvement in trade. We hope that the events of the next few months will prove that we have passed the worst of the depression which has hung like a pall over us for so long, and that the succession of lean years will be followed, if not by very fat years, at any rate by a period of at least moderate prosperity.