THE PRICE OF COMMODITIES.

Press, Volume LXIV, Issue 13100, 27 April 1908, Page 6

THE PRICE OF COMMODITIES.

There is no more interesting or instructive feature in that admirable financial journal, tho "Economist," than the column in which, by means ot it_ "Index Number," it records tho rise and fall in the price of commodities. It is, in fact, a very good barometer of the state of trade. In "boom" times, when there is a keen demand, for goods, prices advance; when there is trade depression, prices fall. In June of last year this commercial barometer stood at tho highest point it had reached for niany years. Next month it commenced to go down, and tho falling, movement continued until January of the present year, when there was a pause, but in February tho financial "mercury" once more began to descend. The following table, taken from our contemporary, shows the index number for each month since June, 1907, and at intervals since the end of December, 1903:— Total Index Number. End of February, 1903 .. 22C6 „ January, 1903 .. 230- ---„ December, 1307 .. 23-0 „ November,-1907 .. ' 2360 „ October, 1907 .. 2414 „ September, 1907 .. 2437 „ August, 1907 .. 2519 „ July, 1907 .. '.. 2-71 „ June, 1907 ..-. 2504 „ starch. 1907 ~ 2-16 „ December, 190S .. 2439 „ November ,I9CIG .. 2501 „ October, 1906 .. 2458 „ September, 1906 .. 2353 M June, 1906 . .. 2_C_ \ „ March, 1906 .. 2306. „ Deoember, 1905 .. 2343 „ June, 1905 .. 2163 „ December, 1901 .. 2130 „ June, 1904 .. 2130 „ Deoomber, 1903 .. -1197 Whilo the index number shows the trend of prices of a largo selection ot commodities "eri masse," and so gives a broad indication of tho course of trad©, it is interesting to know the items chiefly responsible for tho fall that has taken place. Among these we learn cotton plays a leading part. The prioe has been phenomenally high during the last three years, and it is not surprising, particularly after tho crisis in America, that a decline should be witnessed. As it is, the price of raw cotton is nearly twice as high as tho quotations of ten years ago, so that there is ample room, from, the consumer's point of view, for a further decline. Wool, which is of especial importance to New Zealand, is responsible to some extent for the fall, especially tlie coarser qualities of wool. Hemp, another commodity in which we are interested, has fallen in price owing to' large stocks 6f Manila held in the Philippines. Tho heavy drop in oopper. and lead naturally had a considerable effect in forcing down the index number, but pig-iron, on the other hand, showed an advance. The decline which took .place in wheat immediately after the American crisis began was very gratifying from the point of view of th© workine classes in England, however unwelcome it was to wheat growers.. Butchers' meat, on tho other hand, advanced in price, mutton being particularly dear in February. Tho decline which bits taken place is sufficient to show thai? there has been a slackening of trade in the Old World. So far as the fall in prices affects our staple exports, it will, of course, make its influence felt in New Zealand. But it must not be imagined that there is' nothing but evil in a decline in prices with no counterbalancing advantages. On the contrary, when articles in general consumption fall in price, it makes tho oost of living cheaper, and this affords relief to ,the very large class who have fixed incomes or have not derived any direct benefit from the "boom" times. To some extent tlie high prices of eo-ealled good times are delusive, inasmuch as if moro money is coming in to the producers, they as consumers have to pay more away. There is one feature of the situation, however, which our own Government, among others, will do well to bear in mind. With a fall in the price of our imports, there will be, "ipso facto," a falling off in the Customs duties levied on the imports, independently of tho circumstance ' that there may at the same • time be a

deCTease in consumption owing to the fact that our producers, having to bo content jrith lower prices for their goods, have less to spend upon imports, the consumption of which consequently diminishes. The Minister of Finance, in framing his next Budget -will, it. is to be hoped, bear this fact in mind, and endeavour •to effect, a corresponding economy in th© public expenditure.