MORAL OF UNSTABLE PRICES

Evening Post, Volume CV, Issue 108, 8 May 1923, Page 6

MORAL OF UNSTABLE PRICES

Mr. N. Elmslie, British Trade Commissioner in New Zealand, assumed the role of the' prophet yesterday in addressing the Association of British Manufacturers and Agents in New Zealand. " Prices are becoming unstable and are rising," he said. " A period of speculation may be expected." He was referring more particularly to the immediately beneficial effect of the Ruhr, position on certain British industries, a position that might entirely change in a single day. The freedom of the Euhr from French domination would, he held, set free supplies now held back, over-pro-duction would result, followed by world-wide trade disturbance, and a serious curtailment of confidence. The strongest point made by Mr. Elmslie from these remarks was that "it is a very great mistake to think, because there is no direct trade between New Zealand and other countries, that the position in that country does not affect us here." The Commissioner was on sure ground when he referred to this aspect of commerce. In 1908 there was a very serious crisis in Wall Street, New York, which, far-fetched as it may seem, seriously affected the values of properties in Wellington. There was acute financial stringency in New Zealand at that time, and it followed, as a kind of backwash of trouble among New York financiers. The recent high prices to which certain New Zealand products exported have attained have been proved during the past few weeks to have- been unhealthy. There is a slump in the butter and cheese market, and meat prices are easier than at the opening of the export season. Wool is fully 40 per cent, better than at this time last year; but the moral that producers in New Zealand can draw from the Commissioner's predictions is: "Don't bank on present or higher prices." They are welcome, especially the advance in wool; but in view of the unsettled state of world politics, they should not be taken as a standard.