FALL AND RISE

Evening Post, Volume CX, Issue 49, 26 August 1930, Page 4

FALL AND RISE

|@»T ERICES TELL

SOME SOCIAL HISTORY

■*g£tke Movements and Social His"#*y" was tho title of an address dc-pw-ea'oii Thursday evening by Dr. fILW. M'Hraith to a combined meeting i^.the Economic and Historical Sojtieties, iThe lecturer first sketched in brief fcttttfne the main movement of world pKjjes since 1860—a rapid rise succeed-et-by a fall till 1870; another rise till atyjut 1874, and then an almost miW!foken fall till 1896, when world prices Cached bedrock for the century; again ail-almost unbroken rise till 19^0, tollowed by an almost unbroken downward movement till to-day. It was the aiinost uninterrupted fall for a quarter of-:$ century succeeded by tho equally uninterrupted rise that caused a loss o! $aith;in the present monetary system, alppsition greatly accentuated by the ejtntrarrsissing fall in prices since 1920. I'jßi'oadly speaking, he said, tho great dtwline in the price level between 1875 atid 1895 was due to the failure of the world's currency to expand in the same ratio asvtho world's trade, a failure due to. the petering out of "the world's gold fields, for then, as now, the financial credit of tho world was based on gold reserves. Just as economists. were discussing the problem of finding a substitute ior gold since it was becoming relatively so scarce, the mines of the Ea'nd, of Yukon, and the JKlondyke were discovered, the cyanide process of gold extraction was developed, and gold lit* ierally by the ton was poured into the banking reserves. Then the volume of currency expanded beyond the world's requirements; money depreciated ;iri ;vShic—i.e., prices rose; and the situation was still further aggravated during tho war by the issue of huge quantities of inconvertible notes at tho very trine that the reduced trade of the world needed less currency. Since the war opposite forces have been, in operation; some countries withdrew millions of their notes from circulation, much of ■fli© available gold of the world-passed to! 'America in payment of interest on ajji^d loans, while some European cbunIgiefc, and, in particular, France, in. an■ficjpation of some problematical.war aws/piling up gold reserves far beyond £$f; possible peace requirements. Add ■fep-tfhis the facts that the gold produe-tS6-k of the world is already declining, sfid' that trade and industry are rapidly expanding, and wo are face to face ■tjiritn a-situation the development of ■which it is impossible to foresee; The lies with no one country; it is i&t&niational action alone, possibly tjjrrdugb/the League of Nations, that jjan t^e the world from tho financial crises tjjat for centuries have periodically l&H.ieted'it. ■ . ~ ,;. SLUMPS AND BOOMS. 3ja passing, the lecturer quoted the ■wjsirJd gold production in 18S0 as 5 milEon ounces, in 1890 as 6, in 1896 as 10, in 3902 as 14, in 1908 as 21, in 1914 as 2sy.in 1920 as 16, and in 1928 as "19, trafcli no prospect of any increase. _ ' '' ij)esee.ndnig into detail, Dr. M'Hraith Sisciissed some of tli© industrial and i^feial effects of these changes. The zis&. in prices in 1870 induced a land boom, which collapsed about 18S0, rendering bankrupt hundreds of farmers, causing the opening of soup kitchens, and compelling rigorous retrenchment aJad the abandonment of public works. Between 1885 and 1891 departures exee'edislt^fti'riyals by 20,000; a public miserßilg' actually petitioned the Amerifl^an for aid to emigrate! In the "early" 'nineties" the Aus^' kalian banks crashed, and the Bank of New Zealand was saved the same fate only by tfte timely assistance of the Government. . So, top, the rapid rise in. prices before and during the Great War induced a similar land boom, followed by a similar slump, though, of course, the. fall in prices has not yet foeen nearly so uninterrupted or sp wrious. ''■"'.' '; These booms and depressions wrecked' Jtfxoistries everywhere, one general rule being plainly observable; a period Qf financial depression generally results in the return of a party of more radicaltendencies, while a sustained period of advancing prices seems to cause people to turn, from polities to pleasure and to leave government to a party that will safeguard and consolidate the position already attained.- In some countries, however, where the rise in thp cost of Using was exceedingly rapid during the ■war, a discontent passing into revolu*&>nary activity was fostered. In social life the great depression of $fee" 'eighties" was-reflected in a eoniafanoua decline in the marriage rate, which reached its lowest point in, 1895; ■with th» subsequent, rise in prices the marriage rate rose and continued to folltrw the fortunes of our farm produce an, *lmost undeviating regularity. By 1920ft i'yras 50 per cent, higher than m the/^niiteties} it is now a little below ;fche l£oa?leveL\ With the rise in the rate came also' a gradnal rise in the marriage age till by 1920 it could be as-, sertedwith confidence that advancing Wviflijjation was parked by a tendency m postpone marriage a little longer. But raie statistics of the last few years show that the average marriage age of bachelors and,/spinsters has declined by at ■least twoiyeais. One can only speculate as to the cause of this phenomenon. 'And another peculiar social feature of the past four years has been the extraordinary increases of marriages under the age of 25 and over tho age of 45, the latter first manifesting itself during ■the war and proceeding with added moxtestan-' since. The lecturer suggested Bartajjl causes, but, said that the real jiggpons were yet to bo verified. HOW THE MONEY WENT. Following on the rigorous public and private economy of the 'eighties, "skinflint" it was called, came the milder iJßgime. of the later "nineties" folioweji by the liberal expenditure in all departments of life in this century. Trades that amuso and cater for the people's private pleasure in food, dress, and laughter have increased enormousJJ-; the statistics of totulisator betting 3fLve a fair idea of tho amount of sur-' jjlus money at tho disposal of the public. From a modest 16s per head in. 1892, the rate rose to 30s in 1900; to 7Ss in 1914; to 160s in 1920; dropping to 120s in 1924, and 105s in 1928. 3$ is lower still to-day. The education vote has shown a similar but more modest increase from 16s in 1905 to 36s in 1920,, and 53s in 1928—an increase due in great measure to the. extraordinary expansion of post-primary and university education and the increased activities of the Education Department in the matter of child welfare and kindred work. ' Closely following the fortunes of the price level and especially those of the gambling rate, we find the divorce rate. It declined during the dark "eighties,". reaching its lowest level with prices in 1895/' Biace then its expansion has been, sensational, being in 1910 three hundred per cent, higher than in the (per 1000 of married people), in 192p.900 per cent, higher, in 1925 IiOOO TOer pent, higher, dropping in 1928 1» 90<).per cent, higher. Many causes have co-operated to produce this extraordinary result, but undoubtedly an advancing prosperity is one of the'moat potent. TKe.birth rate fell from 42 per 1000 of; population in 1860 to 27 in 1895, re-' mainod almost constant but. with a jftighi downward tendency till 1920, and t^pn <bspt!Qd suddenly to the record

comes much scope for reflection on the social future of New Zealand.

Tho relatively rapid rise in farm produce since 1900 has tended to divert, our energies principally to pastoral pursuits; 94 per cent, of our exports are now pastoral products, as against only 70 p'or cent, in 1905. During tho same period the percentage of our rural population to the whole population has declined from 58 to 47. What will be the effect of our increasing concentration on sheep and cattle? Dr. M'Hraith concluded by touching briefly on some of the schemes for keeping the'price level stationary, the principal of- them being based on the possibility of controlling the currency by means of regulating the price of <rold to the end that every expansion or contraction in the world's trade should be accompanied by a corresponding expansion or contraction of the world's currency. The world has established fixed and "unvarying standards of length, weight, capacity, and time, c g., the yard, the pound, the pint, and tho second; surely, said the lecturer, it has the genius to establish a similar fixed and unvarying unit of purchasing power, i.e., the pound sterling, tho franc, or the dollar, a unit that will buy as much on the whole in 1950 or 1980 as it now buys in 1930! Tlio hope of reform is in the people seeing clearly where the trouble lies, and.in realising that'the remedy can come only by- united international action of the groat Commercial countries of the world.;