The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. TUESDAY, MARCH 22, 1932. THE TIME FACTOR.

Southland Times, Issue 21659, 22 March 1932, Page 6

The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. TUESDAY, MARCH 22, 1932. THE TIME FACTOR.

In times of joy and in periods of depression people forget time, and therefore, lose a sense of proportion. An invasion of China may appealsimple, but if the time factor is included, the invader finds himself up against the fact that conquered China has invariably swallowed her conquerors, and has quite a number of instances to offer as proof of this capacity in her. In economics the same neglect of time is seen, and remedies, most of them inflations under different names, are grabbed by people who are converted and made expert in the working of an elaborate currency management after the perusal of a pamphlet. Currency management by the Government is no new thing and where it has been monopolistic in character it has invariably run to inflation and yielded worse results than the system now in vogue. To talk about a monopolistic control of currency by the banks is to begin at the wrong end. Factors which bring about fluctuations in prices control bankers as well as producers and consumers, and the most that any financial system can achieve is to lessen the swing of the pendulum and minimize the effects. For some years now the crop cycles have been studied and there has appeared a relationship between these movements and the trade or economic cycles, while working with and about the crop cycles there are the famine cycles and the weather cycles. A direct connection between these seems as inevitable as the discovery of a well-marked rhythm, an ebb and flow, conforming to a more or less regular pattern. Statistics on which many people still look with contempt, build up the evidence on which these graphs disclosing v’eather, famine, crop and trade cycles are based. The period under examination is not long enough to yield positive results, but the appearances point to periodic movements which postulated a depression in 1914-16. The war changed that to a period of activity and the downward movement was delayed until 1920-22, and the present fall is accentuated by factors which are the direct product ,of the war. Nd system of credit management can avert these movements, and their introduction will serve to bank up forces, like a dam in a river, and make worse the damage when their weight smashes down the checks. Instead of declaring easily that the world’s financial machinery has broken down, it is saner to realize that special con-

ditions resulting from the war—payment of the immense reparations and war debts —joined forces with the periodic depression and produced a problem too complex to be settled in a night. The financial system, as it has done on other occasions, is adjusting itself to the new requirements. Dr. A. C. Sigbu has said that “optimistic error and pessimistic error when discovered give birth to one another in an endless chain.” This theory of psychological swings is a statement of causes which are themselves effects of other causes, and one prefers to go to the theory of the natural movements to which Dr. Herbert S. Jevous refers when he urges that solar cycles produce crop cycles and these yield cycles affect business 3 activity. Most of these periods of contraction or depression have been between two and three years in duration, though the greater part of the period has been occupied by the recovery movement. When the rhythmic association of these cycles is appreciated, the present day observer is less likely to be earned away by schemes involving publiclyowned currency management of a monopolistic character, especially when the bulk of the world’s experience is that interference of that kind in any department of commerce or industry leads to heavy losses.