The Ashburton Guardian. Magna est Veritas et Prævalebit. FRIDAY, OCTOBER 18. 1889. WHY TIMES ARE DULD.

Ashburton Guardian, Volume VII, Issue 2257, 18 October 1889, Page 2

The Ashburton Guardian. Magna est Veritas et Prævalebit. FRIDAY, OCTOBER 18. 1889. WHY TIMES ARE DULD.

Our Wellington contemporary the " Evening Post " devotes a very pertinent and interesting article to the answering of the common query: — "How is that, with such splendid prices for all } descriptions of produce, business is so dull V For " all descriptions" it would be more correct to substitute v most descriptions," for prices for grain cannot by any means be characterised as splendid, but it is a puzzle to most people m view of the excellent prices for wool, meat and flax to find dullness so obstinately prevalent. The dullness says our contemporary " is undeniable almost amounting to stagnation, and yet money mu3t be literally pouring into the eountrj', m return for the produce which we send away. Little or none of this money, however, seems to have found its way into circulation through ordinary channels of trade, and the complaint as to things being quiet is therefore universal" Perhaps it is not quite so universal as the " Post " imagines, nevertheless it is undoubtedly sufficiently general and pronounced to render the inquiry as to its cause one of very wide interest. This then is the way our contemporary proceeds to account for it : — A glance at the latest Bank returns affords some explanation of the anomaly of a large and profitable demand for all descriptions of produce existing side by side with a general dullness of trade. The fact is that the producers have been working off a ' cUad horse 'so far. The money received for their stock aad produce has not gone into their pockets for use and circulation m the ordinary manner. Nearly all of it has been absorbed by the Banks and other monetary institutions, m repayment of former advance, the recovery of which at one time looked very doubtful The recent advances m value of all kinds of produce has enabled the producers to meet these liabilities to some extent at least, and the Banks and monetary institutions m question having learned caution from the very narrow escape of losing their money altogether, are sweeping np every penny they can get, and are remarkably chary about setting it m circulation again m the shape of fresh advances, however promising or legitimate the securities may appear. Why business is dull is sufficiently explained by the fact that the Banks alono have, within a very short period, reduced their advances by upwards of a million and a half. This means that this sum, which m ordinary course should have passed into general circulation by being spent on improvements or m enlarging the area of production, has been raked into the Bank coffers, and is retained there comparatively unproductive. And the Banks form only one class of monetary institutions and perhaps not the largest m their operations. The same policy pervades all, and we cannot altogether condemn their caution, although we may deplore its effect. They have burned their fingers m the past, and the burned child naturally dreads the fire." This is no doubt the true solution of the problem presented by the concurrence of good priceß for produce and dull times, but we agree with the " Post " that this state of affairs cannot last, and that "the time cannot be far distant when the producers will have a fuirly clean sheet as regards past liabilities, and then the money they receive will pass into general circulation and relieve the prevailing dulness." There are indications of the " good time coming" observable m various directions, as for instance we learn from the "Rangitikei Advocate" the significant fact that recently " after one of the most successful stock sales which has been held on the Coast for years, it was found that not one pf the buyers peeded to give bills for hig purchases, a circumstance without a parallel m tbe history of the firm during the last six or eight years. Every man had the lucre, and preferred to pay it down." There is no better proof of good times than the ability of farmers to pay ready cash, and as there ip eyery indication that the prices of New Zealand produce will keep up, that ability will be general so soon as past leeway is made up. In view, however, of the near approach of a time of prosperity, the caution with which the *' Post" accompanies its predictions m that direction against a revival of the recklessness of the past, either m respect to borrowing or lending, is apposite and timely, and it truthfully remarks that " all parties have had a serious lesson from which they oan scarcely fail to derive instruction." If bo, the dull times which have not yet quite passed away will bear gpod fruit m tse future, and when the revival comes it will be a revival established (< on pare and solid foundations."