The Telephone. WITH WHICH IS INCORPORATED THE POVERTY BAY STANDARD. PUBLISHED EVERY EVENING. GISBORNE, WEDNESDAY, AUGUST 6.

Poverty Bay Standard, Volume I, Issue 202, 6 August 1884, Page 2

The Telephone. WITH WHICH IS INCORPORATED THE POVERTY BAY STANDARD. PUBLISHED EVERY EVENING. GISBORNE, WEDNESDAY, AUGUST 6.

Seasons of depression are always preceded by seasons of activity and speculation, and on all hands the connection between the two is admitted —the depression being looked upon as the reaction from speculation, as the headache of the morning is the reaction from the over indulgence of the right. But as to the manner in which the depression results from the speculation there are two classes of opinion. One says that speculation produced the depression by causing over-production and points to warehouses filled with goods that cannot be sold at remunerative prices, to mills closed or working on half-time, to steamers laid up, money lying idle in banks, and workmen compelled to idleness and priva-

tion. They point to these facts as showing that the productions have exceeded the demand for consumption, and to the fact that when Government enters the field as an enormous consumer, brisk times prevail. The other says that the speculation has produced the depression by leading to over-consump-tion, pointing to full warehouses, rusting steamers, closed mills, and idle workmen as evidences of a cessation of demand, resulting from the fact that people, made extravagant by a fictitious prosperity, have lived beyond their means and are obliged to retrench—that is, to consume less wealth. They point to the expenditure onunremunerative works, loans, etc., extravagancies, which although not felt at the time, just as the spendthrift does not at the moment feel the impairment of his fortune, must now be made up by a season of reduced consumption, Now each of these theories evidently expresses one side or phase of a general truth, but each of them fails to comprehend the full truth. That land speculation is to a great extent the cause of industrial depression is, we think, clearly evident. In periods of activity land values have risen to great heights. This has been followed by a stoppage of production and a cessation of demand, dull trade, and commercial failures. Periods of activity always culminate in a speculative advance of land values, followed by symptoms of checked production. All trade is the exchange of commodities for commodities. Dealers find their sales declining, manufacturers their orders falling off, while the things which they have to sell, yet for which there is a widespread desire, simply show, that the supply of other things which in course of trade would be given for them has declined. We commonly say “ Buyers have no money,” or that “ Money is becoming scarce.” Talking in this way we ignore the fact that money is but the medium of exchange. What the would-be buyers really lack is not money, but commodities which they can turn into money. The decrease of consumption is therefore but the result of a decrease of production. This is seen very clearly by storekeepers when men are thrown out of employment. These men are deprived of the means to make the purchases they desire, and the storekeeper is left with a superabundant stock, and is forced to discharge some of his assistants and reduce his demands. People want things just as much as ever from the storekeeper, but they do not have as much to give for them. It is an unnatural thing to see large numbers of men in big cities who cannot find employment — men who wish to labor in order to satisfy their wants but cannot find the opportunity.