The Taihape Daily Times AND WAIMARINO ADVOCATE. TUESDAY, FEBRUARY 10, 1920. SENSITIVENESS OF MONEY.

Taihape Daily Times, Volume XI, Issue 3406, 10 February 1920, Page 4

The Taihape Daily Times AND WAIMARINO ADVOCATE.

TUESDAY, FEBRUARY 10, 1920. SENSITIVENESS OF MONEY.

With which is incorpi “The Taihape Post and Waiinarioo Nbwb. ,j

The financial strain felt severely in most other parts of the world is, commencing to loom into view in New Zealand. To a considerable extent matallic currency has failed; there is not a fraction of what is requisite to conduct the -world’s trade, and its substitute —paper money—is so depreciated that a return to the old time barter has had to be resorted to. It is not now profiable to trade with paper money, and as there is insufficient gold in the world for minting, there is no other course available but for one co’untry to exchange its goods for the goods of another. It is xot necessary to point out what happens when there is a “shortage’’ of any commodity, there is ample pressing evidence of that; and just what happens in the case of coal, food and clothing shortage will happen with gold, it will appreciate; it will b ( eco ae worth more; it will cost more to get it by those who will have it. The purchase of gold is a reversal of the process of buying meat, wheat and wool;, of buying tea, boots ,clothing and farm implements; we buy gold with any or either of these commodities, and if. there is a gold “shortage” wo shall be compelled to give more wheat, wool, hoots, clothing and farm implements to get it. The shopkeeper will receive more tea and sugar from the merchant, and the workman will get more of these nei cessaries of life for the sovereign he spends upon them. As we experience difficulty in obtaining coal during the currency of coal “shortages’” so we shall all experience similar difficulty in getting money during a currency shortage, we shall have to pay a highier rate of interest for it; banks will tighten their hold upon the precious stuff, and gold-edged securities will barely tempt it out of their grip. It is more than probable that some would-be borrowers have already come into contact with the deep shadow of coming financial stringency. By | the war, the even tenor of the way of finance has been very seriously disturbed, some countries have neither money nor commodities to exchange for it, or for other commodities. Such countries are in a deplorable position as they are forced into dependence upon others until they have produced something that they can sell or exchange. At the other extreme, a short time ago, was the United States, the Americans found themselves with more goods and more gold than was profitable to them, and they preferred to let Britain have goods on credit rather than take payment in gold. America still is largely overstocked with commodities that peoples of the world want, but have not the money to buy them with. Business is in a bad way, all America’s old customers are hard up and trade is dull; the Commercial Traveller returns without having booked a single order. America's wheat, meat, and the millions of tons of manufactured articles, from patent physic to steam engines, cannot he kept to deteriorate in congested and expensive storage, and the inevitable slump has set in. Companies that have manufactured under highest cost for labour and raw materials are reaping the result of their folly, some are ruined outright, while

the value of shares in others has slumped in sympathy with the slump in goods values. Money is recovering its value, and prices of goods are i dropping down like diving kites. Even the Meat Trust, the Big Five, are impotent against the rush of the laws of supply and demand when they break loose from the colossal profiteering dams with which they have been held back from operation. Prices of their meats, the meat the Big Five felt sure starving Europe must have whatever the price put upon them, have miscalculated, have missed out an important consideration in evolving their profiteering scheme, and they are compelled to lose the whole or cut down prices, lessening their income by millions a year. The thief can shuttlecock with the laws of supply and demand to a certain point, but no farther, gold has an awkward way of insinuating itself, of influencing trade one way or the other at the inopportune as well as the opportune time for market muzzling traders. Nemisis has overtaken the American profiteer, he is stocked up from floor to ceiling and nobody has money to buy from him, and he will not allow face value for promissory notes, as he knows that many of them will not ibe met on due date. He cannot very well barter away his stocks, for he is self-contained; he wants for no raw material, or manufactured goods from other countries, and in this conneci tion his position in the world to day is indeed unique. In searching for a way out of his difficulty he is anxiously urging that some way be found for stabilising the moneys of the world; the exchange rate that was to extract for nothing hundreds of millions from war-broken peoples, is operating adversely, and ruin, positive ruin now the American hoarder of manufactured goods, goods made while the Allies were fighting, to scoop the pool when war ended. It is rather early to correctly see just how the present appreciation of gold is going to affect New Zealand, but there are already quite q number of genuine farmers and a still ' greater number of land speculators who can disclose far better than we can what the nature of the change is they have discovered in bank parlours' The one great curse which might have been avoided is the “shortage” of shipping; primary products, chiefly meat and wool, cannot recede below their present values if they can be got to market. The outlook for butter and ! cheese has not quite the rosy hue it ' t had a few months ago, but there seems nothing to prevent good pay able prices being' maintained for sometime to come. Even if they remain at the present level there will still be an advantage of accretion resulting from enhanced purchasing power of the appreciated currency. The whole country will, feel the benefit of a financial stringency that puts the break on reckless land speculation and land aggregation. When these avenues, kept open by easily borrowed cheap money, are closed, men must turn to producing more if they desire the flow of money to continue in their direction. The one black cloud on the production horizon is that of the shipping problem, for it is certain that the influence of the Big Five will go in the direction of preventing the Shipping Combine and the British Government from emptying cold storage in Australasia while there are huge stocks of Trust, Argentine, meat in English stores to be disposed of. Producers had their choice of two views, one was Mr Massey’s unbacked promises of ample shipping, the other was the practical advice of Mr W. J. Poison. The time will assuredly come when isolated islands like these must have their own means of ingress and egress; danger is ever present with dependence on foreign ships. Better say higher prices for ships even now, than risk having to make production unprofitable by paying unwholesome demands of shipping combines. Of course, money, with any considerable appreciation, will be no easier to get by workers than by primary and sec ondary producers; the greater purchasing power of money should, however, go a long way towards solving the wages problem. It is fatal to workners, and the masses generally, that strikes and go-slows should continue; every minute of work time lost further decreases the money available for circulation. There ns in the ranks of workers a sprinkling of Bolshevism that would stand at nothing, but so loffg as honest, determined effort is being made to reconstruct industry on a fair and just basSs the overwhelming majority of peace-loving people in this Dominion will render bloody revolution unthinkable.