RISE IN PRICES.

Taihape Daily Times, Volume XI, Issue 3456, 9 April 1920, Page 5

RISE IN PRICES.

COME TO STAY. Many people are wondering when ‘prices will fall, and how far they will fall. In View of the fact that in order to counter-balance the rise in prices wages generally have been‘ increased, and t.he further fact that nobody will consent to a. reduction of his wages, the likelihood of any reduction to prewar prices is nil. Some of the soundest financiers think that high prices have come to stay. Mr McKenna, the chairman of the London Joint -City and Midland Bank, is one of these. “When we look to the future,” he said; at the annual meeting of the Bank of January 29th, “we naturally ask: Shall we ever get back to prewar prices and pre-war currency and bank deposits? If I might hazard an Opinion, it would be that prices: will remain permanently on a far higher level than in 1914. The rise that has taken place is not local. It is not even European and American. It covers the whole world. The cost of living in Japan has risen quite as much as ill this country. In India. and China, where human wants are much less than with us, and Where custom plays a far stronger part in fixing prices, even there the cost of living is much above the pre—war standard. Increased production will bring down prices to a certain extent, but the purchasing -power of the wo;-Id meas. urea in money cannot be materially diminished. Deflation is bound to be very slow. Any attempt, indeed. to bring it about rapidly would cause widespread ruin among manufacturers and traders. The greatest caution will be necessary in handling our financial machinery, and many of our pre-war ideas must be modified in view of the fundamental change in our conditions.’._’