Te Aroha AND Ohinemuri News. TUESDAY, NOVEMBER 3, 1908. THE PRESENT DEPRESSION

Te Aroha News, Volume XXVII, Issue 43383, 3 November 1908, Page 2

Te Aroha AND Ohinemuri News.

TUESDAY, NOVEMBER 3, 1908. THE PRESENT DEPRESSION

This above all—to thine own self be true , \nd it must follow as the night the day Thou canst not then be false to any man Shakespeare.

While it is always wise to face a difficult position with philosophical calm, to carefully calculate the various probabilities arising out of it, and seek to make the best of an undesirable state of things, yet it is always necessary to look a difficult position straight in the face and admit all its possibilities. That things are not what they were a short while ago financially, either in the Dominion, in the United Kingdom, in Canada or the States there is no possible sense in denying. Various causes may be adduced for the change : the financial crisis in the United States has doubtless contributed its share toward the disorganisation of commerce, by interfering with the circulation of capital; the imanence of the Election in that country is at present affecting industry ; and as to the terrible distress at Home there is no doubt that our too long persisted in policy of Free Trade is making its dire results felt in the shocking destitution, reports of which come come to us with such painful continuousness.

But when allowance has been made for all these factors there yet remains one other great cause which may not be overlooked, namely the wars of the last few years. A financial panic may for a time disorganise commerce, by, as we said above, disturbing the circulation of capital. For it is the amount of capital in circulation which decides between a state of prosperity and the reverse, capital being as it were the great waterway of the world, upon which commodities that is agricultural [and industries, products, are exchanged between producer "and consumer, between one land and another. Therefore to disturb the level or movement of this great waterway is to seriously affect commerce. At the same time no one will seek to deny that to disturb the medium of exchange is not the same thing as destroying the wealth 'which is to be Jexchanged. It is the special feature of war that while it may settle a long fomented quarrel in favour of a stronger power, as against a weaker, it cannot do so without serious loss not only of the world’s best blood, but also of the world’s wealth. The destructiveness of war cannot be tio strongly insisted upon, all the more that the commercial results are not always immediately apparent. For a time in fact it would appear that war has the effect of stimulating commerce, and making things brisk But the the clever illustration used by the economist Walker, in showing the fallacy held by many people as to the destruction of wealth making things brisker may very well be applied here. As ho points out, if a caroloss child breaks a window so giving to the glazier the task of mending it, he nevertheless destroys a certafn amount of wealth, that is to say ho destroys the pane of glass, and the money which his father has to spend on obtaining another pane of glass and gotting it put in, is now no longer available for the purchased other commodities or services.

And equally, in war the amount of wealth bodily destroyed in the discharge of immensely cosly ammunition, together with the amount destroyed in other ways inevitably leaves the world very considerably poorer. In the present instance, after a succession of wars, the American war over the Phillipines, our own war in South Africa, and the Russo-Japanese war, a world-wide depression results. The state of things in Japan it may

be remembered was enlarged upon by us in an article some little time a bn. We spoke of her as groaning under a shocking state of depression her small children being taken to work in the factories, and her returned soldiers being put to the most cruel extremities of destitution, compare! with which the rigours of war itself would be acceptable. It was a wonder indeed that she was able to hold to her naval programme as long is she did. • Hence, seeing that we have such grave factors to take into account in considering the present financial stringency, it behoves us to practise some economy in the state, although so far as the Dominion is concerned, we feel confident in hoping that things may be better than our pessimists fear. A rise again in the price of wool may improve things in the South, while so far as we are concerned in Auckland, we are in the happy position of haying so many resourses that we are likely to , come out of the depression less ?• iously affecte i and we congratulate our dairy farmers most warmly upon the part they are now able to play in deciding the commercial outlook of our part of the Dominion.