The Daily News. FRIDAY, MARCH 15, 1912. THE RISE IN PRICES.

Taranaki Daily News, Volume LIV, Issue 220, 15 March 1912, Page 4

The Daily News. FRIDAY, MARCH 15, 1912. THE RISE IN PRICES.

Why should 1011 have shown a general rise in prices and be coupled with great commercial activity? This' question the London Times set itself to deal with in a recent issue. The commercial phenomena responsible for this position in Britain produce the same results, though they may be manifested in different forms, in New Zealand, though many people are apt to regard this country as proof against periods of depression and unaffected by economic laws. New Zealand, it must be admitted, has had a wonderfully good innings during the past couple of decades, but that fact is no justification for the belief that finds pretty general acceptance that this prosperous period may not be broken at any time, and that, too, by phenomena over which we in this country have not the slightest control. It is not very difficult to see how the rise in prices and great commercial activity are connected, though it is less easy to decide which is cause and which is effect. When prices are rising men are naturally encouraged to effort in order to profit by the opportunities which each hopes to be the first to utilise. On the other hand, when trade is brisk there is an increased demand for many things of which the supply is proportioned to a smaller demand, and prices naturally rise until things are balanced. But which of these phenomena comes first, whether there is any unvarying rule in the matter, and whether both are not the consequences of something which is neither the one nor the other, are questions much more puzzling. The Times points out, however, with an accuracy which experience has unquestionably proved, that these periods of commercial activity come in waves and are assuredly followed by corresponding periods of depression. "Trade activity," says the Times, "does not belong to any one country, but is a kind of tidal wave sweeping round the world. Here and there it may locally rise to an abnormal height, just as the lunar tide wave does in the Severn, but the variations are trivial in comparison with the whole tidal movement upon which, after ' all, they depend. It is, therefore, puerile to found upon this genera; phenomenon any kind of special argument concerning the affairs of a single country. Politicians are always ready to snatch at anything that seems to supply an ad eaptandum argument for their side. Some of them are busily engaged just now in weaving ropes of sand out of the high figures of the trade returns for 1911. They find in these figures new and convincing arguments for the fiseal system prevailing in this country, and they do it by the simple process of closing their

eyes to the fact that the same kind of argument is just as conclusive for protection in Germany, or France, or the United States. Trade has been quite as good in these countries as here, prices have risen in exactly the same way, and trade returns, if compiled upon a basis comparable with ours, show the same inflation as ours for 1911, partly real but more largely apparent owing to enhanced values." Then we come to what the Times calls the third phenomenon, viz., industrial unrest. Standing alone, tlie discontent shown during the past year amongst industrial workers presents no insuperable obstacle to explanation, but why should a universal rise in prices and increased trade activity bring industrial unrest in their train? At first glance the questioner is likely to think—and reasonably so-—that plenty of work and good'prices should tend to contentment amongst the workers, but investigation shows that it is upon the rising market that troubles most frequently occur. This seems to point to something wrong in the industrial system we have adopted or failed to get rid of. If in good years the workers, by a fair and equitable system of profit-sharing, could get some share of the harvest and objective would be placed before them tending to promote contentment and whole-hearted service. The unwise conflict that is continually carried on'between Capital and Labor cannot result in anything but evil consequences. Labor and Capital are natural allies—accumulated wealth is dross unless engaged in the employment of labor—and it must work shoulder to shoulder for mutual benefit. Instead of Labor flying at the throat of Capital it should recognise that it is .the only friend it has. Every £2OO accumulated means the employment of another man.