The Daily News. THURSDAY, MARCH 13, 1913. MOSTLY MONKEY.

Taranaki Daily News, Volume LV, Issue 251, 13 March 1913, Page 4

The Daily News. THURSDAY, MARCH 13, 1913. MOSTLY MONKEY.

The ordinary person who sells his labor for so many shillings a week has a very keen appreciation of the fact when the cost, of living goes up and his wages do not rise to a corresponding extent, lint he docs not, as a rule, unless he is a. student of political economy, realise that in a general way the rise in prices which is distressing the wage-earners of the world is due primarily to the relation lietween the supply of money and the volume of trade. This is Greek, of course, to the man who finds that his bacon and eggs at breakfast time arc costing him V.d more than they did the week before Lent. The general term "'money'' include- not only gold and silver coins, but also bank notes and deposits subject to cheques, and when the total quantity of money increases more rapidly than trade and production do. the standard of value is depreciated. In other words, money becomes cheap because if U plentiful, and its buying power is reduced. This is precisely what has been happening in recent years. The world's money has increased in amount, and the change has been intensified by the acceleration of the speed of exchange, owing to improved facilities which have given money increased capacity for work. Professor Irving Fisher, probably the great.e-,t authority in the world to-day on monetary problems, has made some interesting and instructive estimates relating to the various factors in the equation between money and trade. In an article contributed to the London Times lie finds thiit for the world as a whole the quan-

lily of cask in circulation i.-i increasing at Hie rate of per cent, yearly and its velocity of circulation at '/•; pi' l ' cent. Deposits are expanding a I the rate of li'/, per cent, yearly, with an increase of 1 '/ s per eent. velocity, and the total circulation of the media of exchange is growing at the rate of 7 per cent, lint trade is growing liv not more than per cent, yearly, so that the supply of money is outstripping the requirements of business to the extent |of t\U per cent, annually. An examination of the general level of prices reveals an average annual increase of iy., per j cent., so that the equation theory appears to lie proved by actual figures. Professor Fisher, working from this basis, proceeds to forecast the probable future trend of prices, and after allowing for his expected falling oil in the production of gold he suggests that .the general level of prices will continue for many years to show an annual increase of at least 2 per cent. If that estimate proves to be an accurate one. there will be pressing need for the commission of enquiry which the Unite:! Slates has authorised. The .primary producer, the manufacturer and the business man share the profits produced by the surplus of money, and their incomes will tend to adjust their,selves to changed conditions. Hut t!ie wage-earner and the salaried man do not easily secure from their employers recognition of the depreciation in the value of money, and they are feeling the pinch, and will probably feel it even more severely in the future, in every civilised country. A practical solution of this infinitely complicated problem of modern life has not yet been devised. Probably it never will be so long as wc are all human.