THE Wairarapa Age MORNING DAILY. MONDAY, JULY 16, 1906.

Wairarapa Age, Volume XXIX, Issue 8183, 16 July 1906, Page 4

THE Wairarapa Age MORNING DAILY. MONDAY, JULY 16, 1906.

Dealing with "The Pastoral Position and Outlook," in the June number of the Australasian lusuranoe and Banking Record, Mr Edmund Jowett Bays that the moat striking and pleasing feature of the pastoral position at present is the great recovery which has taken place in the price of wool. The rise in crossbreds, particularly, is characterised as tremendous, In tracing the cause of this great rise in the value of wool the writer enters an interesting field for speculation. Not wool alone, but almost all commodities, 1 be finds, have risen greatly during the past five years, and this he thinks, is no doubt due to tbe great improvement in trade, aud the demand for commodities generally whioh ha 6! characterised the civilised world during the past three or four years. The oauae lor this, which all commodities have

in common, and whiob to bis mind is unquestionably a potent caase in the recovery of wool prioes, is in ttie writer's opinion the expanding supply of money recently enjoyed by the world, owing largely to the resumption of the gold produotion in the Transvaal after the oloae of tbe South Afrioan war. He touobes briefly the hotly-debated question of to what extent, if any, the fluctuations in the world's supplies of money raiße or lower the prices of commodities, and goes' so far as to say that after 30 years' close study of both the monetary question and the fluctuations of wool prioes, he is now more deeply impressed than ever with the close connection existing between the two. Broadly speaking, as the impartial observer would reasonably expeot, during the past 30 years periods of greatly increasing gold supplies have been periods of rising prioes, and periods 'of diminishing gold supplies periods of falling prices. The writer does not contend that there ie any necessary connection between the quantity of gold produoed in any given year and the price of wool or any other commodity that year. What is contended ia that, other things being equal, an enlargement iof the world's money supply tends ito increase the prices .dt commodij ties, and that a contraction of that supply tends to decrease prices. Wool-growers in Australia are in fact, just now, it is argued, enjoying the fruits of an abundant harvest of go.'d in Africa and elsewhere. At the same time, Mr Jowett thinks it is hardly to be expected that wool values are likely to last long at their present extreme prices, even if the annual produotion of gold is i maintained or still further expands, for the tendency of all fluctuations in prioes is to exaggerate themselves until what was originally a trade demand based upon the legitimate purchasing power of the people becomes a veritable boom.