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It is possible in this connection to take a, bird's-eye view of the economic life of the community. Stated in its simplest terms, New Zealand supports its economic life by the exchange of the manifold products of its soil for the innumerable articles it imports from abroad to minister to its necessities and to its luxuries. At the request of the Board of Trade the Government Statistician has furnished a list, of the ten principal commodities exported from New Zealand, excluding gold, for the years 1914 to 1917 inclusive, showing the actual values, of products exported, and their values when assessed at the prices ruling in 1913 (see Appendix F). This shows a total increase for the four years ending 31st December, 1917, comparing the declared values at which these products were sold with the values calculated on the prices ruling in 1913. of no less a sum than £22,840,369. These figures are eloquent of the extent to which the purchasing-power of the community has grown since the beginning of the war. Has the volume of business increased at anything like the same rate ? To answer this question it is necessary to measure in some way the growth of trade.. Can this be done '. It cannot be done with any high degree of accuracy, but a rough approximation can probably be made through the study of certain statistics which typify business activity and growth. But, as pointed out by Professor E. W. Keninierer, of Princeton University, in a, recent number of the American Economic Review, the statistics used to measure business should exclude prices. The statistics used, therefore, as indices of business growth and activity should be expressed in units other than monetary units. The items chosen, moreover, should be important ones which are reasonable indices either of business activity and growth in general, or of business activity and growth in important branches of industry. Among the best items for measuring the movements of business in general, because they are factors that enter into the manufacture of so many goods of first-rate importance, are the production of coal, wheat, and the use. of mineral oils. Other good indices of general business are the number of passengers and tons of freight carried on the railways, the tonnage of vessels entered and cleared at New Zealand ports, the consumption of sugar and tea, and the production of wool, frozen meat, butter, cheese, hides and skins, tallow, and flax. As each of these has its own peculiar bias, it is safer to construct an index number which includes them all, and the index numbei so constructed should represent, in a rough way, the growth of business in general. The index numbers are as follows : Growth of Trade in New Zealand. 1908 to 1917. ... Index ~ Index Yw,r Number Year ' Number. 1908 .. .. .. .. .. 1000 1913.. .. .. .. .. 1249 1909 .. .. .. .. .. 1109 1914.. .. .. .. 1425 1910 .. .. .. .. .. 1192 1915.. ... .. .. 1468 1911 .. .. .. .. .. 1133 1916.. .. .. .. . 1449 1912 .. .. .. 1239 1917.. ... .. .. .. 1232 The statistical data on which this table is compiled will be found in Appendix G. This table shows the steady growth in business up to the end of 1913 as compared with 1908. amounting to 24-9 per cent. During 1914, five months of which we were at war, the increase was 42-5 per cent. The volume of business reached its maximum in 1915, showing an increase over the base year of 46-8 per cent. : thereafter there has been a steady decline, the volume of business falling in 1917 to lower than what it was in the year immediately preceding the war. Tn order to institute a comparison with figures relating to prices let us take 1911 as the base year, and we find that the volume of business in 1915 increased 3 per cent. ; in 19L6 the increase was only 1-6 per cent. ; whilst in 1917 there was a drop of 13-6 per cent., the respective index numJiers beingPer Cent. 1914 .. .. .. .. .. '.. 100 1915 .. .. .. .. ..103 1916 * .. .. .. .. .. 101-6 1917 .. .. .. .. .. 86-4. The Government Statistician's figures show a rise in. food-prices during the same period of 34 per cent., a percentage which in all probability is exceeded by other commodities. We therefore find during the war period there has been a decrease, in the volume of trade concurrent with an increase in general prices, and a comparison of these figures gives a. rough indication of the degree to which the currency has been inflated in New Zealand. Figures are not available showing the actual volume of money in circulation during the period, but a rough approximate estimate shows an increase of 73 per cent. Notes in circulation have increased as follows :- v Index v index Yea: '' Number. IW ' Number. 1910 .. .. .. 1000 ,1911 .. .. .. 1229 1911 .. .. .. 1032 ] 1915 .. .. .. 1.750 1912 .. .. .. 1054 1916 .. .. 2490 1913 .. .. 1030 1917 .. .. .. 3328 If the year 1911 is taken as the base, the increase up to the end of 1917 amounted to 170 per cent. The bulk- of tin' business of New Zealand, however, is effected not by cash- i.e., coin or notes but by means of bank deposit subject to cheque. Bank deposits (including the figures for the Post. Office and private savings-banks, but excluding the, interest-bearing deposits of trading banks) increased considerably, as shown by the following table :-