H.—35.

Wholesale-price Index Numbers in Various Countries on Base.

In drawing inferences from the table of wholesale prices in different countries shown above it should be borne in mind that the figures do not indicate the relative levels of prices in the countries shown, but the relative movement in prices in the different countries. A high index number for any one country may not necessarily mean high relative prices at the present time, since it may be caused by a relatively low level of prices in the base year, which is in this case the year 1914. Comparison of the movement in prices in the countries shown is, however, illustrated by the table. From the above table, it is evident that the trend of wholesale prices has recently been definitely downward. It is difficult to say how far monetary influences have contributed to the fall or to what extent increased competition on the world's markets has been responsible. It is quite evident, however, that some of the important, primary products at least arc being sold at a level considerably below costs of production. The " group " wholesale, price index numbers for the United Kingdom compiled by the Statist were at the following levels in November, 1930 as compared with 1914 : — Per Cent. Per Cent. Vegetable food .. .. - 3-6 Minerals .. • • + 7-0 Animal food .. • ■ 4- 27-4 Textiles .. —13-3 Tea, sugar, coffee .. .. -11-0 Sundry materials .. .. +5-3 Total food .. .. + 8-9 Total materials . . + 1-0 Grand total .. 4-4-2 The " Animal foods " group includes butter, cheese, and meats, which commodities form a very large proportion of New Zealand exports to the United Kingdom. Prices in this group, although only 27-4 per cent, above the 1914 wholesale-price level in the United Kingdom, compare favourably with the other groups in respect of movement since that year. Textiles show a decrease of 13-3 percent, since 1914. This group includes cotton and other textile materials besides wool, the decrease in wool being even greater than that in the " textiles " group as a whole. The monetary influences affecting prices indicate a continuation of prices on a comparatively low level, estimates of future gold-production being considerably below the world's requirements. The monetary factor has been further complicated by the action of the United States and France in accumulating huge gold reserves which are prevented from exercising a monetary function. Our exports are, however, confined to a comparatively few commodities, and it is quite possible that conditions of supply of these commodities may have a greater influence on the future prices of the narrow selection of commodities which we forward to the world's markets than monetary considerations, which affect all commodities impartially. An instance at the present time of peculiar conditions in the market for a single commodity affecting New Zealand very adversely occurs in the case of wool, which receded in price far below the general level of prices. It is possible that influences affecting supply may place New Zealand in the future in an especially favourable or unfavourable position ; and the development of new export industries, such as the pig industry (which was strongly recommended by the Unemployment Committee), would, make for safety and stabilization of returns, since we would have a wider range of products to spread out losses which special conditions may cause in any one product. Inferences drawn from Analysis of Recent Price-movements. The foregoing analysis of recent price-movements has been somewhat detailed, but, since the collapse in prices has been the main cause of the present distressing unemployment situation,

29

(Average prices in the year 1914 = 1000.) New United United „ , L ,, ... . . .. Year. Zealand Kingdom States Denmark. | 8 " B1 ? (Official). (Statist). (Bradstreet). (Official). (Official). , (Official) 1914 .. .. 1000 1000 1000 1000 1000 1000 1000 1924 .. .. 1584 1640 1451 1700 1515 1328 1641 1925 .. .. 1546 1600 1567 1440 1564 1317 1605 1926 .. .. 1475 1480 1451 1070 1525 1272 1594 1927 .. .. 1403 1440 1442 1060 1490 1280 1581 1928 .. .. 1417 1412 1485 1140 1469 1242 1560 1929 .. .. 1413 i 1353 1411 1120 1456 1197 1569 1930— January .. 1413 1254 1293 1.070 1458 1105 1496 February .. 1407 1233 1260 1040 1433 .. 1457 March.. .. 1404 1212 1255 1010 1401 .. 1433 April .. .. 1402 1194 1229 1010 1398 1073 1446 May .. .. 1400 1162 1210 990 1371 .. 1465 June .. .. 1391 1127 1185 970 1341 .. 1442 July .. .. 1383 1111 1173 960 1308 1032 1431 August .. 1399 1085 1171 960 1282 .. 1410 September .. 1383 1068 1156 940 1258 .. 1333 October .. 1364 1064 1129 920 1241 1022 1287 November .. 1350 1042 1104 .. 1219 .. 1218