166 WHEAT PRODUCTION IN NEW ZEALAND 



The rise from 1856 to 1865 is explanatory of the fact 

 that wheat prices lagged behind the rising trend of 

 general prices while an increase of nearly 30 millions 

 in a decade when general prices had commenced to fall 

 aggravated the fall in the price of wheat. 



(c) The Period from 1896. Rising Prices. The year 

 1895 witnessed a great depression in wheat prices. The 

 average price for the year in British markets had reached 

 the amazingly low figure of 2s. lOd. per bushel. Such 

 a price was scarcely remunerative in many countries, 

 and general depression was felt in agriculture, more so 

 than in most industries, for, as before stated, wheat 

 prices fell to a greater extent than general prices. 

 According to Layton, average prices fell 40 per cent., 

 but the price of wheat fell 51 per cent.* 



In the middle "nineties," however, the tide turned, 

 and an era of great prosperity dawned. According 

 to The Economist Index Number, general prices rose 

 from 91 in 1896 to an average of 127 for the years 

 1912-14, and the corresponding figures for the Board 

 of Trade are 88 and 116 a rise of 40 per cent, in the 

 former case, and one of 32 per cent, in the latter case. 

 According to Layton, the average rise of prices was 25 

 per cent, from 1894-8 to 1906-10, the rise in the price 

 of wheat being 17 per cent. 



(i) Causes of Rise. During this period the rise in 

 general prices cannot be accounted for by any dimin- 

 ution in general production. On the contrary, under 

 the stimulation of a prosperous outlook, many new 

 avenues of production have been opened up, and existing 

 ones increased on an extensive scale. An increased 

 currency is the fundamental cause of this new rise in 

 general prices. The increased demand for some com- 

 modities consequent on a higher standard of living among 



*"An Introduction to the History of Prices in the 19th 

 Century. " Page 68. 



