170 WHEAT PRODUCTION IN NEW ZEALAND 



When such an increase of production is considered, 

 it is not surprising that wheat prices did not rise to 

 the same level as general prices. What is, on the surface, 

 surprising, is that prices rose at all. The phenomenon 

 is interesting from the point of view of monetary theory, 

 and is another link an insignificant one in the already 

 long chain of statistical evidence in support of the 

 classical quantity theory of money. 



8. Price of New Zealand Wheat. 



Changes in local prices are not the result of economic 

 causes operating within the Dominion only. Reference 

 must constantly be made to the operation of certain 

 factors, the influence of which pervades the whole 

 economic world. Therefore, reference will have to be 

 made to some ground already covered in the discussion 

 of English prices, but local conditions will be emphasised, 

 as these are of greater relative importance in the 

 explanation of fluctuations, especially in the early history 

 of prices. 



In Chapter I. we have already discussed the question 

 of fluctuations within the year, that is, seasonal fluctu- 

 ations, over a period of sixteen years, and a well-defined 

 seasonal movement was found. This question does not 

 require further elucidation here, and we may pass on 

 to a consideration of annual fluctuations and an attempt 

 to discover certain well-defined periods in these. To 

 these topics we shall confine our attention in discussing 

 the course of wheat prices in New Zealand. 



Although great fluctuations occurred throughout the 

 period, and more especially during the " sixties" and 

 " seventies," certain periods of rising and falling prices 

 can be discerned, and these coincide with similar move- 

 ments in English prices. 



(a) 1860-73. Slightly Rising Prices. During the 

 "sixties" price changes were frequent and of great 



