CONCLUSION 295 



5. Future Prospects. 



What, then, is the prospect for the future, immediate 

 and ultimate? The present decade may be regarded as 

 the close of the first great period in the history of wheat 

 production in New Zealand. We have reached a trough 

 in the graph, the lowest since the middle "seventies." 

 While there have been periodic fluctuations during the 

 intervening years, there was a steady rise from 1870 

 until the early "nineties," then a period of stagnation, 

 followed by a gradually falling tendency. The next 

 30 or 40 years may witness a similar general movement 

 with higher average annual production throughout. 



The present upward tendency of general prices which 

 commenced in 1895 is likely to continue, although pro- 

 duction in all spheres will be increased greatly; for the 

 factors on the money side of the "equation of exchange" 

 will probably all increase at a greater rate than the 

 increase in production. This is the view advanced by 

 Dr. Fisher,* who thinks that the present increase in the 

 gold production will reach a maximum in a few years, 

 and then gradually decline. But this does not mean 

 that prices will fall immediately, for the supply of gold 

 may still be in excess of the demand, and in any case 

 the yearly addition is but a small fraction of the total 

 supply. Moreover, gold is but a small fraction of the 

 total circulating media, and, even though credit is based 

 upon the amount of gold in circulation, the diminished 

 supply of the latter will not affect the total supply 

 greatly for a long period, so that a great expansion in 

 credit may still continue. Professor Fisher has a mas- 

 terly grasp of the subject, and his forecast is based upon 

 absolutely reliable facts. 



Now, we have seen clearly in Chapter VII., that in 

 normal times New Zealand prices are determined by 

 conditions operating in markets which are world-wide. 

 Anything which affects prices in the outside world 



*See "Will the Present Upward Trend of Prices Continue?" 

 in the "American Economic Review, " 1912; and his subsequent 

 annual brief articles on the "Equation of Exchange and Fore- 

 cast," in the same "Eeview." 



