HISTORY OF WHEAT PRODUCTION IN NEW ZEALAND 105 
8. Depression. 
But the decade 1881-90 witnessed a great change, 
and was probably the gloomiest in the history of New 
Zealand. A general world-wide depression had been 
experienced in the late ‘‘seventies,’’ and this was reflected 
in New Zealand by falling prices of the staple exports 
—wool and grain. The average annual price of wheat 
per bushel for the decade was 3s. 8d., while in 1885 
it had fallen to 2s. 11d. But the production of gold had 
declined, and im 1887 was only 50 per cent. of what it 
had been in 1877. Vogel’s policy had been carried far 
beyond expectation, and nearly twenty millions of debt 
had been contracted in the previous decade. The 
country was now as pessimistic as it had been optimistic, 
and Vogel’s policy was bitterly resented, though it 
merely had the effect of accentuating a depression caused 
by the fall in prices of the staple exports. It was not 
in itself the cause of the depression as many will 
endeavour to prove, but there is no doubt that it greatly 
increased the force of the depression, which was the 
result of falling prices of the staple exports—wool and 
wheat. And for the realisation of the extent and nature of 
this economic gloom of the ‘‘eighties’’ a slight digression 
will be of interest. General prices were falling through- 
out the world from 1875-1895, and the great increases 
in the world’s production of wheat had caused a general 
world-wide reduction in price. Now the depression was 
accentuated in New Zealand because of the operation of 
two forces. Our imports are mainly manufactured goods 
and our exports products of the soil. The general 
tendency, in a time of falling prices is for the prices of 
the former to fall less than the fall in the general level 
of prices, while the prices of the latter fall to a greater 
extent. That is, while the general level of prices was 
falling the prices of the exports of New Zealand were 
falling to a greater extent than the prices of imports. 
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