Page 16 Advertisements Column 1

Press, Volume LXI, Issue 18416, 24 June 1925, Page 16

auctions! H. MATSON AND CO. HMATSON and CO. submit the under- * mentioned for the information of WOOLGROWERS IN CANTERBURY, and Vendors, when realising this coming season, we hope will entrust their clips to us for sale:— POSITION KAHtLY STATED. Much has been said and written regarding the position of the wool industry since the collapse of the market. Ono of the best of these efforts to accurately set out the position appeared in the daily Press on Saturday ever the signaturo of Mr R. Vincent, Western Beach, Geelong. He ivrote: — "What is the future of ths Australian wool ?ndustry? This question has for some time past been exercising the minds of all woolprowers. It has also received earnest consideration from business and commercial men who appreciate how vitally the interests and welfare of the country as a whole are bound up in the prosperity of the growers. Various schemes have boen offered as a remedy for the ills with which the industry is at present afflicted. They are:— 1. Control by Bawra or some similar organisation. 2. The formation of a pool under the control of or backed by the Federal Government. 3. Control by an. organisation representing tho growers. Each of these proposals aims at tho stabilisation of wool. It is but fair to enquire what stabilisation means. Indubitably it signifies the permanent arbitrary fixation of prices, and not necessarily with the collaboration of the consumer. In other words, the consumer is to be offered our wool at a pre-determined figure, the growers holding the wool until those prices are obtained through some organisation created for the purpose which would also finance the scheme until it becomes effective. This means Government control and interference in an industry that has hitherto been noted for its Independence and (•elf-reliance. With tho advent of stabilisation the independence of the industry must surely vanish, Bnd with it the grower's control over his own clip, for no scheme of such r» comprehensive character could be carried into effect, or even function initially, without State aid or backing.

In considering the question ot stabilisation, certain relevant and fundamental factors cannot be ignored. Does not the price of wool necessarily, if not primarily, depend upon demand as well as supply < Surely the capacity to buy is at least as important as the power to sell, but is it possible for any stabilisation scheme to guarantee the ability of consumers to pay thß prices demanded by producers? The inhorent weakness of any proposal to fix prices that must always be paid by consumers is apparent. There must Jirst be a demand for a commodity before it can be sold, and the price asked for it must bo within the capacity of the purchaser's purse. No combination, however powerful, can liopo to prove more powerful than the world's economic condition. Demand is the controlling factor of the situation. Of what use or value of llic fixation of reserve prices if tho dcm»nd bo absent? Can any such scheme increase the purchasing power of consumers? If sellers combine, may not purchasers do likewise, particularly should such a course be rendored necessary by a limited spending power ? Furthermore, the Australian grower cannot hope by fixing the price for Australian wool to fix tho world's parity except and only in tho cbbb of fine merino wool. A noto of warning may well be sounded here. During the last few years several textilo substituto industries have come.into being. Their products are now firmly established, and powerful competitors against wool. Tho significance of this development cannot be overlooked. It needs little power of discernment to show ttiat if growers were to fix and maintain wool prices at levels against the interests of consumers, they would seriously prejudice their own industry and foster the increased uso of substitutes. Anything that would antagonise consumers or create the impress ion that wool is a luxury should be rigidly avoided.

The agitation proceeding lately seems to bo the outcome of an unreasonable and uncalled for apprehension that a calamity of more than temporary character lias happened to the Australian wool industry. Some growers, forgotting the past, are so fearful of the future that they have succumbed to panic. As a matter of fact, the slump is but the reaction from the high pricos recently realised. Such stamps have occurred before, and are a featuro of the world's trading operations. No commodity with a wide demand has escaped booms and slumps, but, in the long run, inevitably has found its level again. Australian wool has' a naturally high level, and none but the most pessimistic doubt for a moment that within a comparatively short period tho buoyancy of the market will be reasserted, not to the level of the last November-December sales, but to such a one as will be payable to the grower. Another idea that has fostered this resort to panicky expedients is a widespread belief among growers regarding the benefits which have accrued from the operations of Bawra. They imagine that this organisa-

tion saved Australia and themselves from ruin.' The idea is groundless. The fact is that Bawra came into existence at a time ■when prices had fallen Terr low as the result of just Ruch a slump as \re have lately experienced. Looking back, it can with justification be concluded that even had Bawra never been created, prices would have nevertheless attained the high levels of -last November - December. Circumstanced over which Bawra had no control contributed in part to the success achieved, and although there is no thought in the minds of wool* growers of , Australia other - than of the highest appreciation of the efforts of Sir John Biggins, Sir Arthur Goldfinch, and their colleagues dujlng the time of stress, and full recognition of the splendid manner in which Bawra was managed, it is not contended that any organisation could have prevented prices soaring just) as nothing could have checked their downward course when consumption abruptly and unexpectedly declined.

Attention imut Tx> directed to the fact that Sir John Hfggins and Sir Arthur Goldfinch, in their forecast of the -wool position, did not foresoe the slump that has occurred, and certainly did not anticipate such a' decided and sustained reaction in prices. Amidst the welter ol ink and -words directed towards the solution of the problem now facing the wool industry, the advisability of continuing tho existing methods of wool disposal has been strangely overlooked. That this method may be susceptible of improvement is not questioned.

A FITTING PROPOSITION—You want "WOOLSACKS or CORN SACKS this year—■\vliy not give your order to H. MATSON and CO., who have ample supplies, and who will bo' gtad to book up your requirements at whatever is the lowest basis of prices as supplied by any members of the W6olbrokers' or the Grainbrokers' Association, such will bo your rate. Therefore, why not give us this small commission at the present timo ? These articles on the wool position arc put in by us-at considerable ezpenso, as, although you may or may not bo a client ot ours, our one idea is to forward the interests of the "Wool and Grain Producers of Canterbury.

Tlio fact remains, however, that it ia a system that has, on tho whole, done » vast deal for Australia in the past. Local woolbrokers are . the most constant and powerful friends growers, possess. They have financed growers not only in respect of wool in store, but for carrying on their business, and in periods of drought have rendered material assistance without which many growers would have found it impossible to carry on. They have provided excellent storage and display facilities, and our wool could nowhere be offered under better conditions. Australian brokers have built up, through years of careful study of everything connected with tho selling of wool, a sound and highly efficient organisation. They have behind them a wealth o£ valuable experience which is incessantly applied to further the interests of growers and of the country generally. They are, of course, not doing this for nothing, but I want woolgrowers to realise that the interests of the woolgrowers and the brokers are so interwoven that it is to their mutual advantage that wool should realise the highest possible price. Hastily to scrap, as has been suggested, this organisation and experience, and to jettison the advantages for which they have been responsible, or to materially interfere •with such organisation, would be tho wildest folly.

The paramount need of the moment is n careful stocktaking and deliberate, unhurried survey of the whole position. We ought to proceed with that caution demanded by the enormous value and expense of the interests involved. We must not by precipitate action (which should be avoided at all costs) commit ourselves to what might eventually prove a retrograde and costly step. A thorough understanding of the situation confronting the industry, and particularly of all the responsible factors, is needed. Nearly all the schemes so far propounded assume that stabilisation is immediately possible. This is tar from the case. It would be tremendously difficult to bring about. To secure anything approaching stabilisation would entail a great deal of care and an immense amount of labour, time, and cost in the preparation and elaboration of the plans involved, Ho practical argument has been advanced to prove that any stabilisation would ever be a success. On the other hand, the reasoned judgment of experience Strongly suggests it is more likely to prove a failure. Therefore prudence enjoins that all concerned should hasten slowly. Before any departure from tbe existing syßtem of wool-selling is authorised growers should make, buto that such a change is positively and Indisputably necessary. They should also ascertain whether any one of the scheme proposed, if it had been' in operation, could certainly have obviated or prevented tho existing slump, and whether any each scheme, if adopted now, is incontestably capable of prevenjing such an occurrence in tftftitttUM, ' *16642