N.Z. WOOL

Dominion, Volume 13, Issue 177, 22 April 1920, Page 6

N.Z. WOOL

AN OFFICIAL STATEMENT MOVEMENTS AT HOME FUTURE ARRANGEMENTS Tho following letter, dated February IG. from the Director-General of liaw Materials, London, to the Prima Minister, is of interest to wool-growers in this eountrv "Dear Sir,—l , . . have now to refer to the telegram received from you on February 11 and of our reply dated February 10, copies of which are enclosed. Wodl Shipments. "I am sorry to say that very consider ablo difficulty is expected in carrying out the arrangements to lift tho wliole of the Australian and New Zealand wool beforo the end of the year. Steamers

carrying meat and wool are experiencing very great delay in the Thames and elsewhere in British waters, very largely owing to tho difficulty in dealing .with meat, of which no doubt you are fully informed. Tho carrying power on the steamship lines -working with New Zealand and Australia is thereby reduced by at least 30 per cent., and they are finding it impossible to deal with the cargo offered for shipment in the two Dominions. It is true that this Depurtruent has a contract with the Australian Refrigerated Tonnage Committal whion positively binds -their steamers to lift the entire balance of the Government purchase of wool before November 30, but unfortunately the Shipping Controller has intervened to press upon these steamers shipments of wheat which were not specifically contracted for. We are protesting against such interference, hut public opinion strongly opposes the importation into this country of any class of commodities in excessive quantity so long as the congestion in the ports and inland transport is so evident, and so long as other commodities more urgently needed are not arriving freely for want of ship room. Unfortunately tho fact i» that as regards 4G's wool, our market is very well supplied, and as regards, tho coarser grades of lyool, considerable stocks aro lying dead in our hands. It is, therefore, extremely difficult for us to maintain that tho shipment of 70,000 bales of new wool per month largely consisting of medium and coarse crossbreds is indispensable, and we are afraid that we shall be compelled for some months to come to allow the shipments from New Zealand to fall to 40,000 bales per month, or even less.

Stocks of Wool at December 31, 1919, "I enclose an interesting analysis of tho stocks of wool at the end of last year lieltl unsold' on Government account. You will note that coarse crosnbrcds (tfs and under) amounted to 1-16,000 bales, being one-quarter of tho total. New Zealand wools as a whole were just under 200,000 hales, being l onethird of the total," ns against one-fifth, vliich is the proportion -which the i\cw Zealand clips bears to the total Government purchase. . "I also enclose a recapitulation showing the stocks afloat and in the Dominion and estimated still to appraiso, which 6hows 837,000 tales of New Zealand wool still to bo dealt with as compared with 2,427,000 bales of Australian wool. Iho disproportionately largo stocks of Ivew Zealand wool are, of course, tho direct consequence of trade demand running so strongly upon merino and the finer grades of crossbreds. Future Arrangements. 'TVe'are not altogether surprised to learn from your telegram of 11th instant that your sheep-growers are somewhat concerned at tho position which will exist when tho new clips come to hand at the end of the year, wltile a considerable quantity of wool remains over in the Imperial Government hands. Many things may happen between now and then, but the existing market conditions indicate pretty clearly tho probability that as regards low crossbreds a full year's clip, equal to about 200,000 bales, is likely to remain m tho Imperial Government's ■hands when your next clip begins to be gathered. ' The time must surely como when largo masses of people in tho impoverished parts of Europe who cannot afford to pay for luxuries will provide a demand on a largo scale for useful woollen clothing made out of coarse crossbreds, but it must be admitted that tho market shows no signs of such a demand mating! itself felt. On the contrary wo hear that in the United States holders of coarse crossbreds both from New Zealand and South America aro breaking prices badly in a desperate effort to find an outlet for this dead stock, but they aro not finding that this helps sales much.

'Yoti will no doubt have learned that a wool council is being formed in Australia for (lie purposo of handling the situation in tho transition period following upon the termination.of the Imperial purchase. The proposal seems to be that the wool shall be sold for account of the individual growers, but that all tho marketing arrangement's shall be conducted by a wool council elected by growers who shall be ill full control of the total clip, and shall endeavour to act iu combination with tho Imperial Government so as to prevent old wool and new wool coming into excessive competition. It is proposed that if the Wool Council obtains tho support of three-quarters of the woolgrowers, the minority shall be obliged to put their wool into tho council's hands by somo Government or legislative Act. "Wo were not ablo in our telegram of lGth instant to make any specific proposals as to the handling of any surplus Government wool. All I can usefully say at this stage is _ that there will be tho n-.ost anxious desire on the part of tho Imperial Government to avoid prejudicing the interests of the sheep farmers in any way. We shall welcome any suggestions from New Zealand as to what ought to be done, but it must be clear _to you that sooner or later tho question, must be faced whether too much «iarso_ crossbred wool is not being grown in view of the infinitely better prices which are now being paid i'or line crossbred^. Accounts. "I am sorry to say that owing to illness amongst the auditors we have not yet been able to give final shape to the accounts for the period ending March 31, 1!)1S. I enclose copy of a telegram sent by tho Colonial Office to- your Government on February 5, answering as far as iwssible the request of the Prime Minister for information. lam most desirous of sending at a very early da to not only the completed 'accounts 'up to March, 1918, but also those for the period ending March 31. 1!)1D, which are rapidly approaching completion.

Press Agitation, "Evidently reports have largely figurol in your newspapers of the sensational campaign which lias been going on at this end as to wool profits. Tho general public are naturally very much disgusted at the great rise in price of many commodities including woollen goods. It is not strange that a groat many peoplo havo boon found to say that tho Imperial Government having purchased Australian anil New Zealand wool at a cheap price should have found means to keep tho prices of woollen necessaries at tho same moderate level. This would, of course, involvo tho Now Zealand sheep-farmers renouncing -inv bonus from profits on the sale of his wool and tho British manufacturer being content to ask for pre-war rates of profit at a t.imo when f lie wholo world is clamouring for woollen goods. I may mention to you that tho Australian Government have very clearly laid it down that their sheep-farmers insist upon full advantage being l.iken of tho good wool market, and they are not willing to renounce anything.' We aro bound to supposo that tho Now Zealand farmers havo the same views, and in any caso it would be difficult to treat New Zealand wool on distinct lines from Australia. As to the profits of tlio manufacturers, tho Profiteering Act has not been at all ef.ective up till now, and it is a very difficult problem to interfere with private trading without, injuring the export trade bv which this country lives. As you know, neither growers of low crossbred wool nor tlio manufacturers of goods made from it aro benefiting in tho smallest .4*iiEeo front, {tlio boom in, ,fino woollens,

anil certainly the public by their fieroo drain ml for'line and expensive good), themselves provide tlio chief factor in the riso in pricos.—Yours faithlull.v, '■'(Sgd.) A. JI. OOLDFINCIT, "Director-General of tow Materiuls."