WOOL PRICES

Dominion, Volume 14, Issue 57, 1 December 1920, Page 8

WOOL PRICES

I FARMERS' EXECUTIVE MAKES i SUGGESTIONS

\ SALES TO EUROPEAN

COUNTRIES

!. ; Important recommendations

. AVool prices and prospeots wore disioussed yesterday by the Dominion Executive of tho Farmers' Union at a, ! meeting in Wellington. The question 'was raised-by a Jettor from the North .Canterbury branch, suggesting that a 'eoheme of pooling crossbred wool .-.should ba adopted in order that small growers might obtain advances.

j' Mr. G. Sheat (Canterbury) said that IMa branch, had hesitated to advise the jjjmall growers to bold their wool, in jview of tho general uncertainty the fposition. His- own opinion was that •bwinjf to tho financial condition of tho the farmers must nofc expect ijo be helped very much by anybody, iffhe banks and financial institutions 'Svere already taking precautions to protect themselves. Imports had exceeded 'exports this year, and. the country was filled with high-priced goods. Tho traders were finding great difficulty in their purchases. The obvious ;6i.ggestion was to go to the head of tho 'Government for the necessary financial ■support, but ho thought that the Dominion Executive of the Farmers' JJnion ought to possess brains enough ;to evolve a scheme that would be •useful .to the small men. If wool could not be 'told, then tho farmers would Buffer and labour would suffer because the farmers would be unable to pay wages. Mr. Sheat added that ho did not think any '•full solution of. the problem presented •by the falling wool market. was pos.|eibre. ! Mr. G. L. Marshall (Morton) thought Ithere was no solution. He knew, as a (member of the Wool Committee, that itho Government could not fix values. ■The banks were willing to make advances on the basis of the London I parity, however, nnd he did not believe 'that any better arrangement could be .Seasonably expeoted. The Government 'certainly would not advance or guarantee more than the London parity, .ond there was nothing to be gained by asking the Government to move at all as' long as the financial institutions ■were willing to make the advances. If •the banks and companies were unable 'to make the advances, then a Government guarantee should bo sought in order that the farmers might be accommodated. But the basis nil the time must be the London value :of the wool, less the usual charges. The position of - men who .had recently .gone upon the land certainly was goinc; to be hazardous, and the returned, soldiers would be entitled to look for some special assistance from the Government. Mr. Marshall mentioned that the Wool Committee had resolved that \iS the farmers could not get reasonable 'advances on, their wool, the Government should be asked to support the banks and financial institutions in making such advances. The necessary : authority for this guarantee had been 'given to the Government by Parliament last session. Since then the Ohristcliui'oh ealea had taken place, and tho ■prices obtained there ha 4 been bitterly disappointing to everybody interested in wool. But it had been made quite evident at Christchurch that the buyers were trying to "bear" the market, nnd it had been reported that on the day following the solo the same buyers had paid from lid. to 2d, per pound auore for wool than they had ' offered at auction.

i The chairman (Mr. G. W. Leadley): Up to 3d. per pound, Mr. Marshall repeated that the buyers had tried to "tear" the market at Christchurch. The North Island sales had liet'ii postponed after the Christchurch Ba3e, and thp wool-groweirsV therefore, were still unable to say what was the actual value of wool. 'Clio general policy in the North Island had hewn for the farmers to hold their own wool, and to rely upon their brokers for advances. But the time would come, no doubt, when the farmers would seek for further advances.

Mr. Sheat: In Canterbury we cannot pet along without advances. _ Wo must have the money to go on with, Mr. Marshall agreed that some farmers could not continue- in business without advances on their wool, but he tbougbt they must (be eh-tisfied with advances on tho London parity.

Sales to Germany. ■ Mr. W. J. Poison (Wanganui) said ■te was not satisfied that there was lie:remedy for tine difficulty than iconit'ronted New Zealand. Tho people of jGreat Britain were now* trading with IGcrmany. IV Germans wanted wool A-ery badly, b'ist they could not pay :ca«h for it. If it was the right thing !to trado with Germany—and the Germans could not pay their war indemnity unless they traded—-New Zealand •(might be able to sell Germany some of 'the coarse, wool through the Imperial ['Government. Payment could be accepted in paper, redeemable by the (Germans nfc the end of a reasonable : jperiod. His idea was that the New 'Zealand Government might offer to sell to the Germans so many thousand bales •of wool through the Imperial Government. He was satisfied personally that the German nation was out to overcome its difficulties, and was not thinking of -Anything but square and honest dealing. 'He did not think that the Germans were •contemplating repudiation. The question for tho grower to nsk himself was whether he would rather have a pound ; of crossbred wool worth, eay, td., with jetorago and insurance to pay; or Ger;tnan paper that at tho end of a. fow years would bo worth Is. Gd. Mr. Sheat: I would like Lloyd George ;'to underwrite it.

: Mr. PoLson: I put this oroposition to 'Mr. Massey, and that was his reply. :He would like Lloyd George to underwrite it.

'. Mr. Leadley pointed out that the big'ftest accumulation of coarse wool was in the hands of tho British Govcrnmeni •He expected that tho British Government would prefer to sell its own wool if there wa« a market in Germany. • Mr. Poison: "It does not matter whose wool is sold. The point is to find an 'outlet for the accumulated stocks." The .Kile of wool to Germany, added Mr. PolBon, had been suggested in London, andthe Director of Raw Materials had replied that the risk was too speculative. But it was highly speculative to hold .■wool under present conditions. The available markets did not want coarse Vool it present and ho did not. think that the price would improve for some

.time. The sale of some of • the accumulated wool on credit to European /countries surely was -worth considera■Won.

jtr. Icadley reminded the meeting that many years ago Queen Alexandra had helped "to -revive ths demand for rough tweede by setting n fashion. Perhaps Qucon Mary could be,induced to assist New ZeaitmA by a similar move at the present time. A member: There would bo a counterpstition from Australia. Mr. Icadley:. A demand for rough 'iweeds would be of great assistance to Now Zealand. It is a fact that practically all the woollen mills are using Eolely the finer wools. Mr. Pol=on remarked that the Germans had the mills, and, were in <»rent need of the materials that could be manufactured from the coarse (wools. Slit they weire unnbl" to pay cash for the raw" material. He moved : That the Government be asked to prosecute inquiries as to whether it is possible for New Zealand to • sell wool to Germany through tha Imperial Government, the Now Zealand growers assuming responsibility and accepting «i.ppfov|«l 'bonds in whole or in part payment. Mr. Leadley: What would the German fconds lie, worth at your bank? Mr. W. JB. Mafcheson seconded the motion. He thought the farmers should &e cautious about asking for Government aid. Tha goal was a free market.

Mr. J. A. Macphorson (Otago) did not think that anything practical could come out of the proposal. It would bo useless to ask the British Government to find a market for New Zealand's wool, when more than two million bales of tho wool already bought by the Imperial authorities were awaiting an outlet.

Mr. Sheat: The motion simply suggests that we should trade with Germany. We don't want to trade with Germany. I <lon'fc want to go back to my centre, nnd say that wp have been hying to seJl our wool to Germany.

Mr. Poison: It will do no harm to make inquiries.

Mr. Sheat: The object o£ the inquiries is plain lenough. to see. This sale would not solvo the problem. _ The farmer wants his wool money quickly, 60 that he can meet hi? running; expends. If we sell the wncl on credit to Germany, wo will get the money at oonie,' indefinite 'Ijimo in thd ifuliura. Trade nnd commerce never nested money more than they do at the present, time. The banks are notmakin? advances, and money is not bein" i«.vl" nvailali'". Selling wool on credit to Germany Will not provide us with money. FINANCE FOR FARMERS, Mr. T. Moss (Dominion vice-president) said the Government had advised the, farmers to hold their wool. But many of tliem could not do that without assistance, and he thought the Government should be urged to pvoclueo a definite scheme of finance. Ho suggested that the executive should ask the Government to guarantee advances on wool up tp GO. per cent, of the commandeer value, of tho wool.

Mr. Poison: "It would be absurd to ask, that." The Government, he wns sure, would not make advances on . any other basis than tho London parity. He did not believe, for a moment that it would guarantee tho whole of the London parity, which amounted at present to 4d. or od. per pound for coarse wool.. If the farmers sold their wool on this basis, or if they hold it; the whole country would suffer. Britain had been trading with the late eucmy countries for some time, and he believed that this trading was sound policy. If tho Germans were to meet their obligations, they must be allowed to restore their industries:

Mr. Marshall suggested the possibility of selling wool to France and Italy Imd accepting tho paper of sound banks in payment. The paper would be redeemed when the goods manufactured from the wool had been sold.' *

Mr. Poison said he was willing to make his motion apply to all European countries.

.Mr. E. D. Duxfield (Auckland) disagreed with Mr. Poison's estimate of tho London parity. He 6aid Argentine wool was worth about lfld. per pound ok the London market. Tho New Zealand parity of this price wns about 7Jd. He hod heard that the .Government probably would be willing to guarantee Gd. per pound on the coarse wool. Lack of exnet information was the growers' chief troublo at the present time. Mr. Matheson suggested an amended motion in the following form:—

That tho Government be asked to inquire whether European woollen mills are willing to take a proportion of our orosabred wool at a price equal to 75 per cent, of the commandeer price, payment to be made six months from (fate of salo and guaranteed by banks of standing.

Mr. Poison objected to the suggested price. He did not think that wool was worth 75 per cent, of the commandeer price. A member: Why six months? Why not ono year? Mr. Matheson: I know that some farmers will be bankrupt if they do not get their money in six months. Many of the small wool-growers cannot wait. I know from personal experience that I ■canno* get more than Bd. on tho wool that 1 have 'been getting 15d. for. Mr. Sheat said- it was an open secret that 6d. per pound was tho official idea of tho advance that might be made on coarse wool. After some further discussion Mr. Poison withdrew his motion in favour nf Mr. Matheson's motion, which was 'ben seconded by Mr. Poison and carried. GUARANTEED ADVANCES. Mr. Moss moved: That in view of the necessity for ft definite scheme of finance to enablo the small producers and soldier settlers to hold their wool as recommended by the Government, this executive recommends tho Government to guarantee advances of 60 per cent, of the value of the wool under the commandeer, such advances to bo made by the financial institutions on the - Government's guarantee.

'Sir. Poison said that 60 per cent, of the commandeer value would bo more than the actual value of the wool. The executive would convict itself of ignorance if it mado such a request. Sir. Marshall thought that. 50 per cent. of the commandeer value might be reasonable in the case of 'tne better classea of tne wool', but the Government could not afford to guarantee 25 per cent, of, the commandeer value on the inferior wools. . , Mr. Sheat advocated sonio special provision for the returned soldiers. These men were faring; badly owing to the fall in tho price of produce. Some of them had been offered £1 a ton for their potnMr. Poison thought that very few of the-returned soldiers had much wool to sell. The Government" could be trusted to look after their interests. Mr Mntheson admitted that the I/radon parity of some coarse wools was not much more than 3d. per pound to-day. But this price would increase, and it would be reasonable to ask for half tho commandeer value. The Government could afford to guarantee this value to the farmers. The big producers would not want the guarantee. They would hold their own wool. Mr Macpherson suggested that the executive should ask the Government to guarantee advances up to 95 per cent. rn fne Sew Zealand parity of the London value. This suggestion was discussed at some length, and eventually the motion was carried .in the following form:

That in view of the necessity for a ■ definite scheme of financo to enable the small producers and soldier settlers to hold their wool as recommended by the Government, this executive recommends the Government ,to advance 95 per cent, of the London parity value of such wool, such advances to be made by the financial institutions on tho Government's guarantee. The exocutivo turned then to other business.