TILE WOOL CRISIS

Hokitika Guardian, 14 May 1921, Page 2

TILE WOOL CRISIS

HOW IT IS REGARDED IN

AUSTRALIA

SYDNEY, May 3

Australia and New Zealand appear to lie closely bound together in connexion with the wool crisis. The matter is being watched with the liveliest concern by all classes in this country, artel most of the crepe-hangers, of course, are foretelling a. disaster of the first magnitude. The Prime Minister, before leaving for London last week frankly told the Federal Parliament the position. He said: — Before the war the world was able to consume roughly 2,500,000 bales of Australasian wool, of which, say 1,800,000 bales came from Australia and the balance from New Zealand. As a result of the agreements between the New Zealand and Australian Governments and Great Britain the Australasian clips were sold through the Governments for a number of years. The accumulations of these clips non amounts to about 2,000,000 bales in London, 800,000 bales in Australia, and about 500,000 bales in New Zealand, making a total of considerably more than 3,000,000. This wool has to he distinguished entirely from the wool referred to as the 1920-21 clip, and which is practically the 1920 cl'P- Now the world, which was able to consume only 2,500,000 bales before the war consumes less than it did then. Iliat is so because of the difficulties of exchange the disorganisation of industry, and because Germany, Russia and other European countries are not in the same position now as 1914. So,, with a smaller demand for wool there is an accumulated surplus sufficient to supply the world on a pre war basis for fro n two or three years. That mountain of wool, trembling as it were on tin edge of the precipice, threatens to fall and crush this industry utterly. The other aspect of the wool position is this. What is called free wool —that is wool from the last clip—has to com pete with the carry, over—the accumulated stock. The wool market has declined so much that, expressed in terms of wool crops, .you may gain some idea of what the better class of wool is worth. Wool crops which, ten months ago, were worth say 14s are to-day worth only 4s. It is no exaggeration to say that a very great deal of the inferior, lower-graded wool will not pay to cart away from the stations. Sheep which were bought two months ago for 30s. cannot now find buyers at 16s. The Prime Minister went on to explain the arrangement under which it was proposed the B.A.W.R.A. would put two bales of the carry-over wool on the market to every one bale of the new clip, and that the supply would he so regulated that the price would not fall Inflow 81 d. This was the only possible way out of a most dangerous situation, be said, and it was being jeopardised by the action of various banks who eon- * trolled wool showing a disposition to quit at any price. An attempt was now being made to get all the Australian firms interested in wool to accept a common course of action. Much argument is now raging in Sydney and Melbourne as to the better course to pursue—hold the B.A.W.R.A. wool out. of the markets, as' Mr Hughes advocates, or let the accumulation go at any old prieea until the cheap wool has galvanised the woollen world into life again.