WORLD WOOL VALUES

Hokitika Guardian, 3 July 1925, Page 4

WORLD WOOL VALUES

AAIERICA DISTURBED

SAX FRANCISCO, May -0

America’s questionable policy ot world isolation once more made itself evident when the alarming news was cal,led to the United States from Australia. New Zealand and London, of the astonishing break in wool values, and, while the facts were published in the American Press, there was a notable disposition at the outset to protect the American wool holders from a lowering of prices, on the plea that whatever was happening in the outside worlal shoulil not he allowed to have any depressing effect upon Uncle Sam’s speculators in wool. Furthermore. the manufacturers were not inclined to countenance a falling domes-

tic market in view of their enormous commitments with the wool-raisers in various parts of the country, for their contracts for the delivery of wool have been am a large scale, especially in the West. The idea was that Americans could weather the storm without permitting Kuropc or the Antipodes to check high prices ruling in the United States. (Irnduallv it dawned on the American ah'alers that outsiale influences wa re hound to affect the American situation, and the operators in Huston hi-ghn to show a worrieal look. One Xcw York authority thus expressed himself: "The move in London and Australia in curtailment of a.fiVrings in wool is a desperate effort u, .heck the apparent debacle, which.

is, ,;.:,nv ways, rivals the m.i'l depressing situation of the post-war period. 11l all quarters sentiment was expressed. indicating that the American wooT and woollen goods industries would eventually become unsettled in a worse degree than at any period of do- ! a lining prices on finished goods in the iiistorv of the business. COX!•'I DEXOF. I.ACI< KO. In America the most significant feature of the cable news was the laid that buyer - appearoil to lack confidence at the unusually sharp decline in prices. Some American wool men interpreted the London anal Antipodean comlitiims t a shoa cvitleni'e that the congestion, fur the time lacing, at least, at the various second:,ry markets hail reached a stage which had made it impossible to absorb further quantities of wool, except on a highly sacrificial basis.

Xo American wool handlers are assuming that prii'cs will suddenly tlrop in the Uuiteal States, hut it is recognised that prices have now reached a point where a trailing basis may he estahlislied with some sensi' ol perniana.lla• v. ami one newspaper added: ‘■Particularly as ii wmili! appear that Attstralia has learm-al a lesson from her previous vacillating pdicy.’’ (: 11 a-a ‘rll iug the wool price break, the " Xew York Journal of Commerce ” gave prominence to an editorial on the subject, in which the ealitor stated: "The controversy over the exisience or absence of a raw material alelicil has l.is-ii .sa-ttled hy the buyers. Sir Arthur CohlliiH'h's estimata'il annual excess of consumption over praailuction may he statistically uniii'peai'liahh' hut. like all statistical estimates, it: rests upon the assumption alrawn from past experieaiae. Physical sliortages are very often traiislateal into marked surpluseswhen prices are inaintaiileal at figures \vhuh buyers consider ton high, ami the raw wool marki't is not unique in this iv-peel. FAUKD HY LOSSES. "Mill- tluit have aequiri'il sincks of r::« w-.'il in antiiipaliou ot price adi ames are fai l'll by losses ale.:' to umre or less disastrous -brink:.ae of iuveidorv i allies if the marki-t I< >c raw wool breaks. On the other halnl. anufrouteal with statistics to show that shortages impi'iial. anal knowing that there is a ah ia'iiiiiiH'il resistance to price adjustments clinvmi aril, it may he equally dts-

ii-.h'uus net in ;«nti'ipnto ivcimivinciM s. Tlio miMt.icii ocriini.Ml !»y t!iu miisi in any such market i> tMjUally intnlcrahh*. ili> only alternative io cautious Inlying; on a lmml-iu-iiioutli ha.sis is to «/;anihli* on tho (•.Mirsu of iiiiuiv }>ihh*s, v.ilh no proper c-uidos to a( i ion. * ’

.I >;st before this dispatch left San Francisco, there was a slightly bettor feeling in the Poston wool market, billowing the news that The sales ill Australia had been postponed until duly, and that the London sales had been aLo discontinued. No one in UnAmerican wool circles expects the market to regain its lost position of the past four months, hut it is believed that at length construteivo effort is being made to get the situation in hand and that there is no insuperable surplus of wool in the world In lie overcome. lint that rather, on the present basis oi' values, there is a storting point for the manufacturer and the buyer of goods, which was not in evideiue tinder the demoralised conditions of tiie last lew months. Proof of the improved < midi t ions in American wool trailing was the announcement that one of the buyers of the French worsted mills had taken 2,000,01)1) pounds of Utah wool mi contract at •10 cents per pound.