WOOL CONTROL

Hokitika Guardian, 25 August 1925, Page 4

WOOL CONTROL

i.OXDOX BKOKEKS VIEWS. LOXDOX, July 7. ( ulemau Street and wool broking circles generally in London are almost unanimous in their disapproval of Sir John Jliggins’s scheme for control and siahilisintion of wool values, none the less so in view of the fact that they cannot give official expression to their criticism. The scheme assumes a voluntary association of wool growers; London brokers have no direct participation, and have not, therefore. been consulted. The proposal is that such an association should acquire clips by appraisement, within limits based on the statistical position, and should seek authority iron: the Commonwealth Government to issue wool export licenses. The capital of the asoeialioa would he £SO millions, half in the form of woo! certificates and half in £1 shares. The financing would be arranged iit London, the Commonwealth Government lending its guarantee, and. if possible--, the Imperial, Xew Zealand and South African Governments. theirs al-o. Brokers here variously criticise the scheme on almost every count, both as regards principle and method of operation. Stabilisation of wool values is doubtless a desirable aim in itself, but the brokers contend that stabilisa-

tion by artificial restriction or maintenance of prices is inimical to tho best interests and expansion of the industry. Control and restriction as a war measure was justified by the exceptional conditions then operating. Conditions now are only exceptional in so far as they result from the exceptional over-reaching policy of growers. The slump in values since December last was the steepe-t in the history of the industry. December prices were record prices unrelated to the real facts of the situation. Present values, it is maintained, still offer a reasonably .substantial return ti the grower, hut there is in the scheme, as in all price restriction schemes, the inherent danger that the growers would stabilise prices to a higher level at a too high level, it was only in April last that stabilisation at tin peak mice or December was advocated by one earnest supporter of the scheme in. 1 understand, ike Melbourne “Age." Rut there is a:i economic price limit at which tho consumer will refuse to cun sumo. Apparently that was reached in the ease of the wool industry in Dei ember, and the slump in values since then is the reaction to that fact. Not iinlv is the -eheine a J current values, and with it- thinly disguised objective of higlier values, unjustifiable in its inception, it is id so hold to be imp rail : cable of operation. M’ool cannot he restricted like rubber, it is pointed out. unless you kill your sheep or a oonveukmt drought does i‘ for von. Tin' new Australian clip iknowu to be substantially larger than that of last season; there was. in addition. a considerable amount left ovoi sifter the last London auctions, ’the whole statistical position, that is, is against t’-o Miciessful fixation of prices. Further, are living in an petition from the wool im’”stry is :• real one. v; ! icb must be L-wed. not ignored, r the scheme seemingly ignores it. Rrokers hero are hv no means the only peon!:; apprehensive; <d the scheme. The cables record increa-ine opposition In it from be growers themselves, mainly < n the ground that Government control or Government interference of any sort is undesirable in tl*e wool industry, and well-known , selling brokers in .Australia have also ■ pronounced their adverse judgment on it. Some go si far a- to say that lie scheme is too preposterous to merit 1 discussion, and lias no chance wliati ever to go through. Dt’ers are content to take the moderate view that ■ its fate will depend on t’ e course of ■ the sales, which begin again about : July Id. If the sales go well they say i nothing mere will he heard ol Sir r John Higgins this season at least. Ihe i most hitter ertieism I heard was to the effect that the scheme was: merely a phase of “ Australia for the Austra- ■ liens,” to wit. the scheme would liat- . urally; if adopted, adversely affect the position of the London wool market, r Vet, perhaps, its most essential featt ure provided for the financing of the i association to ho nrarnget! in the a Loudon money market.