WELLINGTON NEWS

Hokitika Guardian, 1 September 1925, Page 4

WELLINGTON NEWS

DEPRESSED WOOLLEN TRADE (Special to “Guardian”.) WELLINGTON, August 28. There are about •:< dozen woollen munulacturing companies in New Zealand and with lew exceptions they have all suffered from slack trade. In l his. however, they tire not singular I’m- that appears to he the complaint practically everywhere. The Australian woollen mills, and there appears to he finite a number of them, have experienced had times. In the United ,'dates the largest manufacturing coinpuny, the American Woollen Manufacturing Company, reported a loss oT a million dollars. In Bradford there was considerable machinery idle, the worsted industry especially having stiffer- ■ i severely from the importation of good-, from countries where labour is much cheaper, ami also because of the depreciated currencies. In France, Germany am! Italy there are also complaints of slackness and the same is true of Japan. The serious rise and fall in wool values during the past season had lieen largely responsible for the unsatisfactory trade enniljiions. The basic cause of the dullness of trade in the woollen industry is undoubtedly the restricted purchasing power of the masses. The people who want woollen clothing cannot afford to pay the current prices. It is claimed that fashion has played a no small part in the matter which may he (rue enough, but the fashions too have keen modified to fit in with the restricted purchasing power of the people. Not so very long ago ii was slated by a Bradford manufacturer that he had raised his price for fabrics with the result that designers shortened the length of the garments to save a fraction id a yard of mat oriel in order not to raise the price of Ihe garment. It is stated woollen bloomers, combinations and night dresses now no longer lorm part of a young woman's wardrobe, because ol the cost, and substitute fabrics are ;i ; ,w used. Cashmere stockings are a rarely and have been replaced by real and artificial silk hosiery. It is the inability of the masses to pay the ■prices for the finished goods that is - ■ ati'iug slackness in trade, and this is mo merelv felt by wool but by ninnv other commodities also. There is tiuis a pressure from the top and this must bring about drastic changes. The price of raw wool has responded, |hut whether this response is suflicient remains to be seen. It may be that wool will he forced lower, hut that will nor, he suflicient unless manufacturing costs are also reduced and this makes it very clear that wages, which constitute the greater part of the cost of manufacture must lie reduced. To this there is hound to he very serious opposition. hut the reduel ion is inevitable. The one tiling that seems certain is that commodity values must decline and reach a low level at which the masses can purchase. When the people can buy goods at reasonable prices there will lie work lor all and great industrial activity. BUYING CHEAPER GOODS. That a reaction is setting in is proved by the fact that t lie re is restricted demand for woollen goods and the cheaper artidcs have the best chance of sale. This tendency towards cheaper articles is also to he noted in the frozen meal market and it is the experience of most exporters of frozen meat that light weight mutton and dumb have dcelindcd relatively more Ilian the cheaper heavy weights for which there is a better demand. Tins shows that people are being lorced to i'iiiv (he less expensive com.modit ies, because they have not the means to Imy the lost. In any case with the drop in the price of wool mutton and land) must he affected and the opinion in well-informed circles associated with the frozen meat trade, the best p:iie tm light weight lamb i-i the new siaMin v. ill not exceed O', iter lb. The cast season has not been a satisfactory one for exporters of moat, and the hulauco sheet which should he published verv soon will reflect the position. In the meanwhile it is consiileicd that stores are fetching higher prices than arc warranted by the preluding conditions. Il i~ stated that ami'*' people are offering 25;; for lambs lor forward deliverv, and il Ojd represents th" probable future price of fat lambs, then a f.2lh lamb would realise ■Jo, Id, which docs not leave any margin for forward buyers, find there is the danger that crossbred wool may go lower, which is a further factor to lie taken into consideration. It is necessary to bear in mind that in whatever its nature or character itis essential that costs of production should be reduced. This may be achieved by bolter management, and lenrc etiiiienl organisation, tor the trend tn flav is toward a lower range of values. The consumers are beginning to insist upon being supplied with cheaper goods.