WELLINGTON NEWS

Hokitika Guardian, 21 September 1926, Page 4

WELLINGTON NEWS

A SOUND WOOL MARKET. (Special to “ Guardian.”) "WELLINGTON, September 17. The general expectation was that London wool sales, the tilth of the series, would show an appreciable advance in prices, and this fortunately has been realised. But it would ho quite easy to magnify the advance and make it appear that wool values are something better than they really are. We may dismiss merino wools, as vert little of that staple is produced in New Zealand. Crossbred wool shows an advance of Id to lid, and the higher prices mainly affect the counts .(8-10 or halfhred wool. This advance is on the closing prices of the July sales and therefore must review the question from the earlier sales. At the January and -March sales the position was normal. and London prices were more or less on a parity with those ruling at the auction sales in New Zealand. Ihe third series of the London sales commenced on April 2:1 rd and within a few days the general strike took effect, and the sales were postponed oil May 3rd and not resumed until June Ist. One need not elaborate on the disturbing effect of that industrial upheaval. Everyone was exercising the utmost caution, and purchasers vcie confined to absolute needs. The result was that a sharp drop in wool prices followed, and of course there was a very hcavv carry-over. At the fourth series held in July the market was still depressed and Bradford was buying very cautiously for there was still the coal crisis to contend with. The market obtained its main support from Continental buyers, and crossbred wool recovered a little of wluit was lost at the previous sale, nevertheless the quantity of unsold wool was large. The current sales have opened with 'an advance, hut the prices of to-day are about equal to those ruling in January-Mnreh or it may be said that prices now are as good as they were in the past season. Again at the current sales it is the Continent and mainly Germany and Era nee who are responsible for the improvement. Bradford is still under the inlluenec of the coal crisis, whereas the Continent is affected by favourable influences. Germany has met all her obligations under the Dawes’ scheme for the second year in succession, and has established or restored 'her credit. Furthermore, the Locarno Treaty has lieon signed, sealed and delivered, and Germany has a seat on the Council of the League of Nations. France has just raised a loan in Switzerland, and with the changed aspect of European politics there is a general confidence, and without general confidence trade cannot revive or flourish. Ever since March the- wool market has been disturbed and in spite of all the difficulties the market has remained sound and healthy. Prices to-day are reasonable. and a reasonable price is that at which goods pass readily into consumption. Growers will not he , foolish enough to wish for the return of the inflated prices of 182-1-21. hut should he satisfied if the past season's prices are maintained. The purchasing power of wool consumers is still very restricted, but every year should see an improvement iu this respect. THE FARMERS’ SLOGAN. The Public Trustee, who controls a large volume of investments, and nets in a representative capacity in so many spheres of business activity, in his annual report says: ‘The fall in the return f rom our staple products uiayonlv be a passing result of the operation of the economic laws of supply and demand, or ll may. on the other hand exemplify a gradual return of lower prices and conditions more closely approximating those of pre-war days. Viewing the matter in relation to the trend ot produce values generally throughout the world the latter statement probably represents the t rue position. ’ Here we have an authority in close touch with, affairs, who expresses the opinion that prices arc tending to the pre-war level, and it stands t:> reason that the cost of production must take the same course or there will lie chaos. Immediate substantial reduction in the tariff is essential if the cost of living and consequently of protection is to he reduced. The tariff is to he revised during the next session if Parliament, and if the farmers aro alive to their own interests they will press for heavy reductions. The effect; of high production in New Zealand has resulted in an excess of factories and workshops in certain main industries. resulting in competition wide' 1, reduces profits and forces these industries to aopeal for more and more protection. It is essential that the cost of goods and services he reduced.