WELLINGTON NEWS

Hokitika Guardian, 24 September 1926, Page 2

WELLINGTON NEWS

WOOL ANTICIPATIONS. (Special to “ Guardian.”) WELLINGTON, September 22. The principal woolbrokers 'in the Dominion are now issuing their annual reviews, and several have already made their appearance, including the always interesting review by Dnlgety and Co. This firm thinks that the opening rates at the New Zealand sales in November should show values equal to those ruling in February and March last. The experience of the past two seasons has been that at the November sales prices ruled high, ’thus last November the average value of the wool sold was a little more than £l9 per hale or slightly more than 13d per lb: at the succeeding sales the average was just over £l7 per bale, or a little more than lid per lb. The later sales indicated that some measure of stabiksation had .succeeded the fluctuations previously experienced. At the London wool sales the recovery shown by crossbreds bring them up to the Janu-ary-March parity, but that does not necessarily imply that there may not be a rene-titioii of the past two seasons at the November sales. Dnlgety and Co. says in their circular": “ The question which at present concerns the grower most is the outlook for 1926-27 season, which is now approaching, and all interested in textiles are wondering what is in store for the trade. From the position as it is to-day we ' cannot see much likelihood of any pronounced change during the coining ' season. Indications point to the fact ■ that prices, having reached a point ‘ stabilising a measure of permanency. ) violent fluctuations such as have been ■ experienced in, past years are unlikely ■ in tile near future. During tiie coni- , ing season we expect caution to be the dominant spirit in the trade, and, unless ’ something unforeseen happens, the speculative element, which at times does much -to upset the market, will be missing. At present the satisfactory feature ,is the strength of the market, in spite of the general disloea- ! tio-ii of industries caused by the coal strike. There is a decided preference for the finer wools, merino and halfbred, and as the supply will not he greater than the trade can absorb, it mtxf happen that rates may show -an ' appreciation. Growers of all qualities ; of crossbreds, however, should not ex- : pect any appreciable betterment of prices during the coming season,.as in all probability they will be in close proximity to those ruling last season from December to March.” There is no doubt that wool is an excellent asset. It would he in a stronger position to-day but for the coal crisis in Britain, the political situation on the Continent and the instalment purchasing craze in the United States. Tlio< coal crisis will continue until tlie perpatetic secretary of the Miners’ Union exhausts his stock of vanity, or perhaps makes some personally satifiaitory economic arangemciit. Events on the Continent have moved rapidly during the past week or two, and all indications point to the probability ol political tranquility and this will help to restore confidence. AA 00l should sell freely during the coining season and tho tendency will be upwards for all grades. FACING THE FACTS. The slump of 1920-21 revealed the weakness of the system of financing and trading that existed among the farmers’ co-operative companies which suffered very severely. The weakness of tho financial system was the holding of too large a volume of deposits, and particularly of call deposits, and in advancing on land at inflated values. AVhcn the slump came and the call deposits were demanded, it was iound that the : assets were frozen. Had it not been for the moratorium on deposits many of these co-operative concerns would have been forced, into liquidation. The New Zealand Farmers’ Co-operative Association, the big Christchurch organisation, has already faced and dealt with very heavy losses, and even so appears not to have made the full provision necessary for it is now stated that there are further ascertained losses totalling £420.853 to meet which capital is to lie further written down and net profits and reserves are to he taken. Investigations reveal that many of the advances are and have been far beyond the values , of the securities held or the ability of tlie borrower to pay. 'lnis is equivalent to saying that advances were made . on inflated land values, but there can scarcely he any excuse for this, for the warning as to tile inflation of land 1 values were strong and persistent. Land values have to be adjusted throughout New Zealand.