WELLINGTON NEWS

Hokitika Guardian, 4 November 1927, Page 4

WELLINGTON NEWS

THE WOOI.I/EX INDUSTRY (Special to “ Guardian

WELLINGTON, Nov

Like one or two other companies the lii uce Woollen Manufacturing C orn-1 puny in its balance sheet just circti- I lated shows a loss ot £15(10 on the I year’s working. The woollen companies . 'generally have experienced rough times during the past two or three ' years. (Jvor-importation was blamed for their troubles, and perhaps there was some truth in that. But no one has thought it necessary to explain why there was this over-importation, which probably still continues. .Merchants do not import woollen manufactures merely tor the pleasure of doing so. Such goods are imported because there is a sale for them at a reasonable profit. It may be claimed, and the claim may he admitted, that the New Zealand woollen mills can and do produce goods o! equal merit to those imported, but the prices are not the same. .More is want'd for the domestic product than tor the imported, and of course the reason N that production in New Zealand is highvr in cost ; hut production costs do not interest the consumer, who is governed lyv the limits of his purse, lie buys the cheaper imported article because it is cheaper, and il it is not cheaper then because it has other merits, such as style, finish, etc., which appeal. It is quite a mistake to suppose that consumers are tools. I hey are the deciding factor in all markets. The customs tariff is used to endeavour to force the consumers to purchase woollen goods manufactured in the Dominion, In* might be persuaded to do so if he could obtain the goods at world parity, but he cannot, so he buys the imported goods. r lhe dairy laimei must sell his butter at world parity. The local prices move upward and downward according to the London quotations, but New Zealand manufactures must move in an orbit ol their own, prepared for them by the customs tariff. And this is where the farmer gets squeezed. He must accept world parity for his product, but for the goods of New Zealand manufacture, which he must buy In. must pay above world parity, ’this is because the customs protected industry tan pass cm the costs, while the unprotected farmer s unable to do so. The fa nut-to-day of more value to the country than the manufacturer, and yet thmanufacturer is wrapped up in eott-m wool and the farmer is exhorted t take lfis chances in markets where pitiless competition is the rule. Ihr

manufacturer can say that wages are high because the standard of living i> high, and to allow countries with lowe standards the privilege of tree compete tiem in New Zealand would result ii the New Zealand standard bohig low ered. winch is quite’ correct, hut th. same measure of piotection should he given to the primary produce:s wl: have to compete io the world's markets against producers ol other conn tries, where standards are lower llmr in New Zealand. 'I he primary pro ducor cannot he protectee! Irom thb unfair competition, hut the effect o that competition can he nullified In granting the producer a subsidy cm lib exports. The fact of the matter iUnit the overlie.id charges t.-i the pro

duvur are ex., ssive, ami in the main lie has no control over them. He c-annot control taxes, rates, high prices tor locally produced goods, which lie must purchase, and cannot pass them on. There is a growing opinion that the woollen industry, like several other in dustries, free-dug, lor instance, is overdone. There are. too many struggling woollen, worsted and knitting mills b the Dominion, and there is not th trade available to give them all a reasonable profit, licit instead ol lac in ibis fact they prefer to say that the c-.ro injured by the unlair competition cf imported goods. What is very desirable in respect to the woollen iticlus try, as with several others, is to reduce the number of operating plants, to in traduce specialisation, and seek 1 > establish an export trade. A techie effort was made some months hack i bring about a merger of the more important woollen companies, but the sanctity of vested interests, or lack o' intelligence or business ability at some points caused tTie proposed to be strangled at its birth. Nevertheless a merger of woollen companies is very desirable, but it would be placing too great a strain on the business ability of those interested in the industry to expect the fulfilment of such a desirable object. With the Customs tariff for protection, with the Arbitration Court to regulate wages and conditions, with associations to help arrange prices and with the primary producers -to squeeze, why need they worry aboul primary costs and overhead charges ?