WELLINGTON NEWS

Hokitika Guardian, 14 May 1929, Page 5

WELLINGTON NEWS

THE WOOL MARKET

(Special Correspondent)

WELLINGTON, May II

At the current London wool sales prices are being well maintained and the trade is operating ifreely. This is very good news' for it indicates that there is a general improvement in the industries of Britain, and this is borne out by the reports received by mail in respect to pig-iron. It is said that the first quarter of the year had witnes&ed a decided improvement in the hematite pig-iron trade, and there is every indication that the gain will lie further enhanced.

It was expected that several furnaces would bo relighted to cope with the increased demand. When the heavy industries are active all the other industries are influenced, and the wool trade must share in the improvement. With respect to wool a Bradford correspondent states shat the recent activity was <t'o in no small measure to prices having declined in a very marked manner compared with twelvo months ago. and esepcially since the commencement of the year. Buyers of wool, consumers off partially manufactured wool materials, and even .purchasers of piece goods came to the conclusion that it was opportune to increase the size of their stocks to cover their possible requirements, for some little, time "ahead; • They* believe that prices were: nop; likely to fall to_:a. ; mueh ,lower.lev,el n aiid that if they dropped at all the ddwmvard:! movement could he safely: followed by a -Fay -of averaging the cost. ; The trouble is that the buying was least in’: piece-goods and greatest in' raw : material. Both spinners and manufacturers because <rf ; .their recent speculative buying;£f£Silpp.lies are well provided for.. Newp business is very’ small, and the improved tone is maintained* only in relation to raw materiiiL rTlii's was the position early last month, and it is obvious that some improvement has taken place in the interval to warrant further speculative buying at the current London wool sales.

A disturbing feature in respect 'to wool is the proposed increase in the Uniteu States tariff. The duty-on wool is to he raised from 31 cents to 34 cents per lb clean content. A duty of 17d on clean wool must further restrict American' ’ purchases of" ‘foreign* ‘ wool and New,- Zealand must he i adversely • affected. ["lt is scarcely, becoming on our part to submit to the American big? stick and"we must endeavour to. hit back. | Wool is one of" our staple; exports and*yanks perhaps next to dairy produce, i We can counter the' Ameri-i can thrift' by imposing-'.at prohibitive duty-[on' the principal import into the Dominion of an American product, and the principle can be applied to other countries'that place an embargo on any of our principal products. New Zealand’s principal import from the United States is motor cars and trucks and to counter the American tariff the duty on American, motor vehicles should be fixed proportionately to the .American duty op wool.. The Americans want a one-sided tariff, and that is their own tariff, but we would be foolish to play into the-hands- of -the United States. According to reports General Motors is to make ■ special, efforts to, extend its operations in foreign markets realising that American curve is> .flattening out, not that the saturation, point has been reached in, the United States, but iriasls pi Induction is overtaking mass consumption and there is danger ahead. Parliament will no doubt give some attention to readjustments of the tariff , and this point in respect to wool may well receive consideration. A movement is on foot in the Qommonwealth of Australia to establish a fund to extensively advertise the merits of wool as clothing, and the scheme is obviously a good one. New Zealand and ■South Africa, the other important wool producers in the Empire are to be requested to link up with Australia in this matter, and New Zealand should join in. This is a case where community advertising is essential for no single firm can undertake the work. Australia could probably find the necessary funds but why should she bear the costs for the sake of others. Community advertising has a great vogue in the United States, where it is found very effective. The life assurance companies there advertise in this way quite regularly. ’The Australian scheme visualises Government assistance, which is wrong m principle. ’The State cannot favour one section at the expense of the others, besides those interested in the wool trade in Australia and New Zealand are quite capable of carrying through this scheme without Government aid. _