WELLINGTON NEWS

Hokitika Guardian, 24 June 1929, Page 2

WELLINGTON NEWS

WOOL IN AUSTRALIA

(Special Correspondent.)

"WELLINGTON, June 21. The seriousness of the wool position is being realised .in, Australia, and the situation is acute. According to " Goldsbo rough, Mort and Co, the well-known, stock and station agents of Australia, when the season oi 1928‘29 opened last September values showed a decline pf‘ 5 per cent, on the closing rates of the previous, season. The level of values at the reduction were well maintained until December last. In H the new yeuir the market turned declining with the progress of of the sales, and the general allround average now is at least 15 per cent, below opening rates or 20 per cent, below the closing rates of last season> This i$- a serious decline for it•,means,u. loss. of; 4s in, the £ compared. with a year ago. 'jt is "■ claimed that the present pviebs of-wool are .well below the cost cfc-produetion, and any business that is

trying to run oii'a loss conies to an end. One authority attributes the slump in wool to over-production and t'b the great strides science has made in the .manufacture of., artificial silk and wool. It is said that the total manufacture of artificial silk is about equal to 1.0r0.000 bales of wool. It bjbhpves.,everyone to wake up to the seriousness df the position and bring ldrward 'any suggestions that may encourage the- use of more wool. It is suggested,, that Australia should manufacture all the wool packs she requires out of low grade wool. It has been proved that about 81b. of< wool-will iflakb- a strong dust proof pack. Tli is alone would consume about 50,000 or 60,000 hales of wool per annum and help to stabilise the wool market. - This of course is the idea of a wool -grower, who is not acquainted with all the facts. Artificial silk no doubt is a great competitor of wool, but it is a greater competitor with cotton and natural silk, and arti•'ficial .silk is nbw displacing/wool to the extent that some people believe it does. Australia depends for prpsperity mainly on wool and wheat, and both these commodities are depressed and so are sugar and several other export products of Australia., The fall in these commodities.-is attributed to over-pro-duction, . which. is scarcely correct. But this cry of over production ’is * /Bringing forth various proposals in | '/various countries to' help the farming communities. What is overlooked In all these proposals to help farmers to obtain bet ter prices for their produce -is that-such-proposals, if they are siiccessfullv carried out, induce more men to enter the field of farming, and to

•w,.. production and make the derzr::vr: maud for still further help louder. In the high prices of the last ten years which are the cause of the. low price today, the prices of the past .ten years have encouraged an increase in the world area put under wheat and production has increased until now there is a surplus. The surplus will no doubt he absorbed hut not at high prices. As the price' falls the field of consumption widens'. At the same time producers on land which give a return below the margin of profitable production are squeezed out. The high prices. of wool in the years immediately Y following the, armistice no doubt stimulated scientific research and artificial silk has been brought to a state of per- •’ fection which makes it a formidable \ competitor with other fibres. The fall in commodity prices has been forecasted by numerous economists. in various countries. It is said that in America the peak of prices was reached last February; in Germany, Fran«e and Italy the peak was y touched in March and in Britain in April. We must adjust the cost of ' .UT production to meet the changing situaP !j 1 tion, and therein lies the difficulty. Australia is in for a sorry time. Her principal export products are falling, internal values are higher than world prices, her costs of production are excessive. Millions sterling have been lost through strikes, and as the Prime Minister (Mr S. Bruce) expresses it vI" • “Australia has drifted from the'path , of prosperity.” Drastic economy will be forced upon the whole nation and , , Btock' Exchange securities will slump.