WELLINGTON NEWS

Hokitika Guardian, 13 December 1929, Page 2

WELLINGTON NEWS

DEPRESSED WOOL MARKET. (Special Correspondent) WELLINGTON, Dee. 11. As the wool sales in the Dominion progress it is becoming abundantly clear-that wool values are very much depressed.' At the first sale of thte season., held in Wellington in November prices were not unsatisfactory, although they were very much lower than,in the past season. As a matter of’fact the prices realised at the first sale in Wellington were above London parity and before subsequent sales buyers had their limits reduced. But since then it would seem that buyers have had their limits further reduced by their principals and it would appear also that the quantities to be bought were curtailed. Thus at the Wellington sale on Friday prices for all grades declined except isuper crossbred showing good growth. These were unchanged, but other crossbred fleece wools were Id to l 2 d down on November prices. ; 'lt was the inferior wools such as Ibellies, pieces, locks and crutchings that showed the least decline. There dees not appear the least prospect of wool improving in the near future, but many growers are very optimistic and are holding their wool for the later sales. There tvill be heavy offerings at the sales to be held in the first three months 3 f the new year and buyers are not likely to losei sight of the fact. In the meantime the report from Bradford is that tops market ‘is depressed ind the demand is slack. The wooL cheques this season are bound to be appreciably smaller than in the last season, and this must have an effect an local trade. If it were only wool that was depressed it would not be a, serious matter, but unfortunately meat also is lower. To-day best North Island lambs under 361bs are selling it 8-id per lb, in Smithfield, and best wethers at 6fd and thevse. are low orices, much lower than a year ago. Butter and cheese are tending downwards but are still very satisfactory, [t is wool and frozen meat that are causing anxibty, and to this must be ldded a big increase in imports which is giving concern to bankers. Various statements have been made regarding the decline in monetary values the Australian clip is likely to show this season. According to Wincheomb, Carson, Ltd., the Sydley woolbrokers, some of the figures nentioned appear to be unduly pessinistic. Calculations are largely conecture because, no person can deini tel/'state what the future holds. Actually it looks as if the total reaim will lie about 30 per cent less ban for the previous season. The noportion of the clip sold in the Commonwealth last selling year reaised £57,000,000. On the percenage quoted the total this season iould be just on £40,000,000. In adlition the proceeds of about 200,000

bales sold abroad must be added. Based on present values the actual wool shorn should therefore be worth £40,000,000 without taking into account the wool exported on sheep skins. In 1921-22 the Commonwealth grew 2,041,136 bales of wool which realised £34,000,000. Actually the Commonwealth will not do so badly with .wool, but what makes the position difficult is the scheme of the politicians to buy fictitious prosperity and incidentally votes by the lavish expenditure of borrowed money. Australia has enormous loans maturng next year besides requiring fresh money to meet engagements. It is this aspect of the matter that is causing grave concern. That Ausralian conditions are somewhat serious is shown by the sale of shares and particularly bank shares. Those who have followed the reports on sales made on the Stock Exchanges of the Dominion will have noticed such expressions as “Sydney Register’’ or “Melbourne Register,” which meians that the shares sold are on those particular registers and they can only be transferred on those registers. A good deal of New Zealand money is going across the Tasman Sea for investment in Australia and this must be troublesome to bankers, who may be obliged to increase their selling rates on Australia, as they did with the selling rate on London. The latter was to cheek imports which have grown rather more rapidly than exports, and if not checked over are likely to cause trouble later on. Earlier in the year the banks held larger deposits particularly time deposits, which provides them with considerable funds, and the deposits in the aggregate were much in excess of the advances, but now the margin has been narrowed down and the ratios of advances to deposits is now over 99 per cent. Owing to the fall in produce values the financial institutions will be called upon to nurse a good many industries, and money will thus become increasingly dear, but that will not become noticeable until say after Easter next.