WELLINGTON NEWS

Hokitika Guardian, 16 July 1930, Page 7

WELLINGTON NEWS

LONDON WOOL SALES.

(Special Correspondent.)

WELLINGTON, July 14

The wool sales f in London—the fourth of the series which opened on Tuesday of last week have resulted disappointingly for woolgrowers for there is a marked recession in values, the drop ranging from £d to Id per lb. This decline was not unexpected by those who kept in touch with the market movements, it is nevertheless disappointing. Wool inflects the instability of the produce markets 1 . The first of the series of London sales opened on January 21st. and the opening prices showed a drop of 20 per cent on the closing rates of the previous series and the Bradford top market was weak with no business passing. At that time 40’s tops, the lowest grade of tops, were selling at 16£d, but two days after the opening of the sales the price receded to 16£d. The sales closed on February 6th., and prices at the close showed an improvement on the opening rates. By the time the sales closed 40’s tops had fallen to 15£d, or l£d since the opening. The second series opened on March 18th. and prices again declined from 5 per cent, to 10 per cent. In the interval 40’s tops had fallen £ per lb,, and two days after the opening of the series there was a further decline to 14£d. The gales dosed on Apri 10th. with buyers operating freely. It was stated that the future outlook was rather uncertain, but there was a better feeling prevailing, and as evidence of this 40’s tops advanced £d to 15d. (The third series opened on May 13th. when there was an all-round advance of !fd to l£d per lb. so that values were back to the January level. There was active general competition, and as the sales progressed there was continued firmness and 40’s tops advanced to The close of this series witnessed great activity, even the American section gave the market fair support. The current series opened'on July Ist. and with the fall in prices we are back to about the level of .values ruling at the second or March sales. . In the interval between the current and previous sales 40V tops declined to lod.. Bradford tops began to recede after June 12tli. which coincided with the slump on the New York Stock Exchange when all commodity values were knocked down, the price of wheat falling well below pre-war level. There has been no recovery since. It seems to the writer thaet the fall in wool values is directly due to the American situation. In October last year when there was a sensational crash in New York the wholesale price index was pushed down 10 points, and as the slump of last month was even more disturbing than that of October last, it would seem that the price level has been further depressed. All commodities are fueling the position and nn easier tone prevails in the commodity markets. This fresh decline in wool will break the confidence of users of the raw material who will be forced once again to pursue the polioy of buying from hnnd-to-muth, which of course is detrimental to the producers. COMMONWEALTH STRINGENCY The Commonwealth sowed the wind of extragvance with the willing help of self-seeking Labour politicians, and now the country is reaping the whi'-’ wind. The financial year which ended on June 30th. has left the Commonwealth with a debit of over £14,000,000 and even South Australia has an unwieldy defioite of £3,881,000. The Fed-’ oral Labour Government is obviously, in a. panic and is proposing all kinds of drastic measures except the right ones to overcome the difficulties.

The position must be one of extreme gravity when Australian, bankers agree to pool their London resources and give the Federal Government the first call on Loudon credit. Those who read between the lines will realise that the bankers have been obliged to render the Government whatever assistance ite required so as to avoid repudiation and a moratorium. The Australians owe a great deal of nmne.V ill London, according to Mr Scullin £30.000,000 will be wanted almost immediately. The fresh heavy taxation has rocked Stock Exchange values, and the enterprising New Zealand investors who deluded themselves with the belief that the worst of the Australian crisis was over, will now lose a good many thousands of pounds. Australia will suffer a great deal more because the proper stops are not being taken. Cost must be reduced there as well as in New Zealand. So long as retail prices and wages remain relatively constant the trouble will continue. The Labour Government dare not do the right thing, because it is the creature of !, the Labour Caucus.