WELLINGTON NEWS

Hokitika Guardian, 3 December 1930, Page 2

WELLINGTON NEWS

THE FALL IN WOOL

(Special Correspondent)

WELLINGTON, Dec. 1

The drop in tne price ol wool at the opening sale of toe season held in Auckland Inns given an electric shock to those interested in the wool industry, find to business nun geuerai.y, but it is doubtful if it has made any impression on the politician. Perhaps a .few figures in illustration ol too ■ fall may convey some impression ol the desperate state into which woolgrowers have been thrust. Average .half-breds of 53,56 quality declined iront Bd, which was the closing average price realised at Auckland sale of March 28, to s id, a drop of 2Ad or 2S per cent; average iialf-breds 48/50 quality also 2id, or 29 per cent; average crossbreds 46/48 quality dropped or 25 per cent; average crossbreds 44/46 fell 2-Ad or 33 per cent; average crossbreds 40/44 declined 2Ad or per cent; low crossbreds 36/40 fell lid or, '25 per cent; bellies and pieces declined 25 to 331, per cent, crutchings by 27 per cent and locks and pieces '.by 60 per cent. The prices for average quality half-brads ranged front 4ld to oicl, while tiossbreri made front 41 d for low to old for fine crossbreds 46/48. These are desperately low prices and well bcldw the cost of production which is estimated at 9d per lib. This is not all, ioi the value of all classes of cheep must fall in sympathy and the value ol farm lands must be written down drastically. It is doubtful whether many sheep farmers, will ’have earned enough from their wool clips to pay the taxes and rates for which they are liable. The Government has already been obliged to make the concession of proiiiAsory notes from farmers in respect to land tax. ,If the matter is considered f’-o” 1 the point of view of the- State and the community it is positively alarming. The sheep farmers are forced by circumstances over which they have no control to be economical, if not parsimonious, and they have no option for they have not the money. Their restricted expenditure must tell on the domestic trade of the country, and that will lead to an inqrea.se in unemployment, for with shrinking business, traders must take- measures for reducing overhead costs. Most farmers will make strenuous endeavours to meet their mortgage obligations, but a great number will bo absolutely unable to do so and those must unfortunately seek relief through the Bankruptcy Court. With produce prices as low as they are there is no sale for farm lands, which means anyone forced to sell must be prepared to give away his land at bargain prices. This again mufit be reflected on city and suburban land, indeed it has already done iso and land agents everywhere in the Dominion can be doing very little business. Their incomes are reduced and some of them are really out of work. The shrinkage in property values is hitting many of the speculative builders and there ,is bound to be trouble in that direction. The drop in wool and dairy produce is causing those who- have money to hoard it because they are afraid that if they invest just now they may see some of their capital “go west.” The fitate revenue is falling and will continue to fall in spite of the alleged efforts of the Government to economise. They are all tinkering with the accounts. The trouble now is nation-wide and relief can only he .found through na-tion-wide co-operative effort and sac lifice. But what can we do? What we can do is to concentrate on the reduction of costs of production. We - must jettison the long cherished fallacy of standard of living. A man’s standard of living is measured by his earnings, or controlled hv them. The man opt of work has no standard of living. At most society insists that lie should not he allowed to /starve and he is therefore entitled to receive enough to sustain him.

All farmers, except a comparatively few, have had to lower their standard and work loneer and harder. The standard of living of everyone from the top downwards must be lowered, that means that salaries, wages, rents, etc., must be reduced, retail prices mpst be reduced all round and the cost of living brought into sum'relation with the earnings of the people. Deflation has taken place in the prices of wool, meat and dairy produce, and deflation must take place in the price of labour. The authorities appear to he shirking this dutv and are thuk adding to our difficulties.