WELLINGTON NEWS

Hokitika Guardian, 12 March 1931, Page 5

WELLINGTON NEWS

FAVOURABLE MOVEMENTS. (Special Correspondent). .WELLINGTON, March 11. For mourns and monttis past an almo-t unpenetrable gloom of falling prices has been the experience of the. world in respect of most commodities, and now it seems that the dark clout!*

ar- parting; mere is more than a ray of hope that the worst of the slump is over, and that recovery lias set in. That recovery, it is generally admitted, will he very slow and very gradual I but what matter that, if it eventually leads cn to the goal of prosperity. To a good many this may appear .super-optimism for there are still many commodities very much depressed. which is quite correct, but it must be remembered that a depression such as the world is experiencing will not vanish in a blaze of glory or in any spectacular way. It is the straws which indicate th e direction of the wind, and the drift of the depression can be judged only by trifling incidents which in themselves convey nothing, but taken collectively and examined closely they moan a very gteat deal. They mean that the declining values of world products has been arrested, that the bottom has bean leached, and though upward movements may not be very pronounced or very regular and sustained they will ultimately be found to be moving in the right direction. It may be asked by the dubious and pessimistic what are the indications to warrant that optimism. One of the most important of the indicators is the buss metal market. Copper, load, spelter and tin with iron are the principal industrial metals. They are wanted in various quantities by every country having any industries. It must be obvious that when the prices of those metals show steadiness or a tendency to advance it must be obvious that there is a demand for the metals. Conversely when the market is lifeless and prices drooping it is an indication ol v poor demand. Over Cue past few weeks the metals named have steadied and some have advanced a little. ’lbis in itself is not much to go upon, for the upward trend may he just one of those spasmodic movements that frizzle out almost as soon as they have begun. Let us therefore take another commodity, that is wanted by practically all the people in the Northern Hemisphere and by a good many in the Southern Hemisphere, and the commodity we refer to is wool.

Just six weeks ago every woolbroker in the Dominion was shaking his head in despair. In January wool prices were very low, much below the costs of production. The London sales which began that month made the position 100 kworse, for there was a erv big drop in prices. 40s tops were down to Bkl per lb and the outlook was extremely gloomy. But just when the position looked blackest there was a sudden improvement "Then one London woolbroker declared was humanly impossible to explain. Others believed that the improvement was too sudden to last. It lasted well over a month and gained strength in the interval. Bradford tops have risen and 40’s tops are now firm at To.jd, a rise of 2d per lb in about five weeks.

i'he average render can of course see no connection between wool and tops, but woolhrokers know all about it. The conversion into tops is the first process the wool undergoes after being washed. The tops are the combings. There is to he another series of sales in London beginning on Tuesav, lOtli inst., and it is safe to predict that there will be a sharp vise compared with January prices, active bidding and a good clearance, notwithstanding that the catalogue is an extensie one. Why is this happening? It is nor because world demand for finished woollen goods has improved? Surely there is reason for optimism in this. There is another indicator of world trade improvement although in its essence it is political, We refer to the agreement which the Viceroy of India has arranged with the leaders of the recalcitrant Congress. Under this agreement the boycott of British goods has been lifted. This frees thousand of Indians to purchase British goods—goods that, they have known and appreciated all their liv-

The first effect of the removal of the boycott will be felt by Lancashire where the cotton looms will presently be working full time. That will mean more work for more people, more purchasing power which will stimulate trade in other directions and other trades will provide work for morehands and they in turn will help others. The circle will continue widening and gradually working towards prosperity. It will slow, but that does not matter so long as it is sure.