WOOL, AS AFFECTED BY THE AUSTRALIAN GOLD DIGGING, THE KAFIR WAR, AND THE STATE OF THE CONTINENT.

New Zealand Spectator and Cook's Strait Guardian, Volume VIII, Issue 699, 14 April 1852, Page 4

WOOL, AS AFFECTED BY THE AUSTRALIAN GOLD DIGGING, THE KAFIR WAR, AND THE STATE OF THE CONTINENT.

[From the Economist, November B.] Considering the character of the intelligence which has reached this country from Australia and from the Cape of Good Hope during the last two months, it is not a matter of surprise that an attempt should have been made to “ get up ” a speculation in woo), nor that that attempt should have proved in some measure successful ; not indeed so much so as some of the more sanguine dealers expected, but probably quite as much as a calm review of the whole of the considerations for and against it will justify. At first sight we admit that a strong primafacie case can be made out, but it is by being too easily influenced by the “ first blush ’’ of the novel conditions attending the supply of an article, without paying sufficient attention to all the other circumstances which tend to modify their effect, that great and serious disappointments result from such speculations, and that it so often happens that events turn out just the reverse of what was expected. As a general observation, an article that becomes the object of speculation is exposed to great disadvantages. A rise in price not only limits the actual consumption to some extent, and the effective demand on the market even more, by the tendency which exists for manufacturers to work up their old stocks more closely than usual, being unwilling to pay the advance; a rise in price has not only these effects, but it also induces larger supplies from ordinary quarters, and additional imports from new quarters. Again, a new and unusual class become holders of an article which bas become an object of speculation, without any regular connection for its sale, and that too, a class which generally operates upon credit as far as it can. In such cases, there is naturally less confidence, and the slightest indication of disappointment urlogs sellers iat-c tls-c ■ market JM.der ..the most unfavourable circumstances.

But we have said there is a strong prima facie case for a speculation in wool. Australia and the Cape of Good Hope have become such important sources of supply, that any circumstances which may be supposed to exert a material influence upon the produce of those colonies may naturally be expected to affect the price of wool. Twenty years ago (in 1830) the entire supply of wool from the Cape and from Australia amounted exactly to 2,000,000 lbs. out of an entire supply of 32,305,000 lbs. ; or to about six per cent, of the whole. Ten years ago (in 1840) the supply of wool from the Cape and from Australia had increased to 10,473,000 lbs. out of an entire supply of 49,436,000 lbs. ; or upwards of 20 per cent, of the whole. And last year the wool imported from the Cape and from Australia had increased to no less than the enormous quantity of 44,727,000 lbs., out of an entire supply of 74,326,000 lbs.; or to 60 per cent, of the whole. But during the periods referred to a great decrease has taken place in the supplies from Spain and Germany, In 1830 the imports from those countries amounted to 27,714,000 lbs. ; in 1840 to 23,078,000 lbs. ; and in 1850 to only 9,600,000 lbs. — Parliamentary Papers, 460 —1850, and 577 —1851.) When, therefore, we find that the Cape of Good Hope and Australia supply 60 per cent of all the foreign wool imported, and that those are the chief quarters to which we can look for that increase from year to year which is required for our rapidly extending woollen trade; it is not a matter of surprise that events which may materially affect the productiveness of those colonies, should create considerable anxiety and induce speculation. The disastrous war which is now waging at the Cape, and of which the conclusion is not at present very easy to see—the desertion of the Hottentot labourers and servants and the consequent disorganization of rural occupations—are all likely to affect the quantity of wool which will be received from that colony in the course of next year. But when it is recollected that the interruption to that industry chiefly affects the frontier of the colony, and that the entire country which lies between Cape Town and the frontier, and which is the chief flock district, remains undisturbed, it is probable that the influence of the war upon the export of wool will be much less than is now expected. The expectation of a higher price will induce all to strain every effort to send as much as possible. On the other hand, the discovery of the gold diggings at Bathurst, it is generally apprehended, will draw labourers from rural occupations, lead to a neglect of the flocks, and to a consequent serious reduction in the quantity of wool exported. The events which occurred in California, when the attraction of gold induced persons to abandon all other employments, is still fresh to the mind, and they are expected to be repeated in Australia. But here, again, according to the best information which we have received, there is every reason to think that the apprehensions on this score are much exaggerated. Unlike California, Australia has the advantage of an organised government. At Bathurst, in the immediate neighbourhood of the diggings, order is maintained by the ordinary police as perfectly as in an English town. The Government lays claim to all the minerals, and no one works without first paying for a license. The necessary regulations laid down by the Government to protect its rights have been submitted to without a murmur. Under such circumstances, the rush

I which was so much promoted by a spirit of gambling and excitement, will be greatly modified in Australia. From a most reliable source we learn “ that there is every reason to hope that the inconvenience to which the employers of labour, and especially those engaged in pastoral and agricultural pursuits, have been put, will not be so great as might have been expected —that many persons have already returned from the gold field disappointed, and will, of course, deter others from proceeding thither — and that there is reason to believe that, generally speaking, the shepherds in the country have not deserted their employments— and that, in the neighbourhood of the gold field, labour was never more plentiful nor cheaper.” At that time about ninety persons were arriving daily, and about thirty leaving after a few days’ trial. Those who have been longest at work average about £1 a-day, and inferior workers and new comers about ss. a-day. “ But the work is bard compared with shepherding or hut-keeping.” Therefore while it is probable that a considerable influx of labourers will take place to the diggings, it will probably be mostly from the towns, and it is not likely that the production of wool will suffer to near the extent which has been apprehended. And here, again, the high price of wool for some time past, and probably the still higher price expected from those events, will induce each grower to 1 use every possible means of increasing his quantity. While, therefore, in the course of next year the imports of wool may prove somewhat less than in the present from the Gape of Good Hope and Australia, we are inclined to believe that a very exaggerated estimate has been formed of the extent of such decrease.

So far as this year has gone, the supply of wool available for the home market is larger than during the corresponding period of any former year. From the sth January to the sth of September, the imports have been : —

An! while the quantity of foreign wool imported has been somewhat more in the present than in any former year, the entire quantity exported, of foreign and home growth together, has been considerably less. The wool exported from January sth to September stb, was as follows :—

So that, while the quantity imported has been 1,350.448!b5. more than last year, the quantity exported bas been less by 1,592,1521b5. making a greater relative supply of 2,842,6001b5. But we do not attach much importance to this fact.

There are three other considerations to which we attach much more importance, as being likely to counteract the effect of any reduction in the •prsd&etica- st- wowi-at. jEk. ..Cape ef Good Hone and in Australia. 1. The probable additional' supplies which we shall receive from other quarters ;2. The probable considerable decline in the export both of colonial and English wools to the Continent during the next year ; and, 3. The probable decline in the demand in some of our chief foreign markets for woollen yarn and woollen goods. The Continent of Europe takes a very much larger portion of our woollen exports than is generally imagined. The latest complete account published is for 1849. According to that return it appears that the following portions of the different descriptions of woollen manufactures were exported to the Continent: — Exports or cuief Articles of Woollen—lB49.

The whole value of the woollen exports in 1849 was £8,342,723, of which no less than £3,500,000 represent the exports to the continent of Europe. Now, it is impossible to look at the condition of Europe without entertaining just apprehensions that the demand for our manufactures during the next year will suffer a considerable diminution compared with what it has during the last two years. Throughout central Europe the crops have proved extremely defective, especially of rye and potatoes, which together form the chief food of the people. Already their trade feels the depressing influence of high prices, And this serious drawback to our prospects is much aggravated by the political uncertainty which, whatever may be the result ultimately, has at least in the mean time, and must, we fear, during the greater part of 1852 continue to have, the effect of destroying confidence and credit, and of paralysing trade. The description of goods of which, according to the table given above, the largest portions are sent to the continent are woollen and worsted yarn, woollen and worsted stuffs, and flannels. The two former descriptions of goods are manufactured at Bradford and its neighbourhood, and the latter description at Rochdale. Both those districts have already experienced the effect of the declining demand from the Continent to a most inconvenient degree, as their trade reports abundantly testify. Again, it is almost exclusively to France and Belgium that we export the 16,000,0001b5. of wool which annually leave our markets. But the same reasons which are likely to influence the demand for our woollens will equally depress the manufactures on the Continent, and to some degree affect the demand for wool from this country. And the same reasons will probably operate even more strongly in inducing the export of a larger proportion of German and other Continental wools to this market, not alone as i. place of safety, but as the best that is likely to be available.

So far as these consequences are likely to be produced by a failure of the crops, that is no longer a matter of speculation, that is already an ascertained fact. How far the evils of scarcity may be aggravated by political disquiet, remains to be seen. It is certain that at this moment there is a growing want of confidence, which, whether well or ill-founded, as it may turn out to

be, is, nevertheless, productive of very serious consequences in the meantime. While, therefore, it may be admitted that there is a fair prima facie reason for some anxiety as to the supply of wool during the next year, we feel assured that on a calm consideration of all the facts to which we adverted, it will be admitted that very exaggerated notions prevail on the subject ; and which, for the reasons we have given, may lead to considerable disappointment to those who have taken the more sanguine view of the possible falling off' in the supply.

Colonial wool, lbs. Other Foreign, lbs. Total, lbs. 1849 28,457,069 20,012,395 48,470,064 1850 38,027,760 16,299,322 54,327,082 1«51 38,134,425 17,443,105 55,577,530

Foreign anil colonial Home 1850. lbs. 9,314,120 8,351,369 1851. lbs. 10,857,895 5,215,442 Total 17,665,489 16,073,337

Total Portions to Quantity. Europe. Yarn, lbs 11,200,372.. ..11,180,000 Stulls, woollen or worsted, pieces • 2,003,595.. . 1 039 000 Cloths, all sorts '331,809.. 5s'0G0 Kersevmeres... 32,500.. 7,000 Baizes, &c., ... 21,000.. 15,100 Flannels 2,066,959.. .. 849,000 Woollens and Cottons mixed,yards. 42,115,401.. .. 15,830,000