THE WOOL TRADE.

New Zealand Times, Volume XXXII, Issue 5131, 3 September 1877, Page 3

THE WOOL TRADE.

(From Bill's Weekly Messenger, July 2.) After a long period of depression, the wool trade seems to be emerging from a most unsatisfactory condition, and to be enjoying just now a moderate degree of buoyancy. There is not certainly as much animation as could be desired ; but the extreme point of weakness has disappeared, and hopes are now entertained that the healthier tone which is perceptible will not only continue, but become more distinct.

The reasons for the slackness in the trade for wool are manifold, and in previous articles have been pointed out.. We may briefly repeat them. Firstly, there' has, tor many months past, been an abundant importation, duo principally to the progressive increase in the production in_ our Australian colonies. Secondly, trade has' been in a most contracted state, not only in this country, but throughout the world. Thirdly, for many months rumors of war existed, which have culminated in actual warfare. Fourthly, last winter was remarkably mild, which diminished very materially the demand for warm clothing; and fifthly, the heavy losses which the public have sustained in their foreign," and in some of their home, investments, together with the reduced profits arising from trade, have necessitated a very general resort to strict economy. We may add, indeed, a sixth and by no means unimportant reason for a cautious policy in the wool trade, viz., the internal political troubles of France. It is well known that France is the largest foreign buyer which visits the London market; but fortunately the effect of the Ministerial crisis at tire recent colonial sales was of short duration, renewed confidence having very quickly asserted itself. Large importations of the raw material, and a restricted homo and export inquiry for the manufactured article, obviously led to a rapid increase in the stocks of the latter. I he raw material being cheap, and money low in price, manufacturers have not been reducing production to any great extent. It is stated that the raw material has not been worked into cloth, but that there are large supplies of it in the various stages of. manufacture, so that should an active demand for goods arise, not the slightest difficulty would be experienced in readily meetiug it. Indications are not altogether wanting of an improving commerce. Were it not for the war, and its uncertainties, we might hope for a very substantial improvement j but as there is no doubt of the fact that in the future events of momentous importance to ourselves and to Europe will transpire, a natural desire exists not to be too bold in entering into commercial speculations. The disposition, so long evinced, of trading within one’s means is almost as uppermost as ever; but there is, perhaps, somewhat less reticence, as vague rumors of peace float about, while the Powers more immediately interested show a strong disposition to localise the war, and to intimate to the aggressor that they will not move until they perceive that their own interests are about to be endangered. This, of course, is not * satisfactory state of things. There is still the possibility of a great war, and even a vague belief in this cannot but be antagonistic to- a revival of commercial activity. ' , The trade in autumn goods will soon commence, and there is a disposition shown to believe that those countries disconnected with the war, and especially those which are agricultural, will be better customers. The rise in the prices of cereal produce, and the remunerative quotations now current must of necessity

have added to the purchasing power of those countries, though it may be contended that the recent improvement has been acting chiefly as an offset to the low rates which had been previously current for so long a period. American advices are encouraging. The crops in most sections of the country are regarded as satisfactory, and trustworthy accounts report that there was every prospect of a good “ fall, or autumn, trade. To what extent this country will benefit from it is partially doubtful, as the manufacturing dtstricts of the United States are steadily increasing, the result of which is that there is less demand for British goods. There is reason to believe, nevertheless, that, should the anticipated improvement become a reality, a moderate share in the resuscitated demand will fall to our lot.

The large standing armies which exist on the Continent, though they create a demand for the coarser sorts of woollen goods, militate very seriously against the market for the better descriptions. France, owing to her thrifty population and genial soil and climate, seems to be able to stand a vast military expenditure better than her poorer neighbors. In Germany it is stated that the military system is impoverishing to a very serious extent the country. Heavy taxation must obviously tell disastrously even upon France, whose resources are regarded as boundless ; but Germany, less favored by Nature, bears the burden more complainingly ; and, undoubtedly, the people would be glad to be able even to foresee the termination of this unfortunate state of things, which, as long as it lasts, must be adverse to the prosperity of the Continent. The vast hosts of unproductive laborers which now exist must clearly diminish the wealth of the countries in which they live ; and it cannot be doubted that this is one of the great questions which must be settled some day in the early future. The English manufacturer must undoubtedly look to other sources than the armed nations of the Continent for a sound, healthy, and permanent trade ; but the check which the European nations receive from this most unsatisfactory state of things cannot but be prejudicial to our trade, as. it obviously diminishes it.

The two principal causes influencing favorably the wool trade during the last few weeks have been the low point to which prices had fallen, and the ease of the money market. Wool has not been so cheap as it has been recently for some years, and as the quotations are below the average the risk of accumulating stocks, at a period when money is cheap, is not very great. At the public sales of colonial wool, which were brought to a conclusion on Tuesday, about 50,000 bales out of nearly 304,000 bales were withdrawn. Exporters purchased some 150,000 bales, and, consequently, the home trade did not operate to the extent of more than about 100,000 bales. The worst period of the sale was when the news arrived of the Ministerial crisis in France; and until French manufacturers were, to some extent, reassured, the sales proceeded with considerable depression. During the closing fortnight, however, the tone became rather buoyant, as not only were foreign buyers operating more freely, but there was a better home inquiry.