WOOL.

New Zealand Times, Volume XXXIII, Issue 5237, 5 January 1878, Page 1 (Supplement)

WOOL.

Wo will, as briefly as we can, describe the events which have for some years acted very powerfully upon the prices of wool. Before and after 1871 England lent very large sums of money to the United States, Peru, and other parts of South America, Turkey, and Egypt in particular. With this money the recipients purchased largely of railway iron, ironclads, clothing, and other goods from England and other countries, expending a portion of these loans in the countries to which they were lent. We find as a result a great increase in 1872 of the export of manufactured woollen and worsted goods and yarns from England amounting to £33,000,000, falling otf suddenly in lS73,more moderately in 1874 and in 1875, and then attended witli a sudden drop in 1876, which we find is considered by late writers nearly the termination to the decline in the export trade of England, which has been so continuous for so long a period. These loans have been very much misapplied, and we find a decline in the value of either the whole or a part of them of £150,000,000 stated by a writer in a recent English review. In the meantime little of dividend or profit has attended granting these loans to foreign communities, and consequently many persons in England have been ruined, whilst others have had to diminish their expenditure to the narrowest limits. In the United States so great has been the increase of railroads, that 60 per cent, pays no dividend, and woollen factories have been enlarged in number and in size to an extent bringing the industry to a profitless condition, and leading many manufacturers to become bankrupt, and others to compromise with their creditors. Failure under excessive production must always be more disastrous in a country with protection laws than iu one with free trade legislation ; for protection means higher prices within than without the country being guided by such principles, and when the stocks increase beyond the local wants, they cannot be sent abroad for a market unattended with ruinous loss. The United States, with overstock of "woollen goods, does not export a pound’s worth in value in the year, suggesting the folly of legislation, which lias entailed so much misery on the working classes of the United States, a country with almost boundless resources,, and the present condition of which can be explained iu no other manner. We will furnish now the excess of exports over imports from England of woollen and worsted manufactures, and yarns in value. The average from 1867 to 1871 is £23,600,000. The average from 1872 to 1876 is £23,700,000. So that the average of the last five years exceeds but to a trifling extent the average of the prior five years. Whilst the average export of wool itself was for the first five years 108,000,0001b5. weight, and for the last five years 150,000,0001b5., or 42,000,0001b5. increase.

Eugland’s imports of foreign woollen manufactures and yarns was for the first five years an average of £4,300,000, and for the last five years ending with 1876, £5,500,000, the year 1876 showing nearly £1,000,000 more than any prior year ; and the same year, as we have already stated, showed such a sudden drop iu its export of similar goods. England retained for home use on the average of the first five years 150,000,0001b5. of wool, and for the last ending 1876, 190,000,0001b5. Thus England has sent out very little more of manufactured woollen goods and yarns during the last five years, but has imported of foreign on the average £5,500,000, or £1,200,000 increase; whilst in addition to the importation of foreign woollens she has retained 45,000,0001b5. more of wool on the average of tho last five years. England’s home trade is seen to better advantage than her export trade, at least in this article. With all these large loans, amounting to almost gifts, England only caused the woollen export trade of the last five years to exceed to the most trifling extent that of the prior period. What would the condition of her export trade to foreign porta have been had she not have been so lavish in furnishing so many millions to States for which she receives little if any return ? Had we the means of distinguishing her foreign and colonial trade, we suspect we

should show that even with this costly outlay of capital, England did not maintain her foreign woollen trade to the rate of that from 1867 to 1876. This is a point we have not seen discussed by Homo writers, though it may have beeu ; but if it has not, we call their attention to it. The remarkable fact is, that during tho last five years, England, through her profitless loans, has subsidised foreign States at least to the extent of £30,0110,000 annual! v, which has occasioned the appearance of her foreign commerce being prosperous, whilst with all this sacrifice she has not increased the value of her export in woollen goods and yarns. With the object of ■ showing our future prospects through England’s wool import, wo will fall back to the third sale of Inst year in Bondou, It commenced with low prices, and the decline continued for about two-thirds of the sale period; then the market took a sudden rise, which continued to the end of the sale, and the fourth sale not only maintained but added to the advance. We thought the first advance arose out of an increase in the price of wool in Boston and New York, the wool markets of the United States, which took place about the middle of June, 1876; but a belief evidently arose and was mainta-'ned to nearly the end of the year that a revival of the trade was undoubted. This opinion existed in disregard of tho Customs returns, showing an increased importation of 25,000,0001b5. of wool, besides nearly a million in value of woollen goods and yarns imported, in excess of 1375, with a drop in the export of 1876 of £4,600,000, exceeding the decline in the export of 1875 by nearly £3,000,000 value, and with an import of wool to tho continent of 22,000,0001ba. sent in 1876 from the River Plate in excess of the prior year. But when the first sale of this year opened on the 20th February, an unusually late period, allowing extra time for the consumption of the purchases made at tho third and fourth sales of last year, the sale was spiritless, and prices declined materially, showing that the manufacturers and speculators had found they had made a singular mistake in supposing they could reasonably expect an improvement in tho woollen trade. It will be unnecessary to more than mention the second and third sales of this year, as the particulars will be before the minds of the class most interested in them, and are considered far from satisfactory. Wo will merely remark that so thoroughly discouraging must circumstances have become to the buyers that even the Customs returns, showing a decline in the import of wool in the first nine months of this year of 10,000,0001b5. compared with 1876, and an increased export of 7,000,0001b5. over last year, with the reports of prolonged droughts in nearly all the countries from which wool is imported to England and to the continent. That these facts in favor of a future smaller supply seem to have had no effects on prices at the fourth sale, which has just terminated in London. The buyers were evidently looking at the present demand for manufactured goods, and wholly disregarding the immediate future supply of wool. A telegram dated 16th December gives the closing of the fourth sale, leaves 42,000 bales unsold. These, unless previously sold, will form tho first item in the first sale of 1873, and then must be added the wool arriving after the entry to the fourth sale was closed, and the end of the year, with the later arrivals despatched for the first sale this year. The four sales show that 1,016,000 bales have been offered, and 974,000 bales of them sold this year. This is tho largest supply ever sent from the Cape of Good Hope and Australasia, but a portion remaining unsold proves tho buyers not to have been eager purchasers. A statement published shows the California clips to have been 52,000,0001b5. for last year and 41,000,0001b5. for this ; and comparing last year’s second clip in California with that of this shows a loss of sheep by drought of 4,300,000 out of 13,000,000 of sheep, the number supposed to have been in that state, or 33 per cent. loss. Messrs. Goldsbrough's Melbourne circular of November the 28th last shows bales shipped from October 1 to November 28 ;

The second number of bales under 1876 formed part of the wool offered in London at the first sale. Under 1877, 81,234 hales shows the number of. bales which had left the port, and the 8000 those shipping on board of steamboats, and also assumed to be in time for the first sale in 1878. But it is not thought all will be Home in time for that sale ; besides which a considerable portion of these bales are going directly to manufacturers on the continent and in England, and will not appear in the sale. The papers report that the duty on wool in the United States will probably be repealed this session. This would be more than the merchants asked to have done. Their petition was for a fixed duty of 20 or 25 per cent, ad vr.lorem, instead of a very uncertain duty, depending on the opinion of experts, of from 18 to 114 per cent. Should the duty be reduced to this extent, it will be attended with a considerably increased demand for foreign wool. For even with the high and uncertain duties, the United States took from these c lonits and from the Cape direct importations, and through England indirectly in 187 S, 76,700 bales, and in 1876, 40,300 bales. We learn from the Economist that though the export generally from England has again declined in the first nine months of this year, still it has declined less than last year, and that there are other small indications of an improvement in business generally. The markets with the diminution of loans by England have annually been settling down to a mere self-dependent and healthy condition ; but the wool-producer in the meantime may look for improved prices through the action of the famine in India, and drought at the Cape of Good Hope, Rio Plate and Brazils, and in California, and doubtless some demand to arise through the war between the Russians and Turks.

1S7R. 1877. Decrease. J31.9S7 . . 108,300 23.588, or 81,254 8.000 per cent. 43,488, or 132,7-12 . . 80,254 . 33 per cent.