THE BRADFORD TRADE.

Rangitikei Advocate and Manawatu Argus, Volume XXXIV, Issue 9410, 2 April 1909, Page 2

THE BRADFORD TRADE.

ANNUAL REVIEW OF THE YORKSHIRE DAILY OBSERVER FOR 1908.. When writing just a year ago on the situation then presented, we quoted a saying very frequently heard on the Bradford Expfaange: “If the bank rate only comes down we shall go on .all right,” and we ventured the opinion that, this extreme optimism was scarcely justified by the facts. We pointed out that our shipments of wool manufactures to the various countries of the world had increased in six years by something like 50 per cent.—-they : were £n ; , 770.000 in 1901; they were £17,730,000 in 1907. , A proportion of this was ol course, due to the rise in prices, but the bulk of it, not less than 35 per-cent., was volume. And granted that five or six years ago the “cupboard was bare,’’ and that the world had been prospering and developing amazingly in the interim, it was still obvious that our ship.ments had increased at a greater rate than the world’s population or capacity to pay for them. And it was to’ be remembered that somewhat similar results could be Shown as regards cotton, iron and other manufactures. And, further, thougu we were still the biggest shippers in the world, other countries had been doing good export busines. Henceit was not surprising to read in regard to one market after another that they were choked with goods, that go-downs and warehouses were fall, and that in some quarters there was already some reckless slaughtering. 'A BAD YEAR, * This rather pessimistic induction from the known facts has been more than borne out by the common experience of the year which closes today. A worse year on the whole we have not had in the Bradford trade for a generation —not exopeting 1900, which was so disastrous in certain quarters. Every branch of the wool textile traiie, in every country, has felt the squeeze more or iless in the year that is now passing away. And, of course, the experience has been by no means confined to the wool trade —every industry has suffered, and from the same original cause. It may be worth while, 1 therefore, while the events are still fresh in our memories that we should recall exactly what has happened in order that, we may understand the lesson, if there be one for us. That there are periods of high prices and * periods of low prices, and that these alternate with some show of regularity, everybody knows. Bnt the causes of the rise and fall in prices are still shrouded in much obscurity. So little undrestood, at least, are these causes, that the cleverest and most experienced business-men cannot predict the movement with any degree of certainty. Indeed, it is a joke which has become accepted almost as an axiom in the wool trade, that a man should get all the information he possibly can, that he should carefully weigh up the pros and cons, and then,; having formed his judgment, should straightway go and do exactly the opposite. In the long run, of course, it is recognised that the law of supply and demand does work. Gradually increased supplies of any commodity in large consumption', produced over a period bf years, do unquestionably bring down the price of that commodity. For many years prior to 1896 this was practically the case with wool. The world’s wool production had grown and was growing by leaps and .bounds, and over many years the price of wool, with occasional fluctuations, went steadily down. Bnt there are so many other factors that tend to influence th 6 market that, except over a long period of years, it is almost impossible to say exactly how supply and demand have affected prices. Indeed, sometimes experience almost suggests that the so-called law is no law at all. For even in the wool trade since 1895 have we not had years of increasing supplies, and yet with rising prices;, x REGENT EXPERIENCES.

So difficult is it to formulate any simple and easily comprehended principle on this subject that the average man often takes refuge in beliefs that are not at all. Because for so 16ng prices have been high, now they must oome down: this sorely is not argument. It is based of course upon experience; but it is a superstitious rather than a reasoned faith; and yet in the autumn of 1906 many men in the wool trade acted upon it and practically they had no other reason for so acting, save, of course, the wish which was father to the thought. They wanted , prices down, they thought they had been high long enough—and they burned their fingers. Remembering this, in January, 1908, was there any , recognised reason why prices should tumble down within the next six months as they did? None whatever. What happened in America was that men lost faith in one another. There had been exposures of shady, acatfdalous “deals” in high places of railway and trust finance. If in such high places things were unsound, what else could be sound? Credit was destroyed. Wherever possibld money was withdrawn from circulation and hoarded. The best firms found it impossible to get money. Even railways paying steady dividends could only pay their hands with a promise to pay. Hence stocks of produce and manufactured goods were thrust upon an unwilling market for realisation. In the commerce of the world no man Irveth unto himself. The sins of one nation inflict an injury on all the others. This panic spread first through America, and unquestionably revealed a good deal of unsoundness there. But although the panic was not followed by a similar panic in Europe, the monetary stringency and the downward im : J pulse given to prices on the other side of the Atlantic were felt on this side, too—perhaps more acutely in GermanvLthan in our own country. #ALL IN PRIOniS.

• When prices have been placed upon an inclined plane, greased by the fears of spme and the desires of others they have a way of acquiring momentum so that no one can tell exactly where or when they may stop. These landslides are not controllable. And in the first five months of this year she value of everything fell so tremendously that everybody must have lost and some very heavily. And yet the check to the downward movement 'oame at a moment when the sky was dark enough —for May was the worst month in the year—and there was little to tempt the speculator. Perhaps an incident may be related ' here which has a moral. A leader

in the trade—now venerable though still virile —is reported to have made his sons and partners against their will boy 40’s tops heavily when they were at a shilling—eorpewhere aoont last February. They went down to eigbtpenoe, and then the firm again bought heavily. These tops to-day, averaging tenpenoe or under, .are very good value. It is indeed, most improbable that stay buyer has done much better than that—it is never the man 1 who waits until the actual bottom is reached who scoops in everything. And what gave the tarn to prices was not experience, but faith. Some men with courage, like this man, bought wool because the price was low in the faith that it would be t wanted. It may be speculation, but it has,the true ring of foresight about it. And there is, no question that since the turn in May we have had a gradual and growing return of Business baa increased, and it is seen that present prices though not sojlow as they have been are not so high as to stand in. the wayoftrade. Indeed the recovery of values has ‘been out of all proportion greater than the apparent increase in the volume of trade, and in that sense cannot be said to be due to the improved demand. FUTURE PROSPECTS.

What, then, about the future; will prices slump again? After an experience such as we have just gone through, the trade is naturally nervous. Confidence "is a plant of slow growth, and it is quite possible that there may be fluctuations in prices before they are again as steady as they were for some years. But, apart from political disturbances, there is no prospect of another slump snob as occurred last year. “History repeats!tself” ; yes, but not at each short intervals. It may as well be admitted that 8d for 40’s in May, 1908, was every bit as much a freak as was 7%d In December, 1903. We have not accumulated supplies in spite of a year of bad trade, during which for a number of weeks short time was the rule, and for the whole of which consumption' has been restricted. It was not excessive supplies but panic that knocked the bottom ont of prices this year. There is, perhaps, no scarcity as yet, and there may be none felt for a year or two. For we are still in troubled waters. The spending power of the people here and in other countries is not what it was, nor will it be for some time to oome. In some markets—notably the Far East—there are still heavy stocks of goods to be liquidated, and we ought to go slowly for a while and not endeavour to push more on to the markets of the world than they can assimilate. Bat when all this is remembered, there is no room for pessimism. The world is going on; it is growing all the time. America hart a much more terrible experience than we have had, and already the outlook there is comparatively bright. The Harvest in the States and in Canada has been •abundant, and the price more profit able to the grower. The cotton crop is a hamper, and again the price is satisfactory. Great economies have been effected in industrial concerns while on the other hand great projects have been held back. Presently these will be taken in hand, and the world will feel the movement Then it will be realised that the one article of world-wide consumption the production of which is not keep? ing. pace with the world’s requirements is wool.