"IN THE LAP OF THE GODS.”

Taranaki Daily News, 26 March 1921, Page 9

"IN THE LAP OF THE GODS.”

FUTURE OF OUR MARKETS. WOOL AT ITS LOWEST EBB. PRESENT POSITION REVIEWED. The position is serious, but we wilj weather the storm all right. Everybody will have to settle down to work. and. not play so much. The depression will settle a terrible lot of unrest. When necessity takes charge it does not argue—people just have to fall into line. Necessity is on the box with the whip and reins just now, and it is no use talking back. It is just a question of getting right down to bedrock. The foregoing statement was made t° a Dominion reporter by an authority in New Zealand commercial circles, who occupies an important position in a large trading concern intimately connected with the producers of the country. Touching wool he said that the most reassuring thjng that could be said was that the market was so bad that it could not get worse. The next change in wool must be an improvement. TO STIMULATE CONSUMPTION. Summarising the present position, he said that the collapse of the wool market was at the back of the whole of the depression New Zealand was at present experiencing. “We have,” he said, “got about 2,000,000 bales more wool in the world than we ought to have. On top of that the world’s consumption has gone off in the face of the high prices of stuff and we have got now to stimulate consumption, not only to catch up with production, but to use up those 2,600,060 bales. Of course, wool has got now as low as it ever can get. If it got any lower it would be hardly worth while carting it off the stations. That is the point. Stimulate consumption ; but how long it wil take nobody knows. “Meat, of course, is down, but there is a bigger slump in meat in New Zealand than at Home. It lias been caused by the shipping congestion, and we are n< getting the stuff away. All exporters are loaded up with meat, and the date of shipment of anything killed now is so uncertain that nobody is going to buy it. A great deal of the financial trouble in this country to-day is caused by the shipping congestion, CAUSES LEADING UP TO DEPRESSION. “In a normal year we have to export about six- million pounds worth of stuff more than we import in order to square our interest obligations and the like. Well, in 19’19-20 we imported approximately £14,000,000 more, than we exported. That put us £20,000,000 wrong. On top of that has come the delay in getting payment for our stuff. Instead of getting paid as promptly as we have always in the past, we are three to four months beind. We are in the position of people always in the habit of selling for cash, who suddenly find that they can only sell on three and four months’ bills. It does not matter how good the bills are, it embarrasses a man’s finances. In pre-war days our wool was sold as it came into the stores, or very soon after, and immediately went from the stores into the ships waiting to take it, and drafts were passed on London through the banks against shipping documents, to pay for the wool ; and we thus got cash for it. ' “Butter and cheese came straight -down from the factories to the ships, and the shipping documents and drafts were passed through the banks on the Home buyers, and practically the same day the factories were paid. Meat was * also shipped very shortly after it was frozen, and the cash was obtainable by drafts on London buyers in the same way; so that practically all our stuff was going out on a cash basis. When the commandeer came on, and we sold to the British Government, the latter paid us for our wool immediately after it was valued. It paid us for our butter and cheese when it came info the cool stores and it paid us a 75 per cent advance against our meat as it was frozen, and the balance when shipped. So there again we got cash. We have always got cash up to this year. £10,000,000 OF PRODUCTS UNSHIPPED. “This year, apart from the reduction in price, there is only about a quarter of our wool sold yet, whereas ordinarily at this time of the year it is nearly all sold. Owing to the shipping congestion we have got nearly 5,000,000 carcases of meat in our works which should be away and paid for. Our butter has certainly been paid for because it‘ was bought by the Imperial Government up to March 31, and got preference in shipment, but we have got approximately £3,000,000 worth of cheese in store that should have been shipped and phid for by this time. “Taking it all round, I. suppose we have got not less than £10,000,000 of stuff unshipped and not paid for, which in any other year would have been con. verted into cash by this time. Looking to the future, in the ordinary course of events our production for the year will soon be falling oil’. The dairying season will shortly end: the wool clip has now been taken off ; the killing of meat ends z during the winter and shipping should then he able to overhaul the position and give us a clearance. It is thus hoped that by the end of the year the decks will be entirely • clear—that will mean that we have got cash for all our stuff, and the worst will be over. f POSITION IN THE COUNTRY. “As to the future of the markets they are in the lap of the gods. The only market that has really collapsed is wool and minor products—tallow, hides, and skins. Cheese at Home is selling wonderfully well, and butter, though not at a tremendously high price, is still selling at a good figure. Meat at Home is still bringing quite a fair price.” Continuing, he stated that it was necessary in connection with shipping to get back not only to reasonable charges, but to regular services. The effect of the slump was, he added, very severe in all sheep districts. Not only were the farmers getting very little for their wool, but they were stuck up with their live stock. The wool producer would have to cut down expenses. While he did not wish to strike an a--larmist note, he stated that a good many sheep-farmers who had bought places at high figures on. easy terms would not be able to cary on much longer, and their farmb would probably fall back on to those who sold them. The most hopeful thing in the immediate future would be the clearance of our

products. The most reassuring thing about wool was that it had fallen so low that the next change must be an improvement. After this year the country would be adjusted to the new conditions. One point about wool was. that when it was dear the manufacturers always adulterated it with a lot of old rags and the like. The dearer wool was the greater run there was on adulterants. Once wool became cheap it was not so profitable to use adulterants, and that meant there would be a bigger consumption of wool.