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The Daily News. TUESDAY, FEBRUARY 7, 1922. FINANCING INDUSTRY.

The scheme which, according to a recent cable message from London, has been arranged for giving an impetus to the woollen industry, should be of much interest to the overseas primary producers, and have a beneficial effect in restoring the value of wool to prices that, will yield at least a. profit to the producers. It is stated that, after negotiations with the Government, bankers, and others had proceeded for some months, a credit insurance scheme was arranged whereby many important woollen firms, who were hardly hit by the slump, would be enabled to spread the payment of their liabilities over a period of years, but as considerable capital was required to enable these firms to carry on, a further step was essential in order to obtain that capital. This has now been taken, and a scheme arranged whereby fifty ' subscribers will each furnish a. thousand pounds, and will also guarantee twenty thousand pounds, thus making a fund of over a million sterling wherewith to guarantee the credit of merchants for both, home and foreign trade, and thus provide work for the, woollen and worsted industries. The stimulation of industry, not only in the Empire. but also in stricken Europe, has been discussed for a long time past, yet without practical means being adopted for the purpose. The war taught many lessons, amongst others that so, long as it, lasted all the productive effort, was required for the prosecution of the struggle, the provision of the necessaries of life, and the output of goods exported in order to obtain munitions and necessaries in exchange from other countries. For productive purposes capital is essential, and it can only be provided as the result of work and saving. It must be remembered that during the war, in order to pay for war materials purchased from other countries, Britain not only had to borrow some thirteen hundred and fifty millions, but was obliged to part with a thousand millions’ worth of her foreign securities, the effect of which being that she will receive fifty \nillions less by way of interest, on those securities, and will also have to pay sixty-seven millions or more for interest on borrowed money, the only contra being such interest as the Allies and the Dominions will pay her for money lent to them. The millions spent on the war were mostly so much waste, leaving a legacy of‘taxation that presses hardly on the people, and crippling industry. As regards the subsequent depression, there are contributing causes which must be greatly deplored, inasmuch as some of them needlessly aggravated the position, while all of them had an adverse effect on the imperative duty of bridging the financial gulf created by the war, a work that could only be accomplished by greater production and leg's consumption. In the case of the British woollen industry, much of the depression which followed a period of exceptional activity after the close of the war was due to the effect of wild speculation during the feverish boom which the lure of high profits created, wherein fabulous prices were given for old mills by new companies, and the markets, after being very bare, became overstocked, as the result of which the raw material, largely held by the Imperial Government, became practically unsaleable. In addition to this the high cost of production was a serious factor m restricting sales of manufactured 4oods, because the purchasing power of the consumers materially decreased. Growers of wool in jhe Dominions have been severely

hit by the serious drop in prices. General conditions have now greatly improved; money is easier; wages have declined to a point at which manufacturing charges will permit of goods being sold at a price within the*reach of. the people. As no industry can be carried on without capital, and as foreign buyers of wool need easy terms of payment, the necessary capital and credit must, be provided if industry is to revive, these and other reasons the scheme ' that has been launched to overcome the existing drawbacks should be regarded with satisfaction. and tend to materially improve the prospects of the wool market, which has lately shown considerable improvement.

Permanent link to this item
Hononga pūmau ki tēnei tūemi

https://paperspast.natlib.govt.nz/newspapers/TDN19220207.2.21

Bibliographic details
Ngā taipitopito pukapuka

Taranaki Daily News, 7 February 1922, Page 4

Word count
Tapeke kupu
703

The Daily News. TUESDAY, FEBRUARY 7, 1922. FINANCING INDUSTRY. Taranaki Daily News, 7 February 1922, Page 4

The Daily News. TUESDAY, FEBRUARY 7, 1922. FINANCING INDUSTRY. Taranaki Daily News, 7 February 1922, Page 4

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