A CRISIS IN WOOL.

Press, Volume LVII, Issue 10803, 2 November 1900, Page 4

A CRISIS IN WOOL.

AN~ AVALANCHE OF CONTINENTAL FAILURES.

(TKOU OT7B SPECIAL COJffiESFOJTDEXT.) BRADFORD, September 7. If wool had not previously fallen upon evil days, the developments of tEe past week have certainly brought the .shimp to a crisis, and the bottom has now been completely knocked out of prices. It is the old story over again. When an attempt is made to bolster up and to corner the market in any raw commodity, and when things get beyond their legitimate value, the movement is certain to outdo itself, and sooner or later somebody has to suffer seriously from the after effects which every boom is certain to produce. Readers wiU have been informed of the tremendous failures which have taken place at the Bradford of France, namely Roubaix, where in all seventeen very big wool houses have been called upon to meet their creditors on account of over speculation in futures, and their inability to meet their calls. When the news reached Bradford and also Coleman street, London, it went through the whole trad« like aa electric shock, everybody at the time quaking with fear. "Could it be possible," everybody said, ''that at last the tremendous slump was to be associated with lieavy failures? for if that was to bs so it would certainly have a very disastrous effect upon the wool trade not simply of this country but the whole world." As men assembled on Bradford Exchange, and saw the telegrams posted it lowered their feelings to zero, and made all think very gravely that the situation had indeed become very acute. Three failures, with liabilities amounting to 15.000,000 francs, or, practically speaking, £552,000. was first announced, this being sufficient to stagger anybody. Little knotty groups stood here α-nd there on the 'Change low discussing eagerly the situation, but nobody could offer any further light upon the matter than that contained in the telegram. With the lapse of time and the business connections of the first three failures, soon made it imperative f«r other Roubaix firms to call their creditors together, when by last Friday nig-ht no less than thirteen houses had made an assignment, and by Monday that number had been increased to seventeen. wh«n, coupled with one of no small order in Bradford itself, brings up the total liabilities to about £3.500,000. There is no question of a doubt thoit as matters stand to-day it seems clear that. Continental bankers are tired of helping their clients to hold on to an article which ahows not the least likelihood for some inconsiderable time to realise within 50 per cent, of what it cost. They consequently decline to be made the tool of circumstances and to find money for pure speculators who wish to go in at what seems to be comparatively low prices, as they hare also declined to find capital for the usual quantities of Wool for trade purposes without having ample security. Ifc need hardly be said! that the situation has bean rendered acute in the extreme, and difficulties now surround a market which before was painfully bad. Attending business last market day I was more struck than otherwise with the attendance of a few &4oes which had not put in appearance on 'Change since the close of the last series of London wool sales. Chief antong its numbers was a well-known London wool brofcar, and one having a close connection not simply with Bradford, but also with Continental and textile ! centres. In conversation he said —"The worst about these heavy failures in such times as tHuose is, ttiut bad influence | is so very contagious, though I think Bradford will generally 'be able to out-weather the storm, for the only difficulties that I«ople here will have to tackle is the difference in value betwixt what their stocks have cost and , what they are worth to-day." "But can you give us any further information about the Continental failures?" I asked. "Well." be said sensibly, "before I left London I had an interview" with the largest sellers of wool in Basinghall street who had just received word from Rtrubaix tliat really speaking four firms had failed on the Tuesday, and as a consequence three more were so'interested that they too had been compelled to make an assignment, thus bringing the number up to six or seven, but since then the number has been more than doubled. Be that as it may, the circumstances are bad, but as to how far they will materially affect the trade depends absolutely on the question as to whether these houses have been pure speculators and dealers only in paper, buying and selling forward, and then paying or receiving the difference on given 'settling' days, for if the latter the effect will only be to show forth the evil of the system,"and to render it more reprehensible still in the eyes of all the wool world." "But what are likely to be the assets of all these firms who have assigned, and is there anything: of a real tangible nature, and which ie likely to materially influence the market there or even here by forced realisations?" "Ah," he said, "it is exactly here that is the crux of the whole question. I am told on Roubaix authority that in the case of two or three important houses, that it is absolutely because the bank has refused to take the step they have, their position being brought about absolutely by holding heavy stocks of very dearly purchased wool in Australia and London, and which on account, of their not being able to successfully liquidate, and drafts coming due, they have found themselves with no other alternative than meeting their creditors. Now in this case there will be considerable weights of wool and tops to be sold, and the question naturally arises, in what centre are these tops going to be sold? The probability is that the raw wool will be fonvarded to London, if some fair quantities are not there already, for the sales next month, while I only fear that the tops will be dumped down on the Bradford market and sold here for what they can get. In that case the market liere is certain to he adversely affected, and possibly it will be a while yet before there will l>e any tiling better doing than what lately Itas been done." "And how do you find trade among your Bradford clients?" I ventured to ask. "Trade; there is no trade, or at least the trifle better feeling that was manifest for the past few weeks has now been absolutely killed, and things are simply anywhere between the 'devil and the deep sea.' The fact is, it will take several weeks now for thi? market to pull itself together, for these failures have started the feeling in every-

body of extreme cautiousness and fear lest they sell to some body who is shaky. It ia my opinion that men will now wait to see what London's verdict will be before- there is any material move forward." THE EFFECT OK THE BRADFORD MARKET. It must be confessed that the Bradford market to-day is a difficult one to thoroughly understand; other centres too defying a clear diagnosis of prevailing conditions. What has happened in Roubaix and at Antwerp, where futures last week fell over 3d per lb, has caused many to feed alarmed aa to the immediate future for merinos, and there are those on Bradford Exchange who freely express the opinion that, sixties tops wifll drop as low as 18d. The majority of people, however, have kept their heads per--1 fectly cool, and taking the market as a whole there has so far been nothing of the nature of a panic, nor likely to be. To say that values, however, maintain their position would be misleading, for, as a natural consequence, there are undoubted signs of further weakness, and it is to-day very certain that the lowest point has not yet been touched. As could only be expected, transactions have been put down to the vanishing point, though one or two affirmed they could sell a 64's top at 19|d, but even at that figure nobody is disposed to speculate, or to take more than a few sheets. Staplers in the Yorkshire market are now beginning to look forward to next London sake, and it is certain tltat the pointed remarks we have repeatedly made in this issue in opposition to the withdrawal of wool, and the carrying it forward pale after sale, will be justified in every particular, and that there is nothing for it but for holders of material to face another material fall. The market to-day is altogether an abnormal one, consequently it is not an easy matter to measure tho market by any former standards, nor is it by any means an easy task to clear away the veil of haze that today envelopes the market, and discern the exact course that events are likely to pursue. It is felt that extreme cautiousness and a waiting attitude is by far the best process and order that can be adopted, and this is evidently the line of policy for the next two or tliree weeks. We think honestly that there are problems awaiting solution, and questions to be answered before the wool market can assume a normal condition, and this process must necessarily be a slow one. The whole business world seems to us to be facing a readjustment of values, and seeking for some amelioration of the strained conditions which have been prevailing for tlte past eighteen months, and which in some respects gets more acute than otherwise. The falling off in the volume of the business transacted during the past several months has not alone been noticeable in Bradford, but in every other manufacturing centre the wide world over, and commodity prices, which have certainly been forced up .beyond reason, can well do with receding, for not until a firm bottom has been established and a good working basis been reached, will the course of the business world be slow and cautious. The way matters have affected Bradford simply proclaim to the wide world the superior strength of the market in Worstedopolis over fhese on the Continent, where so much business has been done on such a fictitious basis, and where quotations to-day are considerably below those current in Bradford. Were it not that this crisis abroad has been the means of sending down values a little further, these failures would have been mors welcome than otherwise, for it is now certain tlwit- the commercial atmosphere will be considerably improved, and possibly all markets will emerge from the experience better prepared to do business on more sound and safe lines. So far as Bradford itself is concerned things ars fully better than one could have expected. There has been one important failure, that of Messrs (t. Root and Co., late Root, Benn and Co., with liabilities amounting to £73,000, but some business has been done even in merinos, prices having eased about a penny. A super 60's top can now be bought at 19d to 19id. a 64's quality at 19j|d, but nobody is pressing business. Crossbreds are the life of th-o market, a fair consumptive business being done, but prices fire rather easier, and a good prepared top can be bought freely at 10d. On the whole the market may be said to be resting and looking at the difficult situation sensibly, and awaiting further developments.