WORLD WOOL TRADE

Press, Volume LXXIV, Issue 22343, 5 March 1938, Page 13

WORLD WOOL TRADE

REDUCED INDUSTRIAL ACTIVITY Craou oua ow» coreesposdwit.) LONDON, February 2. Activity in the industrial section of the world wool trade during December and January is discussed in the latest Intelligence Notes issued by the Imperial Economic Committee. The spurt which occurred in the middle of December, concurrent witn the rise in wool prices, was not maintained, it is stated. The holiday penod, followed by the annual stock-taking, reduced operations, and January opened with the wool market in a somewhat uncertain position. The continuance of industrial recession in the United States, and the new political crisis Jh France, were both factors striking at the confidence of the trade. I Later in January, however, some imI provement in the wool market was reported, but business continued in small volume. . The average monthly index of top production in the United Kingdom, France Belgium, Poland, and Hungary during 1937 was 88.9, as compared with 97.4 in 1936 and 100 in 1935. "In the United Kingdom, unemployment again increased sharply in December, particularly in the carpet section," the notes state. "Business in tops and yarns was very poor early in January, but as wool prices became stabilised confidence returned. Export business in December, however, remained well below that of December, 1936. New business in piece goods has been held back by uncertainty as to the trend of values. In contrast to the position in tops and yarn, exports of tissues in 19«7 (68,800,0001 b) were nearly 3,000,0001 b above those in 1936. "Wool consumption in the United States fell to a record low level in November, and stocks of wool have accumulated sharply. Stocks of finished goods are also fairly large, and activity of the mills at the end of December was only about 40 per cent, of capacity. Activity in France was seasonally quiet during .the first week in January, and failed to show the usual advance later owing to the political crisis. Business was in limited volume on home account, the greater part of the contracts booked being in export orders. A further wage increase has been generally approved by the textile industry. Prices have remained firm, however. "The activity of the German wool industry was satisfactory in the last quarter of 1937.' except where the fall in wool prices hampered export trade. The trade agreement with Argentina has been renewed for two years and

, provides for increased wool exports to ; Germany. It is announced in Japan s that the consumption of wool tops is I to be limited to 5,000,0001 b a month s in January, February, and March. "Combing activity is fairly good in ; Belgium, but spinners (particularly ) woollen spinners) and weavers are [ working at very reduced rates. In Italy consumption of all fibres by the wool industry continues to decline. Exports of tissues also showed - a further decline in November. Both output and employment have declined in Czechoslovakia, following the fall in raw material prices overseas, and t stocks have accumulated. Activity in the Hungarian worsted spinning and 1 weaving industries has been particu- . larly depressed, and business generi ally is slack." ; PROPOSED EMBARGO EXPORT OF MERINOS t The following motion, submitted ■ by Coonabarabran, Mallawa, and . Tamworth branches of the New . South Wales Graziers' Association, will be discussed at the annual con- ' ference to be held in Sydney this month:—"That the Federal Govern- [ ment ask the New Zealand Government to prohibit the export of merino breeding sheep, and, failing its doing so, the embargo be applied to New Zealand." Dubbo district council will submit: "That a committee be appointed to investigate the effect that the embargo on the export of stud merino sheep is having on the wool industry of other countries, as well as our own." THE POTATO BLIGHT To the Agricultural Editor Sir, —I read with interest your remarks in "The Press" each Saturday under the heading "Rural Rides." Regarding your remarks on Saturday, February 26, in discussing prospects of the potato crop, I think you are hardly right as far as South Canterbury is concerned. Crops have blackened off as you say, but they are rotting very badly too. I dig for the local market, besides supplying all the branches of a local institution, and can say that my potatoes (Aucklander Short Top) are half-rotten, and they have had every chance, being well ridged up and grown on a nice slope. I have made inquiries over a fairly large circuit, and all are complaining about the same thing. I am afraid by. the time general digging comes on there will be some disappointments. At the present time a lot of potatoes are just beginning to go; in fact, I have to bag them and repick over in about four days, otherwise there would be about a dozen potatoes well rotten that I had not noticed when bagging in the first place. That dozen, potatoes, I should say, is to a sugar bag. If the weather picks up it might help, but after a week's fine weather it rained heavily last night, and-to-day it is raining again.— Yours, etc., GROWER. Timaru, March 1. TRADE RECESSION IN AMERICA VARIOUS CAUSES ASCRIBED The marked recession in the recovery of the United States during the last quarter of 1937 is attributed to different causes, according to the political beliefs, nnd perhaps also according to the temperament of the observer. Official circles in Washington charge a minority in industry, and many newspapers with instigating and fostering a campaign of fear. It is declared that the object of the campaign is to discredit the Administration, to disrupt Labour organisations, and to reduce wages. In other official quarters the depression is attributed to a stiff increase in the price of manufactured products, the while the values of primary commodities have been falling. Another explanation —and it is obviously non-offlcial — blames the deflationary policy of the Federal Reserve, System in increasing the reserve requirements of the member banks and sterilising gold imports. The deflationary policy has now been reversed. In the autumn the stock markets collapsed, and almost simultaneously the heavy industries collapsed. Though the indications were against a collapse happening, for in the summer the inventories, which we would call merchandise stocks, were so low that apprehensions were expressed that the autumn would see a sellers' market;

yet in September Wall Street found itself in a panic, which it could not explain, and by October industry was in a panic, which it in turn could not explain, except in terms of the stock market. The New York correspondent of the "Economist" considers that the explanation is fear leading to panic, and it is interesting to compare his account with that of our correspondent, published in our financial supplement recently. Since the end of the summer the correspondent of the "Economist" points out, "fear has been an increasing factor in the course of events. It has been quite different from what is termed 'lack of confidence.' No one can understand the phenomenon of the American economylast autumn unless he is willing to recognise the part thus played by panic. Fear is not confined to speculators in W~:i Street, or to magnates in industry. It runs through the whole industry—or at least through that fraction of the population represented by your correspondent's contact. The worker is afraid of his employer, and the employer of his workmen. The capitalist is afraid not only .of the value of his investments, but also of individual persecution. The newspapers are afraid of censorship. It is characteristic of panic that the cause need not be valid to be effective, and one may describe this state of mind ate a mental illness."