EMPIRE WOOL INDUSTRY

Press, Volume LXXVII, Issue 23349, 7 June 1941, Page 12

EMPIRE WOOL INDUSTRY

POSITION IN WAR TIME WORK OF SECRETARIAT (F.0.0.C.) LONDON, May 5. The position of the Empire wool industry in, war time and possible trends after the war were discussed by Mr A. F. Du Plessis, chairman of the International Wool Secretariat, in an address to the Royal Society of Arts Progress of wool shipments from the Dominions to Britain until recently had been very satisfactory, but it was expected that the intensification of sea warfare and the necessity to divert shipping to the Near East for strategic reasons would adversely affect future shipments. “These considerations, as well as the need for releasing the largest possible amount of labour and material for military and export requirements have led the Wool Control to make a further severe cut in the raw wool rations available for the home civilian market,’’ said Mr Du Plessis. "In addition, supplies of wool textiles to retailers in the home market have now been limited to 30 per cent, of quantities supplied last year; that is hardly more than 20 per cent, of average pre-war home consumption. This severe curtailment of home civilian, supplies is coupled with the industry’s co-operation with the Board of Trade's scheme for concentrating production in a number of ‘nucleus’ firms and closing down all others, thus avoiding large-scale part-time working in the industry. “The closing of continental markets precluded operations there, and the restriction of the home market in Britain through these measures of rationing and limitations of supplies, in order also to divert production to war supplies, would have rendered the work of the secretariat abortive had it not befen for the fact that its objective could still be achieved by concentrating on the promotion of exports of wool texliles. Consequently it concentrated on this.

“The promotion of exports is a very vital matter in helping to finance the war, and the British Government has adopted active measures to organise industry to this end. Quite recently the wool manufacturing industry has been organised in this way. A levy on wool has been imposed and the National Wool Textile Export Corporation has been instituted to administer the fund so raised.

“The objects of this corporation being absolutely identical with the work which the secretariat has already been engaged upon since war broke out. it is only natural that the two bpdies sought ways and means to co-ordinate their work and thus to increase its effectiveness. It is a matter of profound satisfaction that absolute agreement has been reached, and a working basis of active co-ooeration is at present being completed. Loss of Continental Market “The war-time difficulties of the British wool textile trade are sufficiently illustrated by the fact that the continental countries now cut off from all overseas supplies used to consume more than 40 per cent, of total British wool textile exports and a still larger percentage of exports of tops 'and yarns, “The concerted export drive, including the promotion and publicity campaign, is responsible for the fact that, in spite of the cessation of practically all trade with Europe, total quantities of British wool textiles exported to the few remaining overseas markets in 1940 were hardly below the 1939 level. Yet. in spite of this maintenance and even a possible increase of exports and the large calls made upon wool supplies for military purposes, stocks of wool are accumulating in the countries of production. “In the case of the Dominions, where all the wool has been bought by the British Government for the duration and one year thereafter, there is no immediate crisis. In. the case of the South American wool-producing countries, however, the position is precarious. Being cut off from the European countries which were among the most important consumers of their raw materials, they now have to look towards Britain and the United States, and their ability to consume our goods depends on the extent to which we can consume theirs. “The United States are fully aware of the necessity of buying up the South American surpluses, and huge sums have already been devoted to this purpose. It may well be that such co-operation enforced by present circumstances may turn out to be the nucleus for a much more comprehensive scheme of economic co-opera-tion of all raw material producers in the British Commonwealth of Nations and in the Americas.

“Another important step in this direction is the recent decision to build up a reserve of 250,000,0C01b of Australian wool in the United States. The officially declared purpose of establishing this reserve is to provide ‘against a possible emergency shortage of wool supplies in the United States.’ In view of the rapidly expanding American armament programme and the unprecedented increase in United States consumption of clothing wool during recent months, the United States Government may well come to draw more and more extensively on this reserve (which will always be replaced, maintaining the total of 250,000,0001b1.

"But over and above these present effects, the fact that at the end of the war there will be a wool reserve of 250,000,0001b in the United States may well have a far-reaching influence on the efforts to solve the post-war problems of wool marketing. If administered wisely, it should be some safeguard against a repetition of the disastrous slump after the last war. In fact, this reserve might possibly become a nucleus for a comprehensive ‘buffer pool’ scheme along the lines of the Exchange Equalisation Fund and based on Anglo-American co-opera-tion.

"The growing understanding of marketing problems in primary countries and the reasonable attitude of the majority of wool-growers who prefer a secure modest profit to speculative gains, would certainly augment the chances of success of any such scheme.

“The present unsettled state of world affairs makes it impossible and inopportune to work out clear-cut plans for the post-war world; all that can be done at the moment is to watch developments closely and with an eye to their possible post-war implications. “Yet, though detailed plans must be left to the future, there is a growing conviction that the economic reconstruction of the post-war world cannot mean a mere repetition of the erratic pre-war' conditions, and that ways and means must be found to minimise the excessive fluctuations of raw material prices which have caused so much distress not only to the primary producers themselves, but also to all those dependent on their prosperity as well as to all those engaged in industry and commerce, whose calculations depend on raw material prices—in short, the entire economic structure of the world.”