OUR YORKSHIRE LETTER.

Dominion, Volume 1, Issue 133, 28 February 1908, Page 10

OUR YORKSHIRE LETTER.

THE FINANCIAL ASPECT OF THE WOOL TRADE. ■ • . (fbom our special correspondent . }.- ' Bradford, January 10. It is coriimon knowledge to every careful reader of the current-news that -wool values have seriously fallen since the middle of last October, involving rather serious loss to one or two sections of the trade. It-is well to state, at the outset that it is now a common practice for the largest users'of the raw material, including both Home, Continental,: and American manufacturers, to go out. to Australia, New Zealand, and Buenos Ayres about the month of; August to be ready for the opening of the season's sales. ' HIGH' PBICES AND WHAT FOLLOWED. It will be remembered that at the. fifth series of London sales, which - began. last September 24, merino wools took .a sudden jump, amounting for good combing'produce'as'high'as'2d.' per lb. This followed a steadily .advancing market from the very beginning of 1907, consequently ,- at the end of the September-October series prices for fine wools looked rather' dangerous. The trade. was fully warned at the time that' in view of adequate' supplies that current prices- could not be expected to last; and yet for all that • niany; Home and Continental buyers rushed in headlong and bought heavily at extremo prices .early in.tho season. Just as showing the course of events, the lowing table 6ets out the full courso of "tops,' i.e., combed wool in Bradford since the highest point was touched:— . 'Price on Price on , Oct. IS. Dec. 30. ." ' d. d. 70's colonial tops ... 31 27 GO's colonial tops (super) 29 25i ! 50's colonial tops ... 22 18.V 40's colonial tops ... 17 12i ... 3G's colonial tops ... 151 12"

} EXPERIENCES AT . BRADFORD. The above facts mean that , considerable losses have now to bo faced, and with-comparative dear money the financial aspect of matters is appealing very poignantly to many. The question arises, How far has Bradford been hit? The natural conclusion one,arrives at by a study of the above facts is that handlers pf crossbreds have' been heavily hit, and that is so. AH last. year the strong, fibred' wools, never assumed the healthy appearanco that merinos did, and as considerable 'stocks were held, corresponding losses have to be faced.. It is felt locally that those dealing in merino wools have not suffered so severely as those handling crossbreds.; The actual trouble: will bo confined to importers and' topmakers, spinners and manufacturers not being anything liko so severely aft'ected. That rise last. October upset the whole apple cart of the majo-, rity of users, especially spinners ind manufacturers. At the time many were ready fcr placing heavy ccntracts fcr "future" delivery, but that rise was felt.te be dictated sp much by special circumstances as te be unnatural, consequently many users refused te go forward.. Just when, they were ,again in a temper, for contracting forward news' came from Australia that things were easing, this having the effect of causing the majority to again put off buying. On the other hand, it is to be feared that importers who went out to Australia have fallen into the trap of purchasing in the hopo. that things would , keep up, and. where no 'futures' were sold forward at the .then ruling price the losses are certain to be' consider-' able. It is a very common practice in Bradrl from August to December for importers to sell forward" tops at' the then ruling price, and those who did-that l will-como Put fairly well, those who simply bought wool on "spec" are bound to be severely hit. It is here worthy of remark that "futures" have been sold forward in Bradford as low as 2od. for, a super GO's ,top, and such foolish sales cannot ■but result in a loss. 'GERMAN BUYERS HARD HIT.

German buyers havo led tho van in colonial markets, and they must be badlv hit. It is common' knowledge that financial difficulties have been very pronounced, and Bradford, which does a huge trade in yarns and tops, has had- during the past four mqnths a very uneasy time. As far back as last July, September, and October the stringency was keenly felt-and remittances much ■ delayed, but during the past month considerable improvement has been noted in this particular. Tho failures have been unimportant in : the Fatherland, though one big shipping house in Bradford with a very large Continental connection suspended payment in November, which for tho time being seriously upset this market. It shows how easily local financial institutions will give credit when one bank allowed an overdraft of <£Go,oilo and another .£50,000, the latter having practically no securitv; German purchases-m Australia have been heavy, and nobody need, yet be surprised to hear tell of wool being re-ofl'cral for salo in Bradford or transhipped to.London;'" ( COMING SALES. . Naturally banks have been and still are of a very enquiring turn of mind. < They realise that thev - have very much at stake, and as wool credits in the past havo -been very cheap they naturally, are looking on with considerable concern. So far there has been no difficulty in financing arrivals, but tho real tug-of-war will bo felt in February, March, and April, when \yool will be pouring in in tremendous quantities. Of coursc, there has been during December many forced sales, ono of the largest houses in Bradford surprising everybody with throwing overboard mostly crossbred tops and selling same for cash at ridiculous prices. The future of wool values is .pre-eminently a financial one, coupled with tho relurr of renewed confidence. During the past week things havo assumed a much more satisfactory attitude, and values for tops have risen about a penny per lb. from tho lowest point, but it is too early yet to say that' the crisis is over. .

FINANCIAL EFFECTS. Considerable relief has been felt- during the last week at tho lowering of the bank rate rom 7 to 6 per cent., and while i am writing

this it is not unlikely that the Bank of England directors will bring it down to 5 per cent. In that case things are assuming a more normal attitude, and in consequence a decided improvement is already observable, while more confidence is expressed over the future. Everybody rejoices that this in so, for a fortnight back a very depressed feeling possessed the entire trade. I can't say that the announcement that the American Woollen Company closing its huge mills is a "bull" factor, but tho directors say they have done this in the best interests of the trade, and to prevent a serious fall, which'would be inevitable if over production became general. This limiting of consumption of wool rather means that stocks arc likely to accumulate, alid this is bound to make itself felt in lessened competition in every selling market in the world. The money stringency in America is undoubtedly ef a very serious nature and more widespread than is generally supposed, and it is going to take some time before its dire effects have passed "v""?' England thero has never been any shortage of gold, only,commercial men with a < per cent, bank rate arc bound in their own. mtercsis to seek outside assistance as little as possible, but thanks to the level-headed character of the managers and directors of Bradford banking institutions, they have never charged their clients more than 5 per cent. Ilio worst is undoubtedly passed, but at the same tunc I don't think thc.ro is much likcliness ot wool values materially improving in tace ot very large supplies for some months to come, but the bottom has been touched.

A TURN FOR, THE BETTER. With the opening of the year a marked change comes over the wool situation, and considerable business has been done. There is 110 j-9- improvement in monetary conditions has been a prime factor in bringing about a corresponding development in wool circles, and the market wears a totally different aspect to what it did before the lioii-daj-s. whether or no it will be permanent remains to be seen, but for all that the outlook has vastly unproved, and good business has been done. ■ ■

The principal movement has been in low crossbreds, these having, of course, suffered the most. lor two or three days before the actual movements came off many felt \that the bottom was about touched, and directly men saw a lowering of the bank rate, in they came. market day of.the,old year, saw good 40 s tops change hands at a shilling, but these were lorccd.sales. Still, it was easy to buv a good combing at 12Jd., whereas yesterday "the same sellers could command 13id., plenty of transactions taking place at that figure. Other purchases in 44's, 4G's, and 50's took place at about 2 d. advance, the weight shifted being a Jong way the_ heaviest for several months back. Evidently spinners were'covering orders thev nau accumulated during the quiet time, anil 'ilu 0 * v , ani bouses were doing likewise. Ino Bradford market during the past year, lias become much more spasmodic, in its movement, and trade seems to come all r.t once, and to be off in the same ivay. Those who nought at the bottom'secured some good stock, and niany cheap lines both' in' merinos and ciossbreds-have been. picked , up. / The move'-: ment in fine wools has been nothing like so heavy as in crossbreds, though two or three nrms have :sold considerable quantities. Plenty or good super GO's have, changed hands at 2s. iu., put to-days price is,more like Jd. to Id. ; U ! rce ' : arrivals are coining forward somewhat heavily, and so far these are being ? v tt ,'i se ™i s , to me- that the direct im-' porter holds the key to .the entire wool situat on and according to the ability of these men to lift and financoj arrivals ivill future prices be governed. The movement has undoubtedly strengthened the whole fabric, and thn future if r?n lool;c<1 forward/ to with considerable &i u a i' c . s ?™° fair stocks of crossbreds J.ing hold, and yet for all that .prices aro now oO reasonable/that the situation is capable of a sound development in a forward direction m u e " ai : e hopeful that 1903 will see a reversion both in consiunption ajid betterment ILIT' flf that T in (1 °P? n(l «P°" re-estab-abroad UCe an inCleaSetl P urc!lascs fr oni