WHY WOOL WENT DOWN.

Dominion, Volume 1, Issue 213, 2 June 1908, Page 3

WHY WOOL WENT DOWN.

.. THE WORST IS OVERi .WHAT-MESSRS. WILL'ANS AND OVERBURY say. v In a:privato letter.to a woolgrower, Messrs.. Willans and Overbury, the well-known wool buyers,- from whom wo havo already published (May. 7) • a; letter< ou: the regulating ,of supplies, have ; (from London) some ■ notes as,to;the apparent-causes of the slump, arid the outlook: for.'the,.future. - They.say , "The; serious i decline'.'iri; values - that oc<rarrediat the March; sales,-affecting.as it,did all descriptions .of wool, is difficult to account >-vf«>fJ®nJninanly, it - may be said to have originated in, a ; complete iwant of confidence in all branches-of the industry.:- -j • "iTo attribute -the present unsatisfactory condition'of..affairs.:wholly, :.or. even mostly, to the. financial, troubles of the end of 1907 would be incorrect.. Originally,; no doubt, the .' money.; difficulties; ';bqth,. in..'America- and in , Europe,-; presented-, an opportunity for ' bear-; ' ing -' the',marketi?too favourable, to be missed. The movement, however, carried tooj far. i 'artificial', depression of . values whai trade:prospects are gbodL'.may.resultiin.satis-. factory - profits..to; the.' !.beai\?* manipulators,', but. when : the reverse is.ithe case and the business horizon is. clouded with uncertainty such action only generates nervousness, ; and is attended,-, as in. the .present instance, .with; : disastrous .results. - Two of; the: great :.wopk' . consuming-nations of thoi'world,'. Germany aiid ;.' America,. have,lately..been:passing through a ■period of decreased purchasing' power, has' largely oon T tributod.' to. the',genoral ■ decline. The"'trade. .of thiV country is/in'no sbnse.'ih an'unhealthy condition;" but "'_witli'' little',,encouragement to buy more than is needed for immediate wants, and ; with the prospect'" of - -ample supplies ahead, manufacturers, and .others are disposed to hold back orders, with a'view to buying at the lowest possible level. • • "Extreme fluctuations in the wool market are rare) and"theiwool.tradeidmring.the past eight; years,has-been, singularly exempt from •snch." For some -yearspast.wehave enjoyed, a period of advancing pric^i.foi:.:bqth:fine.aiidooarse > w<wls,' i Md; ; ./present .trade. conditions of"; twelve months" ago, -wo cannot see in the existing situation: any. real. Justification; for the severe fall'in y£dues ]a,tely e£tablished./, "The future' couTse .of .pnces as 'regards 1 oross-breds 'is very ' problematical. :"-On the one hand, there, is plenty' 0f,.w00l in sight ' to meet':the.reduced requirements of.Euro-r. pean', ( trade: confidence Jsi'still ,lacking, .and. 4 fresh.'j.bpsmess difficult to obtain. On the otheryhand,-.: coarse' wopls |have declined, to a lovel which ; should',tempi? 'manufacturers toplace orders; reports from America are rather, more .optimistic,; and. the ..close "of v the -last/ series'witnessed.a-slight, recovery, in,the value of medium and coarso grades. [We incline to the, opinion that ;the ..worst is j over, and we . sincerely. ,trust thai;;,'the,: future may justify this belief. . ••, • • "Menno. and fine crossbrcds have been dragged down' in, sympathy.with ooarse wools, and, with any improvement m trade shouldeasily.: recover - ,tho .' ground. lost -during March." ... • •