WOOL PROFITS AND WOOL PRICES .

Dominion, Volume 13, Issue 253, 20 July 1920, Page 8

WOOL PROFITS AND WOOL PRICES .

• " ' ♦ —-— TIIB BASIS OF CALCULATION.

(To the Editor.)

' Sir,—l have been making an unsuccessful attempt in the proper quarter, so far. to correct what is regarded as a serious mistake 'in the interpretation of the cablegrams, from the Imperial Government commandeering our wool, involving as it does a large sum of money, which will affect Dominion finance, as w.ell as the resources of the sheepfarmer, but our Government will not admit j that .any error has been made. ' Mr. llassey has, however,.favoured .mo with .copies of the cablegrams, and my interpretation of' them is so widely different "from theirs, and has been verified by a friend, whom I consider one of the most competent in the Dominion to offer an opinion, that I Tegard it a duty to place the matter before the public 1 who are interested as well as the sheepfarmer, as I consider that mistakes when ■ discovered should bo rectified. . Shortly put, the Imperial Government offer according' to my reading of the cablegrams was a cash advance of 55 per cent, over ..the net, proceeds in London of the various descriptions of wool of the 1913-M clip, plus half profits on-any not used for military purposes, and sold in the .open market in the usual way v These net profits were evidently to be arrived at by deducting the pre-war freight and shipping charges, amounting to one penny farthing per lb., from tho gross prices realised in Coleman Street, whioh are carefully narrated and preserved. I estimate that these .net prices for the 191&U clip, with skirtings and pieces, for all descriptions' of wool, would approiimato Is. Id! to Is. 2Jd: per lb., or, eay, about 95.-per fleece, while the Government reading of the cablegrams upon which our payments have been made and' half profits are now being arrived 'at, is 55 per cent, on Dominion wool sale prices for that year, which, according to Mr. Massey's statement in Parliament, Quoted in Hansard, yielded only B£d. per lb. all over, or about Us. per fleece: We have' therefore, 'been receiving 55 per cent, on about 65., instead of 55 per cent..on 9sfper fleece, and by the pound I reckon the shortage in'the.cash payment about 7d„ or, 1 say, approximately, seven million pounds sterling per annum, or■■• something approaching .-thirty. million pounds sterling; for—the four clips.. ' Tble:peculiar"part of the'whole business is/that the owners of slipe wool, who have .evidently, been more astute than those : -who have been handling the greasy, ..have been receiving. 55 per cent, on the average'prices'Jn London during ■MM, for the various descriptions of their wool,. less .one penny farthing per lb. for'•'pfe-war/, freight and shipping charges, ..while the long suffering and much l abused farmer is expected to bo content with ->55 per cent, on the Dominion basic average price, computed at 9.65 d., or, say, 9Jil. per lb., 'instead of about Is.'2d. and less 'the •post-war charges, estimated iby. some as high as lOd per lb., • which will be ■ deducted from the profits on greasy wool, sold at auction, instead of lid. for slipe. ' ■■ Whym such heavy charges are toeing deducted from sheep farmers' profits, no wonder they are "getting small by degres and. beautifully less." -I gather from Home cables that tho Wool Commissioner expects th'eso half ■profits' on greasy, arrived at as above, to be confirmed before he begins to pay out, and such confirmation might be fatal to any claim for rectification of tho error, which I have tried to make clear to all'concerned,

I have made the suggestion to Mr. Massey, whom I consider in no way responsible for the mistake, as both ho and Sir Joseph/ Ward were at Home when the cables reached the Dominion, that he should sink the- half profit clause in the contract for .as I don't think they can bo arrived", at with any degree •of accuracy under the altered circumstances, iand effect an outright sale-at the cash; price originally, offered by tho ■- Wool Commissioner by cable, which I estimate would give lis Gd. to 7d. per lb., more, all over, .and enable a settlement to be arrived at forthwith, instead of waiting perhaps for years for the-realisation of nil the commandeered greasy wool. This I consider would bo a fair nnd equitable -compromise, as tho Wool Commissioner himself has admitted tho difficulty in fit tho half profits, and lias given away no less than 450,000 bales of Australasian ■ wool at about half the market price to toptuukers at Home.

Moreover, some 30,000,0001b. 'of our finest wools have been appropriated by the •Dominion woollen mills at this imaginary commandeon price, and the whole profits pocketed by\ them, and neither the local consumer /ior the unfortunate wool-grower is likelx to receive any benefit from that quarter. '

It is needless, in tho face of all the circumstances quoted above, to argue that the contract entered into by -our Government as selling agents with the Home Government will prevent the correction of :this mistake, as the Imperial Wcol Commissioner, through circumstances entirely 'beyond his control, has been compelled to depart from the terms of his contract, and breaches innumerable have been admitted and can be proved. ,' .1 am therefore convinced that we ij.ave an equitable and, possibly a legal claim up-the Home Government, ns the Commissioner lias admitted ihat our wool has Been obtained, under the comniandeer. Nt much under its then value, and I fully;expect him to effect an equitable settlement of the mistake, if asked to do-so, as their profits on our wool have been -colossal, whilo farmers in other British 'possessions . have been receiving full value for theirs.—l ' am, WILLIAM MILNE, " ; Ex-Director Bank of. New Zealand. Oamaru, July 15, 1919. , P.S.—lt will bo seen that we rtre being asked to • sacrifice about 7d. per lb. on tho 1916-17 clip, in lieu of a problematical half-profit on about one-fifth of; that shipped to London, and used for civilian jurprfics as per tho Journal of Agriculture for February, 1919, to saj' nothing pf the finer, wools appropriated by tho Dominion woollen mills, the profit upon which appears to have gone in other directions. W.M. •1. . ' .. '5