THE WOOL CRISIS

Evening Post, Volume CI, Issue 111, 11 May 1921, Page 9

THE WOOL CRISIS

HOW IT IS REGARDED IN

AUSTRALIA

(PROM OUR OWN COItRBSPOUDKNT.)

SYDNEY, 3rd May.

Australia and New Zealand appear to be closely bound together in connection with the wool crisis. The matter is being watched with the liveliest concern by all classes in this country, and most of the crepe-hangera, of course, are foretelling a disaster ol the first magnitude. The Prime Minister., before leaving for London last week, frankly told the Federal Parliament the position. He said : —

Before the ".war the world was able to consume, roughly, 3*500,000 bales of Australasian wool, of which, say, 1,800,----000 bales came from Australia and the balance from New Zealand. As a result of the agreements between the New Zealand and Australian Governments and Great Britain the Australasian clips were sold through the Governments for a number of years. The accumulations of these clips now amount to about 2,00,000 bales in London, 800,000 bales in Australia, and about 500,000 bales in New Zealand, making a total of considerably more than 3,000,000. This wool has to be distinguished entirely from the wool referred to as the 1920-21 clip, and which is practically the 1920 clip. Now, the world, which was able to consume only 2,500.000 bales before the war, consumes less than it did then. That is so because of the difficulties of exchange, the disorganisation of industry, and because Germany, Russia, and other European countries are not in the- same position now as in 1914. So, with a smaller demand for wool, there is an accumulated surplus sufficient to supply the world on a pre-war basis' for from two to three, years. That mountain of wool, trembling as it were on the edge of the precipice, threatens to fall and crush this industry utterly.

The other'aspect of the wool position is this: What is called free wool—that is, wool from the last clip—has to compete with ,the carry-over —the accumulated stock. The wool market has declined so much that, expressed in terms of wool crops, you may gain some idea; of what the.better class of wool is worth. Wool crops which, 10 months ago, were worth, say, 14s, are to-day worth only 4s. It is no exaggeration to say that a very great'deai of the inferior, lower-graded wool will not pay to cart away from the stations. Sheep which were bought two months ago for 30s cannot now find buyers at 16s.

The Prime Minister went on to oxplain the arrangement under which it was proposed the B.A.W.R.A. would put two bales of the carry-over wool on the market to every one bale of the now clip, and that the supply would be' so regulated that the price would not fall bolow B^d. Tin's was the only 7)ossible way out of a most dangerous situation, he said, and it was being jeopardised by the action of various banks, who controlled wool, showing a disposition to quit at any price. An attempt was now being made to get all the Australian firms interested in wool to accept a common course of action.

Much argument is now raging in.Sydney and Melbourne as to the better course to pursue—hold-the B.A.W.R.A. wool out of the market, as Mr. Hughes advocates, or let the accumulation go at any. old price until the cheap i wool lias galvanised the woollen world into life aeain-