SOUTH AFRICAN WOOL

Evening Post, Volume CXXVII, Issue 40, 17 February 1939, Page 12

SOUTH AFRICAN WOOL

NO GERMAN MONOPOLY *

GOVERNMENT INQUIRY

I It was disclosed in London in midJanuary that in response to the allegations made by the wool industry that Germany was obtaining a stranglehold on the South African market an investigation was recently carried out by the Union Department of Commerce and Industries. While the Department satisfied itself that Germany was not aiming at securing a monopolist control it was admitted that Germany had set up a number of buying houses in South Africa and that the wool was being carried almost exclusively in German ships. Under the fifth annual trade agreement between Germany and South Africa, which was signed last September, Germany agreed to purchase goods to the value of £6,355,000 in the year 1938-39. Of this amount £3,700,000 was to be spent on wool. These goods were to be paid for over 12 months by purchases of German goods by South .A.f i*ic9j In a message from Johannesburg the correspondent of the "Daily Telegraph and Morning Post" stated that several wool-buying houses had already closed down and many South Africans had been replaced by Nazis, while British ships had been unable to get wool cargoes. It was also reported that the heavy frozen credits had been accumulating in Germany, and to liquidate these the Union Government had been compelled to place bigger orders with German firms for many supplies, including typewriters, telephones, and other office equipment. An official at South Africa House said: "The Union-German Trade Agreement, which is a payments and not a barter agreement, is only prejudicial to other wool buyers who are said to be in the process of being forced put of the South African wool trade in the sense that it introduces a strong element of competition.

"What is also true—and this possibly is the basis of the monopolist charge— is that Germany has established her own buying houses in South Africa, thus taking away business from brokers who previously bought for Continental as well as United Kingdom customers." Buying houses in South Africa claim, however, that the German methods are likely to control prices. The Germans, they say, do not bid against each other at the sales, and all purchases are controlled by a central authority. The Germans have also refused to deal with firms employing Jews, and these firms have consequently been forced out of business.

The use of German vessels for moving purchases of wool frpm South Africa is, it is claimed, intended to avoid freightage in sterling.