THE WOOL TRADE

Gisborne Herald, Volume LXVII, Issue 20137, 5 January 1940, Page 12

THE WOOL TRADE

EFFECT OF CONTROL LONDON CRITICISM PLEA FOR CO-OPERATION LONDON, Dec. 15. A criticism that British Wool Control was not acting up to the ideal 1 of removing obstacles to the flow of i exports was made by >Mr. H. G. I Brown, chairman of the New Zealand Loan and Mercantile Agency Company, Limited, at the annual meeting held this week. The company, he said, was more ( affected by the control than any other. Through die medium of the control the British Government has secured on terms not unfavourable lo the buyer the whole of the supplies of Australian and New Zealand wool. “This was perhaps the simplest part of its task. Upon the United Kingdom Government, and in a lesser degree the Dominion Governments, now devolves the special responsibili.v of ensuring the best use being made of these clips. Only thus can the Government ensure that the wool trade makes the most complete con-

tribution to the vital export trade of the country, and avoid the embarrassing economic and political problems to which a growing raw wool surplus trust give rise. Importance Of Exports “The Chancellor of the Exchequer, in a recent speech, made this -very significant statement: ‘There is nothing more important at this time than to improve our export trade. It is perhaps inevitable, when you find yourselves in a great war, that for a time checks of different sorts operate, with the result that the flow of exports is very greatly restricted. It is up to the Administration to get rid of that obstacle as quickly and thoroughly as possible.’ “We are not at present satisfied that the Wool Control is acting tip to this ideal,” said Mr. Brown. “I would, however, observe that the wool industry as a whole should at once lay before the Government the nature of the ‘checks’ which to-day are harassing and impeding its full development, because without their prompt removal it will be impossible for this industry, of such vital importance to this country and the Dominions, to make its proper contribution to the urgent economic needs of the hour. “The efficient operation of the Woo l Control touches almost more closely than any other wartime activity t!m fundamental economic interests of

Australia and New Zealand, no less ; than that of important manufacturing : interests in this country, from which substantial employment derives Meeting: The Market "The experience of the last war and 'any reasonable estimate of current needs point to there being a .-übstan- I 'tial surplus of raw wool in the bands of the Wool Control which can only be disposed of either by direct sale to , overseas countries or by the extension of markets abroad for British wooilet: ( manufactures. Tiie outstanding feature of the wool trade in-recent years has been the relative smoothness with which large and progressively increasing annual clips have been 'regularly absorbed without resort to restriction of production. This has been largely ciue to the policy of meeting reasonably the market price of the iav, and so avoiding the accumulation of unwieldy surpluses. “Under a system of control, where prices are fixed by Government action, it is specially important that tne prices fixed for resale of that part of the clip avails.ole for expert should conform to this policy, and that iv attempt should be- made to extract excessive profits. ••u is also vitally important that the resale should be handled by tlmsi conversant with this end of the bus; ness. If this is not done trade will certainly be lost and the aceumula- ! lion of large wool surpluses will

prove progressively more embarrassing, with the attendant danger that their eventual liquidation will lead to disaster for the producers. “I would plead for fuller co-opera-tion between the control , and all elements of the trade, in a concerted effort to make the best use of the commercial and manufacturing resources of she industry with the skill and experience it possesses for the solution of the urgent and important problems now confronting it,” concluded Mr. Brown.