Hawke's Bay Herald. TUESDAY, APEIL 2, 1895. PROSPECTS OF THE WOOL MARKET.

Hawke's Bay Herald, Volume XXX, Issue 9954, 2 April 1895, Page 2

Hawke's Bay Herald. TUESDAY, APEIL 2, 1895. PROSPECTS OF THE WOOL MARKET.

-TiiE—aißiliuel hardening of prices ana!" steady competition at the close of the late wool sales comes as a silver lining to the cloud of depression whioa has been hanging over the pastoral industry. It is for. innate for New Zealand that little of Us wool was in hand at the lowest Jevel of prices in February, though some of the earlier clips may have been Inoludad towards the close of the sales, Will the improvement continue ? That is the question every pastoraliat is asking himself, for the froz ;n mutton market is so low that no relief can bo looked for there as a counterbalance to the low prices of wool. Messrs Goldsbrougb, Morr, and Co , in their lost reporb, endeavor to answer this question in a cheeilnl and optimiatio spirit. They admit, at the outset, that their hopes for the year just closed were doomed to sad disappointment. The circular says :— Ife would be difficult in the history of the wool trade to recall a year as universally disappointing as that we have now to review. Not only were expectations unfalfilled, but a reverse has been experienced as seveie os it was unforeseen. Under the Influence of the steady market which prevailed throughout 1893, notwithstanding financial disorder and indu?-> trial difficulty, and in view of the prospeotlvely moderate increase in anpplies, there was a widespread impression that the petlod of declining values which had existed for the preceding tour years had closed, and that Che opening of 1694 was the eve of a general' trade recovery. The Impending abolition of the United Sbates

wool duties was regarded aa a happy angnry, and fostered the hope3 of a stimulated industry in both America and Enrope. Confidence grow almosb to conviction during the early months of the year, surviving even the tedious progress of United States legislation, excusing the drooping tendency which kept manifesting itself, and looking to the solution of the tariff question us a panacea for all ills. Upon the final passage of the bill and the admission of wool free of duty, to tha Sbates there waa tin appreciable recovery. Unfortunately, however, it had no duration, and waa so void of legitimate relationship to the manufacturing industry, that in its rapid subsidence It carried with it all the hopes of the year ; nor did It cease until values stood fully 10 to 15 pgr cent below the level of the early months. It may be that when hopes proved de« luaive some despondency ensued, for 1b waa patent that no more fertile source of Improvement) could be tound than tha remission of the heavy dntlea on wool, and the reduction of those on fabrica to so large a consumer aa the United States.

The circular goes on to say that) the reasons that the improvement did not ensue are now apparent, as well as other faotors responsible for the adverae progress of the tradp. The American trade, with the tariff amendment) long in view, had largely discounted the change, so that beyond the position of the market' becoming more defined, business showed j no immediate expansion, Under any circumstances the complete re adjustment necessary with such a revolution of fiscal conditions would require time to develop ; but surrounded as the market was by commercial contraction and monetary derangement, immediate revival became impossible. In Europe, beyond the hopes which proved so fallacious, there was little to afford encouragement, Great Britain had to suffer the ill effeota of the labor dislocation of 1893 that the expected revival might have effaced, and with the whole Continent experienced the pinch of protracted commercial depression, whiok, although as an era of low values may have widened the markets for wool, undoubtedly tended to restrict general consumption, and resulted in a year of declining values and unremunorativo trade. In lopWor towords the future Messrs

increase in Bupply, and something over, S tt having been t>b3orbed by mannfacturers. I U How far the lower price3 have stimulated I ' consumption can .only be gaeesed at. In L> any industry where the cost of raw material bears <i large proportion to the '' cost of the manufactured article, no doubt j; the cheapening of the raw material must 0 stimulate consumption. Bub in woollen [ goods the miin expense is in working up H the raw material. There are only a few |' pounds of wool in a suit of clothes or a [ pair of blankets, and a difference of a a penny, or even threepence, in the price s of raw wool wonld not so materially raise the price of the cloth or blankets, aa to 1 check consumption. Conversely, the fall ■ in wool is not likely to account for its ' increased consumption, and consequently , the fact) that stocks have not in- : creased, bub decreased, affords an ele- i menb of hope to the woolgrowers. Dutlng ' the last three years, indeed, the total world's production of wool has remained practically stationary, being 4,511,000 bales in 1892 ; 4,500,000 biles in 1893 ; and 4,518,000 bales in 1894. Yet during that period, though the increase in the world's population should have stimulated demand, prices have fallen. Same other cause than the alleged bub non-existent I over production must be sought for. I Mews Goldsbrongh and Co. rather R ope in the dark for a satisfactory i exposition of the position when they eny :— "The roil explanation must be found in the interdependence of all com- ' modifies. Had wool alone fallen in value I s f-o dtion would indeed be acute, but if we consider that the whole system of I 3 commerce is one of exchange, ib follows I 1 that no one product can improve Its - relationship except under abnormal con- ? dltions, i.e., stationary or diminished production or vastly increased demand. Wool, therefore, has only followed the course of all produce, and whether the general decline is the result of mono* metalliem or other causes, there is no reason to suppose the depression is per * manenb, while the statistical position of t wool entitles it to Immediate and substantial participation '.in any revival of trade." We fear that Messrs Goldsbrongh and Co. have dimly pointed out) the real cause of the world>apread com- - merclal depression when they suggest the '- demonelizition of silver as responsible. y Wo say we fear, because it tha'jbeso, 0 only the rehabilitation of silver can effect a permanent cure, and that as yet v seems a far cry. Fluctuations in prices may, of coarse, be expected, and the largely increased supply of gold mast 1 have some effect on the currency tension. Bud ib is somewhat disquieting to note n that tbe improvement in the prices of wool and other products is coincident with a rise in tilver, and bo bears out the contentions of the bimetallists. Of course g if the rise in silver were to be permanent, xx the rise in produce prices would be permanent also, assuming Che arguments of d the bimetallisfce to . be correct). Bub d unfortunately it h only the war in the iy East creating a heavy demand for silver which has caused the present upward d movement, and only the remonetization ' of- that metal can give It) stability of d value in a fixed ratio to gold. ;o But there are, of course, other factors ' n especially affecting the wool trade, and Messrs Goldsbrongh and Co. regard them as distinctly favorable. First they put .. the anticipated demand from the United States. For two years, they point out, , h ' uncertainty as to the tariff has crippled its trade, how materially is shown by the - folloning.statistlcs published In an annual .review of the trade by the Boston Comct mercial Bulletin ; — The wool production tor 1895 is estimated at nearly 60,000,000ib greasy less than in 1893, (0 equal to about 150,000 bales Australian. r- Stooks ou hand at the close of 1894 show a decrease compared, with 1893 of )1 11,400,0001b. Imports of wool for the ten I*, months ending October, 1893, 1893, 1894, n- were 140.175,1141b, 106,235,229ib, and a 84,664,2351b respectively, a decrease in S two years of 55,510,8791b. Imports of woollen goods for tbe same periods (in dollars value) :— 1892, 34,758,099 dollars ; 1893, 28,651,645 dollars; and 1894, 14,014,890 dollars, a dec'ioe of 18,743,209 - dollar?. The . improved tone of trade iu the States Is expected to _ react upon' Europe, with a fesjflker demand and higher prices. &r*> j l "^ position, therefore,", concludes bae circa[3" ~iar; " has— a— ymanlfesb • uivicrtone of be strength, and with the Influence of low ie pricea, tending alike to restrict, production „ where conditions render it) unprofitable, r. and to increase consumption, tome ftnt 8 provemenb in wool valnes canifob be long 5f delayed." May this prove a true , e prophecy.