Pushing Crossbred Wool

Hawke's Bay Tribune, Volume XII, Issue 99, 5 April 1922, Page 5

Pushing Crossbred Wool

“8.A.W.R.A.” TAKES A HAND.

ASSISTANCE FOR THE MANUFACTURERS.

WORK OF THE WOOL TEXTILE FINANCE COMPANY.

Reference has been made lately to financial support given by the Bri-tish-Australian Wool Realisation Association to a manufacturers’ organisation, the Wool Textile Finance Company. The Australian chairman of 8.A.W.R.A., in a letter to the New Zealand Wool Committee, states that the subscription was given o the new company on the understanding that it would assist and encourage as far as practicable the utilisation of material manufactured from crossbred wools. Because of the breat fall in values of woollen and worsted goods, and depression in the wool textile trade generally, the resources of many Bradford concerns which have carried on business with success over long periods of trading have become seriously diminished. Reductions in trading strength affect all section of the wool trade by preventing or curtailing new busines, and have had their reflex action in the Australasian wool auction rooms. Many Bradford firms find that their available capital is exhausted, or so seriously depleted by reason of the fall in the value of their stocks of manufactured goods that they cannot continue business operations without assistance. The formation of the Wool Textile Finance Company, with a capital of £1,000,000, has been undertaken with the intention of financing suitable concerns, so that they may resume normal trading or extend their trading. All sections of the ■woollen trade nave been invited to subscribe. The British-Australian Wool Realisation Association was requested to take a financial interest in the company and on this point the chairman of the Australian Board (Sir John Higgins) writes: —

“The request that B.A.W.R.A. should subscribe to a scheme to assist wool textile firms whose resources have been depleted has been given earnest consideration by both the Australian and London boards. There have been exchanges of opinion by letter and by cable on the subject, and finally the directors comprising the two boards have agreed that it would be in the general interest of woolgrowers to assist such firms to overcome their temporary business embarrassments, and would) conform with one of the fundamental principles of the covenant executed between His. Majesty’s Government and the Commonwealth Government in connection with the formation of B.A.W.R.A. It was stipulated in the covenant that the operations of the organisation would be conducted with due regard to the maintenance, and, if possible, the increase of trade relations in wool and wool products between Great Britain and Australia. We were also in agreement that it would be wise and politic to give practical evidence that Australian wool owners, when occasion arose, were prepared to co-operate with manufacturers and distributing houses to overcome difficulties common to the wool industry. “The directors of B.A.W.R.A. saw in the scheme a very favourable opportunity for advancing the claims of crossbred wool. That variety of wool, of which B.A.W.R.A. as owner and agents controls the largest stocks in the world, is to-day the cheapest raw commodity on offer to the textile manufacturers We have indicated therefore, that while B.A.W.R.A. desires to help the British wool trade, it does so on the understanding that this new finance company will assist and encourage as far as practicable the utilisation of materials manufactured from crossbred wools. The merino wool market is in a very sound condition, and statistically future prospects are most favourable; in fact if the current demand for fine wool continues there is every justification for forecasting a scarcity of supply. “It has been agreed that B.A.W.R. A. shall take up an interest in the new company, the total liability of such subcription not to exceed £52,500 paid and callable. While they desired to extend assistance and support to the manufacturers and’ distributors of woollen goods the direcors of B.A.W.R.A. reasoned that they must exercise business prudence and secure for its shareholders proper protection. This they have been successful in acccmplishing, and arrangements have been made to insure not less than 75 per cent, of the association’s subscription to the company with Lloyd’s on very moderate terms. “No proposal for assistance will be entertained by the Wool Textile Fi" nance Company unless properly certified accounts have been produced and all information required has been supplied to the directors of that company. It is intended that assistance to business concerns shall continue during the present financial stringency only, and those receiving help will be required to pay reasonable consideration for any accommodation which may be granted.” This effort on the part of the Association to hasten the consumption of crossbred wool is of very considerable importance to New Zealand. The association at the end of December last was holding some 634,000 bales of old New Zealand wool, nearly all of it medium and coarse crossbred, and the existence of this great stock is the chief factor in deaying the improvement of prices. If the directors of B.A.W.R.A. can stimulate the consumption of crossbred wool by their subscription to the new company they will be assisting the operations of the New Zealand; Wool Committee.