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Hokitika Guardian, 17 February 1930, Page 2

There is evidence now that the downward trend in wool values has been arrested at least , for the tune being. -At the . .sales at Tiniar-u and Christchurch prices were firm, at the lower level at all events there was no indication of any further decline in prices, competition was good within the limits of buyers and Bradford is again an native buyer of the staple. The probability is that the cheapening of money in London and on the Continent trade will begin to revive and it only requires the slightest indication of increased consumption for wool values to keep firm. Growers and others must realise that at the present rate of consumption there is an oyer supply of wool, the demand values are' bound to be easy ; furthermore it must be remembered that N.Z.’s supply towards the world’s supply of wool is very small probably not more than 6 or 7 per cent.,' and if the whole clip was held up it would make very little difference for buyer are not likely to pay more for the raw material than they can obtain for the finisher product. Wool is depressed because there is a lag .in consumption, and it is consumption that required to be encouraged; holding wool off the market does not aid consumption the least, on the contrary it retards by making the raw material artificially dear. The cheapness of wool invites a drive for increased consumption, and with the cooperation of all concerned this can be accomplished.

To ca.i l’y over wgool is essentially a gamble !’"(• there is no gu," cmtee that prices m'l improve permanently be-

causeof jp, and unless there is a /losers. Buyers being aware of the permanent improvement in value those who hold over the wool will be .will continue to from hand-to-mouth knowing that the heldover wool must sooner or later come on the market in volume and depress prices. Then again to distrub the velocity Of our exports is to invite serious financial trouble. The wool that is held over must be financed, and though Rural Intermediate credit asocfations and institutions may be induced to become responsible for finan ee the money in the end will be drawn from the banks and if any large amount of bank funds is tied up in this wav it will react in other directions and, cause money rates to be dear.

The argument that it is absurh to offer more wool than the market can absorb is plausible but a close examination of the scheme reveals its dangers and worthlessness. At best It will cause a temporary rise in its value the benefit of which will be secured by these who sell and not by those who hold. The safe policy appears to he to jneet the market and to sell at cur-