WELLINGTON NEWS

Hokitika Guardian, 5 June 1930, Page 8

WELLINGTON NEWS

THE AYOOI. MARKET

Special Correspondent.)

WELLINGTON, June 3

The third of the series of London woo! sales closed on Friday with the staple in a satisfactory position. The series opened with values a penny 01 more than the prices realised at the close of the previous series and this improvement was maintained throughout the auctions. It is now stated that Bradford tops are becoming scarce and this can he understood for it is a well known fact that for ? long period topmakers have )>eon operating from hand to mouth and with the, first improvement in demand the,' find stocks running clown. This is a “hull” point for growers, for i! means that there must necessarily follow an increasing demand for tile stholc.

overcoming difficulties which threatened the wool .trade tins year, the breadth of vision, taken both by • oilers amji buyers is commented upon fuvou;rably by .the Australian Mercantile and Land and Finance Co\ Ltd., in its latest wool trade review. LI. is recognised that branches of trade apart from the growers have not on•oyed prosperity in recent years, and this lias reacted on growers. Although much attention has been paid to synthetic apparel more though than, ever is now being given to wool Manufacturers of woollen materials belatedly recognising the influence ol competitive fibres have been earnestly engaged in adjusting their output to the public taste, with the result that some of tlio finest and most attactive dress fabrics the world has evei lpiown are now available. There re mains however much more to ho accomplished to encourage a greater demand for woollen wear. The urgency of the moment is sufficient capital to conduct successful research work. Pastoral research in Australia, the Company adds, affords growers an unusual opportunity for a profitable investment hv contributing 2s a iliale from the proceeds of one year's clip. The woollen and textile industries have assumed the offensive, i cinforccd with low priced wool, and these and other factors have heon progressively operating for a speedy clearance for th e remaining stocks of wool in Australia. Other developments assisting in the demand lor wool include the belief that prices hav 0 become stabilised, the better style of offerings, purchases for exchange purposes, the comparatively low )p rices for wool, and the promises that the prolonged adverse seasonal conditions will result in a substantial decrease in the next Australian clip. THE EXCHANGE CONUNDRUM. Prefacing his remarks with the statement that some people may not understand what exchange difficulties meant, Mr G. G. Hamilton, Chairman of the Bank of Australasia, explained the position in a simple way, at the annual general meeting in London recently. Air Hamilton said that when a trader in Australia wished to pay say £ 10,000 for goods bought from a manufacturer 'or merchant in Great Britain ho paid from his resources in Australia £IO,OOO to an Australian hank there, and the bank paid from its resources in London £IO,OOO to the merchant or manufae-

tnrer. • Thus the bank had £IO,OOO more in Australia and £IO,OOO less in London, and the opposite transaction took place when, say a Bradford spinner wished to pay for wool bought in Australia. In times where over a period exports and imports were nearly equal, these contrary exchange transactions tended to balance each other, liut the times were quite abnormal. In the year ending June, 1929, the exports from Australia were slightly greater than imports, but in the previous three years imports exceeded exports by some £29,000,000, and in the last six months of 1929 Australia imported £16,000,000 more than she exported. In addition Australia had to pay more than £25,000,000 a year in Loudon for interest on loans borrowed there by the Commonwealth and States. The result of this large excess of imports over exports, plus the burden of the annual interest payable to London was that the Australian banks in London were askril to pay out of their resources in London far more than they received in London in payment for experts from Australia. The remedies fqr these exchange difficulties were not simple and must take time. The only permanent remedy was for Australia to export far more than she imported.