The Times THURSDAY, MARCH 11, 1943. Complicated Wool Settlement

Manawatu Times, Volume 68, Issue 59, 11 March 1943, Page 4

The Times THURSDAY, MARCH 11, 1943. Complicated Wool Settlement

The three decimal place percentages given in the statement of the Government’s decision regarding the 15 per cent, increase in this season’s wool prices have led to considerable misunderstanding amongst farmers. Understandably so. Nor has this been cleared up by the recent discussions in Parliament. In particular there lias been a difficulty in comprehending how the various percentages are to be applied, some part being cash payments immediate and deferred, a portion being retained by the Government, and a final balance to be paid, out in bonds. To provide the clearest possible understanding one cannot do better than cite a hypothetical ease. Presuming that a wool clip would realise £IOOO on the previous season’s valuations, with 15 per cent, added this season the clip would now be worth £llsO. Here is how tho farmer would be credited his additional £l5O, i.e., the 15 per cent, increase. 3.500%, £35, is added to the current payout on appraisal. 5.744%, £57/9/-, will be “paid” in bonds (A). 4.556%, £45/11/-, is to be added to the end of season payout; viz. retention money. 1.200%, £l2/-/-, will be retained by tho Government to stabilise wool prices to local manufacturers. 15.000%, £l5O/-/-. Total. Prom tlie above it can be seen that the gi-ower will actually receive an £BO/11/- cash increase in both immediate and end-of-season payments. He will lose forever £l2 to the stabilisation policy, his subsidy to the general public per the woollen manufacturer. This on the whole wool clip amounts to just about £240,000. Ho will receive bonds to the face value of £57/9/-, but what tangible value they represent is yet unknown. Almost six weeks have passed since the Government announced the wool settlement terms. No excuse can be advanced for the delay in not also stating the terms for the bonds. These actually represent a compulsory loan from the woolgrowcr of about £1,100,000. • But, unlike tlie terms for any other loan, voluntary or compulsory, the woolgrower does not know either, the interest rate he is to rccieve or the maturity date of his non-transferable securities. They are unlike any other securities x>ut forward as yet. Presumably they will eventually bo announced as bearing the usual rate of interest now current and will be of short term maturity. But that is only a guess. Meanwhile, farmers are naturally very suspicious of this .“paper payment,” as it is wisely considered to be. The Government should without delay give a dccisiion on these bonds.