THE WOOL MARKET

New Zealand Herald, Volume LVII, Issue 17651, 11 December 1920, Page 8

THE WOOL MARKET

The policy of withholding wool from sale for an indefinite period has been strongly recommended by the producers' committee and the Board of Agriculture, supported by the expert advisers associated with the High Commissioner in London, and endorsed by the Government's undertaking to guarantee advances by the banks. Its wisdom has, however, been questioned in many quarters, and those who are sceptical of its advantages apparently have authoritative support of their views from the chairman of the Bank of New-Zealand. Mr. Beauchsimp considers that, available supplies,.being greater than the effective consumption, means should be taken to stimulate the demand by low prices and by offering special terms to customers who are now unable to compete in the open mark * 'The statistical position is against any recovery in values for. some time to. come he says. " The only ray of hope visible at present is in povertystricken Europe, chief among the countries being Germany. . . It would appear desirable that New Zealand should adopt some scheme of extending to Continental buyers of wool long credits." . It is doubtful whether there is much practical value for the individual woolgrower in either of these counsels. Whether his own judgment inclines toward waiting or toward negotiations for new markets, he must turn to his banker for advances against his clip or his German bills. Either scheme seems to cast greater risks upon the individual than he will care to face and unless some.practical scheme is developed the tendency may be toward sale at any price. An effective solution of the present difficulties might be found in a co-operative scheme, by which all the clips would be pooled, and their realisation entrusted to a group of experts, able to study the changing situation and to seize every favourable opportunity for reducing the stocks, to the common advantage of all shareholders in the pooL, Indeed* the

very fact that there would be only one seller of New Zealand " free" wool could not fail to strengthen the market, while the pooling of the proceeds would ensure that the good and bad fortunes of the market were fairly distributed. Such a pool would be in a position to accept two-year bills from Germany or any other customer, and there is no doubt that its shares would be regarded by the banks as better security for advances than so many bales of wool of problematical valueThis is apparently the plan under consideration in Australia. It offers .concrete assistance to individual growers, simplifies the problem of financing the wool industry, and raises definite prospects of a satisfactory realisation. of the whole production.