"AN ANXIOUS YEAR."

New Zealand Herald, Volume LIX, Issue 17983, 7 January 1922, Page 5

"AN ANXIOUS YEAR."

CONDITIONS IN DOMINION. REVIEW BY MB. E. W. PARKER VERY MODIFIED OPTIMISM. Itfom ottb otvh cotJUBFOSMnW ) LOS DOS. Not. Ml An Jnt*rf»tiD? review of ,-ood 4 ioni in Kew Zealand ww Riven by Mr Edmnid W. Parker in \m addwsa ,»t the innn»l meeting of arii Company, Ltd He remarked that shareholders would luve been prepared to lind that the com pany, with its wond«riul inteirsta. had rot passed seathlcsa -hroujjb sven a tur.n of storm &nd stress is had characterised tho past year. The fail in the prices of aly.ost all commodities took a direction which seriously affected the principal branch o( its business. It «m not tro much'to say that, in all probability, jom* thing in the n.itur» of * dobacls in t.'ie wool market was only averted by w.,%« co-operation between those coroerned n handling the 1920-21 clip in Australia, New Zealand and London, and tin British-Australian Wool Realisation Association controlling tho enormous stocks carried over from the British Govern meat's purchase of the Australian ai:d New Zealand ciip3 during tho war years. This co-operation wag not achieved w.tv out difficulty and protracted negotiations, and nnfortunau •'. too. not without poii tical influences K iiij intrniticed, bin, m tho end, a reasonably *xnin<| and smooth working agreement wis arrived at Tho Deposits Moratorium. The unprecedented fall in New Zealand wool, and the impossibility of tururif the clip into money, reacted most srm.usly on valuta of sheep, cattle, and pastoral securities in tlntl country, and led to a sudden stoppage in tho flow of credit, and to a condition of financial stringency for which it was necessary to go bark very many years to find a parallel. All the elements calculated to produce a monetary crisis in the Dominion were in existence, and, with the object of averting this, tho New Zealand Government proclaimed a moratorium, which protected tho local banks and financial institutions from any sudden withdrawal of deposits by their customers. In this connection lie thought it "was duo to the pood name of Dalgcty and Comtmny to say that they took no advantage cJ thin moratorium, and their clionts wero informed that they offered them all the fnci'itios with regard to their deposits with tne company that, they possessed before tL*» enactment of the moratorium. Profits Problematical. u At tho same time," continued the chairman, " I think it only right to warn yon that business In New Zea'.ard is »t a Tory low ebb, and that our prospects of making any profits at all i.n the Dominion for some time to come appear to be very problematical. To add to the difficulties of the past year, the extraordinary increase In the imports of merchandise Into Australia and Kow Zealand —which were enormously in news of the exports from those countries-throw the whole Australasian banking tr'stem out of gear, and, in some directions—especially as regards remittances to this wuV-tho machinery almost ceased to function. Our own financial position hail been such that this abnormal slot* of caused us no great hut it led to our being called upon to itoist many u? our clients who woro projud;cod by tho conditions which had arisen—and wo were glad to be able to do so." Dairy produce exports in Now Zealand and wheat and dairy produco exports in Australia, however, had played an important part in bringing about tho somewhat easier conditions which now obtained The material improvement in the value of wool during the past tliroe or four months encouraged » bnghtor outlook for the future, more particularly in Australia. It was too oariy yet for anything more than a very modified degreo of optimism ; foi In this connection it had to be recorded that the situation of tho market for frozen meat was extremely unsatisfactory. Not only had the demand been restricted, owing to the reduced spending power of the masses, but this state of affairs seemed likoly to continue. Moreover, priocs bad fallen to a level which left little or nothing to tho stock breeders in Australia and New Zealand, after providing for the high ecale of trcatr ment charges on their side, tho relatively high rates of freight, and tlie greatly increased handling cnargea here, which was a legacy of the war years whon market priocs were more i:n proportion to expenses. In his opinion any relief that could be looked for in this industry most come from reduced uqjensos, both in Australia and New Zealand and on this siao, coupled witl 'vivsr rates of fHgl>,t.

Bawra Wool Profits, "A matter of interest to all associated in my way with Australia and Now Zealand or with the wool trade," continued the chairman, "is the progress that is being made in the liquidation of the Government stocks of old wool which were unsold on June 30, 1920. At December 31, 1920, the stork amounted to 2 586.474 bale*, including 768,000 bales of New Zeiland, and a email quantity of Falkland Islands wool. Considering 'he period of depression through which tho wool market has passed during the present year, realisations have better than might have been expected, and if selling can be naintained at its present rate, the N'.ff Year will begin with the B.A.W.R.A. 6tocks down to about 1,900.000 bales. " Out ol the surpluii funds arimng from the sales of this wool, a cash distribution of £5.005,000 was made at tho end of last July, and was naturally a welcome addition to the incomes of the Australian shareholders, and a further distribution of £3.250,000 is to take place in May next year. Cotisiderine the pessimistic views that were widely, end with some justification, e'tertainad curly in the present year as to the quantity of wool likely" to find 8 market during the 12 months, it is satisfactory to be able to report that practically the whole of the Australian 1320-21 clip, and fully threefourths of that of New Zealand, will have been disposed ol! by the end of thi.« year. Moreover, the quantity of free wool sold, Added to the sales of B.A.W.R.A. wools, "ives a total substantially in excess of the Australasian production for the past season, and leads to the conclusion that the liquidation of the old stocks will be effected mnch sooner than was generally anticipated."