THE WOOLLEN TRADE.

New Zealand Herald, Volume LXVI, Issue 20338, 20 August 1929, Page 5

THE WOOLLEN TRADE.

WELLINGTON FIRM'S YEAR.

FLUCTUATIONS IN PRICES.

COMPETITION AND SUBSTITUTES.

[BY TELEGRAPH. —OWN CORRESPONDENT.]

WELLINGTON. Monday

The adverse influence- of substitutes on the woollen textile trade was stressed- by the chairman of the Wellington Woollen Manufacturing Company, Limited, Mr. W. H. P. Barber, in his address to shareholders at the .annual meeting (o-day. The balance-sheet, said Mr. Barber, in moving the adoption of the report and balance-sheet, must, in view of the prevailing conditions of trade and other unusual factors, be considered satisfactory, as the figures closely approximated those of the last year. "Our indebtedness," he continued, " is loss by £6774 and while we added £1094 to the plant the book value has been decreased by £SOOO for depreciation. The stock totals of this and last year arc practically the same, being £216,154 and £216,031 respectively. Profit and loss charges aro £528 more, while the gross profit is lower by £2049. Year of Fersistont Depression.

"The year has been one of persistent depression in tho woollen textile trade, both in Great Britain and New Zealand, and competition, especially from importations, has been unusually keen. The unstable position of the wool market aggravated matters. In the 1927-28 season the cost of wool was relatively high and the 1928-29 season opened with but a small drop on closing rates of the previous year, which caused a hope that prices would remain firm. Unfortunately they did not and from sale to sale small decreases occurred. This was in contra distinction, to tho previous year, when increases, instead of decreases, happened. As our supplies for 12 months have to be bought in advanco in the short time the sales are on, it will be seen how awkward it is to meet these unexpected variations, especially as we have to take indents before the wool is bought to make the goods. Any decline in the price of wool obviously necessitates a writing down of stocks made from purchases on a higher scale with consequent lower selling prices Difficulties in Buying.

"Although we are not always able to cover increases that have occurred this variation in the cost of wool, which happens without visible cause, is a considerable setback to both grower and manufacturer and without doubt fosters the use of substitutes, the cost of which is lower and not subject to such rapid change in value. There are so many substitutes and synthetic 'wools' now put forward that it is not surprising to hear that overseas manufacturers turn to them when met by unusually high and unsteady costs of the real article. Reliable statistical information on wool supplies is not available. Therefore buying becomes more or less speculative. For the private person this may be enjoyable, but when responsibility to shareholders is a factor it is not a happy position. "An association of growers in Australia and New Zealand has lately come into being to provide funds for advertising the merits of wool and while such suggested slogans as 'use more wool' may give a measure of comfort to contributors it is, in my opinion, playing with the matter in so far as making converts. We should -welcome any attempt on effective lines to encourage the further use of woollens, but I think better results would be got by a strong endeavour to removo causes of erratic prices and to institute research calculated to improve appearance, as was done with inferior substances. Check on Imports Wanted.

" There is one thing clear to us, and should he to the grower and to Parliament, that a check on manufactured substitutes coming into the country should be established. It is not on behalf of ourselves that I say ■ this, as wo can, if pushed to it, use substitutes as an adjunct to wool and should no doubt find an easy market if we did, as low price in these extravagant days of quick chaugo is a first consideration. "Trousers arc being landed here which cost 3s without duty," said Mr. Barber. "What does 25 per cent, on that do as stopping the importation of substitutes for woollen goods made here? "The shibboleth of absolute free trade is kept prominent by great importing houses and shipping magnates the whole world over, but it is strango that such a policy is accepted by some as an ideal state when we have the example of Great Britain to the contrary. The 400 years of continuous protection made her a great Empire. The less than 100 years of free trado has endangered that position. The brief period of safeguarding showed what can be done by judicious protection against cheap foreign labour, but even that help granted to British workers and to tho Empire is to bo discontinued by tho new Government. Developing Home Markets. "Already tho altered policy has resulted in "a 10 per cent, reduction in tho wages of heavy woollen workers, and which has been accepted by them. . The disastrous strike in the cotton trade is another result. It is lamentable that in England a wage reduction should take precedence in importance fver tho application of an equivalent amount as a check on goods made abroad under different standards of living." "The best of all markets is the homo one, and land in Now Zealand cannot ho as successfully developed as it should unless profitable markets are to settlers," continued Mr. Barber. "I.' 10 encouragement of manufacturing will i resultant work for a largo population will give an ever-increasing market for the producer. It is a fact that wool sold for uso in New Zealand mills returns tho grower a better price than when bought for s.np"l would be pleased if I could to-day rrivc an assuranco that our company will bo able to show as good a balanco-shect next vear as (ho one before you, but I do not, foci justified in the circumstances in making such a promise. Business is dull and it is hard to maintain output at payable rates. -All that I can say is that tho company's affairs aro in a sound position."