WOOL PURCHASE

New Zealand Herald, Volume LXXVI, Issue 23487, 26 October 1939, Page 12

WOOL PURCHASE

CHARGES AT ISSUE LIABILITY UNSETTLED FURTHER NEGOTIATIONS STATEMENT BY MINISTER [by TELEGRAPH —PIIESS association] WELLINGTON, Wednesday A review of negotiations between the British Government and the New Zealand Government for the purchase of the Dominion's wool was given by the Minister of Financo and Marketing, the Hon. W. Nash, in a national radio broadcast from his office in Parliament Buildings this evening. The Minister said he would be meeting woolbuyers to-morrow. They were still working for an agreement with the United Kingdom in regard to various charges and he hoped an agreement would soon be reached. Mr. Nash outlined various stages in the negotiations, commencing with discussions he had when in London in July. The price first suggested was the averago for the year ended June 30, 1939. New Zealand was not satisfied, because the farmer bad received 9.17 d and on the evidence of Government officers that was below the cost of production. Ho had then called a meeting, at which those present included the Minister of Agriculture, the Hon. W. Lee Martin, the president of the Shipowners' Federation, Mr. H. D. Acland, tho president of the Farmers' Union, Mr. W. W. Mulholland, the chairman of tho Meat Board, Mr. T. A. Duncan, Sir Alexander Roberts, representatives of Wright, Stephenson and Company, Limited, and the Wool Brokers' Association, and the president of the Wool Council, Mr. H. M. Christie. Shilling Suggested A sub-committee had been set up and it reported that it considered the price for crossbreds should be Is per lb. in grease delivered into brokers' stores, net to the grower, store and f.o.b. charges extra. In a cable to the Secretary of State for the Dominions on September 20 the New Zealand Government had suggested that the method of payment should be on an f.o.b. basis or prior to f.o.b. after a stated period in store awaiting shipment. This was important in New Zealand, since during the war period her overseas exchange other than sterling would be almost negligible. The New Zealand producer and the New Zealand Government did not wish to take any advantage because of war conditions. If the British Government privately resold any product purchased from the New Zealand Government the profit made should be divided equally between the two Governments, the British Government to be responsible for freight and shipping and marine insurance. Subsequent Proposal It was further proposed that after the cessation of hostilities a conference should decide what adjustments were necessary to bring the trade to* a peacetime basis. Prices were to be fixed on a yearly basis, but adjustable within this period if the index of export prices in the United Kingdom rose by 10 per cent or more. This was important to New Zealand, since this country would depend on sterling funds to purchase imports, which possibly might rapidly increase in price.

The Now Zealand Government advised on October 12 that it was prepared to accept an overall average of 12£ d per lb. for all greasy wool, this price to be net to the producers for all wool delivered at brokers' warehouses, the New Zealand Government to receive in addition half the profits on all sales made outside the United Kingdom. This meant that brokers' charges, appraisal, delivery from brokers' warehouses to f.0.b., and the marketing, invoicing and accountancy costs of the New Zealand Government Marketing Department should be additional to the 12.20 d price. These additional charges should be settled at the earliest possible date. The price, the cable added, should be subject to revision on request in May of each year. It was imperative that the arrangement for clearing stocks after the conclusion of hostilities be completed before the procedure for purchasing terminated.

Defining Extra Charges That morning, said Mr. Nash, a cablegram had been received by the Prime Minister's Department from the High Commissioner in London, Mr. W. J. Jordan, stating: "To enable the position to be clarified regarding expenses over the agreed purchase price payable by the United Kingdom Government, please advise in as much detail as possible what New Zealand considered should be included, particularly under the heading of brokers' charges. The Ministry of Supply contends that charges normally to sellers cover all up to and receiving into warehouse, where the wool is normally shown for appraisement and sellers' appraisement charges. "They find it difficult so far to define other extra charges beyond buyers' appraisement charges and warehouse after a free period of one month. We will press to the utmost for all justifiable extras fco be borne by the United Kingdom Government, but your details and the strongest case are required in support."

FIXING THE VALUES OFFER MADE TO BUYERS DIFFICULTIES REPORTED QUESTION OF SALARIES New season's wool is now coming forward in increasing quantity into the various stores, the fine weather permitting uninterrupted shearing operations, but so far the Government, which is purchasing supplies and selling to Britain, has not created the necessary organisation foi its appraisement in order to determine prices that are to he paid to fanners. Only the basic price of 9.8 d sterling per lb., 12jd in New Zealand currency, that will be paid by Britain has been mentioned by the Government, but it is stated in'the trade that full details of rates for the different grades have been determined. In order to appraise values for wool in tho stores, the Government has made an offer to the woolbuyers who usually attend the sales that the work should be done by them, as is being done by the usual buyers under the British purchase in Australia.

While prepared to undertake tlio work of appraisement, representatives of' the buyers, in New Zealand have rejected the terms of remuneration offered by the Government, according to men in the trade. Thev state that the salaries offered woolhuyers were very much below what they earned under a free market, and had little i elation to the experience and specialised knowledge of these experts.