THE WOOL PROBLEM

New Zealand Times, Volume XLVI, Issue 10536, 12 March 1920, Page 5

THE WOOL PROBLEM

INTERESTING GABLES PRIME MINISTER AND DIRECTOR OR MATERIALS. “YOU NEED HAVE NO FEAR.” PEE PRESS ASSOCIATION. PALMERSTON N-, March 11. At a meeting of shareholders of the Farmers’ Distributing Company, tho following cable message, not until now public property, were read:.— At the request of the company, tho Prime Minister dispatched the following cable to the Director of Raw Materials, England: ‘‘Dominion woolgrowers, banking and financial institutions, and woolbrokcvs are greatly concerned regarding the position, on return to free market conditions for wool. While it is hoped your published forecast that all wool purchased on behalf of the Imperial "Government will be shipped hence by December 31st next will bo realised, and the relief thus afforded will be fully appreciated, it is recognised that this docs not eliminate all dangers as regards the coming clip of 1020-21. It is feared that unless arrangements can bo made whereby the large accumulation of wool purchased on account of the Imperial Government is prevented from coming into undue competition with the coming clip, grave complications will arise resulting in a serious fall in values consequent on the financial embarrassment of woolgrowers and of New Zealand. The Government trusts you will formulate some scheme providing protection for all concerned in the wool industry on this side, which you can submit for confirmation here.” On February 17th, the Director of Raw Materials replied: “Your cable has had our careful attention. Owing to the great delays in turning round the steamers, and owing to tho Shipping Controller having diverted space from wool to wheat, it will be difficult for me to maintain shipments on a sufficiently largo scale to lift all the Government wool this year. .However, I will make every effort to do so, and, in any case, reduce the carry-over to the smallest possible quantity. We agree, that the position of growers of new wool depends principally not on whether tho Government surplus stored in New Zealand, but bn the total quantity left unsold and arrangements made for disposal of it. You need not have any fear regarding the wool from 48s upwards, which will be readily sold at a good profit almost as readily as they come to hand. Fortysixes are in fairly good demand at prices showing very little margin over tho appraisement value. W r e think that our surplus at the end of the year will-probably bo very little, and need not cause serious concern. Wool below 46’s are selling, slowly, and-arc poorly, in spite of being relatively so much cheaper than finer wool. I do not think that reducing our selling limits below the equivalent of the appraisement prices would substantially increase our sales. Unless the demand materially improves' -there will be a considerable' surplus of. coarse crqssbreds, both New Zealand and Australian, carried over at the end of the year, at which time we expect our surplus stocks to consist almost entirely of these low grades; unless you have some suggestions to make, nothing can be done but to continue on present lines, supplying the market freely with every grade of wool, but not attempting to force wool into speculative hands by cutting prices of unpopular grades severely. I shall be glad six months hence, when the situation has developed, to further confer with you on any feasible plan for combined action. You need not fear our attempting to force 'sales by cutting prices without consultation with you.”