THE WOOL INDUSTRY

Otago Daily Times, Issue 18768, 23 January 1923, Page 10

THE WOOL INDUSTRY

SIR ARTHUR GOLDFINCH ON COMING- SHORTAGE. B.A.W R.A.’S PROPOSALS. (From Oub Own Correspondent.) . LONDON. November 30. It will be remembered that Mr .R, H. Caird, the managing director of the Australian Mercantile, Lund, and Finance Company, severely criticised, at the annual meeting of the company, the proposal to continue the life of the British Australian Wool Realisation Association in some form "to dominate the whole of the pastoral, agricultural, and producing interests in Australia.” Sir Arthur Goldfinch, London director of the association, has made a statement in reply to Mr Caird’s criticism. "The only point upon which I find myself in agreement with Mr Caird,” he said, “is in the doubt he expresses as to whether the- shareholders’ meeting of December 6 will decide in favour or the proposals. 1 have a decided inclination to believe that they will be rejected, not on their merits, but because a natural apathy exists among farmers everywhere.' A very strong canvass is being carried out in Australia against the proposals, and no personal effort is being made to enlist support for them. Finally, it is not unnatural that a great number of farmer's should think the early distribution of six to eight million pounds sterling is more attractive than any expectation of future benefits. A PERSONAL POINT OF VIEW. "Personally, I shall not ba at oil disappointed if the proposals are defeated, though I think the farmers will make a great mistake if they vote in the negative. I suppose rhe result of an affirmative vote would be that I should be asked to undertake for an indefinite period a very heavy burden of work, which I should much prefer to escape, but might not find it possible to refuse. Mr Caird suggests that ‘the B.A.W.R.A. wants to bestride the continent of Australia like a colossus.’ That suggests to me a very irksome leg-stretch-ing operation, and I am not ambitious to be one of . the Lords Commissioners. I should like to explain, however, that no one connected with ■ the B.A.W.R.A. has beeri eo foolish as to suggest that the reconstituted company could dominate the whole of the pastoral and agricultural interests of Australia. The exports of those products amount to £220,000,000 per annum, and one would need to be a child in these matters to suppose that a capital not exceeding £8,000,000 could put anyone into a position of dominating such vast interests. As a matter of fact, the banks and brokering houses who are canvassing so actively against the proposals will find, if they are carried, that none of the existing organisations wil suffer any harm whatever. We could not harm them if we would, and we would not if we could. THE WOOL POSITION. “Mr Caird diagnoses the wool position in the following manner. He states that there is a world scarcity of the finer wools, that prices have already reached a higher level, and that there is a danger of ill-advised meddling which might prove disastrous to merino wool growers, inasmuch as a change of fashion amongst consumers might cause them to prefer a cheaper article made frgm coarser wool. I venture to say that these remarks arc inappropriate to present-day conditions. It is an entirely superficial view of the case to suppose that merino wool growers are benefiting only by a scarcity of their article, due to a particular fashion, and that their position might be endangered through consumers, disgusted at high prices, turning to the abundant supplies of coarser wool. We are passing out of the state of affairs of which that might be an approximately correct description, and it has long been evident to anyone who looks below’ the surface that conditions in 1023 are going to be totally different. THE DOMINATING FACT. “The dominating fact is not that fine wools arc scarce, but that all classes of wool are going tp be scarce. The Australian growers of merino wools have no reason to fear consumers turning more freely to the use of coarser wools. The consumption of crossbred wools is already substantially greater than the yearly production, and the end of the reserve stocks resulting from the shortage of sea transport is already in sight. Perhaps the shareholders of the Australian Mercantile, Land, and Finance Company have nothing to do with medium and lowbred wool, and have not suffered from the temporary depression of prices which has ruined so many sheep farmers in New Zealand and elsewhere. If it is a crime to consider that the market might with advantage have been manipulated-so os to shorten the period during which the growers of coarse-bred wool sweated blood, then I freely admit that lam one of the criminals. I have always thought, and still think, that it was a sad misfortune for wool of the lowest grades to be sold at 4d, when it cost at least Sd to put on the market, and will be in eager demand at 10d or a shilling before the end of next year. CAUTIOUS BUYING. "Looking at things broadly, and not from the exclusive point of view of any particular class of wool growers, it seems to me a good thing that the market should be resisting as strongly as it is now doing the exceedingly high premium on merino wool. No one would wish a return to the state of affairs in 191 S and the early part of 1920, when buyers in almost all the markets seemed to lose all sense of caution, and competed against each other at wildly advancing prices. Nothing of that sort has happened during the steady improvement of the wool market, which commenced in October of last year. Buyers have been, if anything, over-cautious, and are resolutely determined not to suffer in the way that they did two years ago. At all stages right up to the shopkeeper orders have been kept severely down to the point at which an immediate re-sale can bo counted upon, and it has, in fact, boon a feature recently in many sections of the trade that orders have been postponed too long and business has been lost owing to want of suitable stocks at the right moment. PRESSING NEED QF THE SITUATION. “In the merino section buyers have had a very wholesome feeling that the premium over medium and coarse wools is unnatural and excessive,: and that it is necessary to walk very warily against the time when a more reasonable proportion to value returns. All this is good and .sound, and has tended to bring about a solid level of values free from the risk of dangerous relapses. It is time, however, that everyone interested realised that the inevitable reduction of the difference between the values of coarse and fine wools is going to be brought about not by a decline in the price of merinos, but by a substantial increase in the price of medium and coarse brecls. The statistical position of wool is far 100 strong for any relapse in prices to take place. The sales of Australian and New Zealand wool in the year ending June 39 last exceeded 8.600.000 bales. The shipments of Argentine wool during the season closing on September 30 last were equivalent to 1,400,000 bales of Australian weight, fo that from the three chief sources of supply the trade absorbed 5,000,000 bales during the past season. The current clip will not supply more than 3.230.000 bales from these sources, and there is no compensating increase of supply in any other part of the world. The only reserve which can be drawn upon is the stock of B.A.W.R.A. wool, which is less than 1,000,000 bales. The machinery consumption during tho next 12 months will, therefore, be substantially less, for the simple reason that wool is not available in sufficient quantity to maintain tho present scale of consumption. It is idle to suppose, with the prospect of good general trade now opening out before us, that the total exhaustion of the available supplies of wool can be accompanied by a reduction in prices. The increases in the prices of crossbred wool which is now taking place is the forerunner of inevitable further advances next. year. It is well that it should be so, for it is a pressing need of the situation that so far as possible the reduction of_ sheep flocks which has taken place in New’ Zealand, the Argentine, and elsewhere, as a consequence of the disastrously low price of medium and coarse bred wool, shall as rapidly as possible be corrected, and all available sheep lands be filled up. It is also a pressing need of the situation that any waste land suitable for the purpose in any part of the world shall be put under sheep as quickly as possible.”