AUSTRALIAN WOOL CLIP.

Otago Daily Times, Issue 19529, 11 July 1925, Page 9

AUSTRALIAN WOOL CLIP.

THE STABILISATION SCHEME. The principal proposals which wore contained in the address delivered by Sir John Higgins at the Wool Conference in Melbourne last month were reported in our cable messages. In order that the scheme of stabilisation may be bettor understood, however, wo append the proposals in full: —• 1. .That the woolgrowers of the commonwealth shall voluntarily form an association, mutual in character, for the purpose of giving, as far as practicable, greater regularity and greater stability • to wool values. 2. That such association shall acquire Australian wool clips by appraisement methods. 3. That the realisation of wool clips so acquired shall be effected under the direction of the association by proper, technical, and collective methods of marketing. 4. That all 'receipts from whatever source arising, leas deductions and expenses, shall be credited by the association, and distributed as payment for wool so acquired by appraisement. The association would not be for the purpose of profit or gain in the ordinary acceptation of those terms, but would bo created practically as an assurance organisation, mutual in character, for the regulation or stabilislion in values of wool—not fixation of prices—-by collective realisation, thus ensuring greater protection to producers, and assisting generally the development of the wool industry in the commonwealth. Suggested name of company: British Australasian Wool Regulation and Realisation Association Limited, or British Empire Wool Regulation and Realisation Association Limited. Capital: £50,000.000, in £25,000,000 wool certificates and £25,000,000 shares of £1 each. . , The principal terms and conditions tor the proposed system under which the association would operate may bo set out briefly as under: —

1. That freedom of trade in wool within the commonwealth shall be recognised. 2. That, in order to finance the scheme at its initiation, the Commonwealth Government shall guarantee the association until sufficient capital has been subscribed by its members. , „ , , , 3. That the association shall be vested with authority by the Federal Government to issue licenses for the export ot all ■wool from the commonwealth, whether as (a) shorn wools, greasy or scoured; (b skin wools, greasy or scoured; (c) wool tops, noils, waste; (d) woolly sheepskins. 4. That the tables of limits for appraisement by the association shall be based upon the statistical position of wool, including, inter aha, the following “world” factors:—Production (quantities and qualities), consumption, stocks (manufactured arid semi-manufactured), Purchasing power, fashions, etc., for each W s? l 'lTiat'' having determined the statistical value (which will bo an estimate only), less a deduction to cover contingencies, tables of limits shall be prepared £ or _(a) Merino wools, shorn, moulding fine comebacks; ft>) m cross r^® d (2^°’ S S I shorn; (c) skin wool—(1) merino, (2) cross That, should it bo found advisable to further subdivide these P rin^‘ p classes such subdivision shall be made. 7 Th“ the tables of limits are bases only—First, for the appraisement, and secondly for the acquisition by the assoSnoffe wooldips. The real pneo shall bo determined by tho for on the actual disposal of the wool lor ° a ß h TbS y th a e' wool shall be appraised under the direction of the association, and on appraisement shall become the property of the association. P 9 T’hat the settlement for wool shall he on the following basis:—First, payment, 14 days after appraisement; seoon payment, at close of wool, year; thud payment (final, less deductions and expenses), when the whole of the cip the particular wool year has been sold 10 That, as woolgrowers are not m the position to subscribe the large amount of* B capital necessary, for the proposed association, a deduction of 2i P°r cent, annually on account of wool certificates and a deduction of 2i per cent, annually on account of paid-up Sding made as a suggested method for building up the capital of the association by instalments over a series of ycare and as a means for creating an equalisation fund for the stabilisation of limits. 11 That the issue of wool certificates shall be made annually, equivalent to a deduction of 2i per cent, of the net value of the clip, and shall be apportioned in ratio to the value of wool supplied by each individual producer during each wool year. , 12 That wool certificates shall be in-terest-bearing at a rate comparable with such like investments, and shall bo negotiable, but shall carry no voting powers., 13, That shares shall be issued annually, equivalent to 2i per cent, deduction on the net value of the clip, and . shall be apportioned in ratio to the value of wool supplied by each individual producer during each wool year. 14. That shares shall bo dividend earning after a certain, number of years (the date shall be fixed later). The rate of dividend also shall be determined later, but shall not exceed, say, 7 per cent, per annum. , „ , , , 15 That shares shall not be negotiable and/or transferable except to members of the association or bona fide producers of wool Memorandum and articles of association shall provide that directors shall have the power to refuse the transfer of shares if they deem fit and in the interest of the association. 16. That the amount represented m wool certificates and, in shares shall reduce annually an equivalent amount of the Government’s guarantee, and thus in time free the association of all obligations to the Commonwealth Government respecting guoh guarantee. This fact must be emphasised, that the issue of wool certificates and shares represents a 5 per cent, deduction; the former should become, from the date ■of issue, a sound investment, and he as readily negotiable a? ordinary debentures; the latter shares —should carry regular dividends as soon as the capital of the association and the equalisation fund were sufficient to release the association of all obligations to the Government for its guarantee. The association will be a mutual or cooperative company. Therefore, all income over and above deductions for capital, working expenses, interest, and an equalisation fund as provision for stabilisation of limits, shall be returned to woolgrowers. In other words, the deduction of 5 per cent, may be looked upon as an assurance premium—first, towards the stabilisation of wool, and secondly, as a contribution to the capital of the association, which should become a sound investment to woolgrowers. The negotiability of the wool certificates should, in practice, lessen the deduction to 2i per cent. The restricted non-negoti-ability of* the shares is suggested to protect growers’ interests, and to prevent the control of the organisation falling into the hands of persons other than producers.