FARM AND STATION.

Otago Witness, Issue 1897, 12 June 1890, Page 6

FARM AND STATION.

THE WOOL TRADE. The extraordinary increase in recent years in the volume of transactions at the annual wool sales in the Australasian colonies has naturally been regarded -with ill-concealed disfavour by the selling brokers at the London sales, who have substantial reasons of their own for striving to maintain the old-time supremacy of the great metropolis as the centre for dispersion of the world's wool productions. They characteristically ignore the facts that the multifarious charges involved in advances, [discounts, dock and warehouses charges, and costs of transhipment sustained by wellorganised monopolies in London must impel both Home aud Continental buyers of wool to deal with producers directly at the sources of production, But these, same Londoners blink the facts of all the altered phases of the trade. The Australasian colonies have so increased in importance in the estimation of Oontineutal merchants that to Australia there are now French aud German lines of steamers plying, and at extremely moderate rates, so it may be reasonably expected that the direct shipments of wool to manufacturers on the Continent, now in its infancy, will largely develop, for Australasian wools — in regard to excellence aud variety — are admittc-dly beyond compare. Thu purchase of wool iv the colonies on United Status account, markedly compare favourably with those made at the London sales, because the etarveliug manufacturers of woollen fabrics in the " protected " Union must have imported raw material to supplement their indifferent native wools. American manufacturers' wants aru comparatively limited. They are virtually out of she trade supply of woollen goods required for the population, but what they must have of the raw material can be bought in these colonies and shipped direct at less cost than by the roundabout London channels.

But the unexpected decline in value 3of wool at tho later London 6ales has afforded an opportunity to the London brokers to have a damaging shot at the Australasian soles and their effects on prices. Their circulars and inspired cablegrams to Australia recently show ' plainly the animus against the new diversion of the trade. Beginning fairly enough, the circulars give the statistical position of the wool trade and woollen manufacturing interests in Great Britain at the end of 1889, but the collapse in values since 13 attributed, on the brokers' own showing, not to over-speculation in the colonies — which after all was in a great measure the outcome of competition between British and Continental buyers and speculators — but to a well grounded belief in the statistical position of the wool trade during the course of the considerable wool sales in the colonies. The belief, and well founded too, at the time was that there was a growing demand for manufactures of woollen materials, while the raw material was uuprecedentedly deficient. One circular issued by a leadiug ficm of London woolbrokers fairly exemplifies the tenor of the views expressed in several other trade reviews from their standpoint. The following clippings will of themselves exhibit the inconsistencps of the premises with the afterthoughts of the writers :— " It will be remembered that the condition of the industry during the latter part of 1889 was most encouraging. Mills were in full work; additional machinery was in course of being laid down, stocks of wool were in unusually reduced compass, and so far as human foresight was competent of judging, prospects boded well for some

months to come. Apprehension was alone felt lest the outlook might be spoiled, as had happened 12 months before, by colonial purchases. For eveu with the fullest use of cable communication there must always exist the danger of operations not being conducted with sufficiently" close regard to passing events in Europe. The earliest news in September was to the effect that prices in Australia had opened too high to permit of orders being executed, but the rapid improvement of European markets during October and November stimulated the action of buyers, and sellers in the colonies were apparently only too pleased to part with their wool at prices comparing favourably with what — current European values ? By no means. They were content to take as a landmark the basis of a corresponding period of the previous season. So far it is in evidence that colonial markets during an important period ruled under relative European currency. Then what happened ? The November series opened here at a rise of 10 per cent, and after the first urgent wants were filled, the market was about to settle down upon a slightly easier basis when during the first week in December buyers here weradaily apprised by cable of orders filled in Australia on a lower basis than obtained in London. The effect was most natural. That was the beginning of the rift in confidence, which has not ceased to widen ever since. The chief objection against this new development of direct colonial buying is that it must ever be of so uncertain and speculative a character as to seriously prejudice the trade at large. It is not* London which is principally affected ; it is the collective interests of the whole industry which suffer. Buyers can and will make mistakes in London, but they are in such close proximity to the scene of ultimate action that a remedy is soon applied."

To take the arguments advanced in the above seriatim, in the first place there was a buoyancy in the Australian wool sales of the past season, and imparted by whom ? By British and Continental buyers direct, for picked wools. Then "apprehensions wero felt lest the outlook should _ bo Bpoiled." A more conclusive testimony could not be adduced of the influence and importance of the colonial wool sales ; and as to the bunkum about cablegrams, and their insufficiency for keeping buyers of wool in the colonies aware of operating influences on the markets, buyers of wool in the colonies and their principals at Home are more likely to be better posted up than London wool brokers. The circular concludes " so far it is in evidence that colonial markets during an important period ruled under European currency." What wonder, then, that for the last Australasian clip, there was a notable influx of buyers at the colonial sales, and it is especially worthy of note that the largest proportion of the purchases for Great Britain went direct to manufacturers, and therefore escaped London impositions, other than legitimate dock and transit dues. Next in the circular we have reremarks about the "rift in confidence," and which to suit the intended purpose is ascribed to the direct buying of wool in Australia. We Australasians are too well advised on current European topics to be misled by such Cockney effusions. We were well made aware that actual labour strikes, and the fear of their extension, especially in the coal and iron trades, seriously affected the home manufacturing industries ; afterwards the change in the German regime, caused by the removal of Bismarck, proved for a time another nightmare. But with the prospects of settled peace in Europe (and selling wool exclusively by London brokers would scarcely give assurance of that) the values of wool are not likely to be depressed ; and, moreover, the competition for the material — not now limited to London sales — will unquestionably be fought out in the future between vendors at first hands and buyers. It is noteworthy that the London clique rest their case on the losses sustained through speculative purchases of last clip, made in the colonies. They are ignorant of or suppress the facts that, as far as New Zealand wools were concerned, large profits were made out of wools bought here every season up to the last.