WOOL PROSPECTS.

Taranaki Daily News, 16 November 1920, Page 8

WOOL PROSPECTS.

A gloomy view. FALL TO PRE-WAR PRICES. Mr. McGregor, an Adelaide woollen manufacturer and pastoralist, who lias just returned from a visit to England, the Continent, and the United States, takes a pessimistic view of wool prospects. In England, he said, the position was entirely artiiicial. The Imperial Government had become during- the war a business linn, which had cornered the fine wool of the world, retailing it at an arbitrary price, and without any regard to the financial condition of the trade. After the Imperial wool purchase nearly all the woollen trade was working more or less as commission manufacturers for the Imperial Government. After the Armistice civilian trade was allowed, and owing to tile shortage throughout the world price for n time seemed to be no object, with the result that* lino wools reached an undreamt-of price. However, when a definite period was put to wool control, traders and manufacturers were faced by new conditions. In the beginning of the present year it took six times the capital to carry 011 ordinary topmaking and spinning bnsiness_Jhat it did in pre-war days. The trade did not possess this capital. It was admitted that enormous profits were made by woollen manufacturers during the last two years of the war, but it was overlooked by the majority of people that most of the profit had been returned to the British Government in the form of taxation. The principal of one concern > told Mr. McGregor that his taxes ! amounted to 87 1 /» per cent, of bis total ' | profit. In one business where a capital ; of £1,000,000 had been sufficient in pre- ' war days, .CG.000,000 was now required. ' It was quite obvious, therefore, Mr. Mc- • Gregor added, that a breakdown must ' occur. The high level of values was insisted on by the I'ritish Government, ' and users who could buy "from hand ' to niout.li" were quite willing to coil- ' tinue the puce set by the British Gov- " eminent, so long as there was no other ' I source of supply and stocks were held I 1 by the Government and not by merj chants. When the trade hsul to carry !slock* itself, a revision of prices became I necessary. Financial diliicullics arose

'as soon as mercliiints approached thenbankers for capital and assistance in carrying on at inflated prices. The tremendous carry-over of -2.000.000 bales coupled with a reduction in the output of the factories of the world, must have the efi'ect of bringing down wool values, probably within a year, to pre-war basis.