STABILISING MARKETS.

Taranaki Daily News, 7 February 1930, Page 8

STABILISING MARKETS.

Whenever there is a serious drop in the value ol produce ex-ported from New Zealand there are always more or less fantastic schemes propounded for the purpose of what is called “stabilising the market.” The methods suggested vary considerably, but they all have the laudable intention of increasing the returns to the primary producer. The latest proposal is in regard to wool. Growers are being urged to withhold their wool from a market which is apparently overstocked and in which only low prices are therefore obtainable. It may be that there are special circumstances surrounding the wool industry which may warrant special marketing conditions, but the history of “stabilising” efforts is sufficient to indicate caution in any further attempts in that direction. The disastrous experiment in dairy control and price fixing is too well remembered to require reiteration of the deplorable result that accrued. More .recently in •Canada a well organised effort has been, made with the pooling of wheat to prevent violent market fluctuations and sales at unremunerative prices. Despite the fact that Canada is one of the most important wheat producing countries the holding back of Canadian wheat by the pool has not had the desired effect. Instead of purchasers seeking supplies at the price the pool demanded they have found them elsewhere. The consequence has been lower quotations for wheat in Chicago and other centres than have been experienced for years. The banks in- Canada that finance the wheat pools are becoming nervous lest the value of the wheat held should be insufficient in the long run to cover advances made against it, and the aid of at least three Provincial Governments has had to be afforded the pools. What the outcome of the whole business will be is not yet certain. It does indicate, however, that interference with the law of supply and demand which must largely govern all sound marketing, is something to be approached with the utmost caution. History so far seems to indicate that it is more likely in the long run to defeat than to promote the interests of the primary producer.