WOOL PRODUCERS’ BURDEN.

Taranaki Daily News, 12 September 1930, Page 2

WOOL PRODUCERS’ BURDEN.

(To the Editor.) Sir—ln support of “C.H.A.’s” referring to the “Producers’ Burden 1 would like to draw your attention to the wool producers’ particular burden. You are, no doubt, aware that the duty on imported woollen goods has been raised from 45 to 50 per cent., which means that £lO,OOO worth of imported woollens landing in New Zealand are loaded with an extra £aooo and actually cost the importer £la,ooo plus freight, insurance aud exchange. Io cover this the importer adds not less than I’o per cent., and the retailer has to pay not less than £16,500 for the same 'quantity of goods. He, in his turn, adds an average of 33 per -Cent., and the unfortunate user has to pay no loss than £22,000 for the original £lO,OOO worth of imported goods. It these imports were duty free _they would cost the consumer about £15,000, or £7OOO less. The duty means an increase of 120 per cent, against the ordinary trading increase of 50 per cent. Also the user would have an extra £7OOO to spend, and would surely use more wool. I have not got the past year’s figures for importations of woollen goods, but the 1927-28 year’s total amounted to £2,779,471, and assuming that the present year’s figures arc slightly less, say two and a-lialf millions, the duty will amount to one and a-quarter millions, and add 10 per cent, for the importer - and 33 per cent, for the retailor, and vve find the sale of woollen goods handicapped to the extent of something like £1,833,000; And we wonder - why people don’t wear as much wool as they did in years past. We have only seen half of the picture. There is our local industry, which consists of twelve mills employing never more than 2200 hands and generally about 100 less, producing in the year ending March, 1928, £1,836,455 worth, of goods, the cost of -manufacture being no less than £1,200,000. Again assuming that the same amount of goods are manufactured, costing the same, plus 5 per cent, extra tariff, which is bound to be added, we find the consumer is paying yery heavily for the protection of this industry. The manufacturers will have taken full advantage of the protection and the goods will certainly cost the consumer 50 per eent. more than if they were imported free, and we can work out the probable cost of keeping 2200 men and women employed in New Zealand at an increased ‘price of not less than £600,000, plus 10 per cent, for selling costs, plus 33 per cent, for retailer, or something like £BBO,OOO. Thus we see that protection to the woollen industry costs the public not less than £2,913,000 extra. The ' effect of this is that the price of woollen goods is becoming prohibitive, and we find that less wool is going into consumption. The farmer is being offered prices far below the cost of production, all for the sake of keeping some 2200 people employed, while many more thousands of farmers are being .slowly but surely ruined and must eventually come on to the labour market themselves. One could understand a certain amount of protection being given to local industries if those industries were making au effort to help themselves by using up-to-date machinery and reasonable. business organisation, but in the case, of the woollen mills we find that no less Hinn eight of the mills are producing identically the same, range of goads of an iiilinite variety. This means that operatives lire moved from one machine to another, and very costly machinery in lying idle for many hours during each week, and a machinist never really becomes as expert as would a specialist on one machine. This costs money, and adds immensely to the cost of manufiicture, besides the loss of profit on the idle machine, depreciation and interest on capital cost. Then there is Hie duplication of salesmen, wool buyers, etc. But t here is no a ppaVenl effort to eliminate these losses, with the result, that it costs £2 to manufacture every £1 worth of raw material purchased, and we find Hie average cost per lb of wool manufactured rising each year. It must be fairly obvious that this sort of • thing cannot go on for ever. Just imagine a tax of 6d per lb being put on all butter consumed in New Zealand. Well, one can’t, and yet that is exactly what is happening with wool, only the tax is much greater. Now, you will agree with me when I say that the wool producer has certainly a “burden."—l am, etc., P. O’SHANNESSEY. Waitui, Sept. 10, T 930.