WOOLLEN MILLS BENEFIT

Taranaki Daily News, 17 February 1933, Page 9

WOOLLEN MILLS BENEFIT

EFFECTS OF HIGH EXCHANGE TOO EARLY TO JUDGE THE EXTENT. LITTLE HELP IN UNEMPLOYMENT. EXPLANATION OF THE POSITION. It is too early yet to judge of the effects on New Zealand woollen mills of the rise in the exchange rate, according to a representative of a woollen manufacturing- and wholesale firm who visited New Plymouth yesterday, although there is no doubt the present rate would benefit the mills to a certain extent. The benefits will be felt more by those who make up articles from English cloths than by those-who manufacture material in New Zealand The cost of material represented only a proportion of the cost of the finished article, he stressed, so that though the price of material would rise on account of the increased rate of exchange the cost of the made-up article of clothing would not be increased by anything like the same percentage. The selling price would not rise more than from 5 to perhaps 71 per cent. Against this there would be a rise of 15 per cent, in the cost of the finished imported article. This would enable the New Zealand mills to compete on more favourable terms in the sale of their finished article. The advantage to be gained by the New Zealand manufacturer of cloth over the English manufacturer would, not be so great, however, he continued. Clothes were selling in England at reduced prices, and it was expected they would, shortly be sold to New- Zealand at lower prices. The reduction would be sufficient to practically counter-balance the effect of exchange rise, and it was expected that, even with a 25 per cent, addition the English material could still be put on the New Zealand market at the same price. The New Zealand mills were working on full time at present, the representative said, but that was by no means to be attributed to the increase in the exchange rate. The busy period being experienced at present was' seasonal and was a preparation for the approaching winter, when woollen goods were more in demand. At this time last year the mills were working at full capacity also. The rush of work would last until about July, for though the winter manufacture was mainly over before then there was always a considerable number of repeat orders. Even if an improvement in, the woollen trade resulted from the exchange rate advance it was not likely, the speaker continued, to assist the unemployment position to any great extent. A few operatives at present unemployed might find their way back into the ranks of the employed, but it was practically certain that no new operatives would be framed because their training took two or three years and the mills could not Sfford to risk the costly mistakes that the employment of untrained _ workers would involve. Nor would the mills instal any new plant. The exchange position was far too indefinite for that. The mills, if necessary, would prefer to fill tfie extra orders received by working overtime with the available staff and plant. . < The main advantage would be that more manufacture would mean more money circulating within the country instead of being sent overseas to pay for imports.