WOOL DISPOSAL SCHEME

Timaru Herald, Volume CXLVII, Issue 21504, 17 November 1939, Page 8

WOOL DISPOSAL SCHEME

America Anxious For Way Out United Press Association—By Electric Telegraph—Copyright NEW YORK, November 15. American wool interests are keenly desirous of seeing a wool disposal scheme promulgated. They have been making a variety of suggestions, and groups with rival ideas are publicising a number of concrete proposals, the chief of them being the creation of a syndicate or pool undertaking the disposal of the Australian clip in fifty thousand bale lots.

This, however, lacks the support of the major wool groups, notably the Boston Wool Trade Association and the National Association of Wool Manufacturers, the latter offering an alternative under which the wool would be auctioned on the basis of catalogues prepared at Boston from descriptions cabled from Australia, with a reserve price fixed and an independent auctioneer without connection with the wool trade.

The Australian Trade Commissioner’s reactions to these proposals resulted in the natural response that the British Government was purchasing the clip and paying a price approximately 30 per cent, higher than before the war, and it was really their right to determine the proper method of disposal. Most competent observers, both Australian and American, however, inescapably conclude that both the above schemes are unsatisfactory. Vital Objections The syndicate or pooling system, aside from other objections, is open to the major difficulty that nonmembers have strong reasons for protest on the ground that a monopoly auction plan is honeycombed with unsatisfactory features, of which at least three are considered vital. The first is that it in no way assures absolute secrecy for the reserve price which conceivably becomes the sales price with the seller, namely, the British Government, which has undertaken considerable risks and is left without any necessary protection. Secondly a reservp price adequately high might be close to the danger point, an over-high sales price checking consumption which all sources wish to avoid. Thirdly, buying syndicates might be privately cheated among the largest purchasers, excluding the small fellows at the auctions with a consequently bad effect. The Australian and British groups are convinced, however, that a satisfactory solution will shortly be found for the problem, leaving a majority of the parties satisfied. The abnormally keen interest in American wool is due to the fact that American markets will shortly be starving for wool in a pferlod of the highest rate of consumption in the last decade, each of the varying interests trying to safeguard its own position and thus creating a complex situation.