AUCKLAND WOOL SALE CASTS GLOOM OVER THE COMMUNITY

Star (Christchurch), Issue 19237, 26 November 1930, Page 6

AUCKLAND WOOL SALE CASTS GLOOM OVER THE COMMUNITY

Prices Down To Desperation Point, Declares Prominent City Broker.

A GLOOM has been cast over the commercial community in Christchurch by the report of the wool sale held at Auckland yesterday. It is felt by leading commercial men that the outlook is now more serious than it has been for many years and that the public must now be prepared to face the facts of the situation. “ Prices are down to desperation point as far as the farmers are concerned,” said a representative of one of the largest firms of brokers, in an interview this morning. He added that there was no saying how things would move in the future, but he could not see any justification for expecting an early improvement. In face of the drop in wool values in London, the prices realised in Auckland, he said, were as good as could be expected, though that was no consolation to the farming community.

The Hon D. Buddo, M.L.C., said that he had been in business for the best part of fifty years, and he had never known a slump that was likely to be so damaging to the whole of New Zealand as the present one. “This is the record season of low prices,” he added, and unless a \ cry speedy recovery takes place the agricultural industry will be in sore straits. One would like to be optimistic and prophesy an early recovery in market values, but at the moment there is practically no prospect of an improvement. But I have gone through three periods of bad depression and low prices for produce in the past, and there has always been a recovery. From these precedents let us be hopeful that this recovery will not be long in taking place.” “Distressing News.” “The news from Auckland is more distressing than‘the greatest pessimist in the country c6uld have anticipated, declared Mr C. P. Agar, past president of the Associated Chambers of Commerce. “Together with the fall in the prices of dairy produce, which are the lowest in my knowledge of the business, extending over a period of twentyone years, the drop in wool prices rall« for a national stocktaking. _ It is quite obvious that the farming community and the interests associated with it, cannot go on as at present.” Mr Agar said that immediate steps would have to be taken to bring about an adjustment of costs and substantial reductions in Government and local body expenditure. The prices for dairy produce were about 20 per cent below the pre-war basis, and the costs of production were about 60 per cent above pre-war level. It did not need a financial or commercially trained mind to realise that it was not possible to pay with £BO of revenue expenses amounting to £l6O. Must Face the Facts. “Therefore,” Mr Agar added, “the supporters of uneconomic secondary industries, the Arbitration Court,, overservice by the Government, and any other amenities that the community feels called upon to have, but can’t pay for, will have to face the facts of the position. The fall in the prices for our primary products is going to very seriously deplete the national income, and something must be done to try to bring about an adjustment. “When there is adversity panic must be avoided, but it is a time when the people must be sensible and look at things squarely in the face. Adversity calls for the best that is in us, but panic is the result of weakness and unpreparedness.” Bad News From London. When a prominent w r oolbroker was asked if he could see any silver lining in the clouds, he said that he regretted that there were no grounds for a hope of an immediate improvement. A cable received from London to-day stated that there had been a further

drop of from 10 to 15 per cent iri the values of all classes of wool, excepting the finest Merino, which was about 5 per cent down. “The prospects are pretty gloomy, and I am afraid we are in for a period of exceptionally low prices,” he said. “There was a short period, about nine years ago when prices were very low, but a prompt recovery was made, but to-day I’m afraid it is a case of finance being short, and we can’t lopk for a quick recovery. “Last season the prices were on a low basis, but they were good compared with the value of wool to-dayl wish I cotfrd see some signs of an improvement, but there is really nothing to warrant us in hoping for any better prices in the near future. It is a sad story, and the best that can be said is that the Auckland drop was about what we expected.” After remarking that while the Auckland wool was not as good as that produced by the other parts of the Dominion, the broker said that it was quite evident that prices were down to desperation point. “All at Sea.” “I do not think that there has ever been a time in the history of the wool trade in New Zealand when everyone is so much at sea in regard to prospects as we are at present,” he concluded. The principals of several large retail establishments shrugged their shoulders when asked for their opinions. They said they did not understand the wool situation, but there seemed to be no doubt that a serious stage had been reached. The problem was how to meet the situation. (A report of the Auckland wool sale appears on page 4).