PRICE OF WOOL

Wairarapa Times-Age, 20 June 1942, Page 2

PRICE OF WOOL

DISPOSAL OF ADDITIONAL PAYMENT ♦ QUESTION OF FULL PAYMENT.' STATEMENT BY MINISTER. (By Telegraph—Press Association.) WELLINGTON, This Day. A statement that at no time had it been suggested that the Government would not pay to the woolgrowers the additional 15 per cent, rise in price granted by the United Kingdom Government, was made last night by the Minister of Marketing, Mr Barclay. The point at issue, he said, was whether, in the country’s interests, the full payment should be made immediately, or whether a portion should be held in reserve for future disbursement to the industry. TREASURY REPORT. The Minister said that when advice was received from the United Kingdom that the increase had been granted, the opinion of the Treasury was sought as to the effect on the economy of the country of the payment to woolgrowers of this additional price. The Secretary of the Treasury had reported that in his opinion the full payment of the increased price to woolgrowers at present would result in a definite inflationary tendency. The report stressed the point that an increase of 15 per cent, in the price of wool • sold to the United Kingdom Government would mean an additional payment to producers in New Zealand of from £2,225,000 to £2.500,000, and that against this extra money, no additional goods could be provided. INCREASE IN SPENDING POWER. In normal times the additional sterling funds secured by this increase would be automatically used in the importation of additional goods to offset the increased purchasing power made available within New Zealand, but under war circumstances, the securing of these additional commodities was impossible. For this reason, the additional payment would merely intensify the demand for the restricted supply of commodities now available, and this would have an inflationary effect. The Liberty Loan just completed, said Mr Barclay, had as its object the raising of £15,000,000 for war purposes, but the reduction of spending power was actually of almost equal economic importance as the linding of the money. A tremendous effort had gone into raising this amount, and it would be difficult to justify deliberately increasing spending power - to the extent of £2,500,000 by paying this amount straight into the personal accounts of woolgrowers. MARLBOROUGH PROTEST PROPOSALS CALLED GROSSLY UNFAIR. (By Telegraph—Press Association.) BLENHEIM, This Day. The Government’s proposal to retain part' of the 15 per cent increase in the wool price was unanimously condemned at a representative meeting of sheepowners and farmers last night, on the ground that it was grossly unfair to make a levy on one section of the community without making similar demands on every other section, particularly in view of the fact that the New Zealand Government was not directly responsible for obtaining the increase, which was due to representations by Australia and South Africa. The meeting further resolved vigorously to oppose the Government suggestion of exempting the New Zealand woollen mills from payment of the increase, thus subsidising the mills at the full expense of the sheep farmers. A motion that, failing a satisfactory reply from the Government, the United Kingdom Government be asked to retain the increase for war relief at home was defeated.