A.—lo

sell from stock outside the auctions at a fixed percentage above the auction reserve prices, and thus impose a ceiling on prices actually obtainable at auction. Some extension of the selling seasons in the Dominions will be desirable, and special sales of old wool, or sales comprising mostly old wool, may be held during the off-season. The Organization will be prepared, possibly at short notice, to increase or hold back its offerings from stock in some or all of the selling centres to meet fluctuations of demand and to check their influence upon prices. 5. The object of the Organization will be to secure a progressive reduction in stocks while maintaining reasonable stability of price having regard to the conditions of world demand. Reduction of stocks will be achieved as long as the total demand exceeds the supplies of new clip wool which come forward to auction, though in any given year the Organization will be both a seller of old wool and a buyer of new wool. 6. It will be for the Organization to recommend to the Governments the initial level of reserve prices at which auctions of growers' wool shall commence and any major changes which may thereafter be necessary. The Organization will endeavour to maintain the general price level unchanged within a single season, though it may be necessary to meet a definite trend in demand which appears to be of' a lasting character. Changes in the relative prices of different types of wool may also, of course, be necessary. The Organization will ha ve to pay particular attention to securing that the relative reserve prices for wool originating in the three Dominions are properly adjusted. Towards the end of each season the Organization will consider in the light of past experience and future forecasts what changes may be necessary, either in the general level or in relative prices. 7. The Organization will build up the structure of selling prices upon the basis of " c.i.f. Europe," preparing a corresponding schedule of reserve prices "ex store "in the Dominions. Reserve prices will be calculated for the London market, and as soon as practicable growers will be free to forward wool to London for sale there alongside wool from the Organization's stocks. 8. At auction, if no buyer is forthcoming at the reserve price or higher, the lot will be passed in and taken over by J.O. at the auction reserve price, subject to the grower's right of withdrawal. 9. It is recognized that the concurrent marketing of stock and new clips by the method of auction cannot be introduced in full immediately after the 31st July, 1945, since the necessary conditions of free demand and adequate organization and personnel will not then obtain. The Dominions 1945-46 clip will therefore be taken up as a whole by the present methods of appraisement and bulk purchase. On the disposals side, however, it is desirable that auctions should be restarted to a limited degree in the U.K. and possibly elsewhere in the course of the season. This would have the great advantage of providing the Organization with practical experience as to the appropriate differentials between the prices of different types of wool in advance of the commencement of general auctions. It is, in any case, certain that sales of wool will be of much greater importance and complexity during 1945-46 than at any time since 1939, and that during this period foundations will be laid and trade contacts established which will be of great importance in future years. Responsibility for the management of sales should therefore pass to the Organization at the earliest possible date. It will be for the Organization to determine the selling price during the interim period before auctions of growers' wool have commenced. 10. In order to facilitate and expand the consumption of wool the Joint Organization will maintain, close contact with the appropriate bodies interested in such matters as furthering the rehabilitation of the wool textile industry in consuming countries and in securing the replacement and improvement of machinery. It will also maintain close contact with the International Wool Secretariat and other institutions concerned with research, publicity, and development designed to increase the uses of wool,, and with the reduction of costs of wool production, processing, manufacture, and distribution, and. in general will give attention to the removal of any obstacles to consumption. • 11. Constitution and Functions of Jotnt Organization 1. The Joint Organization will be incorporated as a private registered company, with a nominal share capital of eight shares, held as to four by nominees of the U.K. Government, two by nominees of the Government of Australia, and one each by nominees of the New Zealand and South African Governments. This company will have three active subsidiaries in the Dominions to act on its behalf, which may be registered companies or other legal entities. The Directors of the principal company will consist of an independent Chairman, appointed by the four Governments in agreement ; four directors appointed by the U.K. Government, two by the Government of Australia, and one each by the Governments of New Zealand and South Africa. In addition, the Chairmen of the three Dominion subsidiaries will be ex officio Directors of the principal company without additional voting power. The functions of the principal company will be primarily to buy, hold, and sell wool as agent for the four Governments and generally to administer the scheme agreed upon between them. 2. There will be constituted in each of the Dominions a subsidiary for the purpose of conducting; the operations of the principal company in the Dominion in accordance with its policy and decisions. The functions of each subsidiary will include the following : — (а) To hold wool in the Dominion as the agent of the principal company. (б) To sell wool from stocks in the Dominions, and to arrange for the regulation of sales of current clips by auction. (c) To assess on the basis laid down by the principal company the appropriate reserve prices for the individual lots of wool (from stocks or current clips) being offered for sale. (d) To take up wool offered at auction for which the reserve price or better is not offered by" a commercial buyer.

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