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The change in the values of colonial wools and tops during the decade are shown in Chart 2.

Up to May 1920 the endeavour of the Wool Council was rather to maintain than to inflate values, and much fault was found with the Council for not making greater progress with the disposal of the wool to hand the manufacturers were crying out for it. To meet this demand the Antwerp sales were reopened on Oct. 25 1919 and extensive sales in the United States of America were also promoted, one of the first being held in Philadelphia in Sept. 1919. Apparently the fall in the prices of wool was almost coincident with the release of ships for transport. Unfortunately few realized the large stocks of wool on hand or rather they estimated their consumption at the 1919 rate and consequently minimized their stocks. Thus it came about that, following a period when every conceivable bale of wool was called for and (from the sellers' point of view) ought to have been placed on the market, came a period when with bated breath one heard the word " unloading," and all too soon new wool and old wool were on the market together.

1919

1920

1921

20

70 MERINO TOP

568 CROSS BRED 10 TOP

40 PREPARED TOP

CHART 3

Wool Values Adjusted to 1914 Values.

Adjustment of Sale of Old and New Wool In the early days
 * of 1920 those starting new works in the colonies, India and else-

where, were asking can we obtain sufficient wool to run our

factories? And there was every inducement to wool growers - particularly growers of the finer sorts to extend operations. Toward the end of 1920 almost all factory building the world over was suspended or carried on very leisurely; and with the fall in wool values many sheep breeders were already looking on wool as an almost valueless by-product. .Probably both extremes were wrong. Table 10 gives a fair idea of the world's wool stocks about the end of 1920 or early in 1921.

TABLE 10. World's Wool Stocks (Approximate) 1 Wool in England (held by the B.A.W.R.A.). . 1,600,000 bales " Australia " " ". . 800,000 bales Cape wool (held by B.A.W.R.A.) .... 100,000 bales U.S.A. surplus stock (Oct. i 1920) 2 .... 1,000,000 bales S. American wool 5,ooo bales

Total 3,505,000 bales

1 No doubt small stocks were held elsewhere.

2 Two years' stocks said to be accumulated.

Prior to the war the world's yield of wool was about 2,728,- 461,630 lb., and it might be taken that about this amount was yearly absorbed. It would thus appear that the surplus wool on hand was equivalent to about 14 or 15 months' normal world's consumption. 1 Now if there were serious depletion of stocks of manufactured goods, and if there were likely to be a greater demand from the better paid workers of the world, and from countries likely to demand wool goods which previously had not consumed such goods in great quantities (India for example), then the stock of wool would appear hardly sufficient to meet the probable demand. Possibly these brighter conditions might have been realized, but for over speculation in the wool industry and the general slump in prices. Actually, however, what did happen was that the countries which could purchase were inundated with the goods which, under normal conditions, would have been spread over a broader field and the slump fol- lowed storage of goods and lack of sales. The reaction probably went much too far for the home market in Britain was good in the middle of 1921. But the Wool Council had not only to face this surplus of wool but the new wool (1920 clip and in prospect the 1921 dip) coming on to the market at the reopened .sales in Australia. The adjustment of this prospective difficulty was exemplified as shown in table 1 1 in the quantities of old and new wools offered, sold and withdrawn in both London and Australia in June 1921, Of these quantities, about 79,500 bales;

TABLE n. London Colonial Wool Sales (Feb. 22 to March 5 1921)1

Sydney. Queensland. Port Philip. Adelaide Tasmania. Western Australia New Zealand Cape

Punta Arenas Falkland Islands River Plate. Sundries Total.

On Government Account

Bales

24-567 4.991

12,862 5,286 2,648 3,599

20,264

74,217

On Importers' Account

Bales

9,889

6,435

3-274-

1-542

279

10,507

10,213

3,134

3,487

577

165

,724 50,226'

of which approximately 76,000 bales were colonial, were sold 44,000 bales were taken for export, including 2,000 bales -Punt. Arenas and Falkland Islands; 8,oco bales went to America. At the April 1921 London sales the reserve prices of the old wool were so high that no bids were forthcoming and all of this wool was withdrawn. Owing to the formation of the British Australian Wool Realization Association not being completed, or rather its policy not being decided upon, all the Australian old wool sales for April 1921 were also cancelled.

The difficulties of adjustment, actually realized later, were foreseen and deemed so great that when Mr. Hughes (Prime Minister of the Commonwealth and a stalwart fighter for the

1 The U.S.A. normally holds 400,000,000 lb. of wool in stock.