§ 7. Mr. Nabarro
asked the President of the Board of Trade whether his attention has been drawn to the net loss of £7,356,650, excluding the sum appropriated from Reserve Fund, by the Raw Cotton Commission in respect of the 1450 chargeable accounting period ended 31st July, 1949; and what action he proposes to take in the matter.
Mr. H. Wilson
Yes, Sir, but I do not consider that any special action is required. Paragraph 6 of the Annual Report of the Raw Cotton Commission for the year ended 31st July, 1949, shows that the major element in the loss of £7.4 million to which the hon. Member refers results from the necessity to write down stocks held on 31st July, 1949, owing to the decline at that date in replacement values. This reflects the effect of changes in world prices described in paragraph 4 of the Report and has been subsequently more than offset in the immediately following six months, when the net profit after similarly revaluing stocks was £8.7 million. Changes of this nature were expected when the Commission were set up and were required to balance their accounts on "an average of good and bad years."
§ Mr. Nabarro
Is not this another example of the disastrous results of the bulk purchase of raw materials? Had the Liverpool Cotton Exchange been in operation, with its traditional methods of "hedging," would not these losses have been avoided?
If these figures are to be taken as proving what the hon. Member says, then the subsequent profit of an even greater amount should be taken as proving quite the opposite. Certainly, if the Liverpool Cotton Exchange had been in existence they would have been faced with the same difficulties in the restriction of dollars available as those with which the Raw Cotton Commission was faced.
§ Mr. Harrison
Is my right hon. Friend aware that the trade affected by this regulation of price by utilisation of the resources of the Cotton Commission will be considerably assisted in making long-term business contracts?
§ Mr. Sutcliffe
Notwithstanding what the President of the Board of Trade has said, do not these figures confirm the prevalent opinion that the accounts were held back until after the General Election?
I was not aware that there was such a prevalent opinion, but there was certainly no question of holding them 1451 back. They were published as soon as they were available.
§ Mrs. Braddock
Is my right hon. Friend aware that the working-class folk in my constituency have no desire to see the Liverpool Cotton Exchange reopened?
§ Mr. Nabarro
Can the President of the Board of Trade say to what extent "hedging" was practised by the Raw Cotton Commission last year?
I suggest that the hon. Member studies the whole Report, which it would take me a long time to outline in the House this afternoon.