§ Mr. A. M. SAMUEL
asked the Parliamentary Secretary to the Ministry of Munitions whether events have justified the policy of refusing, during the past summer, to sell Government-owned wool at the prices then obtainable, seeing that the result is that the Government is now holding that wool unsold in face of the accumulations of unsold old wool of non-Governmental ownership and of the three new clips coming into the market: whether the high reserves were fixed by the Wool Controller in the expectation of obtaining prices higher than the market was offering at the time; and, if that was not the object of the reserve, will he say what the Wool Controller was and is aiming at and how he proposes to attain his aim?
As my hon. Friend is aware, the wool market has fallen very heavily since May last, and (assuming that the Government could have reduced prices without being immediately followed by all other competitive sellers) it is probable that a certain limited quantity of wool might have been sold to better advantage if the prices obtainable in the summer months had been more freely accepted. The highest estimate that can be placed on the business thus lost is 100,000 bales, against a stock in June last of 2,900,000 bales. The bids actually made and refused covered a quantity of less than £25,000 bales. The objects which the Department has had in view in gradually reducing its reserve prices instead of sharply reducing them or abolishing them altogether are as follow:
(1) To prevent a sudden and disastrous fall which might have had very serious and far-reaching effects on home trade.1485W
(2) To allow the wool market to find its new level in the Australian and New Zealand auctions, and not to force it down by action in this country which might have been thought by the Dominions to be precipitate and inimical to their interests. It must be remembered that the sheep-growing industry is vital to Australia and New Zealand, that prices for their wool were kept artificially low from 1916 up to 31st March, 1919, by Government action, and that wool prices have now fallen to a level which, estimated in gold currency, is, on the average, at least 10 per cent, below pre-war prices, while almost all other agricultural produce is 1486W 50 per cent, to 100 per cent, above pre-War levels. My hon. Friend will see, therefore, that the course of wool prices has necessarily been bitterly disappointing to Australian and New Zealand wool growers, and the Department feel that they have been fully justified in avoiding any suspicion of having aggravated the difficulties under which the wool growers are now labouring. British traders and manufacturers have not been placed at a disadvantage with any of their competitors, it having been open to them at all times to obtain their raw material from the cheapest source of supply.