Wool

"WOOL 28.805). - The functions of " supply " and "demand," of " free-trade " and " controlled trade " in the wool industry, during the decade 1910 -20, form a very interesting study for the economist. The situations before, during, and after the war are best shown separately: I. Before The War (1911 to 1914) (a) Wool Production. - The best available statement of the world's sheep and wool production is given in Table 1; it includes figures of the pre-war and post-war periods.

TABLE I. The World's Sheep and Wool.' 1 Chiefly from the Wool Review of the National Association of Wool Manufacturers, United States.

From these statistics the following interesting deductions are to be drawn. It is somewhat surprising to find Europe heading the list of wool-growing continents. This is largely due to the flocks of European Russia: 320,000,000 lb. of wool (pre-war) are credited under this head, and this probably explains the source of German wool clothing during the latter days of the war. What had become of this huge quantity latterly was not on record in 1921. Incidentally it would certainly appear that the continent of Europe as a wool-growing continent had not claimed the attention merited. In most respects Europe compared more than favourably with other continents, and it was only owing to the diversity of interests, languages, etc., that this was not more in evidence. If the nations of Europe would all pull together, that continent would probably have more to give to the world than to receive.

Europe and North America, being by far the greatest manufacturing centres in the world, have practically consumed the whole of the very large surplus stocks from the other woolgrowing countries, apparently in the proportions of 80% for Europe and 20% for North America. The marked difference in the weights of the fleeces produced as indirectly shown by this table is obviously worthy of careful consideration.

(b) Wool Distribution

The detailed figures respecting local supplies, importations and reexportations are very confusing. The figures in Table 2 may be taken - with exceptions to be presently noted - as an indication of the wool each important manufacturing country received. One or two questions Table 2. Wool-manufacturing Countries. ' These figures require careful consideration. Probably a large proportion of this wool is usually manufactured in other countries - notably Germany and Britain.

here arise. The United Kingdom is credited with manufacturing 90,000,000 lb. approximately of a 120,000,000 lb. clip. It must not be forgotten, however, that a very considerable amount of the world's wool supply passes through the London or Liverpool wool sales, as is shown by Table 3: Table 3. United Kingdom Imports and Exports (1911).

The colonial (and foreign) wool not accounted for by Table 3 is no doubt sold direct to the manufacturing countries. This is indicated by the sales of South African wools for the year 1913 (Table 4).

Table 4. Distribution of South African Wools. An analysis of S. American exports would, no doubt, show by far the larger porportion of S. American wools passing directly to Belgium, France, Germany and the United States, a large quantity, of course, passing through the Antwerp sale-rooms.

(c) Tendencies in Production and Distribution

In wool production from 1910 to 1914 there is little to note. S. Africa made a valiant attempt to improve both the quality and quantity of her wool, and succeeded in both objects to a certain extent. In Australia certain developments of sheep-growing districts are to be noted, but these, with the increase in the weights of the individual fleeces, probably only just served to balance losses through drought and in other directions. Falkland Island wool (fine crossbred) made a name for itself as a good hosiery wool, but unfortunately the increase up to 1914 was not great. S. America generally proved disappointing, in view of the demand for its wools, not only from the European continent but also from Great Britain, following the decline in the prejudice against them.

Undoubtedly the greatest wool problem prior to the war was the provision of a sufficient quantity of fine merino wool. This Table 5. New Zealand Wool. is illustrated in Table 5. S. Africa partly met this deficiency, but Australia pinned her faith on mutton rather than on wool, so that the tendency to eliminate the pure-bred merino is still in evidence.

So far as the distribution of the wool manufacturing industry was concerned there was an undoubted tendency in Britain to relinquish wool manufacture owing to severe competition. The continental European competition took the form of efficiency in manipulation and excellence in the goods produced. How Yorkshire was going to face the importation of certain continental goods was a problem - and one that had still to be faced after the war. The competition with the United States was apparently controlled by the tariff charges, but it is more than probable that the excellence of American manufactured goods was already beginning to tell against European importations; although America still had to start her export trade. Yorkshire, however, appeared to be falling between two stools - she was not producing goods of the excellence of the continental styles and thereby forcing a way into neutral markets; nor was she organized on such a scale that she could face the United States' markets - indeed the American manufacturers were surpassing her in scale of organization. It would not be overstating the case to say that the year opened with many misgivings so far as the British wool manufacturing industry was concerned. The war came, and temporarily dominated everything. But the conditions of 1914 were likely to reappear afterwards, and would have to be faced sooner or later.

II. .THE WAR Period (1914 to 1918) The Slump in Trade. - Fear of the unknown naturally created the trade slump observable during the early months of the World War. Britain, a country whose very life depended upon. the importation of the raw material and exportation of the semimanufactured or fully manufactured article, naturally had most to fear. This fear was further aggravated by the fact that British manufacturers had huge financial interests involved with Germany; and, conversely, Germany had financial interests with Britain. With trade universally in a state of suspended animation, and the sequence of delivery of goods and payment of accounts seriously interfered with, many British firms - and especially those in the wool, top and yarn trade - were at once in serious financial difficulties. The Government, however, tided over the difficulty by. the " moratorium," which, by the " time easement " given, enabled the greater proportion of firms eventually to meet their liabilities.

A period of suspense followed, during which the exact trend of many matters was being worked out. By the middle of 1915, however, the idea that, when the British and French armies got going, they would sweep the Germans back into the Fatherland, had practically gone. In the meantime Germany had been swept from the seas. It was now evident that Germany, from the wool point of view, would have to be self-contained, neither importing raw wool 1 nor exporting manufactured goods; that France was seriously incapacitated as a manufacturing country owing to the invasion of much of her manufacturingi territory; that Russia would seriously have to draw upon: British stocks of manufactured goods; in fact, that Britain' must be the mainstay of the Allies - and of the world, with the exception of the United States and Japan - so far as wool manufactured goods were concerned. The extent to which, Germany deliberately crippled France both during the war period and subsequently will be realized from the following quotation from the Yorkshire Observer in March 1921: " The Fourmies District remained practically the whole time away from actual fighting range and did not suffer from gunfire, but, this notwithstanding, the destruction by hammer, pick, dynamite and fire was complete, the Fourmies woollen plants having always proved most serious competitors of those of Germany. The enemy reached the district on Aug. 26 1914, and' left it on Nov. 9 1918. When they arrived there were 75 textile works in full activity; they destroyed all except five worsted spinning plants,1 one woollen spinning plant and one combing plant. The steam! engines were broken or otherwise damaged; the boilers removed and: rendered unserviceable, the safes were broken into and all records! of manufacture, samples, reference data, representing 30 years of! activity, removed to Germany.. .. Immediately the Germans occupied the northern departments of France, not a single woolcombing machine was left throughout the country; there remained! in activity throughout the land only 160,000 worsted spindles out! of 2,400,000; only half the total of 700,000 woollen spindles; only; about 11,000 weaving Iooms out of 56,000." By 1916, two other factors had come into play. The drain on the man-power of Great Britain was becoming serious. But, it was now fully revealed that in the wool industry there was a vast surplus of labour ready to maintain output, at least at a very high rate. By April, scarcity of shipping was threatened. Thus early in 1916, if the serious limitation of the supply of raw materials was not actually felt, it was in sight.

The Difficulties Leading to Wool Control. - The British War Office, having in the very early days of the war experienced the difficulty of clothing in khaki the large army in course of formation, organized itself to overcome this difficulty, and by the inevitable restrictions indirectly placed on the manufacture of civilian clothing had so far succeeded fairly well in its direct object. But by the early days of 1916 the War Office was seriously alarmed at the future prospects of supplies of raw materials and sought outside advice. As illustrating the method of working the following may be taken as typical. On Feb. 2 1916 a War Office official (who, incidentally, knew nothing of wool) visited the university of Leeds and asked for certain estimates respecting British combs and spindles, to be supplied to him four days later when the Army Council would meet to discuss supplies. In Table 6 the figures then supplied are given, and alongside the estimates are given also the actual figures, kindly supplied some years later by the same official. The estimate for 1916 was 337,500,000 lb., as against an actual production of 309,443,185 lb., based on the first half of 1917.

The following figures were also supplied on the same date: Wool available for use in the United Kingdom. 800,000,000 lb.

Less clothing wools used in the woollen trade.. 200,000,000 Available for combing.. Less shrinkage and tearage in scouring and combing (4 0%) .

Wool available for " tops " .

The estimated shrinkage and tearage of 40% would have been much too low - as average Australian merino gives a shrinkage of about 50% and a tearage of from 5 to r to 8 to 1 - but for the endeavour made to save shipping space by shipping in the scoured state only, and by reason of the large quantities of washed home-grown wools and low-yielding colonial crossbreds included. The effect of this is clearly shown (Table 7) in Mr. Norman Rae's figures published in the Yorkshire Observer of Friday, Aug. Io 1917. From these figures it is evident - (a) that the Government by 1917 had fears of being unable to 1 With the exception noted with reference to Russian wools.

lb.

240,000,000 lb. 360,000,000 lb.

Table 6. Estimates (Feb. 1916) and Figures. (Output of combs per annum.

(Output of worsted spinning spindles per annum.) 1 Large quantities of scoured colonial wools were being imported. Certain worsted wools were also being drawn and spun without being combed, thus eliminating " less tearage." Table 7. Stock Dec. 31. Yield as above. .. .. 219,682,000 lb. (clean) Leaving out skins, yield at 50% (instead of 70.87%) 1 54,9 8 3, 000 lb. (clean) Increase (wool under-estimated). 64,698,500 lb. (clean) Skins, 7,238,000 lb., not included.

keep the Allies' wool industries supplied with wool, and much under-estimated the yields - although they had the Leeds University suggestion of 40% for yield and tearage before them; (b) that the industry was feeling the shortage of wool and was regarding the future with misgivings; (c) that leading wool men thought it actually expedient to question the Government figures, and, if possible, to obtain at once a greater wool distribution; (d) that as subsequent figures seem to show, the university figures of 40% average loss between raw wool and finished top and the other figures supplied were most nearly correct, and would have served well as a basis to work upon. All these figures, however, are chiefly useful as illustrating the difficulties involved not only in estimating the workable supplies of wool during the war period but in estimating the yields and in averaging up the quantities of clean wool which the actual deliveries might be expected to give.

How serious was the problem of supplying wool to the home trade, and to such of the Allies as could manufacture it, is shown in Tables 8 and g. To the quantities shown in these tables should be added something over 300,000,000 lb. of remanufactured materials, probably derived as follows (in 1914 figures): - Of the wool manufactured in Great Britain, 500,000,000 lb., about 3 (166,000,000 lb.) is retained at home, and about half this (or 84,000,000 lb.) is torn up each year; rags imported amount to ioo,000,000 lb.; so that the total remanufactured materials (excluding noil) amount to 184,000,000 lb. But this is probably an under-statement, as the figures collected by the Board of Trade during the war period show an average approximating to 200,000,000 lb. Thus it would appear that the woollen industry of Great Britain roughly consumes per annum: - 200,000,000 lb. greasy wool 1, 200,000,000 lb. remanufactured materials, and 60,000,000 lb. of noil, or a total of 460,000,000 lb.

These figures reveal - (1) the continuous reduction in the quantity of British wool grown and, excepting during the war period, manufactured in Britain; (2) an increase in supplies 1 This figure is questionable as large quantities of so-called clothing wools may be employed for combing purposes.

of colonial and foreign wools, if we take into account the fact that there is possibly still some of the 1919 period wool to be accounted for; (3) the increase in the quantity of colonial and foreign wool manufactured in Britain; (4) the large increase in the foreign and colonial importation in 1915; (5) the effects of the German submarine campaign on the 1918 importation, and the making up of lost ground in 1919; (6) the fact that the average importation of colonial and foreign wool for the five years ending 1919 is much below the five years ending 1914. Had wool gone elsewhere, or had it not been grown? It may be noted (7) that Turkey mohair (sent to Britain by parcel post during the first year of the war) would disappear until 1919, the large increase shown on 1919 being no doubt partly Turkey mohair and partly Cape mohair; and (8) that alpaca, being free, was largely employed to take the place of merino wool during 1917 and 1918, - the clipping of immature fibre led to the marked increase in 1918 and the consequent reduction iri 1919.

Table 8. Pre-war Supplies of Raw Materials. (In millions of lb.) 2 This figure is explained in Table 9.

Table 9. War Period and Post-war Period Supplies of Raw Materials. (In millions of lb.) 3 Average for five years = 72 4 (see Table 8).

These facts and figures, although somewhat prematurely placed here, may be usefully borne in mind in studying all phases of the subject.

In April 1916 the Army Contracts Department of the War Office began to commandeer hosiery yarns on the financial basis of a fixed margin to cover the processes of manufacture.

A little later restrictions were imposed upon the export of raw wool - possibly owing to rumours of it reaching enemy countries and certainly because wool supplies for home purposes were becoming very restricted. By June 1916 the War Office knew that further control was almost certainly inevitable, and circulated compulsory requests for particulars of stocks of wool, tops and yarn, which requests, of course, were very disquieting to the trade. Later in the same month, so serious was the position judged to be that the War Office prohibited the opening of the British wool fair of Kettering, and, eventually, after some debate, purchased the whole of the British clip at 35% above July 1914 prices. The British clips of 1917 and 1918 were also bought.

Anxiety with reference to the possibility of supplying the army with the wool goods it really needed continually increased. In April 1917 the open market for wool was closed and the sales by auction abolished. In May, in anticipation of the lack of wool to keep the factories going and of labour disturbances, an army council order was issued which resulted in the reduction of working hours in the factories from 551 per week to 45 per week, unless permission was obtained from the director of army contracts to work full time. This order was not withdrawn until May 18 1918, following the enormous demand for flannel goods.

Following the revolt, already referred to, of Yorkshire manufacturers in Aug. 1917, due to War Office restrictions of supplies and of estimates of future supplies, and following the failure of the trade itself to supply reliable data, came the formation of a " Board of Control." Wool Control. - The Board of Control was organized with Sir Arthur Goldfinch as director of raw material supplies, Col.

F. V. Willey as controller of wool supplies, and Sir Charles Sykes as director of wool textile production. The department was housed in the Great Northern Hotel, Bradford, and was given complete control of both supplies of raw material and output of finished clothing. The activities of the department followed briefly the following lines: - (1) A reasonably exact basis of " yields " was ascertained and all wools dealt with on the " clean wool " basis. (2) Reliable statistics were obtained and made the basis of the distribution of supplies of raw materials. (3) A method of " rationing " the margin of wool supplies (about 20% of the available supplies) available for the civilian trade was worked out. (4) Difficulties of a minor nature, such as the supply of oils for oiling wool, soaps for scouring, etc., were faced and usually satisfactorily surmounted. (5) A standard clothing scheme was introduced, the intention of which was, no doubt, good, and its failure only to be attributed to the failure to employ the technical skill actually available in the industry in the designing and displaying of the goods manufactured. Exhibitions were held up and down the country and attracted much attention, but little demand for the fabrics was exhibited. Last, but perhaps not least, the department had to face the problem of relinquishing control on the termination of the war. Those who know the anxiety caused, years before the war was over, by the clearly foreseen difficulties of disbanding an enormous army, will know something of the anxieties of the Wool Control Board to close down with credit to itself and no less to either the wool grower or the wool manufacturer.

Provision for After the War. - The Armistice brought with it the determination of those whose trade had been taken from them by the Wool Control Board to oust the Board and regain their own back again. The Board's function, on realizing the inevitable, was to dissolve (1) with credit to itself, and (2) with due regard to the interests of the wool growers and wool merchants, of the wool manufacturers, and of the consuming public. With the huge demand for goods following the Armistice prices soared up and up, and it was only human that the Board should tend to retain command to its own financial advantage, and also to attempt to prevent undue inflation of values to the detriment of the consuming public. So far as British wools were concerned the removal of control was so simple that no preliminary action was considered necessary, and the restrictions were actually removed in time for the wool fairs in 1919.

To meet the difficulty with reference to Australian wools the Imperial Government had decided to purchase the Australian clip for one year after the war. To further facilitate matters, a Wool Council, which included imperial representatives, was formed by the War Office.

With reference to the interests of the manufacturers and consumers the Government again asked for advice from the university of Leeds through one of its representatives. In a personal interview with the official in question the probable trend of trade after the war was outlined and the suggestion given that, in view of the almost certain shortage of immediately available supplies and the huge demand for fine merino wools, certain manufacturing restrictions - such as spinning only to fine counts of yarn - should be imposed. Unfortunately this suggestion was not sufficiently acted upon, with the result that the army's revolt from rough khaki to fine blue serge sent merino wools soaring up to unthought of heights, all other qualities. following suit. The intention of the Wool Council was undoubtedly good, but again the direction of the matter was primarily in the hands of those who knew little or nothing about the wool industry, who could not even judge who were giving them sound advice and who were giving them questionable advice. It may be conceded that to control speculation under the conditions prevailing from 1918 to 1921 was apparently impossible. Apparently the only thing to be done was to unload stocks as rapidly as possible - although one authority did suggest that the way to reduce prices was to keep. large stocks of wool and not to sell.

During this period there was much unrest in the labour world and a great deal of talk about " profiteering." As an indirect result of this the Whitley Act was passed by Parliament, and note should here be made of the endeavours made by the British woollen and worsted industries to take advantage of this Act and form " Industrial Councils " composed of employers and employees, also of the formation of the " National Wool Textile Industrial Council," the final draft-constitution Of which - prepared by Mr. Ernest Marsh (chairman) and Mr.

G. H. Wood (secretary) - as adopted on Dec. 10 1918, was as follows (Yorkshire Observer, Nov. 27 1918): " The title selected is the National Wool (and Allied) Textile Industrial Council, and its objects are defined as follows: - To promote the development of the industry and to secure that wages, methods of production, and conditions of employment shall be systematically reviewed and decisions agreed upon which shall have as their object the improvement of the relations between employers and employees.

In furtherance of these objects the Council shall: - (a) Consider wages, hours, and working conditions in the industry as a whole, and the fixing of standard rates of wages for similar occupations in the industry. It shall also consider the employment of scientific and agreed methods of fixing wages, and of adjusting wages to new conditions, and the securing to the employees of a share in any increased prosperity of the industry; (b) Consider the best means of securing the highest efficiency of the industry, including any improvement in machinery, invention, or method by which the prosperity of the industry is to be increased; secure that such invention or improvement in method shall give to each party a fair distribution of the benefits derived from the increased efficiency; utilize to the fullest extent the practical knowledge and experience of the workpeople, and secure that such knowledge may receive consideration; (c) Consider the existing machinery for the settlement of differences between different parts and sections in the industry, and the establishment of regular methods of negotiation on anticipated issues between employers and employees, and upon differences which may be reported with a view to the prevention of differences and their equitable adjustment; (d) Consider the supervision of the entry into and training of employees for the industry, and cooperation with the educational authorities in arranging educational facilities for the industry in all its branches; (e) Make comparative studies of the workings and methods of the industry in this and other countries, and when desirable publish reports; (f) Secure to the workman a greater share in and responsibility for the determination and observance of the conditions under which he works, in so far as it relates to his material comfort and well-being; make efforts for the decasualisation and permanent security of employment, having regard to the conditions surrounding changes of occupation between one employer and another; consider means toward the improvement of conditions with a view to removing the danger to health in the industry, and toward providing special treatment where necessary for employees in the industry; (g) Make reports to Government departments and local authorities of the needs and opinions of the industry; consider any questions bearing on such matters which may be referred to the Industrial Council by the Government or by a Government department; consider jointly all proposed legislation affecting the industry and take joint action where such legislation is likely to interfere with its prosperity; (h) Consider the best means of insuring the observance of the decisions of the Council and of agreements made between organizations of employers and employees; (i) Consider means ' whereby the employers and employees shall be brought within their respective associations." This Council steadily extended its activities, and may ultimately be the deciding factor in helping Great Britain to maintain and possibly to extend her manufacturing position.

Another indirect result of the war was the development of industrial and scientific research. The university of Leeds (so far as the wool industry was concerned) here took the lead, and, in conjunction with the West Riding County Council and with the help of many prominent manufacturers in the various manufacturing districts, raised approximately 5-,000 per annum for a period of five years. With the development of the Government Department of Scientific and Industrial Research, however, came the question of overlapping, and the university, while naturally retaining its own research status, not only gave way to the new department but strenuously helped in the development of " The Research Association for the Woollen and Worsted Industries " now housed in Leeds. This Research Department is designed to cover the requirements of Great Britain and Ireland.

III. After The War (1918 to 1921) Withdrawal of Control from British Wools. - Under political pressure the Government freed the wool fairs of 1919 from State control. But a curious tendency now made itself felt. Owing to the limitation of supplies of colonial crossbreds and other 1915 1916 1917 1918 1919 1920 1921 ! N..

Chart t Values of British Wools and Tops (1911 to 1921).

crossbred wools, woollen manufacturers had been constrained to use British Down wools and Down crosses. These were discovered to possess just the characteristics sought for in certain woollen goods. They were also the wools sought for by the hosiery manufacturer; and as hosiery now took a wonderful development the Down wools went soaring away in price, at last almost rivalling colonial merinos. When the slump came, Down wools stood out against it even longer than merinos, and it seemed probable that when trade should revive Down wools would again come into their own. In view of the great future before Down wools it was regrettable that more British farmers did not follow the suggestion to grow Down crosses, as strenuously advocated by qualified representatives of the universities of Edinburgh and Leeds.

The changes in values of British wools and tops are shown for the decade in Chart I.

Of course the high values shown in this chart are fictitious in more senses than one, but it would seem that if the 1921 prices of these wools had been brought to the 1914 basis they must be so cheap that demand for goods manufactured from them would have been immediate. Probably the large stocks of manufactured goods still held in 1921 by the middleman kept the prices of these goods at an artificial height and thus lamentably interfered with trade.

Withdrawal of Control from Colonial Wools

The Wool Council of the War Office on the cessation of hostilities found itself in great difficulties with reference to colonial wools. Just as on the outbreak of war no one knew what would happen, so in this case it was impossible to foresee whether the enhanced values of the war period would be maintained or prices rapidly fall. If prices had rapidly fallen it is possible that the wool grower would have held the Wool Council to its bargain, and Chart 2 Values of Colonial Wools and Tops.

no one could well have found fault with their attitude. But prices rapidly rose, and so it came about that the colonial wool grower felt aggrieved that he was not going to profit by the enhanced wool values like the home wool grower. Thus it came about that the Imperial War Council agreed to share the very substantial prospective profits with the colonial wool grower. Unfortunately much of the 1919 wool had not been brought under the hammer before the slump started (May 1920), but it was stated that, after the British Treasury had been reimbursed for the expenditure it had incurred, there was at the end of 1920 a clear profit of 14,000,000, half of which belonged to the growers, bringing their total receipts up to 180,896,09. In addition to this there remained unsold (Dec. 1 9 20) 1,800,000 bales, half of which belonged to the growers.

1915 1916 1917 1918 1919 1920 1921 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.

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 elsewhere, 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 io 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.). ioo,000 bales U.S.A. surplus stock (Oct. 1 1920) 2.. i,000,000 bales S. American wool. ... 5,000 bales Total. ... 3,5 0 5, 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.' 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 followed 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. BLit the Wool Council had not only to face this surplus of wool but the new wool (1920 clip and in prospect the 1921 clip) coming on to the market at the reopened sales in Australia. The adjustment of this prospective difficulty was exemplified as shown in table r 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 II. London Colonial Wool Sales (Feb. 22 to March 5 1921).

of which approximately 76,000 bales were colonial, were sold; 44, 000 bales were taken for export, including 2,000 bales Punta Arenas and Falkland Islands; 8,000 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.

1919 1920 1921 60 Price Per Lb.

IN [[Pence 5 40 35 30 25 20 15 10 5 45 55 50 45 40 ' '35 30 2s 20 70 9 Merino Top 15 569 Cross Bred 10 Top 5 40 9 Prepared Top Price Per Lb]].

IN Pence 5 8 development of Australian wool industries) proposed to form an association of Australian wool growers and British Government representatives, with the object of realizing at reasonable values the large stocks of wool held in Australia and England, the Wool Council accepted the proposed control. Indirectly the Wool Council was apparently sacrificing the possibility of cheap wool for the manufacturers of this country: but it regarded the pocket of the whole country as coming first and the manufacturers' demand for cheap wool as coming second. The Australian Board was thinking chiefly of the interest of the Australian grower. The association was registered in April 1921, as follows: " British Australian Wool Realization Association, Ltd., Caxton House, West Tothill Street, Westminster, London, S.W.I. Incorporated in the State of Victoria, Australia. Registered April 14, to acquire and take over (a) one-half share of, or interest in, all Australian wool bought by the British Government through the Government of the Commonwealth of Australia and still undisposed of, and in all real and personal property acquired in connexion therewith and still undisposed of; (b) one-half share of, or interest in, any surplus profit on resale of Australian wool so bought still undistributed. Also to take over and assume one-half of all or any liabilities and obligations connected with and chargeable to such wool, property and surplus profits not yet liquidated. Nominal capital £25,000,000 in 25,000,000 shares of £1 each. Names of persons authorized to accept service; Sir Arthur Horne Goldfinch, K.B.E., 8 Rosecroft Avenue, Hampstead, London, N.W. (Governing Director British Australian Wool Realization Association, Ltd., Delegate General Chilean Nitrate Producers Association); James Alexander Cooper, C.B.E., F.S.A.A., Mentmore House, Uxbridge Road, Kingston on Thames, Surrey (Assistant Governing Director, British Australian Wool Realization Association)." With the lack of demand for goods and consequent lack of consumption of wool the world over, even the best merino continued to fall in value up to May 1921, and the poorer sorts in some cases were below 1914 values (see Chart 3). Whether the enhanced values realized in May by both merinos and crossbreds would be maintained was questionable. Table 11, from the Yorkshire Observer of May. 16, showed a turn of the tide - if there were no set-backs. Demand from the United States in anticipation of the new tariff might be, at least in part, the explanation. Germany had already commenced to buy wool.

Table 12 Iv. Prospects In 1921 Wool Manufacturing. - Australian combed tops were on the Bradford market, on the American market, and were also being worked up in Japan in 1921. Did this presage a re-distribution of the world's wool manufacturing industry, and if so what was the line of distribution likely to be followed?

The astounding prosperity of the British wool-manufacturing industry following the Armistice attracted world-wide attention, and it was but natural that every one with any connexion with the industry the world over should wish to share in the prosperity.

There were two types of country in which the development of manufacturing would undoubtedly be attempted, and in which the attempt is undoubtedly justified, (I) the wool-producing continents or countries, Australasia, S. Africa, and S. America, and (2) new wool-consuming countries such as India, Japan, Brazil. In Australia some few mills were developing before the war, and after the war, under private enterprise, stimulated by the energy of Mr. Hughes and others, and, in some cases, further encouraged by the mother-country financiers. Australia made strenuous endeavours to develop a huge wool-manufacturing industry. Her ideal was to manufacture one-tenth of her wool production per annum - say, 50 to 60,000,000 lb., and in 1921 nearly 4 o wool manufacturing mills were already in existence. Similarly South Africa, stimulated by Gen. Enslin, was also making a bid for wool manufacturing.

In the case of Australia no forethought or skill was being spared. The mills were being equipped with the finest machinery - French-made combs, for example, had so far been given preference over the speedier but less exact British (Noble). combs - and the best skilled workers were engaged in many of the mills. Excellently combed Australian tops were already on the Bradford market.

So long as profits remained high and high rates of wages were maintained, the appeal to the financial instincts of the worker, even in the case of Australia, might be expected to hold him in the mill. But if the conditions of 1914 came round again and the skill and temperament of the newly developed Australian industry were pitted against the skill and temperament of the older industrial countries, which would win out? Broadly speaking, in anything be y ond combing it would be the older countries' fault if they did not dominate. Again, with the need for harder conditions in the factories which must almost inevitably follow severe competition, it was a question which operatives would best stand the strain. Australia, and possibly S. Africa and S. America, might develop quite considerable wool manufacturing industries, but it would seem inevitable that the old manufacturing countries would almost entirely retain their hold on the bulk of the world trade in manufactured wool goods. In the case of India, Brazil and more particularly Japan, it was probable that the growing demand for wool goods would be only partly met by local production, and for some years to come the outside demand of these countries for manufactured goods seemed more likely to develop than to contract.

So far as the British wool manufacturing industry is concerned everything depended upon (r) the introduction of scientific method into the works; (2) efficiency in manipulative skill, and (3) efficiency in organization. With reference to the first and second points the introduction of automatic machinery was day by day placing an enhanced value on careful, thoughtful workmanship. The Englishman likes to get a job done, he prefers " driving force " to thoughtfulness. The, continental controllers and workers are too often years ahead of the British managers and workers; in thoughtful outlook the American managers and workers are up to the British in bulk production and threaten to pass them even in excellency of output.

With reference to the third point, organization depends upon both directors and workers. An unsympathetic attitude on the part of. either will lead to trouble and disaster. The scale of organization had probably been set by the United States. There the Arlington mills each day treat the fleeces of about 35,000 sheep - say, 200,000 lb. of wool: and this is said by no means to be the largest wool manufacturing company in the United States. Along with this enormous organization goes an efficiency in organization and cleanliness in installation which puts most European mills to shame. The American manufacturer ' has no time to develop that " secrecy " which is far too much in evidence in European concerns; he relies upon progressive efficiency.

To sum up, it would seem that while wool-growing countries may develop quite considerable wool-manufacturing industries, these will not be to the exclusion of the older manufacturing countries. On the other hand, American enterprise (and possi bly Japanese enterprise) will severely test the resources of the older industrial countries, and success will rest in the future with the country developing the most thoughtful captains and rank and file of industry.

(b) Wool Production

During the high prices period of 1918 to 1921 the demand for wool was so great, and future prospects for the wool-grower seemed so rosy, that likely and unlikely fields for the development of sheep-breeding were considered.

With the slump in prices the future prospects of the woolgrower suffered an apparent eclipse. No doubt in 1920 prospects were considered too rosy, but equally in 1921 prospects were regarded in altogether too sombre a light. A few broad glances at the situation will clear the way.

If we take the United States as practically a self-contained country, and allow the approximately ten million negro population (wearing little or no wool) to balance the extra wool required for garments in the northern states, where cold winters have to be faced, we get this interesting result: - Wool consumed, 600,000,- 000 lb.; population, 100,000,000; or 6 lb. of wool per head per annum. Even if we allow for a considerable quantity of re-manufactured material and also for the negro population, this can only be regarded as a " miserable statement," for the 6 lb. is greasy wool yielding about 3 lb. of clean wool, or half a suit or half a dress length per annum for each male and female in the United States. In this allowance are included the imports of wool materials (other than raw wool) amounting to an average of over 30,000,000 lb. per annum. Neither Great Britain, France nor Germany shows any advance on this.

The world's wool statistics and population only serve to emphasize the lack of supplies; for taking the pre-war figure (given in Table I) of 2,728,461,630 lb., and allowing an average yield of 60% clean wool, this leaves about 1,400,000,000 lb. of clean wool to serve for a world's population of I,606,542,000 or. 9 lb. of wool per male or female. To make this discrepancy even clearer, however, take only the population of Britain, Canada, Australia, the United States, France, Germany, Austria, European Russia and the Netherlands - these total up to approximately 282,000,000 souls, consuming hardly 6 lb. per head per annum. The problem of the future would seem to be: - How to develop such conditions of livelihood the world over that the greatest possible number become substantial purchasing (or exchanging) units?

What possibilities of increased supplies are there? These may be grouped under two heads: (I) an increased yield from the present flocks, and (2) the opening up of new tracts of sheep-rearing land. The first point is admirably illustrated by particulars taken from Table I, the weights of fleeces for the several continents working out as follows: Europe 80 1780 } Oceania 645 96 S. America 4826 } 1186 In some cases the sheep-lands are too poor to be expected to do better, but it will probably be found that this is very rarely the case. It is stated, for example, that Herdwick sheep, living on Cumberland hills which will hardly support rabbits, will produce fleeces from 5 lb. to io lb. weight. But what may be effected through careful selection is best illustrated by the following record of New South Wales flocks: - Thus with 25 million fewer sheep in 1916 as against 1890 some 80,000,000 lb. more wool was produced. Great Britain has seriously taken these figures to heart, and under the auspices of the Research Association for the Woollen and Worsted Industries strenuous endeavours are being made, (a) to increase the quality and yield of the well-established breeds of sheep, and (b) to improve the quality of the wool in certain mountain types by crossing with better quality sheep, especially Down sheep.

With reference to the second point, although nothing like the development of a second Australia is to be expected, it is already obvious that marked developments of sheep-growing tracts of land may be expected. In the spring of 1921, for example, Col. Robert Stordy, on behalf of the Peruvian Government, sailed from Britain with cargoes of Southdown, Suffolk Down, Shropshire, Rambouillet (merino) and Soay rams, with the object of developing wool growing in Peru. Wool analysis of the Peruvian wools grown in 1921 on the degenerate sheep of the country, as analyzed by the university of Leeds, revealed remarkable qualities specially acceptable to the hosiery manufacturer. The development of Peru as a wool-growing country is one of the most fascinating possibilities.

The Duke of Devonshire, Governor-General of Canada until 1921, was specially interested and concerned in the development of the prairie lands of the Dominion on the four years' rotation basis, and one of the years will mean sheep. Thus it is quite possible that in the near future Canada will produce more wool of the Down type and possibly of the merino type: for if Russia can raise merinos amid the snows of winter, why not Canada? The Indians and Japanese are both making inquiries with the idea not only of improving the breed of such sheep as they have but also of developing large tracts of land which probably could well carry sheep.

(c) Wool Distribution

The question as to where the wool of the world will be distributed for manufacture and re-distributed for wear, is largely a matter of surmise. and, after the extraordinary change from the conditions prevailing in the early months of 1920 to the conditions prevailing in the early months of 1921, even the most reliable authorities hesitated to commit themselves. If the world becomes more stabilized, and the suppressive effects of vested interests on the one hand and of " ca'canny " on the other are brought within reasonable limits, then it may be that conditions as rosy as 1918 to 1921. will return with accompanying similar conditions in other industries. To meet such conditions, should they arise, will necessitate the employment of every possible type of automatic machine, and a developed skill depending on the quality of " thoughtfulness " on the part of the individual worker in using such automatic machinery. It will thus be evident that forethought, efficiency and skill will play a greater part than ever in deciding the peoples to whom the bulk of the world's wool shall pass to be manufactured. Australia will undoubtedly manufacture an increasing quantity of wool - but she may possibly grow an even greater quantity than that demanded to balance for the manufacturing in her own mills. S. Africa, S. America, India and Japan will no doubt all claim their quota for manufacturing purposes. But the great bulk of the wool will be manufactured elsewhere: and it is safe to say that will be where scientific method and scientific management and a broad, humane outlook dominate. And the manufactured material of course will go to those peoples who have something to offer in exchange. It is true that the immediate outlook in 1921 was dark. But the reason why was becoming apparent. And when this was fully realized the world would be well on the way to adjust its economic condition to facilitate production and exchange to the advantage of all its peoples. (A. F. B.)

Categories: WIL-WOR