A New Wool Scheme. 275 



A NEW WOOL SCHEME. 



Abortive Negotiations in Germany— Imperial 

 Government's Offer. 



The stagnation in the wool trade with its effect upon the wool 

 producers and other business interests in the Union, has engaged the 

 serious attention of the Government for some time past. In view of 

 the abnormal accumulations in the United Kingdom, and the fact 

 that prior to the war Germany was a very large buyer of South 

 African wool, the first step to be taken appeared to be the re-establish- 

 ment of the continental market. The instability of the German 

 monetary system obviously set great difficulties in the way of such a 

 etep, and various schemes for obviating difficulties in regard to 

 exchange were considered. These schemes included {a) barter of 

 wool for articles manufactured in Germany, such as iron and steel, 

 and (b) financing of the wool manufacturers in Germany by an out- 

 side agency which would recoup itself out of the proceeds of sale of 

 the manufactured article and would show profits to the manufacturer. 

 These schemes were found to necessitate the most highly skilled com- 

 mercial management and were, therefore, not readily adaptable to 

 operation by Government. 



In these circumstances the Government requested Mr. Chappell, 

 of the firm of Mosenthal & Company, and Mr. Reynolds, General 

 Manager of ths National Bank, who were in England, to associate 

 themselves with the Union Trade Commissioner and investigate the 

 possibility of re-establishing our continental markets. These gentle- 

 men proceeded to Germany, where they interviewed textile manufac- 

 turers, bankers, and Government officials. Their negotiations, which 

 at the outset seemed to offer prospects of success, were fruitless owing 

 to a number of considerations which need not here be detailed. Con- 

 sequently, conversations were opened with the Imperial Government, 

 and as a result the Union Government is able to announce that the 

 Imperial Government is willing to purchase up to 100,000 bales of 

 last season's crop, the schedule of prices for various types of wool to 

 be the schedule of 1913-14 prices used for the 1917 wool scheme, but 

 th^' 55 per cent, addition to 1913-14 prices given in 1917 is now with- 

 drawn ; 50 per cent, of any profit realized on the re-sale will be 

 credited to the Union Government for account of sellers. 



Arrangements for valuing and paying for wool, and generally 

 for carrying out the scheme, will be the same as those adopted in 

 1917. No cash payments will be made by the Imperial Govern- 

 ment, but the cash disbursements by the Union Government will be 

 deducted from that Government's indebtedness to the Imperial 

 Government. 



Investigations are proceeding with a view to the disposal of the 

 new crop which it is fully recognized is a matter of far more moment 

 than the disposal of the 100,000 bales, more or less, of the old crop 

 still in the country, but before this question could be tackled seriously 



