The Arvada enterprise. (Arvada, Colo.) 1908-1970, 1920-08-12

the United States. A number OF |
factors seem to have brought about
this condition. Prior to that date.
wool buying houses were embarrassed
by the railway situation which greatly
delayed the arrival of purchases at
the manufacturing trade through can
collation. of orders, which followed
announcements of price reductions by
retailers.
Along with the above factors there
was an. effort to deflate credits and
release frozen credits. Unfortunately
the American wool market is largely
matter of initial purchase by
spectators. With the attempt to re-
duce credits, the spectators were
largely shut off from further loans.
This also extended to some houses
that worked strictly on commission
basis doing no specializing whatever,
but representing only bona fide pro-
ducers. The situation thereby created
il a most serious one in Colorado and
other wool producing states. Drouth
conditions of last year followed by a
long and severe winter made
necessary an unusual amount of feed
at unusually high prices. One result
of this isthat spring lamb crop in the
range states is only about 60 per
cent of the normal. Regardless OF
these high production costs the wool
market for the past two years has not
been advancing in proportion to the
advance in the price of labor and feed
nor to that of the finished product
While the price of wool to the pro-
Queer has risen $50 per cent, the prize
of wooen cloth has advanced in excess
of 800 per cent.
, 1t was clearly demonstrated that
the price the grower receivedfor his
wool has had no effect on the price
the consumer paid for the finished
product. The initial cost for material
entering in to suit of clothes is so
small that in 500 suit the differ
ence between a price Of 20 cents per
pound and price of 20 cents per
pound to the grower would not
amount to more than $500 on an en-
tire suit. In 1910 the grower received
about 80 cents per pound viii n was
within 6 cents of the price the dealer
received. This level was fairly con-
slant until May 1919, yet early in
May 1920 when average price to the
| grower was GO cents the price the
dealers received ranged from 70 to 81
cents. This shows that if there has
been an abnormal advance in woods
at the present time the dealer has
benefited rather than the producer.
Another fact brought out-was that
there is no excess supply of wool on
hand in this country or in the world
at large, and that before mill can fill
trade orders they must first pur-
chase the necessary wool. The COM
mittee was unanimous in the opinion
| that this is not the time for sales as
no legitimate market exists and sales
can only be made in a speculative
way to these men who are safely
figuring on making profits on the
deal.
A plan for financing wool growers
during the present emergency was
worked out by subcommittee in
conference with the Federal Reserve
Board which authorized the follow
ing statement.
"A wool grower may ship his wool
to one of the usual points of distri-
button obtaining from the railroad Il
bill-of lading for the shipment; the
grower may then draw draft against
his bank, secured by the bill of lad
ing The Federal Reserve Act
authorized any member bank to
acceptance. After acceptance such
cept draft secured in this manner
at the time of acceptance provided
that the draft natures in not more
than six months from the time of
acceptance. After acceptance such
draft bearing the endorsement of n
member bank is eligible for reds-
count or purchase by Federal Re-
serve Bank, provided that it has Il
maturity of not over three months
from the date of redscount or
purchase 1t was suggested that the
Federal Reserve Board communicate
with the Federal Reserve Banks.
pointing out that shipments may pro-
perly be financed by acceptanccs in