Wool Surplus

In Denver last week one angry wool grower suggested that the easiest way to dispose of the 850-million lb. stockpile of foreign wool now clogging U.S. East Coast warehouses would be to stage another Boston Tea Party, chucking the foreign wool into the sea. Cooler heads recommended that the Government-owned stock of 200 million lb. of domestic wools be used before the imported stockpile is drawn upon. But everyone at the National Wool Growers Association meeting agreed on a hope that somehow the enormous surplus might be shipped abroad when war ends and the European textile industry is rehabilitated.

The wool growers' anxiety was understandable. The wool was imported, mainly from Australia and South Africa, to protect the textile industry against uncertain supplies. Woolen cloth production had spurted; the demand for wool jumped from 650 million lb. in 1941 to over 1 billion lb. in 1943. Since U.S. wool production is only 450 million lb. a year, heavy imports and a comfortable stockpile were necessary. But despite record consumption the stockpile of wool still remains large enough to supply the entire U.S. textile industry for a full year at its anticipated 1944 rate of production.

The wool stockpile problem at Denver last week was only a forerunner of many other and much larger problems that will result from the monstrous stocks of raw materials and finished goods in Government warehouses when war ends. The woolgrowers' nightmare is a sudden end of the war, which will scuttle prices if the foreign wool is dumped on the market. Old-timers in the West have not forgotten that prices plummeted to 17-c- a lb. after the last war ended.

As long as military orders for woolens continue to flood the mills, the wool growers are safe. For military orders specify domestic wool. The Commodity Credit Corporation purchased the 1943 domestic clip at ceiling prices, and is unwilling to sell its wool for less. As a result the growers have already lost the civilian market. Textile manufacturers, forced to keep their prices in line with OPA ceilings on civilian goods, cannot afford to pay $1.18 a lb. for home-grown wool, 65% higher than the prewar price. Instead they are buying imported wool, which despite a tariff of 34-c- a pound sells for only $1.05.

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