Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1906-01-12

For several years before the inven-
ton Of the cotton gin, the price OF raw
cotton was controlled entirely by the
laws of supply and demand; but after
the invention of the cotton gin such
condition did not again arise until
about the second year of the civil
war.
1t is not a difficult proposition to
arrive at There have been but few
periods in the history Of cotton man.
ufacture when the spindles Of the
world have been able to supply the
demand for their product; but dur
ing the greater portion of the history
of cotton production, this production
has been greater than the spindles Of
the world have been able to take
care of.
When the demand for manufactur-
ed goods is beyond the capacity of the
spindles it is natural that prices
should rule high; but in such con-
dition it does not necessarily follow
that the price of raw cotton must also
be high, because the supply of raw
cotton may be a great deal larger than
can be handled by the spindles.
1t has long been an accepted axiom
among the cotton spectators that the
price of raw cotton is fixed not by the
requirements of the mills; but by
what the mills do not require. For
instance, If the mills are able to handle
only ten million bales and the produc-
ton amounts to twelve million bales,
the price of the ten million bales
needed is influenced largely by the two
million bales not needed.
And here has been the great diff
Guilty for many years, In fact almost
ever since the war. The production
of raw cotton has been rather in ad-
vance Of the increased capacity of the
mills to take care of 1t, and the spec
ulators have been able to fix prices
very much as they pleased.
Ordinarily the demand for cotton
goods is greater than the capacity Of
the manufacturers to supply 1t. That
was the case for years until few
years ago and that is why there was
such a margin between the price of
raw cotton and the price Of manufac-
tured goods. A few years ago the
manufacturers caught up with the de-
mand for their output, and prices de-
clined. The situation grew out of
their own fault. Because the demand
had been so great for so many years
previous they had lost sight Of the ne
cessity of any effort on their part to
keep it up, and had gone on with
their increased production regardless
of consequences. The result was the
financial ruin of numerous mills not
only in America, both north and south,
but in England and throughout Eu-
rope. Because Of that catastrophe,
more attention was devoted to the de-
velopment of markets, and since then
the demand for manufactured goods
has continued greater than the supply.
The big nine million bale crop OF
fifteen years ago, it will be remem-
bered; put the price of cotton away
below the cost Of production, and the
mills continued to run at tremendous
profit with constantly increasing spin
dleage until they overdid the thing. as
just mentioned.
While the manufacturers were
quick. enough to recover because they
more quickly recognized the trouble,
with the farmers the process was
slower. In fact they did not catch up
until three years ago, when provi-
dence cut the crop short and the
New Orleans cotton men brought the
fact to the attention Of the world.
AS the upshot Of it all, 1t has been
made clear that the farmers of the
south will be able to take care of them
selves in the future, il they will only
be sure to handle wisely their surplus.
The southern Cotton association
has already made a good start along
this line, and if it gets proper support
from the farmers, and those at the
head of it make no mistakes. there
need be no more starvation prices for
raw cotton.