The Washington herald., 1914-08-14
PROVISIONSS
SHOW INCREASES
Sugar and Flour Prices Con-
tinue to Soar and Top
Prices Are Not In Sight.
FINANCING COTTON CROP
Difficulties Confronting Treasury De-
partment in Its Efforts to Hold
Up Cotton Market.

I
prices Of both refined and raw sugars.
Prices have Jumped enormously through
out the country. In this city for ex-
ample granulated sugar yesterday was
held at ~ cents II was selling at 5
cents at the beginning OF the European
war. II is stated by = leading grocer
here that the price may so to fifteen
Grocers here stated yesterday IL was
1 difficult to get sugars
So far the American Sugar Refining
| Company quotes sugar at 81 cent?.
but the opinion prevails that they will
follow the advance Which has been
made by other rsfinerx. J.Ist when the
upward movement will culminate IL q
matter OF considerable discussion. but
the opinion is general that the top has
rot beer reached.
As Europe, and especially England,
will need further large supplies OF the
staple. prices naturally Will be forced
to a higher level.
One Authority In discussing the sltua-
ton said: The immediate situation Is.
Of course, England's bidding against
America for Cuoau sugar. With the in
creased product on In Cuba this year. IL
is probable that in the natural course
OF events this counJry could spare an
other 10000 tons Of Cuba sugar for
shipment to England. but II seems that
England must have between now and
January 1 in the neighborhood OF 10000
tons, possibly more. II England's fleet
is successful she may later on be able
TO get some sugar from France and
possibly Russia and also Java, but II
takes time TO divert these sugars from
their natural channels and in the mean
time immediate necessities have been
provided.
TT is impossible to tel how high prices
will CO. The price depends entirely upon
IL
can tell how much Of the 10000 tons
that was expected to he harvested in
Germany. Austria. France and Russia
will be made? 1t Is freely predicted
that at least half never will be har-
vested
Flour Also Advances.
Flour here has gone from S to 6
cents a pound. This is not as easily
explained as the rise In sugar, which
must be imported to supply the demand.
II is generally recognized that the
future course OF wheat prices depends
on the reopening OF export outlet. In
bearishly on the report that the Ca
madam government has been ordered by
Great Britain to remove its duty on
wheat TO enable imports Of the grain
from the United States. This Is taken
here to indicate that Great Britain ex-
poets a long struggle. although it may
be that King Georee's government Is
merely adopting precautionary measures.
That packers have obtained some
heavy foreign army orders for meats is
indicated by the action Of the live stock
markets following the first break on the
war scare.
With unemployment increasing in some
Industries on account of the European
war and with corn deteriorating. the
60, - fe rof
clear. Mule dealers, who usually buy
many thousands of dollars worth Of
mules at this season in preparation for
the annual demands Of cotton planters
in the South. have practically suspended
purchases pending some settlement or
the serious problem created by the tenn
porary cessation Of the export demand
for cotton The class Of horse known
as Southerners will also be affected II
the purchasing power Of the South is
reduced.
Financing Cotton Crop.
Many conservative cotton men are
skeptical Of the success Of any financial
plan to prevent the selling of at least a
part Of the cotton crop at very low prices.
Not a few consider the proposal to loan
or 9 cents a pound absurd. Good au-
thoritIes believe that not over or Z
cents can be advanced with safety.
Speaking of the difficulties that are
likely TO be encountered in financing the
crop this season, a cotton authority
says: "A large quantity Of cotton Is
forced sale as soon as picked. in so far
rs the smart farmer or tenant Is con-
cerned, and the small producer raises by
far the major part of the crop. From
the beginning of the planting season
money is advanced to him either by the
country merchant or plantation owner.
Such obligations are met through the
sale OF his cotton, already mortgaged to
the extent OF 4 or 5 cents a pound.
IF the merchant extends the time for
payment Of this loan, he must get an
extension from the country bank, which,
in nine cases out OF ten, has financed him.
The small bank is in turn aided by the
larger city bank, and the latter by the
New York or Chicago banks, or, as will
probably be the case this year, by the
loan OF emergency currency from the
government.
This complicated machinery OF credit
works smoothly enough under normal
conditions, when the crop moves freely
into consuming channels. But with great
congestion, owing to the partial or en-
tire closing of the European outlets, this
machinery will be put under tremendous
strain. Weak spots are bound to develop,
and the whole fabric may thereby be I'M
dernaned, with disastrous results to the
South and the country at large.
Therefore, 1 am not in sympathy with
any plan that contemplates the loaning
Of eight or nine cents a pound on cotton.
True the latter figure just about covers
the cost OF production. But cotton has
sold way under such cost at times when
surplus supplies were far less burden
some than they are likely to be this sea-
son. II the war continues beyond three
or four months.
Doubtless. the efforts to aid the plant |
er are well intended. but uneconmic ven
lures will not benefit him in the long run.
The bankers Of the South should be alive
to the seriousness of a situation that
may have to be faced. They should not
encourage a reckless resort to credit in |
defiance Of the law Of supply and de-
mand.
Conditions are not artificial. they are
real. and under the circumstances the |
best thing for the bankers to do Is to |
proceed with extreme conservatism. As
for the farmer he should be urged to |
hold as much OF HIS crop as possible
TT Is reasonable to suppose that prices |
will be depressed by the first rush Of cot |
ton to market. But a higher average level |
should be maintained thereafter, even IN |
the event of a long drawn out war. Two |
factors which for the moment are Of |
higher influence viii later assume I'M |
portance. One viii be the increased de-