The chronicle=news., 1914-10-01


now being sold at seven and half
to eight cents. and 1t would be well
for manufacturers to bear in mind
that at these figures much cotton
will be withheld from the market
for months to come.
'It is true that there is a great
amount of Indebtedness which can
be liquidated only by the sale of |
cotton. but in view of the increased |
cost of production in recent years, |
sales at present prices would be in |
many cases inadequate for the dis
charge of these obligations, SO that |
even II the producer. being unable |
to sell his cotton for enough to pay |
his indebt edness. should turn 1t over
to his creditor. many Of these credi-
tors would be in position to hold,
and much of the cotton will be with
held from the actual market.
THE financing of the present crop
began with its planting last March
or April. 1t is the one crop in the
South on which loans are always
freely made until it is harvested,
and Investigations recently made by
chambers of commerce in Southern
States show that advances on cot
ton in different states. made from
the time of the planting of the crop
until 1t left the gins, range from $40
to $44 per bale. The last four crops,
including seed, have brought the
people OF the Southern states a gross
average Of nearly one thousand mil
lion dollars per year. of which
amount about one-half has come
from domestic and Canadian mills.
and the remainder represents the
value of exports to foreign coun-
tries.
BY the sale of this crop the
South has been enabled not only to
discharge It's obligations promptly
every fall. but has added half a bill
lion dollars each year to the nation
al trade balance. Cotton production
is stimulated by high prices. and
conversely is curtailed when prices
fall below the cost OF production.
This has been particularly true in
those years when prices were low
throu ghout the season and continued
low during planting time in the
early spring. Never have the evils
Of over-production been so univer-
sally appreciated in the South as
now, NOR never before has there
been such a grim determination to
hold cotton and to radically curtail
acreage. Public sentiment in many
Southern states has been SO aroused
that there is now general clamor
for legislation by the states to rcgu-
late the production OF cotton. and
some farmers have gone SO far as to
demand that the planting OF any cot
ton whatever In 1915 be prohibited.
"Of course. extreme action of this
kind is not anticipated. but 1t is un-
doubtedly true that should prices
considerably below the average cost
of production, which Is probably
about 10 cents per pound. prevail
for the next six months, cotton will
be parted with only as necessity
arises. and most serious curtailment
in acreage for the next crop will be
the inevitable sequence. Many OF
those who might be financially able
to put their lands in cotton would
be attracted blythe high prices for
grain and would plant food crops,
while others less independent might
be willing to continue in cotton but
would find themselves unable to Sc
cure the necessary advances.
| NO well informed man on South
ern conditions will deny that furth
er diversification in Southern farm
ing is desirable, and that more at
tention should be paid to cattle rails
ing and to the production of food
stuffs. But it would be most un-
fortunate, If by any chance. the pro-
duction of cotton next year should
be so small as to make the trade de-
pendent upon the present crop for
the greater portion of its two years
supply. Cotton goods can compete
with more expensive fabrics only W
to certain price level, and If a year
hence the prevailing prices for raw
cotton should be as abnOrmally high
as they are now abnormaly low, the
manufacturers of cotton goods will
have their present problems aggra-
vated, and would be fatally handi-
capped in n movement for trade eX
pansion at the very time when it is
probable that conditions would be
ripe for efforts in that direction"
Mr.. Harding said that while the
opportunity for expansion as an ar
termath of the war was a potential
ity. it did not yet exist to any ap-
preciable degree Mr.. Harding an
nounced that he expected to see the
Federal Reserve Banks in operation
during October.
In conclusion he said:
1.-The tremendous waste incident
to war will, of course be felt all
over the world, and the losses will
inevitably ensue, but there is no
reason, as far as this country is con-
rerned why these losses shnull NOT