The Washington herald., 1914-11-24
Cotton.

l.Aa
quoted price of cotton in the markets of the country
stood for several months at not far from cents !
pound. This was a phenomenal price in many ways
1t was the lowest figure at which cotton had been
quoted within living memory, and it was from to
IA cents pound cheaper than the cost of produc-
ing the article. 1t was probably the fact that in
certain exceptional cases, where number of ex-
traordnarily favorable circumstances coneurred cot
ton could be produced in 1895 at as low cost as
cents; but taken on the average, price somewhere
from to 6 Ia cents pound represented the bed
rock cost Of the commodity
The question may very we'll be asked by persons
unfamiliar with the subject: "What are the elements
entering into the cost of cotton production% There
are many such elements but for the most part they
may be resolved into two great composite factors
the cost of living and the price of fertilizers. When
cotton planter knows what it will cost the laborers
his plantation to live during the cotton season
and what he will have pay for fertilizers that he
must buy in order to assure reasonable cotton crop
he knows the greater proportion of the cost of his
crop. He must of course figure the cost of his land
and the interest upon his mortgage if any, but this
is something that does not vary from year to year,
and can be left out of anything like speculative reck-
onng.
In 1896 the cost of corn, pork and all the other
great staple commodities that are necessary to
tain life in the South was from IS to so per cent
lower than it is today Anyone who chooses to make
for himself chart and put in parallel columns the
ruling prices on November I, 1895, of staples like
wheat, corn pork beef and other standard commodi-
ties and compare those with the prices of the same
commodities today will be astounded at the rise that
has occurred in the twenty years that have elapsed
corresponding rise has also occurred in the price of
fertilzing material The inference from this is plain
If it cost the cotton planter from to 6I-2 ceRts
per pound to raise cotton in 1885, it cost him
somewhere from cents TO cents pound today
We are aware that this IS matter on which widely
differing views prevail, but if the inquirer holds
steadfastly in mind the fact that it is the cost of
living that is always the controlling element in the
of cotton production and that the cost of living
is far greater now than it two decades ago, he
fail to be guided toward correc: conclusion
There is question whatever but that cotton at
present is selling as much below the cost at which
it can be produced as it was in the former period.
OF course, the present price of cotton is not as ab
normal and unique it in 1895, for the rea-
son that it cannot be said as it then, that
the price is something that has not been matched
within living memory. After selling in 1895 at the
low figure we have named, cotton made sharp re-
covery, but some years afterwards, under the iniu
of large crops sold down again to the previous
low figure but it may be said, speaking in round and
general terms that from this low point the price of
the great Southern staple advanced until it sold at
the dizzy elevation touched the time of the great
pool operations of Mr.. Sully
We think all these considerations are worth while
taking into very serious by the merchants by
the business and by the spectators of the United
States today 1t is standard business maxim whose
authority and absolute truthfulness has been
l. Al
staple commodity sells lower in the open market than
the price at which it be brought to the market
It is as sure the shines that it will return to
hat price. The strong probabilities are, moreover
hat the market price will once more rule greatly
above the production price, and this will be because
IF reasons of speculation. The handspring of re-
;overy like this is not coupled up with any sort of
mystery. The fundamental reason for the decline in
he article is usually overproduction, and when an
rtice has been depressed below its cost price by
of overproducton, the only force that is nee
ssary restore it to its cost price is curtament of
PRODUCTION. Such force is at applied when |
eope have to sell article in the market for less
han it costs them to produce it and bring it TO the
market
A complication here is undoubtedly the great war
Europe and the influence of the strugglesupon cot
on prices Europe takes annually three-fourths of
he cotton produced in the United States, and If
europe cannot buy any of our cotton, the commodity
viii be worth comparatively little within own
orders. But it is plain that a certain amount of
european consumption of cotton must be conceded
nder any possible conditions Also it must be con-
idered that the European war will not last perma-
ently. There is good deal of reckless talk about
he war lasting three four years, but that seems
ardly possible. Also, every sensible knows that
he population of the world is increasing all the time
hat the demand for cotton is increasing with it. and
hat great curtailment of American cotton produc-
ion will inevitably take place, beginning with the
rop that will be gathered the coming season. There
something here for the bargain hunters of the
United States to think of. Opportunities like this
% not occur every year in a lifetime |,