Arizona republican., 1917-05-02
COTTON ECONOMICS
 AN EXPERTS VIEW
By w. w. Morrison

Of course, we all know the differ ence between a surplus of cotton and cotton as a surplus crop. These terms. however, have been in such constant use for such long time that many Of us fail entirely to properly value this different in our calculat tions. As the importance of this distinction has been especially emphasized by the develop ments of recent years, it will perhaps be useful d this time to establish it's full significance more definitely in our minds than it has been heretofore.
 "A surplus of cotton is the amount in excess of the seasons consumptivo needs. This season begins with the new crop and ends with the old, or technically on the first day of August of each year. A surplus crop is a crop over and above the producers actual living necessities. As applied to cotton within the meaning of cond- tions as they exist today, it is q crop for whose sale there is no pressing necessity. Or in other and perhaps more accurate terms, 1t is a crop whose liquidation and movement is a matter of much more urgency to those who consume it than it is to those who produce it.
 Before cotton became a surplus crop it was marketed under the stress of necessity A surplus of cotton was then a standing menace and caused more or less of the crop to be sold be- low the cost of production. But since cotton has become q surplus crOD and necessity removed as a factor in it's liquidation, a surplus of cotton has ceased to be menace. While sur plus may yet modify prices to some extent. according to it's size, the record makes it clear that, regardless of what that size may be, it will never prevent cotton, as long as it is a surplus crop. from bringing a good profit. above the cost of production.
 "A failure to recognize this new economic position of cotton has been the cause of many serious errors and many serious losses in recent years. We are confident since the war began, that this has been of all others. the most prolific source of losses in the future market. very great part, perhaps the greater part, of the trade assumed that the interruption of eX- ports would mean great surplus which would have q disa strouS effect on prices and predicated their ventures into the market on this basis. It ia safe to say that hardly in. a single in- stance were their deductions sustained.
 "A very large number of traders still hold on tenaciously to this ancient view Today there are thousands of busy minds busily engaged at figuring in great detail. trying to determine what the surplus will be- History points to their being finally overtaken by similar losses which similar views have almost invariably entailed in the mt us in thus trying to revive the distinc- ton between surplus of cotton and cotton as surplus crop. In summing up it should be emphasized that it is well to remember, that surplus in the supply has been completely eclipsed as market factor by the ability of the farmer and his confereeS to carry all the cotton longer than the world can wait for it.
 The high cost of living means, also. the high cost of producing cotton. If one goes up the other will go up. This is the course of memorable logic, since both are based on practically the same primary necessities. Unless therefore, there is a reduction in the cost of liv ing a reduction in the price of cot ton is unlikely. It should be stated
 here, that some people reason that | high priced food through enforced economy reacts on the consumption of
 cotton This is an economic illusion.
 for it is obvious. that hard times logi- cally increase the demand for those l products which will supply the needs of humanity at the lowest price.
 The decline of the week seems to
 reflect nothing more than the pessi- mism which the future market has us-
 ualy developed on an easier demand. Such declines have, almost without eX-
 ception. been checked by the resist : ance of spots. Of the two markets. it is conspicuous that the spot cotton
 market has been more uniformly cor
 rect. Hence. following the more optimistic lead of spots seems war ranted,'