New-York tribune., 1919-07-29
Trade Scout Works
Out Plan to Sell
Cotton to Germany
Commercial Attache Would
Have Low Grades Stored
in Holland for Sale to
Germany as N e e d e d
Ne1o York Tribune
Wdshington Bureau

Ne4o York Tribune
Washington Bureau
WASHINGTON. July 28.-The Bu-
reau of Foreign and Domestic Com
merce of the Department of Commerce
published to-day the outlines of II
plan for financing cotton sales to Ger
many, prepared by Erwin W. Thomp-
son, commercial attache, formerly
stationed at Berlin and more recent
ly at the Hague and Copenhagen.
Mr.. Thompson asserts that it would
be desirable to dispose of the large
quantity of low grade cotton accumu-
lated in the United States during the
cal fact that the German mills can make
extensive use of these same low
grades. Then he suggests that Ameri-
can banks having funds tied up, in
cotton permit it to be exported and
stored in modern warehouses at Rot
terdam and Copenhagen, where Ger
man mills can draw on it from time
to time in accordance with their re-
quirements, paying for quantities as
withdrawn to Dutch and Danish bank
ing and shipping companies who will
Relieves Bankers of Risk
In this way, Mr.. Thompson aruges,
American banking interests will not
have to concern themselves with ques-
tions of deprecated marks, and will
the German mills will be enabled to
get needed cotton and select it from
time to time without being required
to invest capital beyond their current
requirements. Mr.. Thompson's state
ment is in part as follows:
During 1915 and 1916 German cot
ton mills were working on accumulated
stocks and producing goods almost
entirely for the government. Since
1915 they have had practically no cot
ton, and have been able to operate
only on shoddies, wastes, nettle fibre
and paper. Thus the domestic stocks
of textiles have run down so low that
consumers are in a mood to accept
much lower qualities than formerly.
Fortunately for American exporters
many of the German mills are espe-
clally adapted for spinning low grades,
and so at this time they would be
eager buyers Of the lowest grades. 1t
is desirable to find an outlet for ac-
cumulations of low grades before the
advent of the new crop, and the sale
of these grades to Germany would
seem to be the logical remedy"
Mr.. Thompson cites figures to show
that American stocks on June 80 last
were 4,O67.018 running bales, compared
with 1,710,223 bales en- June 30, 1914,
and continues:
Much Low Grade
at is not officially known what per
cent of the stored cotton is Of low
grade, but cotton experts are agreed
that the cotton in public store is
nearly all of grades below those most
desired by domestic mills. Out of the
30, 1919, it is probably safe to say
that 100000 bales are of the quality
which our domestic mills and banks
would be glad to see exported
Usually the cotton in mill ware
houses is of the quality needed for
current consumption, and is soon liqui-
dated by being turned into saleable
yarn and cloth. In normal times cot
ton stored in public warehouses is
fairly suitable for domestic spinning,
because the lower grades are being
can use them. But the curtalment
of exports leaves the low grades stag
nant. The banks would thus be glad
to see the cotton move from domestic
warehouses to safe warehouses in for
eign countries, because this would in
dcate some probability of final liauida-
tion.
'It is always desirable for spin
ing mill to have a nearby stock of
cotton from which to select individual
bales for proper mixtures to suit the
particular yarn to be spun at the mo-
ment, but the shipment of large stocks
into Germany at this time would in
volve undesirable financial risks.
The problem then is CD to find
way to offer large stocks of assorted
cotton for the German spinners to
choose from, without actually carrying
these stocks in Germany; (2) to find
way to sell the spinners for actual
deliveries only from week to week
or month to month, in accordance with
actual mill consumption. These prob
lens properly solved would put no un-
usual strain or the American banker
and work no hardship on the German
spinner. Both problems can be an
swered by cooperation with trading
and banking institutions in Holland
tand possibly also in Denmark), so
take no RISKS except on cotton paper
such as they are accustomed to-name-
~, bills OF lading and warehouse re-
ceipts-while the Hollanders would
take such risks as they are accus-
toned to by dealing in small install
ments with German customers, with
whom they ire in constant personal
contact.
Holland Responsible
When l was stationed in Holland I
was instrumental in having a cotton
exchange organized in Rotterdam and
II, IN having some modern cotton ware
houses erected in accnrdanca u,ith