The herald and news. [volume] (Newberry S.C.) 1903-1937, 1920-11-05
SECOND THOUGHTS FOR
SOUTH.
. New York Commercial.

q o o 9 o O Q o o 9 @ o Q 9 @ .
The frenzy into which a large ele-
r1ent of the Southern producers
have succeeded in working them
selves because Of the decline in the
price of cotton is likely to do the
South serious harm, if more conserv-
ative thinking does not follow. AS
matters stand now the South is pro-
claiming to the world that it is on
the verge of bankruptcy, and that
ruin stares it in the face, and on the
strength of this showing, expects to
obtain credit. No individual South
| ern banker would give a customer
credit on any such showing, except
on the most exacting terms, and how
the people Of the South can expect
to be treated differently on a col
lective basis than would be individ-
ually is not at all clear. The gov
ernor of Louisiana made a serious
blunder when he issued proclama-
ton calling for the closing down of
the cotton gins within the state for a
period of 80 days, for he virtually
put the seal Of approval on the law
lessness that has broken out in diff
ferent parts of the South. The gov
ernor of South Carolina has been
asked to issue similar request to
the cotton gins of his state, but the
governor of Texas has refused to do
anything of the kind.
These requests for closing down of
the gins are based upon wrong
theory of economics. 1t is AN at
tempt to use artificial means to fight
natural laws. Cotton has not de-
clined because of any conspiracy on
the part Of any particular interest,
but solely as the result Of the de-
fation process that is influencing all
commodities, not only in this country
but in Europe. Even labor is be-
ginning to feel the effects Of defia-
ton, and in due time the labor in the
cotton fields will be similarly af-
fected. Cotton pickers may hold out
for high wages and short hours, but
if they can not obtain employment on
those terms they will have to modify
them until they reach basis where
they can be prohtsi5ly employed.
j Cotton prices for the time being
represent the balance between sup
ply and demand, hot the potential
demand, but the actual demand as
it exists at the moment. The fall
ing off in demand is due to severa!
causes. among them being the inabil'
ity to export because of the fall IN
exchange, which represents the in
ability of foreign customers to pay
for the goods on the usual credit
terms. Steps are already under way
for the formation of foreign IL
nance corporation which will prob
ably 60 long way toward helping
this situation, in which case the for
eign demand for cotton will increase
The domestic demand has beer
checked because the public has re-
volted against paying high prices fo'
goods of any kind, and merchants art
refusing to stock up with high pricee
goods on a falling market, and tht
; mills, not having advance orders
i hesitate to purchase the raw ma
terial. Consequently the immediate
demand for cotton has fallen to
point where the supply is temporarll!
excessive.
The South proposes to correct thu
condition by withholding the supply
which is right enough provided i
goes the right way about it. Closing
cotton gins is the wrong way, for II
Immediately upsets the South's fl
/ i.;,Y f,hr;o and is tho snreSt rOa(