Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1920-10-02

cotton that the cotton farmer re-
ceive a price for his cotton which
will meet his legitimate expenses
and return reasonable profit" de-
clared Edwin T. Meredith, secretary
of agriculture, in a recent letter to
e. S. Gambler, of Corinth, Miss. re-
plying to an inquiry concerning the
decline in cotton prices. The secre-
tary analysed the present cotton sit
uatIon and the probable effect the
new crop would have upon prices.
1t is the general belief, Secretary
Meredith said, that the existing sur
plus in the United States of Ameri-
can-grown cotton is largely composed
of very. low grades which, have been
accum ulated from several crops and
for which there has been almost no
market. He expressed the belief that
nearly 100000 bales surplus of old
crop American cotton would be on
hand throughout the world on Oc-
tober l. The new crop is estimated
at about 1850, 600 bales.
The Secretary's letter
as follows:
Secretary Meredith's letter was as
Receipt is acknowledged of your
letter Of August %, in which you
direct my attention to the decline
in the price of cotton and ask me
to write you my views regarding
the existing conditions.
Briefly stated, the situation in
the cotton market may be analysed as
follows: The worlds consumption
of American cotton, exclusive of lin
ters, during the past year has been
more than 100000 bales, or, in
round figures, 100000 bales per
month. The supply of American cot
ton in the United States at the end
of the cotton season, on July 81 last,
was, in round numbers, about $780,
900 bales, excluding linters, and was
estimated for the entire world at
about 100000 bales or about five
We're used at the rate of 100000
bales per month. AS it is usually
around the first of October before
new cotton becomes available at the
mills for consumption, it will be seen
that two months of the new crop
wear must elapse and at the rate for
the past year 100000 bales of t.
surplus will be consumed before
this years crop reaches the mill. Ac-
cordingly; there will probably be
nearly 100000 bales surplus. OF
old-crop American cotton on hand
throughout the world on October l,
I'm addition to this surplus, the
cotton grown this year will be COM
ing on the market. The prospect
for the new crop, according 70 Iue
latest estimate of the bureau OF crop
estimates, is about twelve and three
quarters million bales. 1t appears
therefore, that on this basis the sup
ply of American cotton for this year
will be about 15,73O,O00 bales. where
as the worlds consumption OF Amer
lean cotton, using last years CON
sumption as basis, will probably
not exceed 100000 bales.
lone who considers only the fore
going statistics may, however, be
misled as to the true market sltua-
ton. 1t is the general belief that
the existing surplus in the United
largely composed of very low grades
which have been accumulated from
several crops and for which mere mas
been almost no market. Even II the
mills should to some extent turn 10
this loW-grade cotton Tor SouTse ot
supply, as we are informed some OF
them are doing, the quantity OF
Goods produced therefrom will be less
than from the higher grades, because
of the greater percentage OF waste
in spinning, so that the presence OIL
surplus of a certain number OF mn
lion bales of low-erade cotton does
not mean as much in terms Oh goooS
rs if that sudplus Were composed OF
high-grade cotton. While Tor the
time being the existence OF TINS sur,
plus exercises depressing elecI
upon the whole market, the eHPerLss
of the bureau OF markets su5SS
that there is likely to be a good de-
mand for new-crop cotton When II
has begun to move because OF the
ability of purchasers to get the hlSh-
ar grades, which the present surplus
does not contain.
while in the case OF some coCt a.
tries the consumption OF American
cotton has returned to about the pre-
var. normal. Germany and Austria m
nartic,lIar have fallen far snort OF
taking as much as they ola prior "
the war. Therefore, in TINS dlrectloitt
there would seem to be the glGa: 80 %
nosribility for increasing the taKlhgS
nf American cotton over those OF
last vear. Germany especially was
fo~T,oerlv a large consumer OF low
~rnde cotton and it is genera ~ NC
Iievnd that the cTrtai!ment or Ger
nan +a11irrs Of American cotton IL
Iarmelv responsible for the ac"umuIa-
~, nf low grades in the stocks in
ing A rsir Price Necessary
"r+ is absolutely essential to the
continued production of Amer1can
cotton that the cotton farmer re- re-
ceive a price for his cotton VIII II. :
will meet his legitimn tie eXnenSes an.
return a reasonable profit. ++o ~
course, the production OF COTTON
should be placed upon the most
economical basis in order that II may
meet foreign competition ana JusCliN
the price necessary to return fea-
sonab'e profit to the FARMER. men
aver the market price of cotton re
cedes to a point dangerously close 10
the cost of production, or THilS De
low that cost, it of course becomes
increasingly important Tor cotton
growers to produce at home. so r.
as possible the food and feed crops
such as corn, oats. hay, legumes, an
live stock, which the maintenance o.
their operation requires. AS YoV
know, this is in fact the pr9c+ic'
which this department has steadll7
advocated in recent years as the on"
safe foun6ation for southern ag"l
culture. Diversified cropDin" is es-
sential to economical production
cotton and much safer than single
crop agriculture of any characte".
"Of course, in view of the world
wide consumption of American COT,
ton there are factors which ent2'
into the determination of price quo
tations over which no control CO
be exercised. For EXAMPLE, recent"
there came a report of an unexpecte'
financial panic in Japan, rumors
the outbreak anew of general v
in Europe, curtailment of nurchaT
by buyers of manufactured produc
ard increased estimates of this yea
yield of cotton which PLAYED t.
part in fluctuations in the COT
market regardless Of actual cure"
movement. The insu Efficiency
timely, authentic information on
phases of the worlds cotton ind
try makes it difficult even to
cuss the situa ton satisfactorily, {
consequently attempts to devise re
edjeS gre Of IN ~n~+air1 V"1''e
TSfn1e1y MnrEeIino- Ymn0rtanE