The Washington herald., 1921-09-04
BRIGHTER OUTLOOK
FOR BUSINESS Seen
BY FINANCEEXPERT
Improvement in Cotton
And Mexican Con-
ditions.
IL
HELPS ALL LINES
Holdover Cotton Especially
Benefited by Higher
Prices.
BY WALTER b. BROWN.

EsotfOr New NOrk C0mmcrChuls
NEW YORK, Sept. 3.-As as rule
the last week In the summer IL not
productive of important develop
nents, but within the last few days
at least two new factors have aS-
peared. likely to have an important
bearing on the entire economic sit
uation. The first Is the moro favor.
able outlook in regard to Mexico.
and the second the sharp upturn In
cotton.
A week or so ago the presidents
Of most Of the oil companies operat.
ing In Mexico went TO Mexico City
for the purpose Of talking things
over directly with the Mexican gov
ernment. They were not unwel-
come, because Mexico seems to have
overshot the mark In her imposition
OF export duties on petroleum ex-
ports, having been curtailed to q
point where the Mexican revenues
are seriously interfered with. BY .
coincidence, Just as these American
oil men arrived In Mexico City, the
Mexican Supreme Court handed
down a decision to the effect that
the much-discussed Article 81 OF the
1911 Constitution was not retroac-
tive. This had endangered property
rights of Americans acquired prior
to the passing OF that constitution
and involved the question Of claims
Of Americans for damages caused by
the revolution.
ObreEon Opposes Treaty.
The effect upon the petroleum
stocks was instantaneous and Mexi-
can Petroleum. which had been
leader Of these securities, got back
we'll above par. In the meantime.
the newspapers have published o
somewhat disquieting report that
President Obregon still insists that
the signing of a treaty with the
United States Is neither possible,
convenient nor necessary, and ID
contrary to Mexican constitutional
precepts. In that 1t requires special
privileges for Americans. On the
other hand the saner attitude re-
vealed by the supreme court deci-
sion may pave the way for a modih-
cation Of Americas treaty demands
in a manner that will be a salve to
Mexican pride and accomplish the
desired end just the same.
Private reports for some time
have told OF the serious condition OF
the American cotton crop. The gov
ernment report issued on September
l giving the condition as Of August
25, placed it at 49.3 per cent of nor
nal, the lowest on record. This
forecasts a crop Of slightly more
than 1000. 900 bales, which II the
smallest since 1892. when 1t was g.
$4,000 bales. Last year the crop
was IL. LAS. 900 bales. The immediate
effect of the publication of the gov
ernment's report was an advance OF
81 TO SO a bale. carrying some Of
the prices for futures above Is cents
a pound. or an advance of so per
cent from the low point of a few
weeks ago. The causes Of this sharp
reduction in prospect are found In
the ravages Of the boil weevil,
which now affect more than 70 per
cent Of the total area under cultiva-
tlon. and the unfavorable weather
which prevailed for SO long period
in many Of the cotton States.
Boon to Old Cotton Holders
Ordinarily such a development
would be regarded as a calamity,
but from the economic standpoint II
is lust the reverse. According to
LATEST estimates there remains un-
sold from last years crop slightly
in excess of 100000 bales, al
though there is the probability that
a considerable percentage OF this
win be found to be of unspinnable
cotton because of it's low grading
and injury in the field due to late
pickiug. As matter of fact, a
great deal of it was never picked at
all. so that the carry-over figures
are probably considerable under
those now generally quoted. In
view of the falling off in exports
and the slow domestic demand,
corresponding reduction in the sup
pIy. must serve once more to re-
store the equilibrium. The decline
In cotton, as a result of general de-
fation. was out of all proportion to
other commodities. and it has left
the south prostrated for practically
a year.
The prices prevailing for cotton
have been largely nominal, for
there has been no demand for 1t
except at forced sale. while even
the prices quoted were not only
far below the cost of production.
but they did not even pay the cost
Of picking and ginning. Hence the
farmer who let the cotton lie in the
field was better off than the one
who tried to market it. The recent
advance has changed this situation
so that the farmer will be able to
realize something from the sale OF
the cotton instead of having 1t re-
main a total loss. II will result in
the. liquidation of frozen loans and
a renewal of buying power in the
South that must spread its effects
community.
General Outlook Better.
As matters stand at the moment,
the whole country is anxious to see
an advance in the price of cotton,
for it is now well realized that the
prostration of the South, wherever
II is. dependent upon cotton, Is a
menace to the well-being Of the
whole country and that its recov-
ery will be an immediate construc-
tive factor in general business re-
vival.
In other directions the outlook
for business recovery is brighten
ing, even II progress is slow. Tex
tiles, leather goods, and other
branches OF trade are finding more
orders from being placed for future
delivery. Further cuts. however,
are being made n'-the price of au-
the most sensational of
which is a third cut in the price
of Ford cars to a point below pre-
war prices. Ford says that because
of Intensive economics and larger
output he is able to produce cars
at lower prices and proposes to pass
the benefit on TO the public. He
notes that there has been an active
demand for the small runabouts