Cheraw chronicle. [volume] (Cheraw, S.C.) 1896-2005, 1921-08-25
COTTON GOODS MARKET STRIKES
UPWARD TREND AS RESERVE
STOCKS VANISH
Only Further Reduction of Production
Costs Can Weaken PrlceS-Further
Wage Cuts Held Unlikely and Law.
or Levels for Crop Seem Out of
QuestlOn-Slgns OF Greater World
Demand Multiply

Indications Of a stronger cotton
goods market continue to multiply
from week to week. For several
months the Economist has been reit.
Grating its opinion that the cotton
goods situation was fundamentally
strong and that a firm and probably
higher market would be seen as fall
approached. This opinion fs being
borne out by recent Developments.
1t must be remembered tha: produc-
tion of cotton goods his been severei}'
curtailed both here and abroad for
about a year. Even during the periods
of comparative activity following the
radical price cuts last January, pro-
duction, except on a few lines, has
not benn fully maintained, and even
on these lines-for instance ginghams,
percales, sheets and pillow cases
production has not been able to over
take a demand which has been sur
prisingly large.
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On these lines, as well as on most
other lines, there has been during the
past year a thorough liquidation Of
stocks in the hands Of retailers, job
bers and mills. And the vacuum thus
created has not been filled by a sur
plus of production over consumption.
The market has been eating into its
reserves, so to speak, until the re-
serves are almost completely gone.
AS a result, only further substantial
reduction of production costs could
further weaken prices, while a more
active consumption would inevitably
stiffen them.
The only possibility of lower pro-
duction costs in the near future seems
to lie in a lower raw cotton market or
further wage reductions. 1t is general
ly agreed that wages cannot be fur
ther reduced for the present, and, In
fact, it seems to be the prevailing
opinion in the industry that anything
like a pre-war level Of wages will not
be seen again for long time, If ever.
An announcement has recently been
made by certain Southern manufactur-
ers that it will be necessary to ad-
vance wages at least 10 per cent from
the low point reached when the mills
shut down some time ago. This in
gradually upward until at the end OF
last week it had reached 1880 cents
And there is every reason to look for
q still further rise.
The milestone around the neck OF
the cotton market has been the huge
carry-over from last season. AS
closely as this can be estimated 1t
amounts to about 100000 bales. But
this is being more and more discount
ed by the increasing deterioration OF
the new crop. According to the last
Government estimate the crop Will
not make much more than S,OOOO0O
bales. and private adyices on the con-
dition Of the crop since the date OF the
Government report tend to reduce this
estimate materially. The market, IN
fact, is beginning to talk about crop
OF 100000 bales or less. On the bas-
is of the Government figures, however
we should have a total supply for
next season of about Ii ,OOO,OOO pales.
This would be about normal, and
would leave substantial surplus
even if world consumption reached the
pre-war level.
itself is sufficient indication that the
lowest level of wages has been reach-
ed for the present.
The hope of a reduction in costs from
q lower raw cotton market has been
getting fainter with the advance OF
the new crop season. 1t never really
had much substance. When world
trade in cotton goods was at its worst
and there still existed the possibility
of a normal cotton crop this year cot
ton went down to about IL cents, and
# was evident that thi sprice discount
ed some Of the worst possloilitles'
Since then cotton has been creeping
But there are several consldera-
,ions which lead us to believe that the
actual supply of good, spinnabie COT
ION will be much smaller than the
figures Indicate In the first place. a
large portion Of the carry-over Is all
accumulation OF low grades from the
w.r wears when the chief markets for
these grades were closed In the sec
ond place. indications point to an un-
usually large proportion OF low-grade
cotton in the new crop. And in the
third place the cotton crops OF INDIA
and Egypt have been materially cur
tailed. which is apt to mean reia'
tively greater dependence of the world
on the American cotton supply.
There are too many complicated fac'
tors involved in the future OF interna'
tional trade for one to hazard a guess
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