Imperial Valley press., 1921-07-23
COTTON WONT
60 LOWER
B R 0 K { R
SAYS
Alleges Market Is Back to
Normal With Prospective
Consumption Far Alb we
Seasons Possible PrOduc-
ton. A. w. ,s~4I

Under the caption Have you no.
ticed cotton lately?" Lamborn & Co..
New York and New Orleans cotton
brokers, have broadcasted a letter on
the market situation which is chock
full of optimism when read between
the lines. Taking it for granted that
| the firms assumptions are correct, the
/ letter possesses great deal OF en-
couragement for the grower, who IS
not tos-deeply involved by last years
| failure to secure costs of production.
The letter follows:
Just year ago this month, the PIN
Inacle of initiation in cotton was reached
and 43 Sd cents per pound was paid.
Deflation started Immediately, and al
| though it's progress was rapid, the de-
cline was orderly and there was never
any danger of panicky markets, since
dealings in cotton are controlled by
Federal statute, known as the Cotton
Futures Act"
"By the end of December, prices had
come down to 13 1-2 cents. Then came
a fleeting wave of 0ptimism,-born Of
the new year with it's false hopes.
and prices rallied sharply. But, when
stubborn farmers refused to take adj
vantage of the opportunity to realize
on the advance, banks throughout the
South, lost patience, put the screws to
them, and, under continued forced
selling, bottom was apparently reached
by March 1st- with the price down to.
10 1-2 cents. All weak cotton in pro-
ducers' hands was thus forced out, and
for three months thereafter, prices
vacillated without any distinctive
trend. However, it was evident that
some sore spots remained to be healed
and these were laid bare in June, when
certain international banks applied the
knife to frozen credits, including cot
ton holdings-mainly held abroad on
American advances-thus precipitat-
ing a sweeping liquidatino, which car
ried cotton prices, for a brief moment
even below the March bottom. This
was the final cleanup and the cotton
market has breathed freely ever since.
Like many other commodities, cot
ton is afflicted ws.h huge carry
over. To overcome this handicap and,
defying all precdents. the farmer took
the bull by the horns and has actually
cut his cotton acreage nearly 80 per
cent, while the government officially
8,433 900 bales, against last years crop
of l3 IA millions and nearly II mil
lions in 1914. This astonishing reduc
tion in supply has awakened the world
and attracted all eyes to cotton.
"The trade now has settled down to
the normal position of measuring sup
ply and demand in terms of prices. The
old supply is known and it is large.
The new crop represents the new sup
ply, and is open to anybody's guess,
with the foreknowledge of reduction
in acreage approximating 80 per cent.
The demand, for months past, has Dccn
at a very low ebb. particularly from
Great Briatin, her takings having fall
len to 81 ger cent of pre-war consunp-
ton, White American mills show tail
ing off of 25 per cent from the big
war time consumption. Japan, how
ever, seems to have beaten all other
nations in recuperation, and has al
ready taken full normal years sup
! ply:
"The outstanding question npw Isl:
what will the world consume in the
season of 1921-22, beginning August
1st?
"In the worst period Of reconstruc-
ton-the season just ended--consump
ton of American cotton has been 10 :
5 100000 bales. Prior to the war. the
), world used on an average Ii 1-2 mil.
t lion bales of American cotton.
Here We have portentious situa-
tion-a prospective crop nearly 6 mil.
lion bales below the prewar average
and a potential increase in consump.
tion of four million bales, IL prewar
4 consumption is to be restored.
But there is no danger Of great
,