Evening star., 1931-12-27
COTTON DROP LAID
TO HUGE j. s. CROP
Staple Has Sold Down Close
to $40 a Bale This
Year.
BY GEORGE DE WITT MOULsoN

ICdI.
BY GEORGE DE WITT MOULSON.
Special Dispatch to The Star
NEW YORK, December 26.-Before
the collapse of the stock market two
years ago cotton sold around 18 to 20
cents pound. This had been cut in
half before the close of 1880 to the
lowest price reached since the outbreak
OF the World War in 1914. Low as
the price level seemed a year ago
values have again been reduced so per
cent, until middling cotton sold below
4 2 cents in interior markets this fall
or but little over $40 a bale-a price
not previously reached since before the
turn of the twentieth century
The cause of this sensational decline
IN values the past year has been, in
part, the depressing effect of enormous
yield, the second largest outturn and
within few hundred thousand bales
OF the largest production in the entire
history OF Southern cotton culture
Though the drastic decline of the
previous year took place under a
harvest Of 100000 bales less than in
1929 and receding values might have
been attributed to underconSumption
rather than to overproduction. there is
little difficulty in reaching logical con-
clusions regarding the forces operating
during the past six months
Instead of a moderate yield coming
on top of a 10000 .0O0-bale carry-over
on July 81, 1881, the yield proved to
be 100000 or more larger than in
1880. The production of 1900 900,
plus the enormous carryover fur
nlShed total supply of 26,OO0 600.
whereas the mills of the world used
only little over 100000 bales of
American cotton the past season.
Returns Less Than Cost.
Under a moderate crop the decline
IN prices might have been less disas-
trouS, but, with virtually a tWo-year
supply of raw material on hanI. every
effort to relieve the market of pressure
mas proved futile, SO that growers have
been receiving less than the actual cost
or production for cotton marketed this
Fall.
Both man and nature are to be ac-
counted responsible for the huge har-
vest. the grower. because he refused
TO reduce acreage as draSticallv as
those familiar with the world cotton
and economic problems deemed abso-
lutely necessary u avoid distress, and
weather, which proved favorable beyond
any season in the memory of the pres
ent generation. Instead of a 25 per
cent cut in the area planted to cotton
last Spring. reduction of about 10
per cent was all that agitation and
persuasion could accomplish
Whatever may be the failures and
shortcomings of the Farm Board. none
OF its members can be charged with
failure to stress the imperative neces-
Sity of acreage reduction, of the urgent
need OF adjusting supply to the worlds
ability to consume.
1t took 100000 bale crop and
prices under cents a pound, which
did not return the cost of production,
to arouse the South. With a price
level that spells disaster and with mil
lions OF bales for which there is no
market, drastic legislation has been
enacted by several States concerning
the amount of cotton that can be
planted in 1892 While it NAV be
questioned whether such legislation is
either constitutional or enforceable,
the widespread, almost universal rec
ognltlon that some action is impera-
tive shows definite though regrettably
belated progress in adopting acreage
limitage recommendations. The cot
ton grown this year provides a supply
which will not have to be produced
next season. In addition to its GUAM
tity, the quality both as regards grade
and staple has probably never been
eXceLed, since it was grown under
unique weather conditions which are
not likely soon to be repeated.
Crises in Other Lines.
While activities of the Farm Board
and the American Cotton Cooperative
Association have continued to meet with
scant favor in cotton circles generally,
operations OF this governmental agency.
with the s500,O0O 900 revolving fund at
its disposal, can hardly be Justly ac
cused of responsibility for the present
plight OF the cotton dustry. This in
dustry has not been passing through a
crisis peculiar to itself. In all indus
tries and in every country, whether due
to absence of buying power on the part
OF the consumer, to an excessive in
crease in production resulting from
more scientific methods. to the UNEQUAL
distribution of gold or to the collapse in
silver and lowering of the purchasing
power Of money in the Far East, the
crisis has been the same in it's world
wide character and productive of the
same results namely, steadily declining
commodity prices. In this general trend
sensational decline in cotton was
inevitable
The course of values in the United
States has approximated with extreme
precision the downward movement.
From an average of 8.138 in 1892 Brad
streets commodity index figure fell to
STOP at the extreme low point of the
depression during the Mckinley election
year of 1896. At the outbreak of the
World War 1t had risen to 8708 and
then, under the Unsuitable demand for
raw materials essential in the conflict,
the figure rose with extreme rapidity to
20869 by 1920. During the succee ding
five years the commodity index declined
to 14405, and even during the progress
of the stock market boom commodity
Continued on Sixth Page)
CLEARING HOUSE FIGURES.