The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-08-06
Trends
Government Cotton
Report Awaited
by Trade.
by VINCENT LYONS
Times Financial Editor

activties-the Spectator. grower,
mlllraen and the government. All
are looking forward TO 1t with the
keen expectancy OF a child await
ing his seventh birthday. All have
some idea Of what might be ex-
pected but. fatalists to the last, are
reluctant 70 cherish tOo-high hopes
l. is the day when. with a great
deal Of pomp and circumstance, the
crop reporting board Of the Depart
ment Of Agriculture releases its
estimate on the cotton crop for
1885. It is an annual occasion; but
for all that never fails to stir the
cotton marts of the world. The
futures exchanges Of this country
do honor to the solemnity of the
day by pausing for a few minutes
Immediately after the release Of me
estimate in order that traders may
have that much time to digest the
findings.
The governments estimate this
year is of more than ordinary
pertnence because the results Will
give a cleW TO the Federal loan
policy on the crop. Borrowing from
Shakespeare, the trades sohloquy
runs something like this: To be or
not 20 be. that IS the question.
VIII the government continue TO
loan u cents on cotton when the
market price is below that fgure?"
FINDER the Bankhead act the
~ allotted production should be
1O983. 264 bales. This. of course, IS
purely an arbitrary figure and
there is bound TO be some defec-
ton from it, according to the tenn
per of nature Some private estl-
mates place the 1885 crop at as
much as 10000 900 bales The Bank
head act declares that any out
put in excess or Individual allot-
ments is subject to a tax of cents
a pound at the time of ginning.
As can be seen the levy autOmat-
icallv prohibits ginning Of the ex-
cess cotton, but the excess remains.
The governments loan policy is
a part of the cotton control pro-
gram. The farmer, in return for
reducing his production, IS guaran-
tced a price OF II cents a pound
for his product by being given the
privilege of getting credit from the
government to that amount. But
the millmen, who process the cot
ton. do not feel so kindly toward
the plan as they view it as creating
an artificial price situation. They
believe that they could buy at a
lower price if the governments
hand was not in the market.
In fact, these millmen displayed
unadulterated disgust recently when
oscar johnson, manager of the
governments cotton pool, disclosed
that he had virtually cOrnered the
world supply of American cotton.
The thought behind this. of course,
was that with the available lint all
in one agencys hands. the millmen
we're going to pay dearly for any
supplies which they needed. That
situation was as on July l and may
have changed some in the interim.
MEANWHILE, as the govern
WI ment attempts to maintain
the price of the SOuth's white
gold" above the world quotation,
our foreign market for the product
is dwindling steadily and steadily.
India and Brazil are producing
more and more cotton and selling
it to sources which once purchased
from the United States. This ten
dency is viewed with considerable
alarm in certain sections of the
country.
Cotton futures have reflected
the uncertainty recently by dis
playing a weakening trend. Last
week prices on the New York Cot
ton Exchange closed rs cents to
more than $3.50 a bale under the
quotations in effect at the close of
the preceding week. If the loan
of u cents is reduced 1t is ex-
pected that there will DE a further
sharp slump.
One other item to cloud the
trades thinking mechanism is the
recent agreement among congress
sional COnferees on an export sub
sidy for farm commodities. 1t is
quite possible that this arrange
ment may allow the sale of cot
ton abroad at a level lower than
domestic price and that it may
replace the present straight-lOan
policy. AT any rate the miscel-
laneous interests have quite a lot
to think about these days.