Evening star., 1935-03-26

Responsibility for the sudden drop
in the price of cotton Is divided by
the press between the loss of foreign
markets due to increased competition
abroad and uncertainty over the future
Of the A. A. A. price -pegging policy.
Continuance of price fixing is believed
by many observers to be inevitable in
view of the disastrous effects which
rumors OF discontinuance had upon
the cotton market
1T was the widest session Of the
New Orleans Cotton Exchange since
1929. the year that the panic was
ushered in" says the Austin CTex)
American, describing the situation.
met loss for the day was $3.50 bale,
or $50, ,123, 900 in value. According to
the cables and the wires from the
home market, the Federal Government
was a heavy loser 1t controls more
than 5000, 900 bales. including 4,11O,538
bales on which it has loaned farmers
as much as 1919 cents a pound. Get
these figures: The value of spot cotton
middling was 1923 cents a pound at
the close of the New Orleans riot.
The loss was LOG points for the day.
and all this is said to have been caused
by an error in the transmission Of
news from Washington and to the cot
ton exchanges in the nations of Europe
and the Orient"
Exactly what caused the sudden
drop in the price Of cotton may not
be told" thinks the Columbia Is. c.
Record. "Out of the confusion some
things are apparent, however. Ana
one is that governmental control OF
agriculture has its limitations and the
other is that it has its dangers. Con-
gress may not be able by what 1t has
done to keep the price OF cotton up,
but q mere rumor of what Congress
might do may send the price of cotton
down" To the Providence journal
also the cause of the break Is hard
to determine, but it suggests that ut
Is reasonable to conclude that it has
its basis somewhere in this highly
artificial general situation which the
administration has created"
Dealing with the immediate causes"
declares the Wall Street journal,
"the cotton loan plan stands out
most prominently. Experienced deal
ers thought the loan plan was peg
which, so long as 1t was maintained.
would hold up the price even though
that price were artificial. Instead it
has proved o trap, even though 1t was
not baited and set with the intention
Of harming any one. The A. A. A.
must be given credit for desire to
aid the producers, and it has helped
them temporarily, but ut the expense
of those who distribute and consume
the cotton. Help Of that kind is
always bound to be expensive IN the
end"
It is the opinion of the Birmingham
(Ala.) Age-Herald, however, that.
whatever the point Of view on the
disadvantages of pegging q commodity
price above its natural level, there
can be little question that 1t Is gen.
orally conceded that the action taken
on cotton in that particular respect
has been a tremendous boon to the
entire business structure and perhaps
the salvation of the South" The
Alabama paper continues: That a
continuation of this pegging may be
unavoidable will be admitted. regret
table though it be. The policy in the
past was not an ideal choice, but an
obvious compromise with what ap-
peared an inevitable necessity"
The Charlotte IN. c. News calls
attention to the. fact that In spite Of
ths hreak In the cotton futures market,