Evening star., 1937-10-17
Economic Problems
Wrapped in Cotton
BY OVEN L. SCOTT. :

l "A CAACACdA &lhliIC dg tllnt CdSC CAPldllo
much as the President is finding. In it
is one strong reason for special ses-
| sion of Congress, another for the wobbly
business situation, still third for q
| projected second new deal. Also, here
is turning out to be a clear glimpse of
the forces that are rocking the world
and driving this country to choice Of
| courses
One ofiicial suggested: Watch develop
ments IN cotton and you have q ring
side seat 1t the real world show.
| At one side are the advocates OF q
return to the good old days. They have
spent years telling the country that in
cotton Is graphic evidence OF the way
government Is wrecking the country.
Their insistent cry is that crop control
by government has created an artificial
scarcity that forced prices higher and
ruined essential foreign markets. This
policy OF scarcity-their argument has 1t
! lis disrupting the South and undermine
Ing the economic set-up OF the whole
country Take of all controls, they say,
and all will be well.
*H*
At the other side are the New Deal ad-
vocates. They insist that Government
HAN'S oeNh AL w SOAAblOA ACy lllQuSUIiCo-
| OF which cotton Is one-and to maintain
a balance between the income OF great
groups IN the population as an alterna-
tive to collapse. Remove controls. they
say, and the road Is opened to ruin not
only for cotton. but for agriculture and
industry as q whole.
Until now this argument has been on
the plane OF theory. Now theory is out
the window>and the Nation Is up against
some hard facts that can provide 4
practical test OF the two viewpoints. The
ringsiders are in = position to watch
what happens and to pick q winner.
Take a look at cotton.
The South this year grew more cotton.
with only one exception, than it ever
before grew. There are huge quantities
Tor sale-much more than consumers
ever in history have bought in one year.
Instead of the long -talked-of scarcity,
there is actual per-abundance As for
prices, they are the lowest since the
bankruptcy year Of 1892 and, on the
basis OF gold values, are the lowest in
history.
According to the theory OF those who
oppose Government intervention, this is
an almost perfect set-up. Customers
shoulo clamor for vast available quanti-
ties OF American cotton so that they can
turn out goods to clothe their peoples.
thereby creating jobs and raising living
standards. Not only that, but Southern
farmers should be happy because their
lands have produced bountifully, resulting
IN prices that will permit them to run
ragged the farmers of India, Brazil,
Egypt and China
And how is this Laissez- -Faire theory
working out?
OLD customers are making no rush to
buy. Our biggest customer, Japan, is
buying only a fraction of what she
bought last year, when prices were so
per cent higher. Former big customers,
like Germany and Italy, appear not to
De interested In American cotton at any
price. England has been slowing her
purchases for years. American textile
mills are buying and using less cotton
than they did year ago. when prices
were much higher and when they set a
record for use.
So now it is question whether the
South should sit and wait for the world
to develop an active interest in her huge
supply Of cotton, meanwhile getting
ready TO produce another huge crop. or
whether she should get busy and induce
the Government to do something about
production and about prices and about
| marketing. The answer of the South to
that question has been loud enough to
induce President Roosevelt to speed
Congress back to Washington and to
set up clamor for action from Southern
Senators who thought last June that
they didn't want action
linen there are other questions: Can
the fuu cotton production OF the South
be sold at any price? And, what would
be the result Of Government withdrawal
from the situation, as demanded by some
vociferous groups?
Some hard and cold facts now help
answer those questions. They touch on
the basic present world trouble. That
trouble is, in important degree of
American making, under policies of the
l920s. 1t grows from the fact that the
war put old customers into debt to the
United States. To pay interest and
principal on those debts, those customers
needed either gold or markets that
would enable them to obtain the dollars
they required for payment. Tariffs were
raised against their goods. Loans now
largely in default helped tide them over
for time. Then their gold was shipped
here until now its total Is fantastic and
its presence an actual embarrassment
After that there was not much for the
one-time customers to do but to seek
other sources of supply or to try to be-
come self-Suf1cient. Germany and italy
and other nations, with foreign markets
for their goods curtailed. turned to bar
ter and to substitutes Now when this
country would like to get back the mar
kets they offer for raw materials the
dictators are not greatly interested.
The conclusion of the Governments
trade experts is that, pending a general
readjuStment Of world tariffs or 4 re-
newal OF large-scale foreign lending by
this country, there is small chance OF
recapturing old markets or greatly de-
veloping new ones outside this country.
II that is the case, why not let the
South struggle out of It's predicament az
best 1t can II cotton growers cannot
sell their full surplus abroad, why not
use 1t at home? Southerners. as well as
Northerners, often do not have enough
to wear, and, if they did, the cotton
crop might soon disappear.
But again the answers are not so
simple.
The huge 1887 crop, II left to itself.
would return many fewer dollars than
the smaller 1896 crop. Yet, with those
fewer dollars the 9n,lth erpor mould e..