Evening star., 1937-09-03


and is its belief David Lawrence.
In policy OF re-
stricted production and price-pegglng.
Today the South-stronghold OF the
Democratic party-faces economic rum
unless the doctrine so sedulously taught
the Southerners by the New Deal is
reversed by the Roosevelt admins
tration
This situation has come about
through the subsidy paid out of the
Federal Treasury to keep the price
up by restricting the amount planted
The Supreme Court of the United
States, although not concerned WIN
the economic or legislative wisdom OF
Government policies, but their con-
etitutionality, gave the New Deal an
"out" when the A. A. A. was held IN
valid. but the New Deal didn't take
It. and at the next session OF Con-
eress Mr.. Roosevelt plans to 60 ahead
with crop control, believing he now
has a majority of the Supreme Court
with him.
Cotton Exports Slump.
But what has been happening in
the last three years in the Supreme
Court of world economics?
Eight years ago the United States
had SO per cent of the world export
OF cotton Today it is "A per cent.
Back IN 1929, and for the five years
preceding, the world bought 100000
bales year of American cotton.
Today the annual volume of cotton
exported by America has dwindled to
b.4oO, 900 bales and there are at least
l 900 900 persons unemployed in the
South.
Where has our market gone? BY
pegging the price beyond the true
economic level, we handed big slice
Of our trade to countries which had
never produced cotton at profit but
which could now easily make profit
at the artificial price set by the United
States Government.
Brazil is case in point. She pro-
duced only $4,000 bales in 1929. Now
she is producing annually about $780,
900 bales.
High Prices Spur Competitors.
But Is the world consuming more
or less cotton? The official figures
show that the world buys 100000
more bales of foreign cotton now than
1t did eight years ago. Not only has
the South failed to get any of this
increased market. but America has
lost, in addition, 2,5OO,OOO bales OF the
market it once had. For the world is
buying 100000 bales less cotton than
1t did from the United States eight
years ago.
The New Deal has been camoufag-
ing. Officials started reassuring the
South three years ago, saying Brazil
had a lucky break in weather, that
other countries could not keep up pro-
duction OF cotton and so on, but the
tell-tale figures reveal the tragic truth
the South is losing its traditional
world market for cotton.
The idea that a domestic price can
be fixed at will and that this will ben
efit our producers was fallacy which
the old Hoover Farm Board encoun-
tered. Mr.. Roosevelt spent a good
deal Of time in the campaign of 1882
denouncing Government control of
farm prices and so did the Democratic
national platform, but the New Deal
went ahead and repeated in another
form the mistake of the Republican
administration just the same.
Risk Run in Price Rise.
Where there is world supply and
where a nation produces more than it
can itself consume, the world supply
and demand determines the true price
Restriction of output can force the
domestic price up, but the risk run
Is that the export market will be
Robbled up by other producing ma
tions, either through freight differ
entail or by slightly lower sale price
The American cotton farmer saw
cotton at 18 cents in 1929. He saw
It at - cents under the New Deal
with crop restriction and now the
price Is down to cents and there is
. big loss in his share of the world cot
ton market besides.
Mr.. Roosevelt was importuned to
peg the price at 10 cents or even II,
but he fixed it at cents through his
Use OF the power of Government to
lend money on cotton. About IS per
cent OF the cotton crop is to be SUBJ
sidized at cents in addition to the g.
cent loans. This is paid for by the
taxpayers generally and by consumers
IN the extra cost of finished products.
There's big cotton crop this year,
something like l5500,000 bales, which
Is about 100000 bales higher than
last year. Instead of letting cotton
90 into export at the world price in
an effort to regain the lost market,
instead Of letting the cotton farmer
increase his income by selling more
bales at lower figure than fewer
bales at higher price, the New Deal
Is insisting on a continuance Of its
crop reduction policy. This inevitably
will lead to more and more unem-
ployment in the South, less and less
total income for all the cotton farmers
and hence less purchasing power with
which to buy the products and goods
Of the other sections Of the country.
(Copvrioht lO21,