Evening star., 1939-06-27
British Cotton Trade
Bo|stered by Barter
Pact With j. !.
Attitude Of Rubber
Committee Regarded
As Vital Factor
BY the Associated Press.

American barter agreement involv-
ing cotton and rubber has been well
coined in industrial circles as not
able contribution to the slowly i'm
proving British cotton industry.
Before details were released Fri
day the scheme had been viewed
with much distrust by both the rub
ber industry and the London rub
ber market. Now, having the week
end for full digest of its possibili-
ties. market men are not expected to
find much fault with it.
The ministry of supply bill, ex-
pected to be passed soon by Parlia-
ment, will automatically ratify the
agreement on Britains side Pro-
vided it is ratified also in the United
| States, observers say its success de-
pends entirely on the attitude of the
International Rubber Restriction
Committee.
When the scheme was first pro-
posed total of at least 100000
bales of American cotton was sug-'
| gested as the amount to be involved.
At that time it was generally under
stood that the Restriction Commit
tee would be unwilling to release
correspondingly large quantity of
rubber.
Cooperation Expected.
| Now, however, with the cotton to-
tai at only 100000 bales, the Rubber
Committee is not expected to put
obstacles in the way of releasing the
balancing stock of 10000 tons of
rubber for purchase by the British
government in the open market.
There was no market reaction to
the agreement at the end of the
week, as all cotton and rubber mar
kets were closed However, dealers
saw no reason to expect more than
slight price fluctuations.
Some cotton industry leaders al
ready have suggested similar barter
agreements with Egypt and India to
supplement still further Britain's
war reserves of cotton, which were
said to be 'far too low"
There was general satisfaction that
the agreement provides for the stocks
to be held immobilized until required
in wartime.
| London's war-conscious stock
traders found little in the interna-
tional situation to encourage re-
sumption of business.
The absence of hopeful indications
that the British-French-S Soviet mu-
tual assistance pact would be COM
pleted soon and fears that British
japanese tension over Tientsin
might precipitate Far Eastern
conflict brought a quiet close with
nervous undertone.
Markets Ready to Rally.
The markets, however, demon
strated residence and readiness to
rally at indications of improvement
in the international situation. Prices
were marked down at the opening
Thursday on the strength of the
overnight statement that no prog
ress had been made in the Russian
talks. Later sharp rally occurred
on a rumor that a pact would be
signed at the end of the week.
The cautious attitude of traders,
however, quickly stifled improve
ment and prices again fell off.
MldWeek nervousness over the
United States foreign silver buying
policy slumped prices in the London
bullion market to the lowest since
September, 1888. Spot declined
halfpenny to 1915 pence (about 1912
cents Tuesday. A further fall of
about 38 cents followed Wednesday.
Though there was a fairly wide
spread opinion in London metal
markets that the United States was
unlikely to make any drastic alter
alton in its policy, there was only
moderate support throughout the
week pending a definite decision
from Washington.
The week closed with slight i'm
provement at around 1915 pence
(about 38.43 cents per ounce.
Price Slump Feared.
If the United States withdrew it's
support for foreign silver, it was said
that about half the world output
would have to seek new markets.
The ultimate price, it was calcu-
lated might slump to about "a cents
per ounce.
The difficulties under which f1nan-
cial business is being carried on
under present nervous conditions
were illustrated during the week by
provisos attached to an offer by a
gold mine company to its stock
holders.
The offer contained the right to
withdraw If war breaks out be-
tween any European states
prior to July IS, 1885,"
Another condition provided for
withdrawal of the offer If "finan-
cial conditions in London at any
time up to that date (July Isl
are such that = it is undesir-
able to make the offer. ="
The quality of imported American
scrap iron for British armaments
factories has created a favorable
| impression in the British steel in