Evening star., 1939-06-23

United States seeking to create
stocks OF raU materials tor Udr
time. Strategic raD materials bill
passed by Congress, authorizing
exchange OF surplus American
products for materials In Uhich
U. S. Is deficient. Barter plan
originally Uas to exchange Amer
ican cotton and wheat for Brit
ish tin and rubber.
BY the Associated Press.
LONDON, June 23.-An agree
ment for the exchange on a barter
basis of British rubber for United
States cotton for use in wartime was
signed here today.
Ambassador Joseph P. Kennedy
signed for the United States and
Oliver Stanley, president of the
Board of Trade, for the British gov
ernment. The agreement was to be
published at midnight (p pm. E.
S. IT,.
Previously Stanley had informed
the House of Commons of the bar
ter pact.
Negotiations for the large-scale
transaction involving the exchange
of certain raw materials required
as strategic reserves in both cour~
tries were opened more than a
month ago.
OFF Market Five Years.
Assurances were given at a spe-
cial committee meeting of the Liver
pool Cotton Association that the
cotton stocks in question would not
come on the market for at least
five years and then through ordi-
nary channels.
1t was also said yesterday that
the cotton trade would not oppose a
bill to legalize the barter deal and
the Cotton Association agreed to
name experts to sample cotton in
the United States and arrange for
its acceptance in Great Britain.
Futures jumped II to 18 points at
the close of yesterdays dealings on
the Liverpool cotton market.
The Canadian government had
protested against the agreement.
Because of this, wheat was said to
have been dropped from the deal.
Mr.. Stanley's statement to the
House did not mention wheat and
officials of the Board of Trade,
government department, said the
present agreement did not include
that commodity.
1t was reliably understood the
agreement would involve 600 900
bales of United States cotton.
Against this, Great Britain would
accumulate for the United States
stocks of rubber for any emergency.
Canada Protested Whole Deal.
When the barter deal was first
mentioned, the United States was
said to have planned to exchange
wheat and cotton for rubber and
tin, but this led to the Canadian
protests on the grounds that the in
clusion of wheat would harm the
Canadian wheat market.
Canada also protested the whole
idea Of the exchange arrangement
as being contrary to her trade rela-
tions with the United States and
Great Britain as exemplified in
trade treaties.
In Washington, officials of the
Agriculture Department said it was
probable that cotton for the ex-
change would be taken from stocks
of 100000 bales accumulated in
warehouses throughout the South as
pn11otnrol fnr @~t,
pegging to growers.
The exchange would have the ef-
feet, they said, of reducing an esti-
mated surplus of 100000 bales of
American cotton. This surplus in
cludes the Government loan stocks
and supplies held by cotton manu-
facturers at home and abroad and
by traders and farmers. The sur
plus was said to be the largest on
record.
Officials also said legislation prob
ably would be necessary to consul
mate the trade. They explained that
existing law denies the Government
the right to sell any loan cotton
unless it can get from such sales
the amount it has invested in loans,
handling charges and benefit pay
ments. The barter arrangement
would not bring such a return, they
said
These Washington officials said
failure of the agreement to include
wheat was no great disappointment.
They explained that because of
sharp reduction in the American
wheat acreage this year and spring
drought conditions in the winter
wheat belt, the surplus problem in
the bread grain was less acute than
was indicated when the barter pro-
posal was first suggested.
The wheat surplus has been esti-
mated at about 275,000.o00 bushels,
compared with about 375,000,00O
year ago. Present crop prospects
and continuation of exports during
the coming marketing year at levels
of the past two years would reduce
the surplus to between 10000 900
and 200,000,O00 bushels, a figure
these officials said they considered
a normal reserve for the United
States.
1.-Two Presidential