AMERICAN COTTON TRADE.

Auckland Star, Volume LVIII, Issue 20, 25 January 1927, Page 4

AMERICAN COTTON TRADE.

RESTRICTION OF OUTPUT. EFFECT ON BRITAIN. (From Our G«*n Correspondent.) SAN FRANCISCO, December IS. The closing of the year saw the United States Government and the cotton growers endeavouring to wrestle manfully with the serious predicament in which the cotton industry had become enveloped during the recent months of 1926, chiefly owing to an enormous over-production in the cotton-growing areas of America, but those who study economics throughout the year have found something at which to smile in the indication that the United States is about to imitate Great Britain's action, designed to conserve the rubber trade, by reducing the area of cotton under cultivation in order to bolster up the price. The Stevenson Act was the object of amazing fulminations in the United States, where the manufacturers of rubber tyres demanded that the President do all sorts of impossible things, and even the ordinarily calm and commonsense Mr. Herbert Hoover, rose up to urge reprisals. But nothing happened. The Stevenson scheme remained, and still exists. In his speech to the U.S. Congress, however, Mr. Coolidge advised a reduction by onethird in cotton-growing area, at the same time stating that pledges had been sceured to finance the storage and retention of four million bales of cotton.

Everybody recognises that this certainly has all the appearance of a deliberate conservation plan to boost cotton prices, which arc very low. A Manchester cotton spinner views it with apprehension, and so does a London paper, judging by cabled reports from Britain to New York. On the other hand, a cotton manufacturer takes the opposite view, having regard to the stocks now on hand and already assured. Some American manufacturers are wondering whether any action will be instituted in the .natter in England, but very little notice has been take -- .of the circumstance.

There are grounds for questioning whether the cotton interests within the British Empire ought not rather to pass a united vote of thanks to Mr. Coolidge for having unwittingly given them the opportunity they seek. One commentator says: "Just at present Egypt is worrying fearfully over the slump in cotton prices, and the growers have been making strenuous appeals to the Government at Cairo to stabilise them. The Government has responded promptly by reducing the area under cultivation by one-third for the next three years. Here is a swift response also to the American gesture. The verything now needed is for the Americans to reduce their output. Inevitably, as a result, the Egyptian product will automatically go up in price. Cut down the British supply from the United States, and she will buy more cotton within the Empire."'

This is regarded as a sign of prosperity in Imperial trade by some observers, and it is freely admitted that Mr. Coolidge has decidedly made another of those unconscious gestures, the result of which has no disastrous effects to the British Empire, but rather the reverse.