THE SLUMP IN COTTON.

Dominion, Volume 3, Issue 714, 13 January 1910, Page 4

THE SLUMP IN COTTON.

Tee slump in cotton recorded in our; cable news to-day is not altogether unexpected.. The cotton market has been' keenly watched by the wholesale', soft' goods houses in New Zealand -and elsewhere' for some time past m anticipation of trouble.. The market : is being.., manipulated' by American millionaires, arid the. possible outcome has caused much con-: interested quarters. ■ - Me. Thomas Ckook, of Manchester, who is thoroughly; conversant - witn: the trade, in T a letter to; The. Economist of 'November .13, writes' interestingly on the cotton situation. Mr. Crook. points, out. that cotton 'corners'; are inot unusual! between 1 seasons.;.when manufacturers aro .running.short_of the ; staple, but the . advance which at that date was taking place was engineered at'V time whcii there was plenty of cotton available, which was .quite, a : new .experience. - „ The advance had been forced on - the iniero' assumption; that a - scarcity ' might 'arise, in ; the future."'"' The; advainco'in price; has been 1 continuous: all the. .-'year; it amounts,to 3d.,'per:-lb.,:frbiii 5d.-, at the beginning of the year to: ■about Bd. - at;the close.., During the :last thirty years cotton 'has ' not ■touched; within a penny per lb. 'of Bd.. at the same: time of the year. In; dealing with the statistics, - Mji. :Crook ' points' out; that the stock in Liverpool: on November 5 was stated ; at.; 671,000 bales,. against' l 410,000 a .year.ago; a' week later the figiires were 741,600 bales, "against 409,100, shoving that, the' excess over last year iB not only large but increasing.', ■There ;,is a sayingi in America that the' "farmers kill the cotton crop." This year they have drownqd it with floods, burnt it up with heat, injured it by drought, damaged it by storms, and killed it by frost, and : it iß.tci bo feared, that the; persistency |ofithese'.'reports, has-'iijfluenced plo to take a pessimistic view,of. the situation.,:.The-.whole population ,ofthovSoiithern, States, from' members', rof the' Gp'yornment, .bankers,'., chants, .factors, -down to; tho negro on,' .the; .plantations,' ' are interested ih.hi^h.prices for cotton,: arid at times : ;spe.cula,tiori 'rises ' to. fever' heat.-It" has: been; so recently: . iri -New; York. Messrs., Neill Bros,, who are regarded as ' authorities, forecast .'a''-crop; of .10,500,000 ;'balesj, ;while:Mß : . Ellison, ariother.iacceptcd authority, placcs the crop at. about 11,000,000 bales.-, Mr. Crook is : dis-; posed to dispute the accuracy of these .crop 'forecasts,'.and : that the receipts of cotton at .American ports at. the .'.dato'-' , o£.:.hiß. ,i !letter.;ex-; ceedod those of last" year, but no reliable conclusion-.can be drawn from the circumstance. But assuming - that the cotton- ginned on November 1' bears'; the ■ same' proportion to.v the ultimate: yield this year as the average of,.the.last.three years,: :theri .the crop will be much greater than the.vforecasts.; : The - figures, are those of the Census Bureau of the United - States ■.'Department' of - Comr ; merco and Labour, and show as undor: — ■ ■ : ■ "■• , •';.' Amount ginned. • '■ ', ■.■ '■ : ! November 1. Total crop. Year. '■•■ ,r ' ■ Bales. Bales. , 1906 ' ..;i L, 6,907,000 ' i 3,510,000 '.-1907' '■ 6,129,000 11,572,000' . -190S ■;;;; 8,192,000 13,800,000 ■" -Average' of ;■ 3 ; • •• * . veare ...... 7,076,000 ■ 12,960,000 - ■ 1909* : 7,012,000 •. . 12,842,000 The artificial manipulation of the market cannot supersede''the/natural, 'law of 1 supply' arid.demand, arid;the excessive v: speculative; buying that has forced up prices is working its own cure.; . Mills are-'running short time, arid.: the '.time- stopped is':logt and cannot be regained. Short-time working' has been -pretty general - in England and on the Continent, and 'to ; a-lesser extent' iri: the. United' i States, and this, it is estimated, will, be equal to a saving of 1,500,000 bales.. There was : a large surplus carried over :from- last, season, so that supplies,are.really.ample, even, if we accept .the lowest crop, forecast.; The gambling on the New York Cotton' Exchange., has .apparently' led to' 'the-.inevitable collapse, and with; it has come . the . collapse .in prices.