r -L 2Q. -f:2'22t
,'h ,-'." /,.


U'lITED ST.ATS DZF..RTi;:'T OF '.GRICULTUiL.
Burerc: of Aj;ricult.r. 1 co..olics
was .i- :toni


Septe-.:ber 3, 1931


I-.I
9- 1.;


.PRLD COTTON PROSPECTS


C-72


Prices of ;iUiericen- cotton declined to new low levels in An iat on

the basis of an indicated total world S'.pply of 1noc.rly 24.53 million b:les,

tne continued ujns.tisfactory condiition of business both at come CId -.bro-.d,

and the low r,-te of co.:sum.ption t.,.rou...out t:ico world. In Liverpool prices

of the iost co:r.petitive foreign cottons i:.-dc declinsc cr.:p..rabic rith- t::c

decline in .' .crical during Au-Ist, but i:, Japan ,icricc1 declined 2 ocr cent

i.iore thc.n Indian end as a result, Ft tle end of A'Lsrt, interest c.ntercd on

iumeric-,n cotton a.nd practic,-.,lly no intcrcst w.-. tcce.i in Indioan cotton- in

that irTport.. %t acrke.t. C..in:I. .also reporccd more interest in Ainrica-i.

While world consur.iption of Ane,-ricon cotton darin-; J'une :- i Jul, h.s

been estimated to have been sli;.tl.y abovee -:e corrospondi-: i..ontlhs of last

yenr .-. th.c scasoncl decline in cons,.um:ption during th'eso two r.on:ths t-is

year w-.s less thbi during ; the corresoo-ndin5: period in t.ic past 5 ci.r.'s, t..e

ra.to of consumi-ption is still fur below a.vorrc. In the .pst lovw prices ..ve

usually served to sti,.rulate co.mncmption both in the United States r.id f.rei.,

comirtrics, In Japan cotton cons.u..jtion in July -.s indicated b, ;,rn pro-

duction incrccsed coi pared with J.ae -d :lw..sf 21 p r cent cobove Julj.1 1930.

Chinr. reported thrt uill activity continued a.t n fair ra.te about t..o i.-iddle

of .lAuust ind that fewer r.ills were close thrni non.iatly d'-rin; this time of

ycor. In Great Britain end Europo conditions in tl.e cotton textile industry

have continued unsatisfactory.


rr
~..







C-72


The 1931 do:uestic crop, while somewhat later than usual, had un-

usually .,ood crowinc conditions during July and August and on August 1 the

condition of the crop indicated a production of almost 15.6 million bales. On

September 1 conditions were such as to point to a production of 15,685,000

bales of 500 pounds gross. In Indir. the acreage planted up to the first of

'ugust was estimated at 6.4 per cent less thn a.t the smne time last year

cnd 12.3 per cent below 1929. Th e &inese crop is estimated by the Chinese

Cotton lMill Owners Association c.t almost 25 per cent less than in 1930-31

due largely to damage from. floods and excessive rains although there was some

decrease in :.cracee. The Eoypti-n acreage is about 19 per cent below last

-'ear rnd the Russian acrer.ge is .aout 50.5 per cent above last year, but

Lompl.ints are numerous as to the delayed cultivation.

Prices

D.rin; Au:ust domestic cotton prices in the 10 markets declined from
7.52 conts per pound on August 1 to 5.28 cents on the last dcy. The average
price in these markets rcanged between 7.30 to 7.52 cents during the first 8
days of the uonth, dropped to 6.12 cents on Ausust 12 recovered to 6.44 and
on LAugust 19 was down to 5.89 conto per pound, the low for the month. In
the New. OrleN.s n'1. New York markcts, where the daily price records nrc avail-
able for n.any years, the prices ab)ut thle riddlc of August wore the lowest
since 1898. Continued unsatisf.-ctory world economic conditions, continued
slow v.:ovcl.1cnt of cotton into co.:sua;ptive ch0z-:;ls, and present estimates
ind.ica.ting the Ic.reCst su-pply, o-f i.rican cotton on record, are all factors
contributing to t._% present low level of prices.

_.t Liverpool .nmcrican i.il.ling on July 31 was quoted at 9.37 cents
per pound -id on Iua-ast 23 h.-:d declined d to 7.77 cents or c &rop of 13.1 per
count. Darint this period Brazilir.a and Est Indian cottons declined
prQp)ortionc.lly as mach as Janericrj cotton i.: the Liverpool i-rkett but
cprrespon-lin d.cclines did not occur in Peruvian and v,3,ptirn cottons. On
August 28 t:iose types of longer staple cotton (Peravi;n -nd Egj5ptican) were
5 to 6 pcr cent higher relative to Ancric-n thain at t.1c ond of July. In
Jr.pn a report from Consu.l D)novL-,. states tnh'.t Amcrican spot cotton declinedd
27 per cent from. July 23 to Augast 22 while Indian Cinras dropped only 18
per cent 2eid th.-t as a result pr,.ctica.ly no interest w-.s being displayed in
Indirin cotton. In the past low prices rxc a favorable parity with foreign
cotton shave sti,.Tulated the consumption of Ame-ric.n cotton in Japan.

The ovcrage price received by domestic producers on August 15 was
6.3 cents per pound, 2.2 cents per pound below July 15, and 5.1 cents per


-2-








C-72 -.-

pound bclow .-i :A~ast 1930. In 1Tovc/,.Lr 1914 th E.verc.- pricc, rccivt:l b:
pro-.ucers in t':e United States rr3 6.5 c-nts per pounii wLi.ictS, .ithi t.:e
exception of the .kL;,J.st pric.' t..is ;'c-:, v 3 t": lo',::.st price rc.or.. c 1 t.o)
fern price series, t'es.- prices .:vi'j b.ri; coll.,ct"L since e ..11- t 1909.

Stocks : -I Mcve-c:.nts

C:xrr;--ovcr and suppl- of Ancricn cotton

C-. Jul-' 31, 1 1, t3-.er. w re c.p ro::ii.:tel; *5, 6 ,000G i-,u- -. .i-ng b -lcs
of An-rico:. co)tto;. ii- tL-e UL'itci Stc.tc;, 2.cC .r.-i:. t. to t: E.ircr of tl.-
Ccns- s. T:is c-?r, .rcs with 4, -2, 000 b.-lcs c. yo.r earlier, -: ircr:..sc of
1,940,-000 br-les or .14.9 p..r cint. In 12?, ,',llo..ing t:e lS .rGe cr), cf i26
thee ccrry-ovPr of u.ji.ric-r: cotton in t.- United. St:.ts .ac o.ity ,663,0'1'
b-les '.ue to l.r, ;c .e.nertic c: nsuj.ptioni .rn l.1.rjer LXportJ. iot sinc.J t..e
b.-gianinl of tl.c 1921-22 ."c.sji: a.S. tn. c.-.rr:-o-.cr ir ti: United St tcs b-on
as l..r'-jr ..5 c.t t-i~ b.:innin" of thl present AJ-r.scfn. At that tiei. tlc crr'y-
over w-s 6,i61,000 b.-lcs.

Th.e ',orld ca.rry-over of *..i-ricrn cotton .t tl.c bCo.innin of t.-is
season ha.s bcen estir.1.ted (pro:li:.in -r7) .t bout 9,UCO,C'0':O b-lcs b,- t l 1.'.
York Cotto-i E-:cb?11ve S.rivice which is t;s e r rcst world -.'ry--.v, r since
1921 v.icen the worj i total was csti-.ted by tn. Br-irena of tie Clnius rt rli '.st
9.2 i.1illio.i b.l- s.

Shyi C t 1..o 1931 .:.- ric'n crop turn; out to be as l.r,:e -..s t.-, S, t.;i:ber
1 conTiti.n indic-.ted (15,685,00U b Ics) tlhe tot-al spply for th' 1251-32
seOson l-."1: b0e -i'ost 24. / million b.-les. Thec supply for tilL' 1'26-2
sea.sorn w s c.b:.ut 23.3 million i Ics w. ich was t.,e la.rgeet supply y of Lr".- ricn
cotton for -_ny pr.st sLa?.sn.

World. r.ill stocks

World. mill stocks of a1- ric-n cotto--. on .L:-iat 1, 1921 rnoi tted to
1,75,000 nruniij 'u-ls cr.poar :'. -*ith 1,985,C00 b--les 12 I.iont .E c-rlicr, .
cecre.se of ll'-1,0G00 b:.s or 5.5 per ec.-t, ..c onrinr t) cstirn.tes of t. '
Intor._2tion.1 Federr-ticn of no.,t-or CC tton Spin-r.c;r' -ad. !;1 .. ,ufct-irer;'
.:ssoci.tir.-ns.. World'L ill stoct-:; of .\i;:ricx;-. cCtton at the be i..:-lin of t'ie
1928-29 .nldl 1929-30 seasons 'o-r, Mi i:)tl ovLr 2,100,lJ3 b-lcs cad in_ 1927-
28, 3,C56,000 b:.les. St'oc'-. of nicric:n on Au_- sz 1, this -c..nr .wer tl1o
snr.lcst of an-.y y.r .in'.c 192..

Stacks of for-cijn c)tto,: -.t rmils on 2l.uust 1 zucrc likcwis._ 'clow c.
r1 c-.rlibor, o-aouti:k. to 2,142 ,C'00 rJJiin .j lo3 c ?porc:' *':itl: 2, 5.3,000
b-los, o. 'cc:c-.O c ,a 2.6 pjr c.:.t. TiAs w.1.:; t.i: lowcHt ri ..'ut of f-rci,;;r
cotton: hold b-- raills of t:'e world c.t th.-c Le..;infin.: of tt s.Ci-n since
1927-23. T'.h idccre,-se this ye-.r wrs :I-..o to .acric.os i-- I-!i-'-- --
E .ypti-n cottons, tc stcdcks of t-:C-: cotto-s be-i:: o : c..-t v-1- S -..r-
cent rcspectively lblo'. l:.st ye:.r. In t.., eaco o' Ili-.i:i cottotr Lme r'il
stocks were t'ic lo-.est since A~a;.st 127 r.'- EB.jpti-. st'aks 'wJr3 t:c
lowest since t- b,-;i.annin- of the 1928-29 seas.r.. Sni'.rics cttoi-L at
mills, on t1c otcr ha..1, were "b),nt 9 per cent r.cove last y-c.r, but w.crc
below the two previous years.







-4-


C-72

The net result is that the total mill stocks of all cotton on
August 1 t.is year amounted to 4,322,000 running bales compared with
4,498,000 bales and 4,363,000 b;-.lsc- one-andttwo years earlier or a de-
crease, this year of 3.9 ani. 11.1 per cent respectively from last year end
the year before. Not since the beginning of the 1925-26 season have mill
stocks of all cotton been as ljw as this season.

fIorld visible supple

The world visible supply of all cotton on August 28, 1931 eaou-nted
to 3,435,000 running bales compared with 3;190,000 bales one year earlier,
and 3,458,000 bales on the corresponding dote in 1929, according to the
Co,.m-nrcial and Financial Chrjnicle. The visible supply of .imerican
cotton on August 28 was 4,498,000 bales or 69.9 per cent of the total,
v.rhoreas a ear earlier the 3,159,000 b les of Am:rican cotton amounted
to 60.9 per cent of the total :-and in 1929 mnerican constituted but 47.1
per cent cri.d tot-lod 1,629,000 b:.les. Part of this greater increase in
.ucricc-. than in foreign is due no doubt to the fact that mills, particularrI
.ii the United States, have decreased their stocks. In addition, however,
thic, consumption of muneric,'n. cotton has declined more tnan foreign cotton.

Stocks in consunin, establisT:.'.:cts

On July 31, 1931 the stocks of all cotton in consuming establish-
rcnts in the United States totaled 995,000 running bales compared with
1,183,0u0 brlcs or a decrease of 15.9 per cent, according to reports of
ti:c Burcau of the Census. Stocks in consuming establishments at the end
of each of tlie l1,st 5 months of the season ended July 31, 1931 were the
lowest for those dates since tho 1924-25 season.


Stocks in public storrae and :Lt compresses

Stocks in public rtorcc and at compresses at the end of July
t.is year totaled 4,524,000 running bales compared with 2,877,000 b les
a year e-.rlier and 985,000 bu:les at the end of the 1928-29 season,
according to reports of the'- Bure.u of the Census. T.-is is a.i i;crcr.se
of 57 -nd 359 per cent respectively. These stocks dccre-.scd 446,000
b.ls dLuring July, .iowe.ver, cor;pared wit.: a decrease of 228,000 bales
in July, 1330. During the 1929-30 season sto-ks in public storage a.id
a. at cr.-presss reached a pacr- a.t the end of December raid by the end of
the season tad decreased 3,021,000 b-oes whereas during the season just
closeL te. 1:cllne from the perk to the end of the season mounted to
3,873,000 bales or 852,000 b:.les more than in the previous season.





'4












C-72


Domestic exports

Exports of 2.r,,.zstic c.tto.- 1lri-.; Jul: wore sli.ntly above Juno
r1-.ic.'. 1'. bcrc i- I asu L1y ,:. O .I-: -..1 t l oi : f 3 r- at 50,Cr 0 brles in
Ju-ly. Thc 259,0C. rtI.i:.- b-ui-. -::portci in J-.ly ;. o r.rtcl by the
Burc:u -:f the Cc:.sus w,.s *1,00 '":.lcs 2;ac-; Ju-.., 81.,0 .0 bales or 47.6
per cc-:t above J-uly 1930, ;:. 22', j" b. len or 9.0 p r cent above July,
1929. Tot.al exports -or tL.c c.car. just ::~ilcd nm:..u:toe to 6,760,000
c-::-p:-rcrd .it.i 6,690,C00 b-lcs in 1929-30 -1 5E,0-,000 b-les in 1928-
29. Of t-ic importa-nt conutriu., Grcrt Britain.: t-?: 202,000 b-les or
16.1 per cnt loss ti.-c; i., t.:c 1929-J30 sEon, Ita, 176,000 b les or
27.0 per cunt less, Gcrnm.iy 47,000 Lc.lcE (2.- per coent) less, other
EuroS c 12-'2,COu bcles (14.9 po- crnt) less vw.ile c rpzrts to Jr.p-:. -jring.
the 1S30-31 scas.I were 202,000 brlcs or :0.4 per cen:t more than iI
1929-30. Frr.-.ce took 1C-3,000 -cs (12.7 pcr cent) nmre rnd exports to
.ll stcr c tries c c:.bin.Ji: ucrL 30S,O0'0 "-1, s r ?1.8 per cent above
t-ic provioj.s s. .s n.

reportss ;f cotton from Indi, :l ''-pt

Fri- 2:._,L-.st 1 to .u.'.st 23 t.. is ;.cr exports of r.iv cotton fr. i
Id.ia. c.,cg.,mted. to 211...,000 -'uini; ales corrp.r,:d witl. -.05,COO bJl. s in
1930 r2.. 210,000 b-ls in 1522 r.ccorlin to ti'c Comr.ircirl .an
Fi:-ncil-:. C-.ronicle. Ex:o:'ts to rc't ritaiin wcr:e abV tht two
prcvi-v..s c'rs r.s wore ux ?.,rt t3 J prI "-i C .i:'.., ',it the Contincnt
tnk 1only 3,j13J0 bor.ls c. .iprc'! d t.- [.9,'0 b 1- s in 1930 mrnd 120,000
...lc's in 1 2'2 .

E:: orts Tron Ilcxa:irU-, ..;-pt ..-rin: tc: first 26 s .-s of this
c:'. .. ...-..U.L:tcl t 5D,000 r)u:-:i:. '-les c .'.-r'- wit.: i6,000 brlos last
sorn-t nmi'. 51,000 :rlcs *t-riV. t.e correr.:-din. eri.od. in 19?2'.


1___ _~~ _I~~


-O-'






C-72


Textile Situation

Ucrld nill consumption .

V.'orld mill consumption of all cotton for the six months ended July 31,
1931 amounted to 11,319,000 running bales compared with 11,164,000 bales during
the previous six months and 12,007,000 bales during the last half of 1929-30,
according to reports from the International Federation of Master Cotton Spinners'
and Manufacturers' Associations. This places the total consumption for the
1930-31 season at 22,483,000 bales compared with 25,209,000 bales in 1929-30
and 25,882,000 bales in 1928-29 or a decrease from the two previous seasons of
10.8 and 13.1 pcr cent respectively. ,Imnrican cotton represented 48.5 per cent
of this total whoeras in 1929-30 .lmerican represented 51.7 per cent of the
world consumption. Similar ccnprrisons for ether growths are: Indian 26.1
per cent of the total for tne 1930-31 season compared with 24.1 per cent in
1929-30; ELgyptian 3.8 against 3.7; and sundries 21.6 against 20.5 per cent.

Tctal world consumption of Jnmorican cotton fur the six months ended
July 31, 1931 amounted to 5,629,000 running bales compared with 5,278,000 bales
during the previous six months and 5,940,000 bales during the last half of the
1929-30 season. T,,o t. tal consumption of oncrican cotton for the 1930-31
season was 10,907,000 LL.l0s comipred with 13,023,000 bales in 1929-30,
15,076,000 bales in 1928-29 and the record consumption of 15,780,000 Lales in
1926-27. This was a lecruase of 16.2 and 27.7 per cent respectively from the
1929-30 and 1928-29 s-as-.ns and was 30.9 per cent Lelcw the 1926-27 season.
L. .d I .. *.. ..
Consumption of Egyptian cotton like that of ;Je;rican showed an increase
during the last six months of the 1930-31 season over the previous half year,
and v'as also above the corresponding period cf the 1929-30 season. The total
consumption of Egyp.tian fcr the season just ended, however, was 9.1 per cent
below the 1929-30 season, being 852,000 bales compared with 937,000 bales.
This w;as the lowest consumption for any season since 1921-22.. Consumption of
both Indian and sundries cottons during the last six months of the past season
was below both the i.revious half year and theo corrosponding period in 1929-30.
The tc tal consumption for the seas3,n was likcerise below the 1929-30 ccnsumptioz.
MIill consumption cf Indian cotton for the your ended July 31, 1931 amounting
to 5,860,000 bales was 227,000 bales or 3.7 i.er cent below the previous year
but was above any other year cn record. ;World mill consumption of sundries
cctton ,which amounted to 4,864,000 bales uurinC the 1930-31 season was
298,000 bales or 5.8 per cnnt below 1)29-30 but was also larger than for any
other year.

'Wrld co:nsunpjtion of Anorican cotton in July

'World ccnsurrti-n m f 4maoricar. cotton for the month of July was estimated
by the iew York Cotton Exchange Service to have amounted to 925,000 running
bales compared with 939,OuU bales in June and 878,000 bales in July last year.
During both June and July the estimated ccrnsumption has been above last year.
During the past 5 y':*&rs June -n.i July consumption as estimated by the Exchange
Service has averaged 7.4 per cent below consumption in lril and Llay whereas







0-72 -

this year the June and July ccnsumntinr estimates averaged only 4.0 per cent
below Ap.ril and M;ay. This indicates that \hen adjusted f:r seLsonal that the
world spindles using American cotton were more active in June and July than in
the two previous months.

United States

In the domestic cotton textile industry the situation during July was
somewhat nixed. In the standard cotton cloth section prLduction declined 7.5
per cent from the June level whereas total consumption of raw cotton in the
United States during July amounted to ab 'ut 451,000 running bales 'r only
4,000 bales belo June. During the past 5 years the July consu3antion has aver-
aged about 53,uuu bales lelcw June. In July, 1930, ccnsumptiLn of raw cotton
amounted to 379,UuU balos, l:ut year before last CLnsumption totaled 547,uuV
bales during July. The total consumption of all clttLn in the United States
during the 193u-31 season was 5,271,uuo running bales, 835,~uoo bales cr 13.7
per cent, below the previous season and 1,82u,uou bales or 25.7 oer cent Lelcw
the 1928-29 season. This "was the lowest ccnsur:ptiun for a season since the
192u-21 season when only 4,893,uuo bales w;ore ccnsumca.

nlthcugh Vroduction of standard cotton cloth decreased 7.5 i:r cent
during July and salos decreased 44.5 i r count, shii.pents during the month wore
9.8 per cent above Iroduction and resulted in a decrease of 6.5 per cent in
stocks making the stocks cf stzLndard cotton cloth at the end cf July the lowest
and-of-the month figure since October 1327. The 269.4 million yarcs in stock
at the end of the season were 186.1 million yards cr iv.8 iper cent below stocks
at the end of the 1923-3u season and 113.5 million yards rr 29.6 per cent below
those at the end of July 1929. Although unfilled orders at the end of July
were 16.u per cent blow a nonth earlier they wore 24.8 ior cent above a year
earlier.

Great Britain

In Groat Britain the cotton textile industry continues tc suffer from
low domestic and foreign demand for both yarn and l-ijce o .ds. Following the
drop in crtton prices during early Lu(ust, demand was rclorted to have declined
considerably, but later in the month, as yarn and1 cloth Irices beca.ie adjusted
to the lower raw cotton prices, demand both in Great Britain ar.L the Oriunt
showed sono improvermnt.

Exports of cotton piece -coods durin- July ar.sount-a to 177.3 nillicn
square yards conmared with 132.6 million squarL yards in June and 1)7.4 in
July 19ou. This incrsasc of m4.5 million square yards during July was slightly
less than has been the average increase of July over June durir., the jast 10
years. Fer the 193U-31 ccttcn season exports of piece coods tctalel about
1,746.6 million square yards, a decrease cf 1,32,.6 million and 2,138.4 million
square yards reslectivoly from the 1JE3-3u and 1328-2i seasons anu ccnmproe
with 4,431.9 million square yards exported in 1324-25, the record yj-ar of the
last decade. This uecre-seo of '.3.1 and 55.u per cent from 1J29-3u and 1928-29
compares with a decrease of 14.6 and 25.6 ,cr cont in the seasons exiprts cf
cotton yarns. The July exports of yarn amcunted to 11.3 million j.ounds, an
increase of 1.7 million pounds over June anu v.9 -lillion poundss over July 123u.
During the east lu years exiprts during July have averat-ud slightly less than
in June.





":1

C-72
-0-


Continental Durope 1/

The more hopeful sentiment which sprang up in Continental cotton
and cotton goods markets at the close of June, proved very short lived in the
face of the sharp financial and economic crisis which occurred in Germany
and central Europe.

Just as cotton probably would have been one of the commodities profit-
ing most promptly and largely from an economic recovery in Germany, it is,
'by the same token, one of the commodities most affected by the less favorable.
conditions of recent weeks. Since Germany .alone accounts for about 25 per cent
of the total continental consumption of American cotton, or 7 to 8 per cent
of th1 total world consumption of American cotton, the German situation is
of no little significance in our cotton outlook. Furthermore, with other
central European countries Czechoslovakia, Austria, Poland, Hungary so
close.ly conrocted, economically, with Germ;any, the German situation has
ramifications far beyond the country's borders. This block of countries
consumes about 40 per cent of continental and 12 tc 14 per cent of total
world's consumption of mecrican cotton.

Continental spinner und.wovever sales of yarn .aid cloth continued un-
satisfactcry, on the whole, during tho month of July. The somewhat more
cctive business toward the end of June in cnrtral Eurcpe as well as France
and Italy, as a result of the rising raL cotton prices, soon disappe.sred,
and s-les fell ba-cK to prcvi.us lo:.' levels witYh raw cotton prices again
dropping to now lows. Business, however, was 3s~me hat improved in France
and Italy during the second half of July, with wcrk in northern France
being largely resumed following the strike, and the trade tending to tako
advantage of present low\ cotton prices. In Germany spinners and weavers
reported business almost at a standstill during the last of July and early
August.

Cotton spinning and wJ-ving mill activity appears to have changed
but little on the avcrge during July. Some improvement in Italy and
possibly in parts of contrLl Europe seems to have been counter-balanced by
the strike restrictions in France.


1/ Based on report dated .ugust 1, 1931 from A1,ricultural Attache L. V. Steere
at Berlin supplemented by cables on iagust 18 ind August 20.








C-72
r1




Stocks cf cotton yarn and cotton gccds shoved further declines in all
S important continnt:.l centers during must cf July, as the regional improve-
rmonts in business wore net followed by corresponding increases in th.e iut-
put -of the mills. The considerable stocks pruviLusly existing ut Roubaix-
Tourcoing nave been reduced through tnc intorruptinn of production caused
by the strike at those centers.

Continental spinner buying cof- rar ccttm, following t c promising
revival during the second half of June, came ne-rly to a standstill Curing
July, vAhen raw prices fluctuated sharply adl. uroppe-C 160 points from July 1
to July 28. The Gorman financial crisis cause spinners in central Eurcpo
to witihhld colmnitm.2nts, .and in GCorany t-he rostrictirns oil transfers :f
foreign oxcha.ng also hunpored buying. Wj'strcn ETuropj wcas very quiet, toc,
in July, both for nJ\e business and for price-fixing. In Itil,', lhuv:vr,
some impcrta.nt purchases were affected during the skcord half of t'.3 month
at the lew prices ruling .nld price fixing alsc bocL.ic quite imnport-nt, but
it should be ncted that Italy has shown little activity in raw ccttun pur-
chases fur scnC months, even :Aon spinner ir.tjrost v:~Ls .vidCnlt clse-'hiere Ln
the Continent,

Gernarny

Prior tc July, developments in new business of German spiinnrs and
weavers were not unfavorable. Improved sales by the cl'oti mills in L;ay con-
tinued through June and int: July, -with an oven considerable up-s/'ir.g tc.'card
the end of June as a result cf the rising raw cotton prices. The du\mwnwrd
turn in prices during July, however, imrediatcly brought an aucut-swing, and
the improvement cane tc a stnziustill. Developments c.n the yarn r.urket were
similar, though quieter, but sales again bccaie vrry unsatisfictorj curing
July. In late July and early August spirnnrs and weavers ropcrted business
at almost a c.:mplete standstill dueo tu firn:ncial aifficultios and declining
cotton prices.

Activity in the spinning and :weaving mills, i1'-il...i' bett rm-.nt during
the first 4 icnths of the year, is shoi:. nr' further improvement in recent
months, but has been maintaino,e. Stoc-: of yarn and goAs arc- low every.:here.

Spinner buying anu prico-fixin,- Jf cotton at Brce:cn, follu\.ing the
second half of June improvement, nj-s been very quiut subsequently as a result
of the declining raw market, and c;.'ic- tj. an arlcst c aplcte standstill :'.hoi
the official restrictions cn tihe transfer cif f:rcln echcnago Locar..e effective.
Spinners and mcrcih-nts are now a:waitingo developments, as they recently Iuia-i
representations to the G'vernment to insur-: their right to dispose o f forc-ign
exchange accounts hold by spinners Lu. merchants, als1 tLi obtain Imoney if
needed for increases in nurgin deposits, transactions which require full
freedom of action if severe losses are not to ruvsult.





Ai:







C-72


In view of the recent economic and financial difficulties in Germany, itd:
appears timely to give here a short review of the cotton situation in Germany
during the past few years.

Mill consumption of cotton in Germany rose to extraordinary levels
in 1926-27 and 1927-28, at which time there was a re-filling of the
much reduced stocks of goods and yarn in wholesales and retailers hands,
The largo Anorican crop of 1926 and the low price of cotton undoubtedly
stimulated cotton mill cons uiption in Gormany greatly at that time.
Since then, consumption and mill activity have declined steadily, spinners and
eoavcrs margins have been cut sovorely and conditions have gradually worked
into depression. The general economic conditions are a major cause of the
depression in cotton in Gormany, yot it should also be noted that the cotton
mill capacity was greatly expanded from 1925 to 1928, the industry apparently
not realizing that the boom conditions in those years worc unique and unlikely
to be repeated: i.e., a period of replenishment of stocks ezhaustod during
the 'Jar and Inflation.


Table 1,-


Gorman;/: Cotton'spinning spindles in place
on July 1, 1923 to 1930


Yeoar : NJuubcr of spindles : Yc.r : Number of spindles
: Thousands : : Thousands.


9,600
9,640
9,500
10,500


: 1927:
: 1928
: 1929
: 1930


10,800 0
11,150
11,250
11,070


Ta.blc 2.-


Gorriany: Mill consumption of raw cotton
sonsons 1920-21 to 1930-31


-. -.-
Se-son A: -.crican : Total
:1,000 b,-lus of approx- ,:1,000 b.als of appror-
:imfLatly 478 pounds not i : ir-.tely 473 pounds net /


1920-81
1921-22
1922-23
1923-24
1924-25
1925-26
1926-27
1927-28
1928-29
1929-30
1930-31


644
911
784
696
916
884
1,214
1,276
1,024
923
750


860
1,162
1,030
946
1,189
1,125
1,468
1,564
1,353
1,292
1,150


f Running bales, as reported by the Intcr-.tion.al Federation, converted.
J2 Estimato.


1923
1924
1925
1926


-10-


4 r
---


4i








-1'--
C-72 -


Thu declined in mill c:nsumnpti-n h:s ben vry import' nt, ispoc]i'll
during 1930-31. This d,'clinr in recent suas-ns is :11 th.-' mcr sitrnific-nt
in th:-t it cincides r.ith C. vy fell in prices, which, n ,rrm.lly, ;.,uld
result in incror.sd c:nsurmpti.n. A drr.stic decline in d-.rnd, thcref-:ro,
appe-rs to h-v taken pl.ce r nd this is und -ubttdly c- .se.qu-'ncc of the
serious cc n imic cunditimns in CGrrm.ray. G..rrm.ny is still >no -i.f the largest
ccnsumnrs -f jnAmrican cott-n. During thz pr.st five yc.'rs Germany has r:nkcd
next to Great Britain, rhil3 Jap-.n and Frr.nce rankerd third and fourth 2.mong
the fcroign c',untrics in the c'nsumpti.n of 'mcricr.n cotton.

similar nr-,vemcnt )f r c3tt n ccnsumpti'-n is indicct.d in the German
foreign trrdo figures.

Table 3.- Germany: ImpDrts cf r.ll cotton, sc.scons 1923-24 to
1930-31

Season : All cott n
S 1,CCO bl -.s of 478 pounds not

1923-24 1,013
1924-25 1,328
1925-26 1,419
1926-27 :1,715
1927-28 :1,495
1928-29 : 1,385
1920-30 1,381
1930-31 / : 1,338

1/ Estimante.

The tendencies in c-,nsuir.pti .n -r n :t s. 1 cl.r.rly evident in the ab've
tabl-e s in the figures .,n mill consumntie.-n, since th:. changes in stocks
have to be t'-ken intc :.cc unt. Imports for st:ck -ere v.ry lrrgo in 192C-27
c.nd uc;ro used up aI.rgoly in the hubsoquont y.,r. A '-tt.jr index of r.ctucl
mill activity is tho following index of cottr, yr.rn pr-ducti'n:

T:blc 4.- G;.rmr.y: Index of cotton y-.rn pr ducti ,n par spindle
(M?:nthly c.vu.r.agc, 1926 100)
S-,son :A-.. to Oct. : K;'A. to J:'n. : FEb. to Apr. : My to July
Per cent : Pr c cent r cent : Pr c.'nt

1925-2 : 105 : 104 : 7 : 5
1926-27 : 89 : 106 11 : lON
1927-28 113 : 113 : 111 : 6
1928-29 : 90 : 90 : 9. : O
1929-30 : 90 : P9 : 1C :7
1930-31 :83 : 83 : 85


__






I .-.
C-72 -


Gormany's position with regard to imports and exports of semi-
manufacturcd and finished cotton goods is as follows: imports amount
to about 10 to 15 per cont of domestic consumption, while exports amount
to about 15 to 20 per cent of domestic production (Those ranges include
calculations based on quantites as well as on value. They also
tIkeo into consideration cotton material contained in mixed goods.) Of
those imports and exports, a large share consists of decidedly different
goods, but the share of nearly identical goods in imports and exports is
also considor.bloe. Therfore, theoretically, some of the exports could
be substituted for imported goods ind thus reduce German dependence on
foreign trade.

Under average price and economic conditions, a mill consumption
of about 1,350,000 bales of raw cotton annually may -be considered as
normal for present Gerr.any.

Czechoslovakia and Austria

Czechoslovakia and Austria report continued unsatisfactory con-
ditions in new business and mill occupation. A report about the end
of July indicated that 40 per cent of all cotton looms were idle in
Czechoslovakia and that the cloth mills there were working only 60 per
cent of capacity. Exports of Czechoslovakian cotton fabrics have declined
enormously in recent years, with 1930 exports amounting to .only 290
million meters (317.1 million yards) against exports of 400 million
meters (337.4 million yards) in 1927. As much as 90 per cent of the
drop is due to decreased takings by Austria, Hungary, and other Danube
countries. This merely reflects the economic depression in those countries,
as well as increasing self-sufficiency in the Danubian countries. The
Austrian industry is hoping to benefit from a no- trade treaty with Hungary
through increased textile exports, but is still suffering from serious
economic depression. Developments in C-errmny will be of considerable
importance for the future of these countries.

Hungary

Quiet yarn sales but active cloth business during July wero
reported in Hungary. Business sonti:.iont, hooevor, was somewhat impaired
by the financial crisis which has also extended to the Hung.'rrian banking
system and ncccssit-ftir6n certain restrictions upon payments, banking
transactions and foreign exchange.








C-72


France

In l;.tc July it .vas r;eortod that there u,:.s --r..ctically a c.xiplo.te
discontinuation of the strike in th.; ilorthorn co-to:j n;iills of Franco,
I.ost of the .-orkers have rcsum.ed .;ork -.nd those :lills arc coi.;iiti into
operation c.gin. Y-rn ?.ni cloth business w.- reportol to have boon quite
good early in July, particularly in the Vos-co district, but qauicted con-
sidorably about the middle of the nonth undor the influence of Gzri-ian
financial conditions and the dcline in cotton prices. During th: second
half of July, hoeovcr, cloth sales again picked up b-cause of liberal
retail business. Fronch spinner purchases of ra'7 cotton a;-' pricc-fi::ijng,
hoo,:vcr, contrary to other devclopncnts at the eid of Juni, wcrc r vr'y n.uch '
restricted., !ill stocks of cotton yarn and cotton goods woro further
reduced through the last of July salcs i .!pr '.-'r.:._t'.'r-tic~wl rl.: 1-i th'--. V's --s.
During the first half of August, however, French spinners conplai:'.d of a
com.plcto lack of orders.

Early in July the broak-dovwn of a largo spiluninLi and manufacturinC:
firm at Roubaix caused so,.ic ulccrtainty in business circles, cs'l the
losses the 'rc.ach industry has incurred through the strike; have also beon
widely discussed.

Etaly

Cotton mill activity in Italy in July .7as only bot-.eon 60 and 70
per cent of sin..le shift capacity, or about the sane as in June. l1 '.
business of the spinning and weaving ost..blishlo.nts also ror~ainecd li..:itcl,
follo-.-in- a shcrt revival at th-e end of June. Spiri-er de.ar.A for ra
cotton, ./hil iaodorate during the early part of July, bcai.io quite i..mortant
during the second hall, *.:'hen price-fixing; -,:s also active. So011 of the
purchascs ':cre r.m.deo for nov/ crop cotton. It appears that Itali.-.n spinners,
having boon very rcluct-.nt buyers in rcc:"..t i.nonths, even at tix.es .:.iUn other
continental spinners wemre kccnly inteorstedl, not. find it ncce3ssary -c buy
for current needs.
- .- .






C-72 -14--


Poland

The Polish Cotton Spinners' Cartel has been completed, with all cotton
spinners at Lodz adhering to it. The Cartel has requested its members to
wor.: only one shift of 46 hours per week, beginning July 6, 1931, whereas
Polish spinners during the last few months have been working about 115 per
cent of full capacity. The Cartel, however, allows some of the smaller mills
to produce 10 per cent more than the Cartel figure, and mills with weaving
plants mny produce up to 50 per cent more. The spinning mills spinning Egyp-
tion cotton and high counts (fror Ho. 46 English up) do not belong to the
Cartel. The sumrier season for cloth sales has been quite successful at Lodz.

Raw cotton buying by spinners continues limited, but Polish imports
in 1931 show n levul steadily above the low figures recorded last year.
The figures are as follows.-

Table 5:- Cotton, all kinds: Imports into Poland

Year April IMay June Jan. Juno
: Balss of 478 lb.: Boles of 478 lb.: Belss of 478 lb.:Balos of 478 lb.

1930 : 16,069 : 20,030 : 18,887 : 109,870
1931 : 27,133 : 25,076 : 25,274 : 134,144



Soviet Russia

Russian production of cotton fabrics during the quarter ending Sep-
tember 30, 1931, according to the recently increased plan, is to amount to
about 808.2 million yards, which is about 153.1 million yards or 23.4 per
cent above that of the preceding quarter and 159 p-r cent moro then during
the corresponding quarter of a year ago. This increase, however, only moans
a return to normal conditions, in view of the fact that July-Soptember pro-
duction in 1930 was ,reatly reduced us a result of shortage of raw material;
compared with thu corresponding period of 2 years ago, the planned increase
is only about 6 per cent.

Production of cotton fabrics during the first half of thu calendar
yec-r 1931 Was 16 ,nca 25 per cent, respectively, below that for the corros-
ponding periods of 1930 end 1929, so th; t the r-rgo increr.se planned for the
third quarter woul. little more th:n oJfset the reduced outturn in the pro-
Vious two quarters.

Japan

Yrrn production in Jr.p:n during July ::mounted to 86.9 million pounds
comp-r-d nith 85.5 million in June, 85.1 million in May rnd 71.8 million in
July 1930. With the oxcoption of July 1929 the production of yr.rn during
the Irst month of the 1930-31 sonson wrs the lr.rgest for the month of July
on record. The July production, which vrps 21 per cent above the correspond-
ing month Irst year, 1-s the only month during th. 1930-31 scrson which was


-I--i~








C-72 -15-

above the corresponding month in 1929-30. yarn production in Japan has shown
a steady upward trend since July 1930 with the exception of the first three
months of 1931. Total yarn production for the 190-31 season vwas about 984.9
million pounds compared with 1,118.2 million pounds in 1929-30 snd 1,072.2
million in 1928-29, a decrease of 11.9 and 8.1 pur cent respectively. The
1929-30 y-rn production .&as the largest on record.

The demand for piecu goods during July bnd e-arly August remained dull
although exports during July Emountcd to 137.8 million square yards compared
with 118 million in July 1030. F.-ur of the leading Jap: n'so mills are oper-
ating on a more profitable busis this y!ar then in the past two years. Ac-
cording to reports for thu six months ended Jun, the combined profits of
thc.se compai.ius amountOd to 7.8 million doilrrs compared v'ith 2.2 million in
the corresponding period in 193C -.nd 4.3 million n in th.. first h:lf of 1922,
or a gain in profits of 255 rnd El per c-nt, respectively.

The visible. stocks of r-,: cotton in Japan continued to decline and at
the end of July tot-led 302,01-0 balls. This cormpar.s \'ith 229,000 bcles a
ycrr cnrliur, ,.nd 433,000 in 192'c. Amnrican cotton stocks ;o riso lo.or
then in :.-rlier months but above th. .nd of July 1930, the comparison being:
196,000 bales at the end of July 1951, 111,000 nr.d 155,000 bnles at the end
of July 1930 end 1929 respectively.

Chin

Increased buying of m--_riccn cottDn in Chin,, wus reported bout the
middle of Auust by ,gricultau. 1 Corimission-r Dl"wson at Sh- nghai on the bvsis
of the price decline which iinroved thu price parity .with Indian cotton.
While stocks of Amcric-.n cotton at th. end of July '..1:ro frirly h. :vy, rnd
stocks of Indit.n only r.bout normal, thu price parity is fa.vorcbli for r.n in-
crease in the ta!hings of .'j.ierican cotton by spinners in Chin:.

Stocks of high count y rns in Chin'. nt the end of July -:Lr., not hce.vy
and th.; J. pr.nos3 mills v:cre sold out ..;ll forv.c.rd .ith Chin.sc nlls not
sold out quite to such .n uxt.nt. The mill activity c-ntinues at a fr.ir
rate -ni fuolr mills are closed than usur1 during this time of yVc.r.


Production, Acregeo .r.d Crop Conditions

United Status

The condition of the 1931 cotton crop in the United States on Septem-
ber 1 indicated a production of 15,685,000 bI.les of 478 pounds net. This
compares vith a production of 15,930,000 bales 12st year, 14-,82iC,000 bales
in 1929 and the record crop of 17,977,0C0 bales in 1926. Tue 1925, 1914,
and 1911 crops were also larger than the indicated 1931 crop. The indicated
yield per acre for the newv crop is 182.6 pounds ..hich is 35.9 pounds greater
than last year, 29.2 pounds above average a.nd is higher thari the yield secured
in any year sincu 1914. Except in %eorgi- and Alabama, the indicated yield
per acre in all important States is considerably above the yield last y-ar.
In Texas even '.ith an 8 per c'nt decrease in ,crougc the production in that







C-72 -16-

Stcte is forecast at almost 1 million bclas more t'.an in 1930. Iii some of
the other States even a larger incrursc in yield p-r acre is indicated.

Inning up to September 1 amount.-d to 565,000 running bales compared
*::ith 1,880,000 b'.lcs last year nr.d 1,568,000 balus in 1929, :nd was the low-
est Lmount ginned to thrt date sinco 1921. Those lo: innings compared with
previous years, in view of the prospective production, are perhr-ps due to
the 1'.t.ness of the crop, unfr.vorable weather in some sections, end to the
f-.ct th-t producers using hired labor a.re often able to get the picking done
at chenper rates if picking is postponed until most of the bolls rre open.
In tradition, many producers who ordinarily hire part of the picking done rro
probably trying to use only family labor this yc-r in an effort to reduce
expenses.

India

Tnr area plant d to cotton in India up to the first of August this
:3e.r was estimated at 13,226,000 acres compared with a revised estimnto of
14,878,000 acres at the some datu last y;er, according to a cable from the
Indian Dupartment of Strtistics -.t Calcutta. T is is a decrease of 952,000
acrcc or 6.4 per cant comprrod with l.st y.arr, 12.3 per cent below 1929-30,
8.3 per cent below th; a.verrnge for the previous 5 ycr.rs, and rrs the lowest
since 1D24-25. During the post 5 ycors, the ncrorge reported in this first
estirm: to has ranged bat...jn 5' ,nd 63 pcr count of the totL1 acreage pl.ntd.

These trcrriago estim- tcs .-.re rclcecsed about the 17th to the 24th of
every other month beginning August rnd ending April. The official produc-
tion estimates "re released at the sr.me tine the acroage estimrtos rre, ex-
capt thit the first estimTte of production is not released until Decembor.

China

The Chinese Cotton 'ill Owners' Association forecasts the new crop in
China at 1,850,OC00 bales of 478 pounds net against a 1930 crop of 2,457,000
bales or a decrease of almost 25 per cent. It should be noted, however, that
this is the first time this association has attempted to forecast the cotton
crop _ind due to inadequate facilities for securing information on the crop,
the forecast nay involve a considerable error. It is expected that a consider-
able reduction in production will occur in the IIankow district due to floods
and in the Shuntung due to excessive rain.

gg'.p t

The acreage in Egypt has been estimated at 19.2 per cent less than last
year with bn estimated decrease in the area in Sakollaridis of 42.8 per cent.
It will be remembered that the Egyptian Government passed a law restricting
acreage in the three principal Sakel producing provinces to 40 per cent of the
aroa in cultivation.









C-72 -17-

Russia

Very little is definitely known as to the outlook for the new crop in
Russia. Shortage of labor and equipment are indicated, however, from the
numerous complaints of delayed cultivation, but similar complaints were made
last year. As shortage of labor has always been a problem in the cotton re-
gions of Russia the 50.5 per cent increase in acreage renders the cultivation
and harvesting of the crop particularly difficult this year.

In some sections of C-ntrcl Asir (Turkestan) the plants woee in the
first st;.go of blooming rnd the condition wrs reported to bo evercgc or above
evorago, according to the report of the PVathur Bureau of th: Comriss-ric.t
of A-riculture of U.S.S.R., for the first ten d-.ys of August, published in
the "Socialist Airiculture", August 22, 1931. In other sections of this re-
gion, th.: bells waru beginning to cp-n and the condition of the crop is re-
ported rs satisfrctory. Ccntrrl Asia (the lopublics of Uzbokist:-n, Turkmnon-
istan r-d T-.djikistan) '.cceunts for almost 60 p.-r cent of the 1231-32 Russian
cotton acr--ge-. Sec VWrld Cotton Prospects, Jul: 25, 1921, p. 18 for regi-n-
rl distribution of Russiain *crc-go.

In the r:ust.rn p:rt of I'Torth Caucrsus, th. plants **ere blo-ming a.nd
in the eastern prrt of the rogiin, bolls -:.re beginning t. form; condition
is rep-rted as satisfactory. o-,rth Cr.ucasus is one of the ncr: rcgit'ns of
c-tt-n cultivati-n in Russic. ':horc : l1rg: increase in acrgeo h-.s eccurrod
this y."r. In Crim.-a:, v:hich is similV.rly nwhv c'tt:.n rcgi'n, the c:'nditi:n
of th.! crp is reported -s sntisfrct r:..




rL I


C-7,2
C'XTl TTS






S- St ck . . . . . . . .
- P cL . .. . . . . . . .



5 Cm:ti:c.t1 rp . . . . v .
C J ) . . . . * * *. *
7 C i:."- . . . . . . . . .

S Pr acti .., crc-. e, -:.. cr- c-...ti-:-:s.


UNIVERSITY OF FLORIDA

111U BIIIIIIIIII IIILIIIlU l 111 lLIIIIIII II l1 .......
3 1262 08863 1089 .
p %


* .3 I 6 3 0 3 .3

o
o


ora
*. 3. . . .
* 6 3 .6 . ..
. . .S .
*. S 3 .3 3 3
*. 3 . . .5.3
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S..,2-3
. . S 5 ..:

. .14-


. .. 15
S. .15 11:


1 G-cr -..: C-.tt.. snpi::.i.' spi:-.ll s i:. pi c1 o:: Jul]. 1, 1923
1930 . . . . . . . . . . . . .
2 G-rr:y: .1ill c-:.u-1Tptic:- rf r- n cott':. ScL.so0:-- 1920-21 to
1930-31 . . . .. . ... . . . .
3 G .n.. .: Ic,.-ts r-f 11 ctt--., su.s-:.s 1923-)4 t; 1S50-31
I1 Ocn. :.y: I...:. of c tt y-r:. pr. .ucti.z- pur pi-'.lc *
5 Citt:., -.].1 ki..Is: Ir.:v,-rts i.Ato Pol-:.. . . . . .


t
.. 10


. . 10
* . 11
. . 11
. 14


;; .(.**"*

: i'.':.:#
,,::, i.: : i, ,:

. .... .... .. :: .; :;, ;i .