Some effects of the World War on cotton

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Some effects of the World War on cotton
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15 p. incl. 6 tables. : ; 27 cm.
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United States -- Bureau of Agricultural Economics
Cooper, Maurice R ( Maurice Royce ), 1905-
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Cotton   ( lcsh )
World War, 1914-1918 -- Economic aspects   ( lcsh )
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At head of title: United States Department of Agriculture. Bureau of Agricultural Economics.
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Reproduced from typewritten copy; t.-p. printed.
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By Maurice R. Cooper ...

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-7 UNITED STATES DEPARTMENT OF AGRICULTURE
Bureau of Agricultural Economics















SOME EFFECTS OF THE WORLD WAR ON COTTON
















By Maurice R. Cooper Agricultural Economist


















Washington, D. C.
June 1937

















Digitized by the Internet Archive
i n 2013











http://archive.org/detaiIs/worldwarcotOOunit








SOME EFFECTS OF THE WORLD WAR ON COTTON


By Maurice R. Cooper,
Agricultural Economist



CONTENTS

Page

Summary and Conclusions ................................... 1
The War Period ............................................ 3
Some Initial Effects ................................. o. 3
Effects on Cotton Consumption and Production ........ 4
Effects on Cotton Prices ............................... 6
Effects on Cottonseed and Cottonseed Prod-acts .......... 7
The Post-War Period .... o ................... o ......... o.... 7
Tables .................................................... 11




Summary and Conclusions

German, Austrian, and Hungarian markets were largely closed to American and most other cotton during the World War, and there was a substantial decline in the world consumption and production of cotton in the war period as compared with the pre-war period. In view of the upward trend in world population and other factors which have resulted in a long-time upward trend in world cotton production and consumption, it is reasonable to believe that had there
been no wcr, the annual production and consumption in the 4 years ending 1917-18 would have av enraged fully as large as and probably larger than during the 5 years immediately preceding the war, despite the reduction in United States production resulting from the spread of the boll weevil. The indications are also that had there been no wart the prices received for cotton would have been materially higher in the 1914-15 season ana possibly in the 1915-16
season and much lower during the period from the s,,=.ier of 1016 to the latter part of 1920.

The demand for cottonseed and cottonseed products was considerably greater during the war period as com-pared with the pre-war period than was the demand for lint cotton. Although the ratio of the quantity of cottonseed produced to the quantity of lint produced is approximately the same from year to year, the weighted-average price received by domestic producers for cottonseed averaged 87 percent higher in the war period than in th( 5 years ended 1913-14, yet the weighted-average price received for lint was only 27 percent higher. This was apparently due to t1ie increased demand for foods and feeds, including fats and oils, the reduced production of these products in Europe, and the large demand for linters for the manufacture of munitions or other war supplies* Cottonseed-oil prices averaged approximately 69 percent higher and linters prices about 100 percent higher in the 4 years ended Jaly 1918 than in the 5-year pre-war period*





-2

Domestic prices of most commodities advanced very materially during the war, partly because of currency inflation; and, despite the increase in cotton and cottonseed prices, domestic cotton production declined because of the high prices of alternative farm products, increased per-acre production costs, and reduced yields caused by heavy boll-weevil damage.

Immediately following the war, exports of American cotton averaged higher relative to supply than in the 3 years ended 1917-18, although it was sometime after the close of the war before trade with Germany and its allies was resumed. The high level of foreign demand together with the domestic currency situation resulted in domestic prices of cotton and cottonseed reaching levels substantially higher in 1918-19 and 1919-20 than in the war period. Prices of other products were also high as were cotton production costs.

This prevented domestic cotton acreage and production from expanding significantly during this period. But in the early 201s cotton prices and income were relatively high because of the* great shortage of cotton growing out of the heavy weevil damage and the resulting low yields per acre, the large demand for cotton accompanying the recovery from the post-war depression in 1920-21, the large loans to foreign Countries, the fact that-trade with Germany had been resumed, and a greater decline in the cost of producing a number of other farm commodities than in the cost of producing cotton following the war. By 1924 the comparatively high prices resulted in both domestic and foreign acreage and production reaching new high levels.

foreignn cotton acreage and production were also stimulated, to some extent, by new or increased tariffs and other nationalistic measures which appear to have been due in part to the war. In addition, the disrupted Earopean cotton-textile situation and the high prices of cotton textiles during the wor and, to some extent the nationalistic developments that followied, hasteaed the shift in cotton manufacturing from Europe, particularly Great Britain, to the Orient and Brazil.

Between the 5-year period ended 1913-14 and the 5 years ended 1935-36 there was a decline of 1,500,000 bales, or 35 percent, in the quantity of cotton .,anuf.ctured by British mills, and the annual average not imports of cotton by continental European countries excluding Russia decreased 500,000 bales, or 8 percent, Daring practically the same period there was an increase of 770,000 and 1,730,000 bales, or 45 and 148 percent, in the quantity of cotton manufact, u'ird in Japan and India respectively. In China and Brazil consumption estimates are not available but the number of spindles increased about 445 and 140 percent respectively. During the corresponding period the average an- i exports of cotton yarn and piece goods from the United Kingdom declined by n amo-nt equivalent to approximately 2,100,000 bales of raw cotton, abc1. 1,100,000 bales of which occurred in the exports to India, Ch-ina, and Lrazil. At the same time exports from Japan increased by an
-*5,.;nt very roughly equivalent to 1,000,000 bales of raw cotton.

Boesase of the more favorable location with respect to foreign cottons
n Jin Lt cas the ue of cheaper labor, the shift in cotton manufacturing h,-c; rth~ently ben to the disadvantage of Ajerican cotton in relation to






-3

The numerous developments mentioned above, most of which have been
effected to some extent at least by the World War, have been important factors in the marked decline in the importance of American cotton relative to foreign growths during the-last 20 or 25 years. In Great Britain the percentage of American cotton used declined from 80 to 50 percent in the 5-year periods ended 1913-14 and 1935-36; this was only partially offset by the increase from 22 to 56 percent in theproportion.of American used by Japanese mills. In continental Europe, exclusive of Russia, American cotton declined
from about 78 to 63 percent whereas in Russia American declined from something like one-fourth of the total to less than 3 percent. In British India and particularly in China, important proportions of American cotton wore used during the 5 years ended 1935-36 compared with very small proportions before the war but, as in most other countries, the proportion has declined greatly since 1932-33.

Between these two 5-year periods the average United States crop declined slightly while foreign production, exclusive of China for which estimates for earlier years are not available, increased nearly 50 percent, more than half of which was accounted for by the increase in the 3 years ended 1935-36.

The War Period

Some Initial Effects: The initial effects on the cotton market at the outbreak of the war in Europe in 1914'were very demoralizing. In the
5 days immediately preceding the clo-sing of the domestic cotton exchanges on the morning of July 30, domestic cotton prices declined about three-fourths of a cent per pound, When business was resumed on the New York Cotton Exchange in mid-November, the price was 521 cents below aad by December 11, 6 cents (over 45 percent) below the July 25 quotation. The great decline in prices in the early months of the war was due in part to the uncertainty with respect to foreign markets and in part to the very large crop, During the first 3 months of the 1914-15 cotton season, total exports were only 23.6 percent as large as in the corresponding period a year earlier. Although it was not definitely kno-.,m, until the season was well advanced, just how large the crop would be, final returns showed that the 1914 crop was 14 percent larger than the previous crop and the largest Xn history.

The seriousness of the situation existing at tha-t time is further
illustrated by the numerous. schemes suggested for relieving the farm-f si tu.tion. These included plans for storing the crop, efforts to bring! a bout substitution of cotton for other fibers in the domestic market, a buy-a-bale movement, attempts to commit the Government to a scheme for the valorization of cotton, and schemes whereby cotton would be accepted on a fixed price basis in exchange for other goods and services.

After a short time, it became apparent that Great Britain anid its
allies would be able to keep the ocean routes fairly well open to their commerce, and trade soon picked up greatly. In fact in each of the last 7 months of the 1914-15 season, exports from the United States were larger than in the corresponding months a year earlier. For the season as a whole total exports including linters were only 7 percent less than in the previous season, despite the very poor showing made in the first part of the






-4

season r.d the fact that exports to Germany amounted to only 243,000 bales compared with 2,786,000 bales in 1913-14.

Effects on Cotton Consumption and Production: In the 4 years 1914-15 to 1917-18, the estimated world consumption of American cotton averaged 12,430,000 running bales according to estimates of the New York Cotton Exchanze Service. This was 722,000 bales, or 5.5 percent less than the 5-year
pre-war average, 1909-10 to 1913-14, and was 1,652,000 bales, or 12 percent, less than the average for the 3 years ended 1913-14. As there was a rather marked increase in the consumption of American cotton in the United States, there was a very substantial decline in foreign consumption of American cotton. The average annual estimated consumption of American cotton in foreign countries during the war period was 6,353,000 bales. This was 1,929,000 bales or 23 percent less than the 5-year pre-war average and 29 percent less than the average for the 3 years immediately preceding the war (see table 1,
page

In the United States, cotton consumption increased very materially
during the war as compared with the pre-war period. In the 4 seasons, 1914-15 to 1917-18, the United States consumed an average of 6,077,000 bales of American cotton which was 1,207,000 bales or 25 percent larger than the average for the 5 years ending 1913-14 and about 18 percent larger than for the 3 years 1911-12 to 1913-14. Although some of the increase was a result of increased expoorts of cotton manufactures, the indications are that this accounted for only a small proportion of the increase.

Consiuption estimates are not available for the individual foreign
-co-mtries, but export data and consumption data for the 2 years 1911-12 and 1912-13 indicate that a considerable part of the decline in foreign consumption of A-merican cotton was due to the fact that trade with Germany and its allies was largely cat off almost from the outbreak of the war. As may be seen from table 1, exports to Germany in the pre-war period averaged 2,441,000 bales, whereas in the 4 years ended 1917-18 direct exports to Germany averaged only 61,QC0 bales. Although a great deal of the American cotton exported to Germany before the war was reexported to other countries and although Germany probably obtained a considerable quantity of Anerican cotton indirectly in the early part of the war, the loss of the German market was very important to American cotton although not so significant as is indicated by the export data. In the 2 years, 1911-12 and 1912-13, the average annual consumption of American cotton in Germany was approximately 1,350,000 bales, according to data released by the International Federation of Master Cotton Spinners' and Manufacturers' Association. Austria consumed an average of 636,000 bales of American in those 2 years, the only years prior to 1919-20 for which estimates are available. These two countries also consumed an average of about 500,000 bales per year of foreign cotton in these two seasons -ad with the outbreak of the we.r these rhets were also closed to much of this cotton.

Annual exports of Lmerican cotton to all countries other than Genany
aver; :ed about t;e same during the war period as in the 5 years ended 1913-14, >ut exuort2 to the United Kingdom and to France averaged respectively 15 and
rc nt powerr during the war period than in the pre-war period. Exports to taiy uwa 'ed .)O percent hig-her and exports to Japan 78 percent higher in the or -onz 1914-f- to 1917-18 than in the 1909-10 to 1913-14 period.







-5

In the 1914-15 season the loss of the Germnan, Austrian, and Hungarian markets and the larger supply available for export to other countries aiid the decline in cotton prices tended to stimulate exports to most countries other than Germany and its allies. In the years immediately following, however, the low cotton prices and/or the high prices of other agricultural products and increased costs resulted in reduced acreage and production. This reduced production in turn contributed to the decline in exports. In the 4 years ended 1917-18 the average annual production in the United States, including the city crop, was about 12,664,000 running bal 'es which was 4 percent less than the average for the 5 years ended 1913-14. The 1914-15 crop, however, had already been planted and in some sections was being harvested when war was declared., The 3 crops that were planted during the war averaged only 11,475,000 running bales which was 13 percent less- than the 3-year pre-war ave rage*

A somewhat similar situation existed in respect to Indian and Egyptian cottons, the most important growths of foreign cotton. The 1914-15 Indian crop, like the 1914-15 United States crop, was the largest it had ever been and in Egypt the acreage was the largest it had ever been. The 1914-15 acreage in both countries had been largely determined before the outbreak of the war* In 1915-16, however, cotton acreage and production declined materially in both these countries and for the most part remained~ lower for the remainder of the war period. Although production in India and Egypt in the 4 years, 1914-15 to 1917-18, averaged respectively 102 and 80 percent of the average for the 5-year pre-war average, the average for the 3 years 1915-16 to 1917-18 was respectively 96 and 77 percent as large as the average for the five seasons ended 1913-14. The exports of Indian and Egyptian cottons during the war period showed about the same changes relative to the pre-war period as did production.

As may be seen from table 4. the estimated world production, excluding China for which data are not available, averaged 3 percent less dur- n, t-.s 4 years ended 1917-18 and 11 percent less in the 3 years ended i97)9>ni the 5 years ended 1913-14. The estimated production in foreign Cou17, _J excluding China, averaged only 1 percent less during the 4 yx 1 .5 to
1917-18 and 6 percent less in the 3 years 1915-16 to 1917-16 t'n&Iju1
5 years immediately preceding the war. Domestic produc't-inw. o Le, ot2br 11ir-nd, averaged 13 percent smaller in the 3 years 1915-13 to 19.1Y-163~~ in tho 5-year pre-war period. Except for changes in stocks, world prodt~uctiux!& nurrto would be the same. Complete stocks and consumption data aro n~t viablee but the indications are that world consumption declined fully as mach or probably more than did production.

Certain fundamental -underlying factors have tended to bring about a long-time upward trend in world cotton production and consumption, despite the factors operating in the opposite direction. These underlying factors include increasing world population, increased industrialization and the resulting increased need for cotton for industrial purposes, and tec.Mological developments with respect to the production, marketing, and manufacturing of cotton.

It would seem, therefore, that, had there been no World War, cotton production and consumption might reasonably have been expected to have






6

averaged higher in the 4 years 1914-15 to 1917-18 than in the 5 years beginning 1909-10. Consequently, it appears thot the World War (with the countries divided as they were and with the existing conditions in respect to cotton and other commodities) reduced the world cotton consumption and production to a level somewhat below the pre-war level, and even lower still, relative to what might reasonably have been expected had there been no war.

Effects on Cotton Prices: The uncertainties with respect to foreign
markets, together with the record-breaking crop of 1914, caused domestic prices of kmerican cotton to make a very rapid and marked decline in the first several weeks after war was declared in 1914. By the early part of 1915, however, it became apparent that trade with Great Britain and its allies would probably be maintained and cotton prices soon recovered somewhat. The heavy
exports in the first part of 1915 and the high level of domestic consumption resulted in the price of American Middling at New Orleans advancing to an average of nearly 94 cents in April. This represented an increase of nearly 35 percent over the average price for the previous October.

In the 1915-16 season, the domestic cotton crop was nearly 5,000,000
bales less than the previous year and despite the larger carry-over at the beginning of the season the total supply was substantially smaller and cotton prices in domestic markets averaged materially higher than in the previous season even though exports were one-fourth less than a year earlier. The fairly high level of consumption in the United States and the rather small domestic crop resulted in a significant reduction in the world carry-over of ALmerican cotton at the end of the 1915-16 season even though exports and foreign consumption were comparatively low.

In 1916-17 and 1917-18, small crops, along with medium-sized carryovers, resulted in the supply of American cotton in these two seasons being the smallest for several years. Although consumption in those two seasons declined, domestic cotton prices (Middling 7/8" at New Orleans) averaged about times as high as in 1915-16 and 1-7/8 times as high as in the 5-year pre-war period and materially higher than in any period since the Civil War. The unusually high prices were due to a large extent to currency inflation and the markd advance in the general price level. In 1916-17 and 1917-18 the all ornmoity index, on the 1910-14 base, averaged 172 and 192 respectively (table 6),

For the 4 years ended 1917-18, the weighted-average price received by
domestic producers for lint cotton was 15.8 cents per pound, an increase of 27 perceAt ris compared with the 12.4 cents average for the 5 years ended July 1914, even t-ou:h the average estimated world consumption of American cotton in the war period was only 71 percent of the average supply of American cotton, while n he -year pre-war period, average consumption was 81 percent of the average


A comparison of the simple averages of Middling 7/8-inch cotton at New
0rI... s suows a slightly greater increase, the average for the war period being 3" r t larger than for the pre-war period. For the four seasons ended 91 -18, however, the Bureau of Labor Statistics all commodity index averaged 47 : rcmnt r ijher than in the 5 years 1910-14.







Effects on Cottonseed and Cottons4ee products: The World War appears to have had a greater effect on the demahd f'or cottonseed and cottonseed products than for lint cotton. This was apparently accounted for in part by the great demand for food and food products, including fats and oils, because of the drop in food production in Europe and in part by the increased demand for linters.

During the 4 years ended July 1918 the index of food prices(Bureau of Labor Statistics) averaged 41'percent higher than in the 5 years 1910-14 and the price of Prime Summer Yellow cottonseed oil at New York averaged 69 percent higher in the 4 years, august 1914 to July 1918, than in the 5 years ended July 1914. Livestock prices were high as were the prices of such feeds as cottonseed meal and cottonseed hulls.

The Bureau of Agricultural Economics has no series of prices for
linters during and before the World War but there is no doubt that the demand for linters and the prices of linters were very high during; the w~ar as compared with the pre-war period. According to data released by the Bureau of the Census, the average value per bale of the linters produced in the 4 years ended July 1918 was 100 percent higher than the average for the 5 years, 1909-10 to 1913-14. The increased demand for linters is further indicated by the fact that in the 4 years ended July 1918 there was an average of approximately 197 bales (500 pounds gross) of linters produced per 1,000 tons of cottonseed produced in the United States. This was a little more than twice as large as the average of 87 bales per 1,000 tons of cottonseed produced in the 5-year pre-war period arid about 60 percent greater than the average production per 1,000 tons in the 5 years ended 1922-23.

Total domestic linters production averaged 109 percent larger during the war period than in the pre-war period even though domestic cottonseed production averaged 4 percent less than in the pre-war period. D.amestic consumption of linters averaged 233 percent larger during the war period than in the pre-war period (table 7). Data on exports of linters during the pre-war period are not available although domestic production, consumption, and millstocks figures indicate that they averaged about the same during the war as during the 5 years preceding,

As a result of the great demand for cottonseed products, domestic
prices of cottonseed advanced considerably more during the World Wgar period than did the prices for lint cotton or even the average price of all commodities. In the 4 years ended July 1918, the average price received by farmers for cottonseed was 87 percent higher than in the 5 year pre-war period comapared with an increase of 27 to 30 percent in domestic prices of lint and a 47 percent increase in the all commodity index.

The Post-War Period

During the World War many European countries greatly depleted their stocks of raw cotton and cotton textiles. This was particularly true in Germany, Austria, and Hungary, and it was true to a lesser extent in other countries. Following the war, therefore, there was a large pptential demand for cotton 'and cotton textiles in European countries. It was sometime after






8

the close of the war before trade with Germany and its allies was resumed, but total exports of cotton to all co- fftries averaged larger, relative to the world supply of American cotton, in 1918-19 and 1919-20 than in the last three seasons of the war period.

Somewhat similar situations existed in respect to other products so that even though cotton and cottonseed prices in these two post-war seasons reached levels substantially higher than in the war period, the high prices of alternative products and higher costs along with lower yields resulting from increased weevil damage prevented domestic cotton acreage and production from reaching pre-war levels.

By 1923, however, the income from cotton had become high relative to
alternative products and to costs. The causes included the shortage of cotton caused by heavy weevil d=mage and low yields per acre, the large domestic demand for cotton accompanying the recovery from the post-war depression in 1920 rAd 1921, the large loans to foreign countries, and the previous resum-ption of trade with Germany and its allies.

In addition to these factors, several others appeared to have contributed toward making the rrice of cotton high in relation to pther farm commodities. One was the increased mechanization and large-scale production of grain (stimulated by the high prices and shortage of labor during the war) which had probably reduced the cost of producing wheat in relation to the cost of producing cotton -,s compared with the relationship existing before the war. This probably also tended to reduce the cost of producing livestock and livestock products in relation to the cost of producing cotton. There were also increased s-upplies of labor in European countries after the close of the war, practically all of which (except in the case of Russia) were used
in the production of commodities other than cotton.

The relatively high prices for cotton in the early 1920's provided an incentive for a trememdous expansion in cotton acreage and production in the western cad northern sections of the Cotton Belt, where the boll weevil was held in check: by climatic conditions. It also provided an incentive for increased efforts to combat the boll weevil in the weevil-infested areas. The development cnd introduction of early maturing varieties, improved cultural practices, and relatively high prices for cotton resulted in substantial recoveries in yields, acreo-ge, and production in these weevil-infested areas. This, tocther with the continued expansion in many of the newer sections,
bro-uht domestic production back in line with the pre-war trend by 1925.

The high prices for cotton in relation to most other agricultural commodities also stimulated a material increase in foreign cotton production.
But 1) ote the recovery in United States production ad the high level of forci Fn roduction after 1923-24, domestic cotton prices and incomes averaged rath r iD-h, relative to prices of most farm commodities, during the period fro,, l -9,excet in 1926. In that year the highest acreage in history alr th r largest yield per acre for more than a decade resulted in a domestic cror. ,;rly 2 million bales larger than the previous crop, and a supply for son about 3,700,000 bales larger than the supply for any previous
cawon. Omitting 192-27, the index of United States farm prices of cotton ah2d cottonsted (Auiist 3909 to July 1914 = 100) averaged 170 for the years
I ]9: 9-3%, whereas the farm price index of all farm commodities









Still another important development, influenced by the war, was the
impetus given to the expansion of cotton-textile industries outside of Europe. The disruption of the cotton-text'ile situation in Europe during the war, the resulting decline in cotton-textile exports and the high prices of cotton textiles throughout most of the world stimulated the expansion of cottontextile industries in certain other countries, particularly in the Orient and Brazil.

In Japan the average number of working spindles increased 52 percent
from 1913 to 1919 and in China, Brazil, 'and India there were increases of 83, 30, and 9 percent respectively. Ini absolute numbers, the increase in working spindles between these 2 years amounted to 1,188,000 in Japan and to about 750,000, 365,000 and 570,000, respectively, in China, Brazil, and India.

Aided in some instances by new or increased tariffs the expansion in these countries has continued almost without interruption (even during the recent depression) up to the present time. It seems probable that the World War either directly or indirectly contributed materially to these increased tariffs and the other forms of economic nationalism which have spread throughout the world during recent years, as well as to the acuteness and severity of the recent widespread depression. Despite the depression tVie annual quantity of raw cotton consumed by Japanese and Indian mills averaged 1,730,000 and 770,000 bales and 148 and 45 percent larger during the 5 years ended 1935-36 than for the 5 years ended 1913-14. Mlill-cdnsumption estimates for China and Brazil are not available 'for the earlier period, but the estimated average number of working spindles in China and Brazil increased 445 and 140 percent respectively between these two periods.

The growth of the cotton-textile industries outside of Europe, the
marked increase in f oreign cotton production, the decreased cotton production in the United States, and the decreased use of cotton in Germany and Italy because of governmental regulations, have resulted in important changes in international trade in cotton and cotton textile's. As all of these developments appear to have been effected by the war il at least in some respects, there is no question but that the war was,*to some extent, responsible for the important shifts which have occurred in the flow of cotton and cotton textiles between nations during the last quarter of a century.

In the 5 years ended 1913-14, mills in the United Kingdom consumed an average of about 4,200,000 bales of raw cotton per season, approximately 3,300,000 bales or 80 percent of which was American. In the 5 years ended 1935-36, however, British mills manufactured only 2,700,000 bales, about 1,340,000 bales or 50 percent of which was American. During this period of less than a quarter of a century, therefore, total British mill consumption of cotton declined about 1,500,000 bales or 35 percent, the quantity of American cotton used declined 1,960,000 bales or 41 percent, and the quantity of non-American cotton manufactured increased 487,000 bales or 56 percent.

l/ For a detailed discussion of the factors affecting cotton production in foreign countries and in the United States see "Foreign Cotton Production", April 1935, and "Cotton Production in the United States", February 1936,Parts I and II respectively of' a report on "The World Cotton Situation', prepared by
the Bureau of Agricultural Ecoao:.iics.






10

_uring aproximatey this same period,..exports of cotton yarn and piece goods from the United Kingdom declined by an amount equivalent to approximately 2,1C0,000 bales of raw cotton. Of the total decline in cotton yarn and piece goo.s the equivalent of approximately 1,100,000 bales occurred in the exports to Tindia, China, and Brazil. At the same time exports of cotton textiles from Janan to these and other countries taking British cotton textiles increased by an amount very roughly equivalent to 1,000,000 bales of raw cotton.

In the 5 calendar years ended 1913 average annual total net imports of
cotton by continental European countries excluding Russia amounted to 6,083,000 bales whereas during the 5 years ended 1935 total imports for these countries averaged 500,000 bales, or 8 percent, less. During the 5 years ended July 31, 1936 average exports of American cotton to these countries amounted to 3,-150 -bales, a decline of 1,220,000 bales or 26 percent compared with the average for the 5 years ended June 30, 1914. In Russia there was an increase in cotton consumption due largely to the increased production and use of Russian cotton. American cotton declined from roughly one-third of the total of all cotton manufactured in Russia to less than 3 percent.

Offsetting to some extent the decline in the total imports of cotton
and the imports of American cotton by European countries between the two above periods was the marked increase in imports of cotton into Japan and China. Luring the 5 years ended 1935 net imports into these two countries amounted to 4 million bales of cotton compared with 1,200,000 bales during the 5 years immediately preceding the World War. During the recent 5-year period Japan alone imported an average of 3,400,000 bales per season, 1,900,000 bales or o percent of which was American cotton, whereas in the pre-war years Japan imported 7,42, 0 bales, 300,000 bales or 22 percent of which was American. In the united States the severe depression, the restriction of cotton production, the i:creased competition from rayon, and the cotton-processing tax were largely re. aos.ible for the fact that cotton consumption declined from a much higher le:1 in the late 192,0's to an annual rate during the 5 years ended 1935-30 c1ly 12 percent higher than in the 5-year pre-war period. Through its effects :on natio:ali:tic developments, if in no other way, the war probably contributed to the severity of the depression and influenced the agricultural policies of t U:ited States and other nations.

Th..e net effect of these and other developments resulted in a decline of
, or 15 percent, in the average annual quantit of American cotton exporte' between the S years ended 1913 and the 5 years ended 1935. Between 1:.0e ;'*0 o-:.o periods, however, annual exports from the 11 principal foreign cot .-ertin. countries increased 991,000 bales or 25 percent. More imF.o- '. po I < o n r e 1, rV e 9 sLap i n w tli e e a
or ....t t:.an this, however, is the increased cotton consumption within several of o i::ortant cotton-producing countries which has tended to reduce the q;a..tiy of cotton exported from these countries.

.::e sof Lte nnerous changes in the supply and demand conditions ;O'f .i A&r*eri.n-grow : oand forei';n cotton, many of which have resulted at
f.. -r from the ;ortd W7r, th<.. world production and con option of
A-: ''- u' ''n, e at ,. cotton a vera- S ; a r.s r uiat ely '.}r-eedin,- tlao war, whereas prodltction in f<' i-. sontri a; (exe n ;iv' of China for w]iSch earlier estimates ar 110t i'' b ') s1' a : ;i ;iny C}A u i sacs ou~nt for by toie ne in the avcrnse for to : ; co Urid w.i th tial of tho 0 receding ; enIS.











Table 1.- Cotton, American: Production, carry-over, supply consumption, and exports, specified: periods

:Pre war: : : : : Average for war
:average,: : : period, 1914-15
:1909-10 : 1914-15: 1915-16: 1916-17: 1917-18: to 1917-18 Item : to : : / : 1/ : l/ : :Ratio to
:1913-14 : : : : : Actual :pre-war
1/ : : : : : :average
1,000 1,000 1,000 1,000 1,000 1,000
:running running running running running running Percent bales bales bales bales bales bales

Carry-over begin- :
ning of season..: 3,040 3,769 6,716 4,889 3,851 4,806 158.09
Production includ-:
ing city crop...: 13,177 16,231 11,307 11,559 11,558 12,664 96.11 Supply ............: 16,217 20,000 18,023 16,448 15,409 17,470 107.73
Consumption:
United States...: 4,870 5,375 6,081 6,471 6,382 6,077 124.78
Foreign coun- :
tries......... : 8,282 7,874 6,958 6,091 4,489 6,353 76.71
Total ......... : 13,152 13,249 13,039 12,562 10,871 12,430 94.51
Exports 2/ to: :
United Kingdom..: 3388.8 3771.6 2852.4 2682.2 2275.4 2895.4 85.4
Germany ......... : 2440.6 242.7 0 0 0- 60.7 2.5
France .......... : 1036.7 682.6 921.9 994.1 509.4 777.0 74.9
Italy .......... : 482.1 1109.5 788.9 643.6 349.2: 722.8 149.9
Japan........... : 282.5 433.0 491.4 481.3 604.3' 502.5 177.9
Other countries.: 891.4 2305.2 1136.5 937.8 550.1 1232.4 138.3
Total .........: 8522.1 8544.6 6191.1 5739.0 4288.4' 6190.8 72.6

: Percent Percent Percent Percent Percent Percent Percent
Ratio of world consumption to
world supply....: 81.10 66.24 72.35 76.37 70.55 71.15 87.73
Ratio of total ex-:
ports to world :
supply .......... : 52.55 42.72 34.35 34.89 27.83 35.44 67.44

1/ Year beginning August 1 except for carry-over, production, and consumption in the pre-war period, which was the year beginning September 1. 2/ Including linters.

Production, carry-over, supply, and consumption compiled from New York Cotton Exchange Yearbook, 1935. Exports compiled from reports of the Bureau of Foreign and. Domestic Commerce.




12

Table 2.- Cotton, Indian: Production and exports, specified periods

:Average fCor
:Pre-war: : war period,
item and :average: :-:1914-15 to 1917-18
country :1909-10:1914-595 1.9 .l1917-18 :Ratio to
to ::: Actual : pro-war
.191.3-14: : .::average
1,000 1,000 1,00C 1,000. 1,000 1,000
:bales bale bale -btiles: bales :bales
:47381bs.478 ibs.478 1"6s.478~ lb.-78 1bs; 478 lbs. Percent
:net nef -net" net : net net

Prod-action...... 5,585 .4,359 3,128 3,759- 5,393: 5,660 102.1
Exports: 1
n it e IK _n~don .... : 103 166 195 195 267: 205 199.0C
............ : 295 290 0 0 0: 72 24.6
Yrne......: 91 129 48 63 38: 70 76.9
7 .. ... .. 195. 317 265. 226 .130- 234 120.0
jaa ...... 847 1,0414 1,587 1,442 1,216; 1,272 a15-0.2C
Other cntis.: 485 47C 182 164 61-. 222 45.8
Total, *............. 2 014- 2,4i1 5 .29075 2,0 88 1,712:.. 2., 075,. 103.0C
1/Ye-'binn April.
Produlction estimates from the Depart-meft of -C corme rc ial Intell1genoe and Statistics in India. Ex-oorts from Annu~al Statements of the Sea-Borne TrLide of British India, Vol. i.

Teblbi 3.- Cotton, Egyptian: Prod-action and exports., spebified periods

:Pre-ar: : *:Averag e for
averug)-e: 1914-1l5 1/' 1915-16 1/: 1916-17 ]J:) 97-l 1/ l: .-Ir Period, :199-0: or o : o'r rf : 1909-10 to
Ien nd. : to 10,13- 1915 -1/ 1916 1 1917' 1/ 1'918' 1/. 1913-14 l/
:141 :or19 -1 /

:o I .r- :Rti to

1, coo 1,000 1,000 1,000 1,00 19Oble s balos 478 bales 41-P bales .478 bolo 4 78 bales Per:478 1brz. lb's.net -lbs.net lbs.net ~Lbs.net 478 lbs. centnet nL t

P r hti on .......: 1,53 1,337 989 1,048 11 1304 1,169 80.51

wIY:~im.: 80 63)0 2 731 23 91.6
x *.. .......: 129 0 C, 0 00
1 238 54 6 3 45- C ,'
0..... 49 92 53. 54 60 6 1 13,.
*1 ........ ( 386o2
ie: 153/8 398 187178 37 7.

-: F~5> "7 p~, ..844 l, o.,.. (6.-Id 'I- uf(V 'e-'r fo~r cxoo rtlu
1~ .- ;. ~*'~ I: 2.ro r>U *i r' r, rr~ rot. 8f the Mii:trof Finance, Stat io2ticai
E ~r~ ~ ~ frv Co----rc u Ext cr1cur dl IEpyp to 1 90 9-191J7 Annual
~; ~ E,t frA .l.












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.Lable 5.Pieof cotton, cottonseed, cottonseed oil, and wool, -'id price index numbers, specified i-markets and periods

:Pre-war-. :.vLor war-peri:average: ::od 1915-18 1/
I c- m :1910-14: 1915 :- 1916 1917: 1918 : :Ratio
1/ :1/ l / l / l / :Actuaal :to pre2cto: Cts.per Cts.per Cts.per Cts.per Cts.per Cts.per
Liver'-coo1 l os : pound pound p ound pou~n pound poun P.ct.
Am Er i can : idli~ ng .: 14.74 11.00 15.04 24.72 43.56 23.58 130.0 : P.ct. P.Ct. P.ct. P.ct. P.ct. PAzt.
-Patio of3 types ofIt r.-ii-n -o 2 -radcs of
,A:ic an~ ................~ 35.5 83.0 82.6 84.9 86.5 84.3 98.6
>tfo o ~ytia TUpers
to Acicrican Yiddling .: 138.04 123.6 129.8 166.4 120.9 155.2 97.9 :Cts.pcr Cts.per Cts.per Cts.per Cts.pcr Cts.per
Do0 noStic fa r crm mic 0 : pound pound mound poand po0Undl 'oand
Acul2/ ................ : 12.4 7.4 11.2 17.3 27. 1 15.8 127.4
>fiatodby 31-ircau of:
Labor St,-tiotics all
C o 'i"t ina--ex
(19Icl ic)......: 12.4 5.0 7.6 11.7 18.4 10.7 86.3

_oeS~uezrYeIlov4\T.Y.:
Actu, al................. : 6.98 6.23 8.98 15.07 18.91 11.80 189.1
2L)efiat ed by 3ure-au of:
-Labor Stat~istics all
comaiityindex
7i cC 0 G).... 6.98 6.14 7.20 7.62 9.86 8.01 114.8
:Dollars Dollars Dollars Dollars Dollars Do 11i-ur' COtt:Onz'&ed: :Pcr ton mer ton-per ton por ton per tor per ton
Thme~icf:-rrm price#*ur ................ 22.01 16.350 32.65 49.13 3.15 41.11 16.8
>-,fii b-," Burcau of


(~ ~)........: 22.01) 11.19 22.15 33.33 44.88 27. 69 126.7
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r~~ c b--r Statism)4_.indcx
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