Business: Experiment in Cotton

In an old, smoke-blackened sandstone building on Tithe Barn (pronounced tie-barn) Street in Liverpool, the world’s biggest cotton exchange operated, before the war. Last week the British Board of Trade announced that the Liverpool Cotton Exchange, closed since 1939 would not reopen. The Government had decided to stay in business as Britain’s only cotton importer. Britain’s 400 cotton importing firms will go out of business.

The decision was in line with the Socialist Government’s aim to control markets and eliminate middlemen. But the theory was not as important as the practical value of bulk buying as a trade weapon. Now smaller cotton-producing countries may be forced to buy British goods before Britain will buy their cotton. Even the U.S. may be forced to centralize cotton selling in a single governmental agency, to deal with the British on equal terms.

Other British commodity exchanges wondered what was coming. All Board of Trade President Sir Stafford Cripps would say was that the matter must be studied “case by case in the light of special circumstances, and cannot be decided on any preconceived theoretical basis.” Translated, this doubletalk meant that the Government would see how well it did as a cotton dealer before it takes over any other commodity markets.