(6 of 7)
Cotton is a complicated subject on a domestic basis. On a world scale it is staggering. Aside from the difficulties introduced by foreign exchange and local preferences, international cotton merchants have to think, deal, quote in terms of a thousand different kinds of cotton. In the U. S. alone official standards specify 37 different grades on quality, 20 grades on staple length, offering in combinations no less than 740 possibilities. Will Clayton s not only an international cotton merchant but a profound student of economics. When he travels, usually by plane, his brief case is always jammed with earned tracts. What he learns, what he thinks, he can express with clarity.
U. S, Out. Writing in a special cotton supplement in the New York Journal of Commerce last week, Will Clayton gave he New Deal a hand for the first time in many a season. "The most significant development in cotton in the season just drawing to a close," said he, "is the fact that the Government is rapidly on the way out of the market. Less than a year ago the Government held approximately 6,000,000 bales of spot and future cotton.
The end of the 1935-36 season finds these huge holdings reduced to approximately 3,500,000 bales. . . . Not having been slow to criticize Government entrance into the cotton market, it is a pleasure now to commend the wisdom of decision and the skill of execution in liquidation of Government cotton holdings."
By training, tradition and conviction Will Clayton is a free trader. Any meddling with the economic machine is, to him, the supreme sin. Before the Bankhead Act] before the AAA crop reduction program, before cotton loans were instituted, before the Hoover Farm Board started to thrash around in the futures markets, Will Clay ton's favorite hate was the tariff. Said he, when ploughing-under was rampant: "There is only one means of preserving a correct balance between supply and demand in a great world commodity like cotton, and that is through the corrective influences of competitive price levels established in the free markets of the world — a harsh method, perhaps, but the only one that works. . . . Our present cotton policy means the complete loss within a comparatively short time of our export markets for cotton." Foreign cotton acreage increases and declines in a remarkably direct proportion to the U. S. price. Of late, foreign cotton production has been rising sharply. But no country today is ready to take over the South's share of the world's cotton. Russia is increasing its production at a tremendous rate but for a closed national economy. India, which is the second largest cotton producer, and China, where the Japanese are encouraging heavy planting at bayonet-point, need their land for food. In Egypt there is a limited amount of Nile water. Nile soil. Only in Brazil and part of the Argentine are there real possibilities of increasing cotton production to the point where the Cotton Belt could be dropped from the list of world cotton exporters. But those areas lack the South's cheap labor. The threat from the Rust cotton picker (TIME, March 23) or improved versions of that machine, is less to employment in the South than in South America where it would overcome the lack of labor.