"5 ,<^_> 4 "7 £ UNITED STATES DEPARTMENT OF AGRICULTURE Bureau of Agricultural Economics SOME EFFECTS OF THE WORLD WAR ON COTTON UNIV. OF FL LIB. DOCUMENTS DEPT. U S DEPOSITORY By Maurice R. Cooper Agricultural Economist Washington, D. C. June 1937 Digitized by the Internet Archive in 2013 http ://arch i ve . org/detai I s/world warcotOO u n it SOME EFFECTS OE THE WOELD WAR ON COTTON By Maurice R. Cooper, Agricultural Economist CONTENTS Page Summary and Conclusions 1 The War Period • 3 Some Initial Effects 3 Effects on Cotton Consumption and Production 4 Effects on Cotton Prices 6 Effects on Cottonseed and Cottonseed Products 7 The Post-War Period 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 com- pared 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 war, the annual production and consumption in the 4 years ending 1917-18 would have averaged 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 indica- tions are also that had there been no war, the prices received for cotton would have been materially higher in the 1914-15 season and possibly in the 1915-16 season and much lower during the period from the summer of 1916 to the latter part of 1920. The demand for cottonseed and cottonseed products was considerably greater during the war period as compared 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 cotton- seed averaged 87 percent higher in the war period than in the 5 years ended 1913-14, yet the weighted-average price received for lint was only 27 percent higher. This was apparently due to the 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 July 1918 than in the 5-year pre-war period. - 2 - Domestic prices of nost 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 cotton- seed 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 produc- tion costs. This prevented domestic cotton acreage and production from expanding significantly, during this period. But in the early 20' s 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 follow- ing the war. By 1924 the comparatively high prices resulted in both domestic and foreign acreage and production reaching new high levels, Foreign 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 European cotton-textile situation and the high prices of cotton textiles during the war and, to some extent the nationalistic developments that fol- lowed, hastened 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 manufactured by British mills, and the annual average net imports of cotton by continental European countries excluding Russia decreased 500,000 bales, or 8 percent. During practically the same period there was an in- crease of 770,000 and 1,730,000 bales, or 45 and 148 percent, in the quantity of cotton manufactured 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 annual exports of cotton yarn and piece goods from the United Kingdom declined by an amount equivalent to approximately 2,100,000 bales of raw cotton, about 1,100,000 bales of which occurred in the exports to India, China, and Brazil. At the same time exports from Japan increased by an amount very roughly equivalent to 1,000,000 bales of raw cotton. Because of the more favorable location with respect to foreign cottons and in most cases the use of cheaper labor, the shift in cotton manufacturing ha3 apparently been to the disadvantage of American cotton in relation to foreign growths. - 3 - The numerous developments mentioned a"bove, most of which have been effected to some extent at least "by the World War, have "been important fact- ors 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 per- centage 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 the- proportion • 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 some- thing like one-fourth of the total to less than 3 percent. In British India and particularly in China, important proportions of American cotton were 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 de- clined slightly while foreign production, exclusive of China for which esti- mates 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 closing 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 Ex- change in mid-November, the price was 5^ cents below and 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. Al- though it was not definitely known, 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 in history. The seriousness of the situation existing at that time is further illustrated by the numerous, schemes suggested for relieving the farm situa- tion. These included plans for storing the crop, efforts to bring about 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 and its allies would be able to keep the ocean routes fairly well open to their com- merce, 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. Eor the season as a whole total exports including linters were only 7 percent less than in the pre- vious season, despite the very poor showing made in the first part of the season and 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 hales according to estimates of the New York Cotton Ex- change 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 for- eign 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 exports of cotton manufactures, the indications are that this accounted for only a small proportion of the increase. Consumption estimates are not available for the individual foreign ■countries, 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 American cotton was due to the fact that trade with Germany and its allies was largely cut 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 61,000 bales. Although a great deal of the American cotton exported to Germany before the war was reexported to other countries and although Germany pro- bably obtained a considerable quantity of American 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 re- leased by the International Federation of Master Cotton Spinners' and Manu- facturers' Association. Austria consumed an average of 636,000 bales of Ameri- can 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 and with the outbreak of the war these markets were also closed to much of this cotton. Annual exports of American cotton to all countries other than Germany averaged about the same during the war period as in the 5 years ended 1913-14, but exports to the United Kingdom and to France averaged respectively 15 and 25 percent lower during the war period than in the pre-war period. Exports to Italy averaged 50 percent higher and exports to Japan 78 percent higher in the four seasons 1914-15 to 1917-18 than in the 1909-10 to 1913-14 period. - 5 - In the 1914-15 season the loss of the German, Austrian, and Hungarian markets and the larger supply available for export to other countries and 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 bales 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 lessithan the 3-year pre-war average. 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 acre- age 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 during the 4 years ended 1917-18 and 11 percent less in the 3 years ended 1917-18 than in the 5 years ended 1913-14. The estimated production in foreign ceun.tr] ?s, excluding China, averaged only 1 percent less during the 4 years 191 -'-15 to 1917-18 and 6 percent less in the 3 years 1915-16 to 1917-18 than during the 5 years immediately preceding the war. Domestic production, on the other hand, averaged 13 percent smaller in the 3 years 1915-16 to 1917-18 Mian in the 5-year pre-war period. Except for changes in stocks, world production and consumption would be the same. Complete stocks and consumption data are not available but the indications are that world consumption declined fully as much 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 technological 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 that the World War (with the countries di- vided 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 American 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, how- ever, 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 9^ 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 be- ginning of the season the total supply was substantially smaller and cotton prices in domestic markets averaged materially higher than i^n 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 American 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 carry- overs, 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 2 times as high as in 1915-16 and 1-1 1 Q times as high as in the 5-year pre-war period and materially higher than in any period since the Civil War. The un- usually high prices were due to a large extent to currency inflation and the marked advance in the general price level. In 1916-17 rind 1917-18 the all commodity 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 percent as compared with the 12.4 cents average for the 5 years ended July 1914, even though the average estimated world consumption of American cotton in the war period was only 71 percent of the average supply of American cotton, while in the 5-year pre-war period, average consumption was 81 percent of the average supply. A comparison of the simple averages of Middling 7/8-inch cotton at New Orleans shows a slightly greater increase, the average for the war period being 30 percent larger than for the pre-war period. For the four seasons ended 1917-18, however, the Bureau of Labor Statistics all commodity index averaged 47 percent higher than in the 5 years 1910-14. - 7 - Effects on Cottonseed and Cottonseed products : The World War appears to have had a greater effect on the demand for cottonseed and cottonseed pro- ducts 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 per- cent 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 war as com- pared 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 approxi- mately 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 and about 60 percent greater than the average pro- duction 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. Domestic con- sumption 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 mill- stocks 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 War period than did the prices for lint cotton or even the average price of all commodi- ties. 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 com- pared 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 potential 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 countries averaged larger, relative to the world supply of American cotton, in 1918-19 and 1919-20 than in the last three sea- sons 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 damage and low yields per acre, the large domestic de- mand for cotton accompanying the recovery from the post-war depression in 1920 and 1921, the large loans to foreign countries, and the previous re- sumption of trade with Germany and its allies. In addition to these factors, several others appeared to have con- tributed toward making the price of cotton high in relation to other 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 as 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 supplies 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 and northern sections of the Cotton Belt, where the boll weevil was held in check by climatic conditions. It also provided an incentive for in- creased efforts to combat the boll weevil in the weevil-infested areas. The development and introduction of early maturing varieties, improved cultural practices, and relatively high prices for cotton resulted in substantial re- coveries in yields, acreage, and production in these weevil-infested areas. This, together with the continued expansion in many of the newer sections, brought domestic production back in line with the pre-war trend by 1925. The high prices for cotton in relation to most other agricultural com- modities also stimulated a material increase in foreign cotton production,. But despite the recovery in United States production and the high level of foreign production after 1923-24, domestic cotton prices and incomes averaged rather high, relative to prices of most farm commodities, during the period from 1922-29, except in 1926. In that year the highest acreage in history and the largest yield per acre for more than a decade resulted in a domestic crop nearly 2 million bales larger than the previous crop, and a supply for the season about 3,700,000 bales larger than the supply for any previous season. Omitting 1926-27, the index of United States farm prices of cotton and cottonseed (August 1909 to J u ly 1914 = 100) averaged 170 for the years 1922-23 to 1929-30, whereas the farm price index of all farm commodities averaged 145. - 9 - 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-textile 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 cotton- textile 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. In 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 through- out the world during recent years, as well as to the acuteness and severity of the recent widespread depression. Despite the depression the 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. Mill-consumption 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 foreign 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 textiles. As all of these develop- ments appear to have been effected by the war jj 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 Ameri- can 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. l7 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 Economics. - 10 - During approximately this sane period, ...exports of cotton yarn and piece goods from the United Kingdom declined by an amount equivalent to approximately 2,100,000 bales of raw cotton* Of the total decline in cotton yarn and piece goods the equivalent of approximately 1,100,000 bales occurred in the exports to India, China, and Brazil. At the same time exports of cotton textiles from Japan 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 3,515,000 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. During 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 im- mediately 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 56 per- cent of which was American cotton, whereas in the pre-war years Japan imported 1,400,000 bales, 300,000 bales or 22 percent of which was American. In the United States the severe depression, the restriction of cotton production, the increased competition from rayon, and the cotton-processing tax we're largely responsible for the fact that cotton consumption declined from a much higher level in the late 1920' s to an annual rate during the 5 years ended 1935-36 only 12 percent higher than in the 5-year pre-war period. Through its effects on nationalistic developments, if in no other way, the war probably contributed to the severity of the depression and influenced the agricultural policies of the United States and other nations. The net effect of these and other developments resulted in a decline of 1,300,000, or 15 percent, in the average annual quantity of American cotton exported between the 5 years ended 1913 and the 5 years ended 1935. Between these two same periods, however, annual exports from the 11 principal foreign cotton-exporting countries increased 991,000 bales or 25 percent. More im- portant than this, however, is the increased cotton consumption within several of the important cotton-producing countries which has tended to reduce the quantity of cotton exported from these countries. Because of the numerous changes in the supply and demand conditions affecting American-grown and foreign cotton, many of which have resulted at least in part from the World War, the world production and consumption of American-grown cotton averaged slightly lower during the 5 years ended 1935-36 than during the 5 years immediately preceding the war, whereas production in foreign countries (exclusive of China for which earlier estimates are not available) increased . about 50 percent. About half of this increase in foreign countries excluding China is accounted for by the increase in the average for the 3 years 1933-34 to 1935-36 as compared with that of the 2 preceding years. Table 1.- Cotton, American: Production, carryover, supply : -Hi- ; Cotton, American: Pro due ti an, carry-over, s' consumption, and exports, specified periods : average,: : : : : period, 1914-15 : 1909-10 : 1914-15: 1915-16: 1916-17: 1917-18: to 1917-18 Item : ' to : l/ : l/ : l/ : l/ : ~ :Ratio to : 1913-14 : : : : : Actual :pre-war : l/ : : : : : : 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 6,355 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' 60.7 2.5 Prance... : 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 con-, sumption 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 Item and country : Pre-war : average : 1909-10 '1914-15! : to . : 1913-14; 1915-16.' 1916-17 1917-18 Average for war period, 1914-15 to 1917-18 : Ratio to Actual : pre-war : average : 1,000 1,000 1,000 1,000-- 1,000 : bales bales bales "bales: bales :478;'lbs.478 lbs. 478 lbs.47S lbs. 478 lbs. 478 lbs. • net net net- net : net '• net 1,000 bales Percent 4,359 3,128 3,759 Production \ 3,585 Exports: lj . : United Kingdo.n. . . ijn Germany : Prance ; Italy , i Japan : Other countries...: Total :"~ 2,014 1/ Year beginning April. Production estimates from the Department of Commercial Intelligence and Statistics in India. Exports from Annual Statements of the Sea-Borne Trade of British India, Vol. I. - --. '- ..... • 103 293 91 195 847 485 166 290 129 31?.; 1,044 479 195 48 263 1,387 : 162 193 63 226 1,442 164. 2,425 -2,075 ! , 088 3,393: 3,660 102.1 .1.267: 205 199.0 72 24.6 38: - ■ : 70 76.9 . •130; . 234 120.0 1,216; 1,272 .150.2 61: . 222 45.8 1,712: . 2., 075. . .. 103.0 Table 3.- Cotton, Egyptian: Production and exports, specified periods : Pre-war: . ' • : average: 1914-15 l/: 1915-16 l/: 1916-17 l/ : 1909-10: " pr • or ~: or Item and : to 1913-s 1915 l/ ': ' 1916 lj . : 1917*1/ country : 14 vf ; - ■ ' - ' : :or 1905>--' . -~ . ' - - : 13 1/ : . , • i 1917-18' 1/ 1918' l/' Average for 'war period, ' 1909-10 to ' 1913-14 1/ or 1909-13 l/ :Eatio to Ac tual : pre-war j Per- 1,000 1,000 1,000 1,000 1 , 000 1,000. * • bales bales 478 boles 478 bales 478 bales 478 bales • • 478 lbs. lbs.net lbs.net lbs.net lbs.net 478 lbs. • net net » ' * 1,453 1,337 989 1,048 J ' ' 1,304 1,169 Exports: ' ; United Kingdom. : . % 680 : 663. .. J 570 ... 528 . 731 623 129 ' . 0. . 128 54 63 45 46 52 •. .49 92: . 53. 54 . 60 65 • .': '■. ■■ • .97; :. 38 .30 25 : . 32 r Other countries: 453 584 398 187 . -178 337 ' 1,446 1,430 1,122 844 1 , 040 1,109 ' j,/ Crop year for production and calendo.r year for exports. 80.5 Production estimates compiled from reports of the Minister Lopartment. Exports compiled from Commerce Exterieur del" I Statement of Foreign Trade of Egypt for 1918, of Finance, Statistical te 1909-1917, Annual - 13 - 03 O H P u ■ ■ cd fc. l cd , | •H r, rH •P CD CD OH CO rH |> m ft cri w u o CD p ft lO Fjrl s ' al H p o o H H O rH o- I— I I to rH O rH tO I LO .i— I LO rH I CD o tiD i— t P O o O o o co O CD o O CO CD

O to H O CD •> H CD H cd o o) en h in in • ••■■»••*» lo cd oa o c> cn Oi O CO N H H O O C> O W O O ^ O H CO LO tO IS H O tO tO W *x ?>. «s ffl (B LO CM LO CO CD LO O O O If) ^ o #^ c. r. to o- cO H H| CO •H rH « d o O •H Cd -P -H CD -H ft rH -d O f! M M W cd o o as rH CO o tO o H tO to CO CO rH CD H -a G O : rH ■H CO o H 1 ed p O- a o c\i; CD CM w p o o H o 02 • cd -p o •p t3 H rH O rH o ccT •H o i=l •H rH O « Hi tH o rH -d CD i o o - 14 - Table 5. -Price of cotton, cottonseed, cottonseed oil, and wool, and price index numbers, specified markets and periods Item :Pre-war : average : 1910-14 : 1/ • • 1915 1/ : 1916 1/ 1917 : 1/ 1918 1/ • LAv.for war-peri od 1915-18 1/ : : Hatio Actual : to pre- : war av . Cotton: • Liverpool prices- : iCts.per Gts.per Cts.per Cts.per Cts.per Cts.per ! pound pound pound pound pound pound P.ct. ! 14.74 11.00 15.04 24.72 43.56 23.58 160.0 P.ct. P.ct. P.ct. P.ct. P.ct. P.ct. Ratio of 3 types of Indian to 2 grades of American Ratio of Egyptian Upper to American Middling • Domestic farm price- Actual 2 1 Deflated by Bureau of Labor Statistics all commodity index (1910-14 = 100) Cottonseed oil: Prime Summer Yellow, JT.Y. Ac tual Deflated by Bureau of Labor Statistics all commodity index (1910-14 = 100) Cottonseed: Domestic farm price- Actual 2/ Deflated by Bureau of Labor Statistics all commodity index (1910-14 = 100) Price index numbers: Bureau of Labor Statis- tics all commod. index (1910-14 = 100) Bureau Labor Statistics food products index (1910-14 = 100) B.A.E. farm price all groups index (Aug. 1909- July 1914 = 100) n 85.5 83.0 82.6 84.9 86.5 84.3 98.6 138.04 123.6 129.8 -166.4 . 120.9 135.2 97.9 Ct s .Tier fit ^! . ner Ct .ner Ct ^ .ner C t ^ . n e r Dound pound TDOUnd pound pound •oound 12.4 7.4 11.2 17.3 27.1 15.8 127.4 12.4 5.0 7.5 11.7 18.4 10.7 86.3 6.98 6.23 8.98 13.07 18.91 11.80 169.1 6.98 6.14 7.20 7.62 9.86 8.01 114.8 Dollars Dollars Dollars Dollars Dollars Dollars per ton tier ton •per ton per ton per ton per ton 22.01 16.50 32. 55 49.13 66.15 41.11 186.8 22.01 11.19 i 22.15 33.33 44.88 27.89 126.7 Percent Percent Percent Percent Percent Percent 100 101.5 124.8 171.5 191.7 147.4 147.4 100 : : 101.4 117.4 162.0 184.7 141.4 141.4 loo : : 98.0 118.0 175.0 202.0 148.0 148.0 Year ending July 31 except 2/ Weighted averages. 3/ Pri rfo'r wool which is year ending December 31. .Jce of wool, greasy merino. 4/ No sales at London March 1917 to April 1919. Quotations for the period were estimated from govern- ment-fixed quotations for tops, and relation of prices of wool to tops prices prior to government control. 5/ Weighted average price of shorn wool. - 15 - ■3 o ft Pi rd -p O I 05 Pi © P -H C 14 O P Cd d cd Pi cd o Pi O rH o » o H O LO CO Pi w 1 i & Pi i § ° 1 O o 05 P Pi o rd o O r co •H O ft ^d © Pi p - o 05 P CO © o H Pi o •H Pi P 05 o d p o Pi d Pi Pi p rd a cd •H ■H o o p o p P ft Pi ft P o Pi pi CO o ft o ft •H ft ot? Eh do Pi 3 • ft •H M ba d o rO © o § § bO I Pi 05 H ©I H cd Pi rO 05 (— 1 © O al rO LO O Pi w O -H © *• H ^ H d -O Pi 1 o o 1 • • • • LO rH to j w to «o 00 • • • • CO LO o o CO rH rH H LO | • • • « LO 60 to LO rH 05 r-j CM CO rH i o o r> 1 • CO I o co O • • ft • rH CO H to to o to 05 r— > • • • • 9 LO CO CO r> 05 o rH H H H LO co 00 • • ■ • CO rH o cr> CO rH go rH N CO 00 rH H C\2 H^ CO ^ Q CO 05 CO o ^° o H H CO CM CO o> rH cm rH O 00 o 05 rH o rH o 00 rH * +^ • CV!|H rH 1 1 Tj Oi to O O rH •h Q5 a> Pi rH H ft LO tO O H H H I I I lO tD rd o o •H +3 Pi LO CO ft I rH rH rH a> o> a> d H rH rH rH rH I r> rH § 0> Oi • rH rH I P CTJ Pi • • rH o 05 Ph LO H N P-t p CO Pi 00 • © • O o C\2 Pi CO 00 © CO ft P 1 Pi • © 9 o O r> 05 Pi Cv! H N ft P • Pi • CO © CO O o o Pi © H ft .. h Pi • ft • o o P -H ft Pi O rd o I to ft •H Pi Pi P Cd cd ft £z ft rd o •H P: ft w Pi ft Pi O ft O H ^2 cd H •H cd cd p o Pi 05 P Pi O ft • X rH * -9 H g © >. p d ft p © H CO ttf tsD Pi Pi •H -H d d d d •H -H ttD bD rd ^ s & >H >H h|w| ♦ a d CO d © o © -d 4^ ft O d pi © Pi d © ,d 43 ft 05 P Pi O Ph © Pi a Pi ft rd © H •H • 1 © O O Pi © © Pi cd O CO © O •H O P P 05 05 s I