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Georgia | 5,195,000| 1,883,911 | 16.7 | 322,600,000
Louisiana | 1,454,000| 638,729 | 5.7 | 102,260,000
Mississippi | 2,788,000| 905,554 | 8.0 | 152,270,000
Missouri | 345,000| 60,831 | 0.5 | 10,100,000
North Carolina | 1,515,000| 617,989 | 5.5 | 103,940,000
Oklahoma | 2,783,000| 959,081 | 8.5 | 150,270,000
South Carolina | 2,837,000| 1,236,871 | 10.9 | 207,220,000
Tennessee | 882,000| 240,525 | 2.1 | 40,130,000
Texas |11,092,000| 3,125,378 | 27.7 | 495,590,000
Virginia | 50,000| 18,777 | 0.2 | 3,140,000
All Other States| | 5,666 | 0.1 | 970,000
+ - - - - - + - - - - - - - + - - - - + - - - - - - -
Totals |33,841,000| 11,302,375 | 100.00 | 1,866,240,000
================+==========+==============+========+==============

There are generally speaking, two kinds of cotton produced in the United
States - Upland cotton, and Sea Island cotton. The former makes up the
great bulk of the crop, the relative percentages in 1917 being 99.2 and
.8.


The Constant Search
For Long Staples

A few years ago the terms short-staple and Upland were practically
interchangeable, but the great demand for long staple, chiefly from the
manufacturers of thread and of pneumatic tire fabrics has led to a
successful attempt to grow the longer fibers in the Upland districts, so
that now more than a million bales annually are being produced in the
Upland districts of cotton with a staple length of 1-1/8 inches and more.
The world's total production of long staple is in the neighborhood of
2,250,000 bales. Egypt is the chief producer outside the United States,
her product being approximately 1,000,000 bales of 500 pounds every year.
Although the product is small, the best Sea Island produced in the United
States grows upon the small islands off the coast of South Carolina. The
long-staple Upland is grown chiefly in the Mississippi delta, where the
product is called "Peeler," "benders," etc., though the percentage of
long-staple produced elsewhere is steadily increasing. The success of
certain Arizona growers in producing long-staple from Egyptian seed is
being watched with great interest. More than 3,000 bales came from this
source in 1916, the fiber averaging 1-1/2 inches in length. There has
recently been developed there, the new and important Pima variety, which
is superior to the native Egyptian cotton, being both longer and whiter,
and the growers are now planting Pima almost exclusively.

The following table, taken from the Encyclopedia Brittanica, gives the
comparative length of staple of the more important varieties of cotton.
The order in which they are given represents, roughly, their relative
commercial value:

_Length of Staple
Sea Island Cotton in Inches_
Carolina Sea Island 1.8
Florida Sea Island 1.8
Georgia Sea Island 1.7
Barbados Sea Island 2.

Egyptian Cottons
Yannovitch 1.5
Abassi 1.5
Good Brown Egyptian (Mitafifi) 1.2

American Cotton
Good Middling Memphis 1.3
Good Middling Texas 1.0
Good Middling Upland 1.0

Indian Cottons
Fine Tinnevelly .8
Fine Bhaunagar 1.0
Fine Amraoti 1.0
Fine Broach .9
Fine Bengal .9
Fine ginned Sind .8
Good ginned Kumta 1.0

The table of the number of spindles in each country in the world, given
on page 6, gives some idea of the relative position of the United States
in the field of cotton manufacturing. We have seen how the English
industry, having the prior start, grew to imposing proportions and helped
to bring about a change almost as great in its effects as the French
Revolution, which was occurring at almost the same time. British
supremacy in cotton manufacturing has never been truly challenged, but
there has been an appreciable growth in several other countries, and in
Germany and Japan, at least, the recent development has been little short
of phenomenal. New figures will probably show that in the future Japan
will be the chief competitor of England and the United States for a share
of the cotton trade of the world.

[Illustration: _Fall River, Massachusetts_]


The Home Market
Created An Industry

The chief factor in the growth of the American industry was probably not
the nearness of the source of supply, cheap fuel or labor, nor any of
these factors which operated in the case of England, such as climate,
geographical position, and shipping control, but more than anything else
the presence of a market close at hand which grew so rapidly, more
rapidly indeed than the industry could grow to meet it. Aided to some
extent by an import tariff, the manufacturers have weathered some short
periods of depression, but in the main the industry has grown in direct
ratio to the growth of the country.

[Illustration: _A typical Southern mill_]


New England As Home
Of American Spinning

The cotton mill, as we have seen, early chose New England as its
domicile. Mills are scattered more or less throughout the entire region,
but there are several localities which stand out beyond all others, and
almost deserve the title they have acquired as the centers of the
industry. Premier place for a long time was held by Fall River, and even
now the race between that city and New Bedford is strong, with the lead
slightly in favor of the former city.

Bristol County, Mass., in which these two centers, and Taunton, are
located, Providence, R. I., and Middlesex County, Mass., together
contained 10,086,686 spindles in 1917, or 29.5% of the country's total of
34,221,252.

The growth in this one locality is due probably to the advantages which
come with centralization, as well as to the natural advantages they
possessed. These latter, which include particularly water power and a
moist climate, are not as important now, With steam power and mechanical
humidifiers as they were a generation ago.

In the Middle Atlantic States, the number of plants and the spindlage
have remained about stationary over a long period of years, and are even
showing a tendency to decrease. Small weaving establishments which buy
their yarn are particularly numerous around Philadelphia, and there are
large cotton duck mills in and near Baltimore.


Mills in the Midst of
Cotton Plantations

It has been in the South, however, that the growth of the cotton
manufacturing industry in the last few decades has been most phenomenal.
In 1860 there were 324,052 spindles in the cotton growing States compared
with 8,632,087 in New England. In 1917, the figures were: Northern
States (including Connecticut, Illinois, Indiana, Maine, Massachusetts,
New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and
Vermont), 19,835,662 spindles devoted to the spinning of cotton
exclusively; Southern States (including Georgia, Kentucky, Louisiana,
Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Texas,
and Virginia), 14,292,918 spindles devoted to cotton exclusively.

The census figures do not give the number of spindles in each city except
when the confines of the city and of the county happen to coincide. But
the appended table is presented as showing the spindlage of counties
having more than 100,000 spindles devoted to the spinning of cotton.

About 1880, the Southerner saw the opportunity that awaited him when he
should manufacture his own cotton. At that time he was consuming only
188,748 bales, while New England took 1,129,498. In ten years, he was
utilizing more than half a million bales, while New England had just
passed the million and a half figure. In 1905, the South consumed
2,140,151 bales, while New England had climbed to only 1,753,282. The
figures are Scherer's, who points out that the race was won in
twenty-five years. However, as competition with the South increased, New
England, following the earlier lead of Old England, has tended always to
produce a finer and finer quality of cloth, leaving the coarser grades of
sheeting, drills and ducks to the Southern mills. Thus, while the South
is consuming an ever larger proportion of the cotton crop, she is still
far from receiving for her product the money that comes to the New
Englander, who with a higher grade of labor and greater variation of
output is constantly catering, with dress fabrics and fine stuffs of
various kinds, to a discriminating well-to-do patronage.

_Spindles
_County_ (Number)_
Bristol, Mass. 7,294,221
Providence, R. I. 1,709,713
Middlesex, Mass. 1,082,752
Hillsborough, N. H. 907,245
Spartanburg, S. C. 831,476
Windham, Conn. 780,232
Worcester, Mass. 766,110
Greenville, S. C. 758,144
Essex, Mass. 645,020
Hampden, Mass. 642,096
Gaston, N. C. 603,102
Kent, R.I. 594,380
Anderson, S. C. 582,464
Berkshire, Mass. 521,408
New London, Conn. 512,170
Oneida, N. Y. 419,255
York, Me. 408,600
Androscoggin, Me. 402,471
Muscogee, Ga. 346,740
Pittsylvania, Va. 346,320
Union, S. C. 330,656
Strafford, N. H. 318,160
Cabarrus, N. C. 315,810
Mecklenburg, N. C. 272,198
Guilford, N. C. 262,862
Richland, S. C. 244,660
Essex, N. J. 232,291
Albany, N. Y. 226,564
Madison, Ala. 225,168
Greenwood, S. C. 217,744
Pickens, S. C. 211,320
Bristol, R. I. 210,488
Hampshire, Mass. 198,792
York, S. C. 198,404
Fulton, Ga. 198,016
Aiken, S. C. 193,989
Laurens, S. C. 193,312
Richmond, Ga. 192,914
Rockingham, N. C. 191,810
Durham, N. C. 172,532
Newberry, S. C. 168,040
Chambers, Ala. 164,000
Cherokee, S. C. 163,820
Kennebec, Me. 163,815
Alamance, N. C. 153,176
Knox, Tenn. 152,100
Lancaster, S. C. 151,768
Richmond, N. C. 149,748
Chester, S. C. 146,692
Stanley, N. C. 146,000
Rutherford, N. C. 143,400
Calhoun, Ala. 138,048
Troup, Ga. 136,204
Floyd, Ga. 126,264
Cleveland, N. C. 125,182
Cumberland, Me. 124,392
Spalding, Ga. 121,252
Talladega, Ala. 115,448
Philadelphia, Pa. 114,547
Merrimack, N. H. 113,316
Davidson, N. C. 110,564
Baltimore City. 106,008
Halifax, N. C. 104,116
Hall, Ga. 102,588

The wealth of the world - at least up to the time of the Great War - was
constantly increasing and while there is little likelihood that the
demand for the coarser grades of goods will fall off, the need for finer
stuffs, not only in the United States, but abroad, is constantly growing.
The greatest development of the South is probably still to come.

The locations of the world's cotton markets have been dictated by the
location of the growing fields and the manufacturing centers. Thus we
find that the great raw cotton markets of the United States are in New
York and New Orleans. In Europe they are at Liverpool, Bremen and Havre.
Because of conditions imposed by the German government, the Bremen market
is largely dependent upon New York and Liverpool. The other great world
market is that of Alexandria, which, although it handles but a
comparatively small part of the world's crop, is important on account of
the quality of the staple which makes up the Egyptian bale.

The two chief American markets, New York and New Orleans, are sharply
differentiated. The New Orleans market is a true trader's market. The
great bulk of the sales made on the New Orleans floor are bona-fide
sales, in which cotton actually changes hands. The New York market on the
other hand is a merchants' and manufacturers' market, in which business
transactions are protected against loss by the purchase or sale of
"futures", though, of course, there is always a large amount of
speculating. Delivery is rarely demanded. The function of the exchange,
therefore, is largely that of insurance. The intricacies of this market
will be discussed later.




CHAPTER III

The Raw Cotton Market


Because of the ramifications of the cotton industry, the cotton itself,
on its devious way from planter to consumer, is successively the concern
of a series of individuals and corporations. The immense value of the
product, the expense of growing, handling, manufacturing, and selling it
all mean that great quantities of capital are utilized in bringing it at
last to its final consumer. At any stage of the process, cotton
represents no inconsiderable part of the nation's wealth, and to expedite
its journey, merchandising and financial methods of a highly specialized
technique have been developed. There are two very clearly marked stages
in this process. The first has to do with the raw cotton, as it goes from
planter to mill. The second has to do with the journey from mill to
consumer. The first is usually called the Raw Cotton Market, and the
second the Cloth Market.

The planter begins his work early in the spring. His crop is dependent
upon his ability to secure and pay for the labor to work it, for the
tools and machinery which are used, and his own expenses. Small planters
are rarely sufficiently in funds to enable them to go through the growing
season without financial assistance. They must borrow money, and they
usually borrow it with the growing crop as a basis.


The Local Grower
And the Charge Account

They may borrow from the country merchant in the town near which their
plantations are located. Credit here is usually furnished through the
"charge account" system, whereby the merchant supplies the planter's
wants for the growing season, even to the extent of giving credit to his
farm hands. Tenant farmers live almost entirely on credit furnished by
the store-keepers of the vicinity. When the picking season begins, in
July, August, or September, according to the region concerned, the
merchant, in lieu of money, may take the cotton as it comes from the
gins, crediting the grower thereof at the market price. The cotton thus
accumulated is sold to local buyers, or, occasionally, to shippers or
exporters. In the case of the larger plantations, or groups of
plantations operated by syndicates or corporations, the cotton is
frequently shipped direct to the mill or, more often, to a warehouse. The
larger producers, instead of getting their credit from the local stores,
as their tenant farmers do, are financed either by their banks, or by
their buyers, who in turn are financed by their bankers.


The Street Buyers
Of Texas Towns

In some districts, particularly in Texas, there is the small or local
buyer, usually called a "street buyer," who operates in the smaller
towns, buying his cotton at the gins in lots of from one to ten bales,
either from the small planters, or from the country merchants. This
buying gives a certain concentration to the crop, and enables the larger
buyers to deal in lots of comparatively uniform quality from certain
regions, the general type of whose product is known.

[Illustration: _Street buyer in a Southern town_]

Cotton bought from the planters or from the country merchants is almost
invariably paid for in cash.

Cotton is frequently sold at the compress point, rather than at the gin,
this course being pursued in the case of large producers, or when the
original buyer is a mere local operator. One of the most important
operations, commercially as well as industrially, is the grading of
cotton, which takes place as a rule at the compress point under the
supervision of the buyer, who employs experts for this purpose. Cotton
mills as a rule operate on certain specified grades of cotton, and any
deviation from this grade means either a readjustment of machinery or
disgruntled and dissatisfied employes, or, perhaps, an inability to fill
an order for cloth of certain types. The manufacturer will usually refuse
to accept any grades save those he has specifically commissioned the
buyer to obtain for him. The actual grades, and the terms describing them
have been established by the United States Government, and are rigidly
adhered to by the trade. Prices are established on the grade known as
"middling" as a basis, and variation from this basis is taken up in the
price.


Standardization of
American Cotton Grades

The grades, for white cotton, as established by usage and confirmed by
Governmental standardization are:

Middling Fair Strict Low Middling
Strict Good Middling Low Middling
Good Middling Strict Good Ordinary
Strict Middling Good Ordinary
Middling

For yellow tinged stock the grades are:

Strict Good Middling Middling
Good Middling Strict Low Middling
Strict Middling Low Middling

For yellow stained and blue stained there are only three grades quoted,
good middling, strict middling, and middling, the inference here being
that stained cotton below the basic grade, is unsuited for most
commercial purposes.

With cotton selling around thirty cents a pound, the difference between
the cost per pound of middling fair, the highest market grade of white
cotton, and good ordinary, the lowest market grade, may amount to twelve
or thirteen cents. The value of the shipment, and its use as a basis for
credit, is dependent upon its proper classification.

The large cotton buyers purchase for the account of mills, for exporters,
or for clients abroad. They are usually firms of strong financial
standing, and as we have seen, they are bankers or factors themselves,
financing growers or small buyers during the growing of the crop, and the
first concentration of the cotton. But when the large movement of cotton
is on, it is frequently necessary that they, like the local banks, must
be financed in order that they may execute their orders, or, as is
frequently the case, accept cotton sent to them on consignment. Cotton
sent on consignment must be stored until a market is found for it, and in
order that proper storage facilities may be supplied, the provision of
suitable warehouse facilities is an important matter.


Warehousing as
Industry's Great Need

Until recently, warehousing in its relations to the textile trade, had
not been developed to the extent which might have been expected in those
methods which would make it of the greatest use and advantage to textile
interests. By means of the facilities which could properly be afforded by
warehouses, manufacturers, or merchants should be able, at times of
favorable markets, to lay in large stocks of materials, and to finance
them safely and easily.

Today, this need is being met in constantly increasing measure by the
Independent Warehouses, Inc., affiliated with the Textile Banking Co.,
and having, like the latter, the support of the Guaranty Trust Company of
New York, and the Liberty National Bank of New York.

Modern warehouses of approved type, with all requisite facilities, will
be established by this company at various ports of entry throughout the
country, as well as at the important concentration points in the cotton
belt, and also in the great textile manufacturing centers.

[Illustration: _Weighing cotton on the compress platform_]

Thus it is seen that the cotton merchant has an important economic
function to perform. His is the duty of gathering up the great aggregate
of cotton, from all parts of the cotton belt, and distributing it in
exactly the quantity and grade needed to the cotton manufacturers of the
world. In the performance of this function, and in order that the supply
of cotton may be fed out exactly as it is needed by the manufacturers,
the cotton merchants have found it convenient, and even necessary to
establish great common markets where they may meet and enter into the
transactions with each other and the whole world which are necessary to
bring the cotton into the channels of commerce and keep it moving to its
multitudinous destinations. These markets are in addition to the numerous
local markets where the preliminary concentration takes place, and to
some extent they are subsidiary to the latter, where the cotton of the
actual quantity and quality they are seeking is to be had in the first
instance. Yet it is the great markets which establish the prices, for it
is they which are in close and immediate touch with all the other markets
of the world, and it is on their floors that the merchants and brokers
meet who deal in great quantities. It is their connection with the
numerous sources of information which gives these great markets their
importance, for it is they which register immediately and most accurately
the resultant of the sum total of all the economic forces which
determine the price.

[Illustration: _The New York Cotton Exchange_]

The great cotton markets of the world are those of New York and New
Orleans, in the United States; Liverpool, in England; Bremen, in Germany;
Havre, in France; Alexandria, in Egypt; and Bombay, in India. There are
differences between these markets which give a greater importance to some
of them. Bremen, which serves a large territory, operates under
governmental restrictions which make it necessary for Bremen merchants to
deal in other markets as well. Havre serves chiefly the needs of France,
which is not one of the large cotton consuming countries. Alexandria
deals only in Egyptian cottons, and Bombay, whose dealings are confined
mostly to the native staples, has neither the responsiveness nor the
completeness of the remaining markets. Thus, by elimination, the three
great markets of the world, wherein cotton of all kinds is dealt in, and
all forms of transactions in it are common are those of New York, New
Orleans, and Liverpool. To these, the cotton world looks for guidance
from day to day. The prices established on their several floors are the
prices of the world.

[Illustration: _Cotton train going from gin to compress_]

The Liverpool Exchange, under different names, has existed since 1841,
having taken approximately its present form in 1870, in the attempts to
stabilize conditions after the great speculative period which resulted
from the American Civil War. The New York and New Orleans Exchanges were
both organized the following year. The uniformity of rules and practices
in the trade which resulted from the establishment of the exchanges have
been of inestimable benefit to the industry and to the world, and this
despite occasional abuses, which have usually been corrected as methods
for correction have been evolved.


Spot Markets and Those
Which Deal in "Futures"

The New Orleans Cotton Market, and those of lesser cities, are largely
spot markets, that is, the dealings which takes place in the Exchanges at
those points involve the actual transferring of cotton which is on hand,
or, at least, contracted for. The New York market deals preponderantly
in what are known as contracts for future delivery, or, in the language
of the Exchange, "futures." The Liverpool Cotton Market is both a great
"spot" cotton market, and a great "futures" market. The striking thing
about these "futures" contracts is that but few of them are fulfilled by
actual delivery.

The question then arises, what function is fulfilled by the New York
Exchange that it should have such an important place in the cotton


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