"A Happy Idea" (Cont'd)

What President Hoover and his Cabinet called "a happy idea" took tangible form last week when Germany offered to buy 600,000 of the Federal Farm Board's 1,300,000 bales of cotton on long term credits. But even before the State Department had transmitted the German proposal to the Board, Washington resounded with vehement protests from the cotton-growing south. Led by mumbly Senator Smith of South Carolina and bushy-browed Senator Harris of Georgia, cotton men declared that the German market by rights belonged to the 1931 crop now coming in, not to the 1930 crop which the Farm Board stabilized.

After weighing the German offer for 48 hours the Farm Board rejected it--on the ground the price was too low. Germany had offered to take the 600,000 bales in return for a three-year credit of about $30,000,000 at 4 1/2%. The price was to be a monthly average of the New York, Liverpool and Bremen Cotton Exchanges' cash quotation. The Farm Board had taken its cotton at about 16-c- per Ib. or less, leaving the Farm Board about $30,000,000 in the red on the deal.

The Department of Agriculture last week estimated the 1931 cotton crop at 15.684,000 bales as compared with 13,932,000 last year. Despite a 10 percent cut in acreage (TIME, July 20) excellent weather conditions had produced a crop yielding 85 Ib. per acre, 31 Ib. above average and the highest since 1914. This forecast rocked the exchanges of the land, sent cotton prices tumbling $7.50 a bale.

This file is automatically generated by a robot program, so reader's discretion is required.